United States
Securities and Exchange Commission
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
December 31, 2000 0-29491
THE NEW ANACONDA COMPANY
(Exact name of registrant as specified in its charter)
UTAH
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(State or other jurisdiction of incorporation or organization
87-0405529
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(I.R.S. Employer Identification No.)
136 East South Temple, Suite 1700-A
Salt Lake City, Utah 84111
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(Address of principal executive offices)
(801) 355-1341
----------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
None
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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.
X Yes No
---- ----
State the number of shares outstanding of each of the registrants classes
of common equity, as of the latest practicable date.
Common stock, par value $.001; 95,000,000 shares outstanding
as of February 16, 2001
THE NEW ANACONDA COMPANY
FORM 10-Q
For the Quarter Ended December 31, 2000
INDEX
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PART I--FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheet -
December 31, 2000 and March 31, 2000
Consolidated Statement of Operations -
Nine months ended December 31, 2000 and 1999
Consolidated Statement of Cash Flows -
Nine months ended December 31, 2000 and 1999
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II--OTHER INFORMATION
Item 1. Legal Proceedings
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE NEW ANACONDA COMPANY AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, March 31,
2000 2000
------------------------
ASSETS
Current Assets
Cash $ 1,869 $ 1,825
Prepaid expenses ---- 21,204
------------------------
Total Current Assets 1,869 23,029
Property and Equipment
Mineral interests in property 29,146,369 29,146,369
Mineral rights 1 1
Office equipment 93,867 93,867
Plant equipment 782,418 790,987
Automobiles 56,388 56,388
------------------------
30,079,043 30,087,612
Less: Accumulated Depreciation (690,138) (389,914)
------------------------
Net Property and Equipment 29,388,905 29,697,698
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Total Assets $ 29,390,774$ 29,720,727
========================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 85,504$ 81,483
Accrued liabilities 1,099,765 668,519
Capital lease obligations 121,966 122,076
Notes payable 36,316 29,150
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Total Current Liabilities 1,343,551 901,228
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Long-Term Liabilities
Note payable to related party 1,802,578 1,744,971
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Total Long-Term Liabilities 1,802,578 1,744,971
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Stockholders' Equity (Deficit)
Common stock - $0.001 par value; 100,000,000
shares authorized; shares issued and
outstanding: June 30, 2000 - 95,000,000,
March 31, 2000 - 95,000,000 95,000 95,000
Additional paid-in capital 68,097,583 68,097,583
Deficit accumulated during the development
stage (41,947,938)(41,118,055)
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Total Stockholders' Equity (Deficit) 26,244,645 27,074,528
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Total Liabilities and Stockholders' Equity $ 29,390,774$ 29,720,727
========================
3
THE NEW ANACONDA COMPANY AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Cumulative from
January 1, 1993
(Date of
Inception)
For the Nine Months Through
Ended December 31, December 31,
2000 1999 2000
------------ ------------ --------------
Sales $ ---- $ ---- $ ----
Cost of sales ---- ---- ----
------------ ------------ --------------
Gross Profit ---- ---- ----
------------ ------------ --------------
Operating Expenses
General and administrative 829,883 7,672,795 16,706,927
Research and development ---- 3,145 4,761,551
------------ ------------ --------------
Total Operating Expenses 829,883 6,907,729 21,468,478
------------ ------------ --------------
Loss from Operations (829,883) (6,907,729) (21,468,478)
------------ ------------ --------------
Other Income and (Expenses)
Other income ---- ---- 60,664
Sale of precious metals ---- ---- 125,022
Interest expense ---- (11,494) (25,850,045)
Loss on disposal of equipment ---- (73,151) (520,101)
------------ ------------ --------------
Net Other Expenses ---- (84,645) (26,184,460)
------------ ------------ --------------
Loss Before Extraordinary Item (829,883) (6,992,374) (47,652,938)
------------ ------------ --------------
Extraordinary Gain on Extinguishment
of Debt, No Tax Effect ---- ---- 5,705,000
------------ ------------ --------------
Loss $ (829,883) $(6,992,374)$ (41,947,938)
============ ============ ==============
Loss Per Share $ (0.01) $ (0.10) $ (0.70)
============ ============ ==============
Weighted Average Number
of Shares Outstanding 88,234,742 71,247,253 60,171,750
4
THE NEW ANACONDA COMPANY AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Cumulative from
January 1, 1993
(Date of
Inception)
For the Nine Months Through
Ended December 31, December 31,
2000 1999 2000
------------ ------------ --------------
Cash Flows From Operating Activities
Net loss $(829,883) $(6,992,374) $(41,947,938)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Depreciation 300,224 21,835 770,712
Amortization of discount on
notes payable ---- ---- 1,429,989
Stock issued for services ---- 6,750,000 7,386,765
(Gain) loss on the sale of
property and equipment ---- 73,150 416,184
Gain on extinguishment of debt ---- ---- (5,705,000)
Exchange of services for vehicle ---- ---- 2,000
Changes in operating assets and
liabilities, net of effects of
businesses acquired:
Prepaid expenses 21,204 (7,500) ----
Accounts payable 4,021 53,316 85,504
Accrued liabilities 431,246 23,749 1,349,792
Accrued interest payable ---- 131 24,298,576
------------ ------------ ------------
Net Cash From Operating Activities (73,188) (77,693) (11,913,416)
Cash Flows From Investing Activities
Proceeds from sale of property and
equipment 8,569 ---- 226,417
Capital expenditures ---- ---- (1,348,575)
------------ ------------ ------------
Net Cash From Investing Activities 8,569 ---- (1,122,158)
Cash Flows From Financing Activities
Proceeds from issuance of stock ---- ---- 10,000
Principal payments under capital lease (110) (14,755) (101,079)
Principal payments on notes payable ---- (4,077) (8,468,988)
Proceeds from issuance of debt 7,166 ---- 9,575,085
Principal payments on related party debt ---- ---- (3,310,981)
Proceeds from issuance of related
party debt 57,607 144,084 15,333,406
------------ ------------ ------------
Net Cash From Financing Activities 64,663 125,252 13,037,443
Net Increase (Decrease) in Cash 44 47,559 1,869
Cash - Beginning of Period 1,825 2,457 ----
------------ ------------ ------------
Cash - End of Period $ 1,869 $ 50,016 $ 1,869
============ ============ ============
5
THE NEW ANACONDA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Condensed Financial Statements The accompanying unaudited consolidated
financial statements include the accounts of The New Anaconda Company and
its subsidiaries ("Anaconda"). These financial statements are condensed
and, therefore, do not include all disclosures normally required by
generally accepted accounting principles. These statements should be read
in conjunction with Anaconda's most recent annual financial statements
included in the Company's report on Form 10-KSB for the year ended March
31, 2000. In particular, Anaconda's significant accounting principles were
presented as Note 1 to the Consolidated Financial Statements in that
Report. In the opinion of management, all adjustments necessary for a fair
presentation have been included in the accompanying condensed financial
statements and consist of only normal recurring adjustments. The results
of operations presented in the accompanying condensed financial statements
are not necessarily indicative of the results that may be expected for the
full year ending March 31, 2001.
Business Condition Anaconda and its subsidiaries have accumulated deficits
of $41,118,055 since their inception in 1993 through March 31, 2000 and
$41,947,938 as of December 31, 2000. They have had losses from operations
and negative cash flows from operating activities during each of the three
years in the period ended March 31, 2000. These conditions raise
substantial doubt regarding the Company's ability to continue as a going
concern. Although the Company had positive stockholders' equity at March
31, 2000 and December 31, 2000, realization of the investment in properties
and equipment is dependent on Anaconda's obtaining financing for the
further development and utilization of its technology to extract precious
metals from mineral reserves and other sources.
NOTE 2 RELATED PARTY NOTES PAYABLE
During the third quarter of 2000 Anaconda continued to rely on its major
stockholder for financing the Company's limited operations. The loans are
intended to be
long-term in nature as it is determined that the Company will need what
resources it is able to obtain in the near future for current operations
and not to reimburse the stockholder for loans made to the Company.
NOTE 3 COMMITMENTS
The Company has defaulted on its capital lease obligations. Certain
equipment has been repossessed and it is expected that other equipment will
also be repossessed by the creditors. All outstanding lease obligations
have been reclassified to current liabilities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF
OPERATIONS
Liquidity and Captial Resources
The Company had cash on hand of $1,869 as of December 31, 2000.
6
Since inception, the Company has been engaged in research and
development and raising the needed capital to bring technology to the
production level and, therefore, is considered a development stage
enterprise. The Company's ability to move from the development stage is
dependent upon its ability to generate sufficient cash flow from operations
to meet its obligations on a timely basis, to obtain additional funding as
may be required, and ultimately to attain successful operations.
Management has been authorized by the board of directors to issue up to
5,000,000 shares of its common stock to the public for additional financing
sometime in the future. Management is negotiating with a source of equity
financing. The Company is also holding discussions with additional private
placement sources in case anticipated financing does not materialize. No
firm commitments have been received. There is no assurance the Company
will be able to raise any capital or that the Company will receive
sufficient capital to continue in operation. The Company's activities have
been placed on hold, until new funding is secured. The minimum expenses
incurred during the quarter have been funded by the Company's largest
shareholder on a long-term loan basis. Management believes that the
shareholder will use its best efforts to continue to provide subsistence
funding, however no agreement to do so exists, and the shareholders ability
to do so on an extended basis is doubtful. Future capital commitments,
including the funds needed to complete the pilot plant, are also on hold
subject to the equity financing mentioned above. Repayment of debt is
anticipated to come from operating profits to be generated when the pilot
and or subsequent plants are in operation. No debt repayment is planned
from the anticipated financing, should it be successfully concluded.
The Company had entered into discussions with International Waste
Solutions (IWS), a London based waste technology company with the intent of
acquiring IWS. The shareholders of IWS voted to remain an independent
company and merger discussions were terminated.
Results of Operations
Comparison of the nine months ended December 31, 2000 and the nine months
ended December 31, 1999.
The Company had no revenue during the nine months ended December 30,
2000 or during the same 1999 period.
General and administrative expenses of $829,883 incurred in the nine
months ended December 31, 2000 are $6,842,912 less than the $7,672,795 for
the nine months ended December 31, 1999. $6,750,000 of the difference is
the expense of having issued 3,000,000 at $2.25 per share in the six months
ended September 30, 1999. These shares were issued for services. No
comparable transaction occurred in the 2000 year. Net of this single
transaction general and administrative expenses are $92,912 lower in the
nine months ended December 31, 2000, than in the comparable 1999 period.
The nine months ended December 31, 2000 general and administrative
expenses consist of operating expenses in the Victoria Plant of $37,865,
$370,500 of accrued salaries and fees, $55,032 in travel expenses,
$300,224 in depreciation and $13,126 in legal expenses. The $37,865 in
operating expenses at the Victoria plant are for facilities expenses such
as telephone, utilities and rent only as the plant is not conducting any
activities at this time. The 1999 comparable period expenses are also for
the faculties expenses but include additional salaries and wages as well as
a small amount of laboratory expenses. The 1999 nine month period did not
include the accrued salaries as two of the officers had waived the
liability and one was not yet employed.
7
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As disclosed by the Company in its Form 10, filed on February 14,
2000, it may have potential liability under the Comprehensive Environmental
Remediation, Compensative and Liability Act. There were no changes in the
status of this matter during the quarter. The Company is not involved in
any other legal proceedings.
ITEM 5. OTHER
On November 23, 2000, Mr. Paul A. deRome, Mr. Mark A deRome and Ms.
Harriet Blum resigned their positions as officers and/or directors of the
Company. Mr. Burkhard Getta, and Mr. Lars Bjork were appointed as
directors to fill the vacancies left by the resignations of Messrs. deRome
and deRome.
BURKHARD E. GETTA, 52. In 1975, Mr. Getta was appointed the general
manager of Singer Limited in Toronto, Canada. He was responsible for the
company's sales and marketing efforts. In 1985, Mr. Getta formed and
operated Medident & Medi Leasing - a large group of medical and dental
centers in Canada and the United States. Mr. Getta oversaw the operation
of Medident & Medi Leasing until he sold the company in 1990. In 1990, he
was appointed as an investment coordinator for Lamar International, a Hong
Kong based international precious metals sales and marketing company. Mr.
Getta was based in Lamar's Geneva office. In 1995, Mr. Getta retired from
Lamar International. Since that time he has worked as an independent
private investment consultant advising companies on matters relating to
precious metals, international markets and emerging company financing. Mr.
Getta received an MDT degree from Dental College in West Germany in 1970.
LARS BJORK, 50. Mr. Bjork received an Honors Degree in Economics from
the University of Lund in Sweden in 1976. He received a second degree in
Economics from New York State University at Stoneybrook in 1978. In
1978,Mr. Bjork went to work for Electrolux Sweden as General Manager. He
was the CEO of Electrolux Sweden and Finland when he left in 1981. From
1981- 1987, Mr. Bjork was in charge of money market trading desk for
Manufacturers Hanover Trust. During that time, Mr. Bjork managed a team
that traded between two and four billion dollars a week. In 1987, Mr.
Bjork joined Bank LAR, a Brazilian subsidiary of Chase Manhattan Bank,
where he served as CEO. During his four years at Bank LAR, Mr. Bjork
completely reorganized the structure and administration of the bank. Mr.
Bjork left LAR Bank at the end of 1991, to start his own investment finance
consulting service. Since 1992 he has consulted with business worldwide
helping his clients obtain funding, personnel and products.
On November 23, 2000, the Company appointed John F. Pope to act as
interim Chairman of the Board and CEO until such time as a new Chairman of
the Board and a new President can be appointed. Mr. Pope was also appointed
as the Secretary of the Company.
On December 5, 2000, the Company also reported that it had reached an
agreement in principle to acquire International Waste Systems, PLC, ("IWS")
subject to approval by the shareholders of IWS. The shareholders of IWS
voted to remain an independent company and merger discussions were
terminated
8
On February 14, 2000, the Company filed a Form 10. On April 13, 2000,
the Securities and Exchange Commission sent a deficiency letter to the
Company requesting additional information and disclosure be added to the
registration statement. Pursuant to Section 12(g) of the Securities
Exchange Act of 1934, the Form 10 filing went effective 60 days after it
was filed. On November 13, 2000, the Company filed Form 10/A-1, amending
the original Form 10 and responding to the comments of the Securities and
Exchange Commission. On December 21, 2000 and January 3, 2001, the Company
received comments to its Form 10/A-1. The Company is currently preparing
its responses to these comments. The Company will not be eligible for
relisting on the Over-the-Counter Bulletin Board until such time as all
comments have been cleared.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K
On December 5, 2000, the Company filed Form 8-K reporting the
resignations of Paul A. deRome and Mark A. deRome as officers and
directors, and Harriet Blum as an officer of the Company. At the same
time, the Company announced the appointment of Burkhard E. Getta and Lars
Bjork to fill the vacancies created by the resignations of Messrs. deRome
and deRome. The Company also appointed John F. Pope to act as interim
Chairman of the Board and CEO until such time as a new Chairman of the
Board and a new President can be appointed. Mr. Pope was appointed as the
Secretary of the Company. The Company also reported on its proposed
acquisition of International Waste Systems, PLC.
SIGNATURES
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.
The New Anaconda Company
February 19, 2001 /s/ John F. Pope
--------------------------------
John F. Pope, President,
Chief Financial Officer
9