SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
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 Number 0-2000
METALCLAD CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-2368719
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 Corporate Plaza, Suite 125, Newport Beach, CA 92660
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (949) 719-1234
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 ____.
As of September 30, 2000, the registrant had 6,167,452 shares
outstanding of its Common Stock, $.10 par value.
METALCLAD CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
Page
----
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets at September 30, 2000
(unaudited) and December 31, 1999.......................... 1
Consolidated Statements of Operations for the nine and
three months ended September 30, 2000 (unaudited) and
September 30, 1999 (unaudited)............................. 2
Consolidated Statements of Cash Flows for the nine months
ended September 30, 2000 (unaudited) and September 30, 1999
(unaudited)................................................ 3
Notes to Consolidated Financial Statements (unaudited)..... 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (unaudited)...... 5
PART II. OTHER INFORMATION............................................ 9
SIGNATURES............................................................ 10
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
METALCLAD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE><S> <C> <C>
September 30, December 31,
2000 1999
------------ -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $1,511,904 $ 769,176
Accounts receivable, less allowance for doubtful accounts of $20,000 at
September 2000 and December 1999 2,493,615 1,644,991
Costs and estimated earnings in excess of billings on uncompleted contracts 188,023 147,991
Inventories 149,101 161,832
Prepaid expenses and other current assets 210,440 125,630
Receivables from related parties, net 57,259 77,686
Note receivable sale of Mexican assets 779,402 779,402
---------- ---------
Total current assets 5,389,744 3,706,708
Property, plant and equipment, net 366,151 357,769
Net assets of discontinued operations 4,890,139 4,815,811
Other assets 25,765 23,086
---------- ---------
$10,671,799 $8,903,374
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,855,708 $ 898,745
Current liabilities, net -discontinued operations 92,645 339,936
Accrued expenses 597,033 499,076
Billings in excess of costs and estimated earnings on uncompleted contracts 4,003 -
Current portion of long-term debt 61,393 42,798
Convertible zero coupon notes 1,403,063 2,071,003
---------- ---------
Total current liabilities 4,013,845 3,851,558
Long-term debt, less current portion 140,917 105,915
Convertible subordinated debentures 360,000 360,000
---------- ---------
Total liabilities 4,514,762 4,317,473
---------- ---------
Shareholders' equity:
Preferred stock, par value $10; 1,500,000 shares authorized; none issued - -
Common stock, par value $.10; 80,000,000 shares authorized; 6,167,452 and
4,859,498 issued and outstanding at September 2000 and December 1999,
respectively 616,745 485,950
Additional paid-in capital 67,241,308 64,330,947
Accumulated deficit (59,554,320) (58,106,460)
Officers' receivable (591,273) (569,113)
Accumulated other comprehensive income (1,555,423) (1,555,423)
---------- ---------
Total shareholders' equity 6,157,037 4,585,901
---------- ---------
$10,671,799 $8,903,374
========== =========
</TABLE>
See Notes to Consolidated Financial Statements
METALCLAD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE><S> <C> <C> <C> <C>
For Nine Months Ended For Three Months Ended
-------------------------- ---------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
Revenues--Insulation
Contract revenues $12,091,646 $ 9,963,449 $ 4,007,494 $ 2,483,601
Material sales 68,769 209,159 17,658 24,831
Other 10,008 49,264 739 49,264
---------- ---------- ---------- ----------
12,170,423 10,221,872 4,025,891 2,557,696
---------- ---------- ---------- ----------
Operating costs and expenses--Insulation
Contract costs and expenses 10,713,836 8,733,309 3,614,656 2,241,864
Cost of material sales 41,175 191,128 10,588 44,271
Selling, general and administrative expenses 1,079,475 895,308 358,476 290,432
---------- ---------- ---------- ----------
11,834,486 9,819,745 3,983,720 2,576,567
---------- ---------- ---------- ----------
Gross operating profit (loss) 335,937 402,127 42,171 (18,871)
Corporate expense 1,537,378 1,502,056 664,705 658,733
---------- ---------- ---------- ----------
Operating loss (1,201,441) (1,099,929) (622,534) (677,604)
Interest expense (192,858) (207,589) (61,952) (58,917)
Other income 9,627 - - -
---------- ---------- ---------- ----------
Loss from continuing operations (1,884,672) (1,307,518) (1,184,486) (736,521)
Loss from discontinued operations (63,187) (1,346,687) - (728,907)
---------- ---------- ---------- ----------
Net loss ($1,447,859) ($2,654,205) ($ 684,486) ($1,465,428)
========= ========= ========= =========
Weighted average number of common shares 5,193,941 3,666,964 5,341,057 4,179,401
========= ========= ========= =========
Loss per share of common stock, continuing
operations--basic and diluted ($.27) ($.35) ($.13) ($.18)
==== ==== ==== ====
Loss per share of common stock, discontinued
operations--basic and diluted ($.01) ($.37) ($.00) ($.17)
==== ==== ==== ====
Loss per share of common stock--basic and diluted ($.28) ($.72) ($.13) ($.35)
==== ==== ==== ====
</TABLE>
See Notes to Consolidated Financial Statements
METALCLAD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE><S> <C> <C>
For Nine Months Ended
September 30,
-----------------------------------
2000 1999
------------ ------------
Cash flows from operating activities:
Net loss ($1,447,859) ($2,654,205)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss from discontinued operations 63,187 1,346,687
Depreciation and amortization 72,745 210,338
Issuance of stock for services - 588,333
Changes in operating assets & liabilities:
Decrease (increase) in accounts receivable (848,624) (923,718)
Decrease (increase) in unbilled receivables (40,032) (84,549)
Decrease (increase) in inventories 12,731 (13,174)
Decrease (increase) in prepaid expenses and other assets (84,810) 35,120
Decrease in receivables from related parties 20,427 43,088
Increase (decrease) in accounts payable and accrued expenses 1,054,920 (246,397)
Increase (decrease) in billings over costs 4,003 (10,415)
Other (2,679) 20,076
--------- ---------
Net cash used in continuing operations (1,195,991) (1,688,816)
Net cash used in discontinued operations (384,806) (1,070,756)
--------- ---------
Net cash used in operating activities (1,580,797) (2,759,572)
--------- ---------
Cash flows from investing activities:
Capital expenditures--continuing operations (81,127) (118,525)
--------- ---------
Net cash used in investing activities (81,127) (118,525)
--------- ---------
Cash flows from financing activities:
Proceeds from long-term borrowings 266,975 688,476
Payments on long-term borrowings--continuing operations (36,052) (27,943)
Borrowings by officers(net) (22,160) (17,663)
Proceeds from exercise of warrants 2,195,889 2,653,084
--------- ---------
Net cash provided by financing activities 2,404,652 3,295,954
--------- ---------
Increase in cash and cash equivalents 742,728 417,857
Cash and cash equivalents at beginning of period 769,176 519,940
--------- ---------
Cash and cash equivalents at end of period $1,511,904 $ 937,797
========= =========
Supplemental disclosures of cash flow information:
Cash paid for interest $ 88,499 $ 69,638
========= =========
Disclosure of noncash investing and financing activities:
During the nine months ended September 30, 2000, the Company converted
approximately $845,000 of zero coupon notes payable into 430,000 shares
of common stock.
</TABLE>
See Notes to Consolidated Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Period Ended September 30, 2000
(Unaudited)
1. The accompanying unaudited financial statements of Metalclad Corporation
and its subsidiaries (the "Company") have been prepared in accordance with
the instructions to Form 10-Q and do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management all adjustments (which
consist only of normal recurring adjustments) necessary for a fair
presentation have been included. Operating results for the nine months
ended September 30, 2000 are not necessarily indicative of what results will
be for the year ending December 31, 2000. These statements should be read
in conjunction with the consolidated financial statements and notes thereto,
and the report of independent public accountants which was qualified due to
substantial doubt about the Company's ability to continue as a going
concern, included in the Company's Form 10-K for the year ended December 31,
1999.
2. In October 1999, the Company completed a sale of its operating
businesses and development project located in Aguascalientes. The sale
specifically excluded those Mexican assets involved in the NAFTA claim. The
terms of this sale stipulate payment of the purchase price in stages as
various benchmarks are achieved in the operation of the business as well as
the buyer's assumption of all liabilities. The Company received an initial
cash payment of $125,000 and recorded a receivable of $779,000; however, no
gain or loss will be recorded on the payments until 100% of the Company's
net investment is recovered.
Under the terms of the sale, the Company can receive up to $5,000,000 in
payments as certain specific milestones are met. The most significant
milestone payments are associated with the buyer's ability to complete and
open the Aguascalientes landfill project. If the buyer can obtain all
necessary authorizations, complete construction and open the facility,
payments totaling $1,125,000 will be due the Company under the milestone
payment schedule. To date, the Company believes that the buyer has not
achieved any of the milestones necessary to trigger additional payments.
Moreover, the Company believes that the buyer is in default of its agreement
with the Company under the indemnity provisions and may have committed fraud
in attempting to assign its interest in the companies purchased to a former
employee of Metalclad. The Company has engaged counsel and believes it has
a cause of action against the buyer and the former Company employee and the
Orange County, California-based parent of the buyer as a result of
representations said parent made relative to giving the buyer financial
support in its acquisition of the companies purchased. On November 13,
2000, a complaint was filed in Orange County with the Superior Court of
California. The Company cannot assure the outcome of such a case. If the
Company is not successful in this litigation, it would result in writing off
the $779,000 note receivable.
The Company addresses the realization of its assets as required by SFAS
121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of". This statement requires that long-lived assets
and certain identifiable intangibles to be held and used, be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying value of an asset may not be recoverable. The Company has
conducted this review and believes that no impairment currently exists and
no material adjustments are necessary to the valuation of its assets.
3. Included in net assets of discontinued operations at September 30, 2000
and December 31, 1999 is approximately $4,797,000 and $4,476,000,
respectively. These assets represent the Company's net investment in its
completed hazardous waste treatment facility in the State of San Luis
Potosi, Mexico, known as "El Confin". Upon payment of the NAFTA award by
Mexico, the landfill will become the property of the Mexican government and
its net asset value will be written off by the Company. (See 8-K dated
September 1, 2000.).
4. In October 1999, the Company entered into a "non-binding" letter of
intent which outlined terms under which the Company was considering a sale
of its Insulation business to PDG Environmental. On September 27, 2000 the
Company announced that it has terminated these discussions.
5. The loss per share amounts for the nine months ended September 30, 2000
and September 30, 1999 were computed by dividing the net loss by the
weighted average shares outstanding during the applicable period.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
All statements, other than statements of historical fact, included in
this Form 10-Q, including without limitation the statements under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" are, or may be deemed to be, "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934. Such forward-looking
statements involve assumptions, known and unknown risks, uncertainties, and
other factors which may cause the actual results, performance or
achievements of Metalclad Corporation (the "Company") to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements contained in this Form 10-Q.
Such potential risks and uncertainties include, without limitation, the
ability to collect the NAFTA award, competitive pricing and other pressures
from other businesses in the Company's markets, economic conditions
generally and in the Company's primary markets, availability of capital,
cost of labor, and other risk factors detailed herein and in other of the
Company's filings with the Securities and Exchange Commission. The forward-
looking statements are made as of the date of this Form 10-Q and the Company
assumes no obligation to update the forward-looking statements or to update
the reasons actual results could differ from those projected in such
forward-looking statements. Therefore, readers are cautioned not to place
undue reliance on these forward-looking statements.
Results of Operations: Nine Months ended September 30, 2000 and 1999
General. Historically, the Company's revenues were generated primarily
in the United States from insulation and asbestos abatement services and in
Mexico from the collection of waste oils and solvents for recycling,
placement and servicing of parts washing machines, brokering the disposal of
waste and remediation services.
Since November 1991, the Company has been actively involved in doing
business in Mexico. The Company's initial focus was the development of
facilities for the treatment, storage and disposal of industrial hazardous
waste.
During the fourth quarter of 1998, the Company determined that its
efforts at building its business in Mexico would not be allowed to succeed.
The Company's investment in El Confin resulted in an arbitration under the
NAFTA treaty, its investment in Aguascalientes had been blocked just prior
to the project's completion, and its other businesses were impacted due to
the loss of these projects and the synergy they would have provided.
Consequently, the Company committed to a plan to discontinue its Mexican
operations to minimize future losses and halted any further investment in
Mexico.
In October 1999, the Company completed a sale of its ongoing operations
and development assets, specifically excluding the landfill assets
associated with its NAFTA claim. (See Note 2.)
Insulation Business. Total revenues from the insulation business for
the nine months ended September 30, 2000 were $12,170,000 as compared to
$10,222,000 for the comparable period ended September 30, 1999, an increase
of 19%.
Total expenses for the nine months ended September 30, 2000 were
$11,834,000 as compared to $9,820,000 for the comparable period ended
September 30, 1999, an increase of 21%.
Contract Revenues. Contract revenues for the nine months ended
September 30, 2000 were $12,092,000 as compared to $9,963,000 for the nine
months ended September 30, 1998, an increase of 21%. This increase is
attributed to the Company's efforts to diversify its client base, including
its entry into the commercial insulation market. The Company's accounts
receivable have also increased due to the increased contract revenues and
the timing of cash receipts.
Material Sales. Material sales were $69,000 for the nine months ended
September 30, 2000 as compared to $209,000 for the nine months ended
September 30, 1999.
Contract and Material Costs. Contract and material costs and expenses
were $10,755,000 for the nine months ended September 30, 2000 as compared to
$8,924,000 for the nine months ended September 30, 1999, an increase of 21%.
This increase is consistent with the Company's increase in revenues.
Selling, General and Administrative Costs. Selling, general and
administrative costs for the nine months ended September 30, 2000 were
$1,079,000 as compared to $895,000 for the comparable period ended September
30, 1999, an increase of 21%, due to the increased volume of work in the
period and increased marketing efforts.
Discontinued Operations. Effective October 8, 1999, the Company sold
its interests in Administracion Residuos Industriales, S.A. de C.V.,
Ecosistemas Nacionales, S.A. de C.V. and Ecosistemas El Llano, S.A. de C.V.
The Company also intends to dispose of its interests in Ecosistemas del
Potosi, S.A. de C.V. and Confinamiento Tecnico de Residuos Industriales,
S.A. de C.V., pending resolution of the NAFTA claim. As of December 31,
1999, the Company recorded a provision for anticipated costs to complete the
ongoing NAFTA claim process of $107,000. For the nine months ended
September 30, 2000, the Company incurred additional costs of $72,000, which
have been charged against the December 31, 1999 accrual. Additionally,
$63,000 in fees for the continuing costs of the NAFTA proceedings has been
expensed to discontinued operations.
Corporate Expense. Corporate expenses were $1,537,000 for the nine
months ended September 30, 2000 as compared to $1,502,000 for the nine
months ended September 30, 1999. This increase is due primarily to
increased legal fees associated with ongoing litigation, partially offset by
cost reductions in other administrative areas.
Interest Expense. Interest expense for the nine months ended September
30, 2000 was $193,000 as compared to interest expense of $208,000 for the
nine months ended September 30, 1999. This decrease is due to the reduction
in outstanding loan balances from September 1999 to September 2000,
primarily as a result of debt conversions to equity.
Consolidated Results
The Company experienced a net loss of $1,448,000 for the nine months
ended September 30, 2000 as compared to a net loss of $2,654,000 for the
comparable period ended September 30, 1999, a decrease of 45%. The net loss
from continuing operations was $1,385,000 for the nine months ended
September 30, 2000 as compared to a net loss of $1,308,000 for the
comparable period ended September 30, 1999, primarily due to legal costs
associated with completed litigations.
Liquidity and Capital Resources
In the fourth quarter of 1998, the Company committed to a plan to
discontinue its Mexican operations and in October 1999 completed a sale of
its non-NAFTA related businesses. (See Note 2.) Although no further
investments are being made in Mexico, the Company continues to rely upon
additional capital to maintain its remaining operations and complete the
collection of its NAFTA award.
On July 30, 1999 the Company entered into an amendment of the terms of
its Five-Year Zero Coupon Notes with the holder. The amendment included the
conversion of accrued interest through July 30, 1999 into principal notes,
the interest rate was adjusted from 9.3% to 12% effective July 31, 1999, the
convertibility of the notes and the holder's redemption option on the notes
was extended until the earlier of March 31, 2000 or completion of the NAFTA
proceedings and the conversion rate per share will be at the lesser of 70%
of the average market price per share or $2.50 per share. In no event,
however, can the holder convert its principal into common shares such that
it would result in the holder obtaining shares that would exceed 19.99% of
the outstanding common stock of the Company. Should the holder exercise its
right to convert the notes, all accrued interest would be forfeited. As
part of this amendment, the note holder agreed to exercise certain of its
warrants and to purchase $250,000 in additional notes. As of April 1, 2000,
the holder has the right to convert the principal amount of the notes. The
holder also has the right to require the Company to redeem these notes.
During the quarter ended September 30, 2000, the holder converted $845,000
of the outstanding note balance into common shares of the Company.
Management has been informed that the holder intends to convert the
remaining balance of the notes as well.
During the nine months ended September 30, 2000, the Company received
approximately $2,196,000 from the exercise of warrants, issuing 877,954 new
shares of common stock.
The Company had positive working capital at September 30, 2000 of
$1,376,000 compared to negative working capital of $145,000 at December 31,
1999. The Company had cash and cash equivalents at September 30, 2000 of
$1,512,000 and $769,000 at December 31, 1999. Cash used in continuing
operations for the nine months ended September 30, 2000 was $1,196,000
compared to $1,689,000 for the nine months ended September 30, 1999. Cash
used by discontinued operations for the nine months ended September 30, 2000
was $385,000 compared to $1,071,000 for the nine months ended September 30,
1999. Cash used in operating activities for the nine months ended September
30, 2000 was funded primarily by warrant exercises during the nine months.
For the nine months ended September 30, 2000 the Company generated
negative cash flow from continuing operations of $1,196,000, net of $301,000
in positive cash flow related to the insulation business due primarily to a
higher volume of work in the first nine months of 2000 versus 1999. The
remaining negative cash flow is related to corporate activities, the
Company's NAFTA claim, along with general and administrative expenses
without revenues to offset such expenses. The Company is aware of its on
going cash needs and continues to work with its investment bankers and other
sources to meet its on going needs through December 31, 2000. The Company
believes it will obtain the necessary funds to continue its planned
operations throughout 2000; however, no assurances can be given that such
funds will be available to the Company as required, while it awaits
collection of the NAFTA award. Collection of the award could be delayed or
placed in question if Mexico decides to pursue annulment of the decision in
a Canadian court. (See Part II, Item 1. Legal Proceedings.)
Foreign Currency Translation
Effective January 1, 1999, Mexico is no longer considered to be "highly
inflationary". However, the Company has discontinued its Mexican operations,
therefore, the impact of this change had no effect on the Company's
financial statements.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Given the Company's long history in the insulation business and in the
sale of insulation materials, it is subject to various claims related to
prior asbestos related business as well as its current business. The number
of these claims is over 300. The Company believes it has adequate insurance
in place and had adequate insurance in prior years and is vigorously
defending all claims. The Company does not believe that these claims,
individually or in the aggregate, will have a material adverse effect on its
financial condition.
On May 14, 1999, two shareholders, as individuals, filed almost
identical lawsuits in both state and federal courts in Los Angeles against
the Company, its officers, directors and certain advisors. Their claims
included violations of the California Corporations Code, intentional
misrepresentation, negligent misrepresentation, constructive fraud, breach
of fiduciary duty, and negligence. No specific amount of damages was
claimed. In July 2000, at the request of the plaintiffs, these cases were
dismissed with prejudice.
On July 7, 1999, Morton Associates, a Virgin Islands Corporation, filed
suit in federal court in Los Angeles against the Company requesting a
declaratory judgment interpreting certain anti-dilution provisions of a
warrant agreement owned by Morton. The Company defended the case on several
grounds. Other holders of similar warrant agreements have reached a
settlement with the Company. In August 2000, Morton and the Company reached
an agreement whereby Morton's warrants for common shares were fixed at
398,000 shares, exercisable at $2.50 per share, 210,000 of which were
exercised in exchange for common shares of the Company, for which the
Company received $425,000 net after deducting $100,000 in settlement costs.
On October 2, 1996, following a long period of negotiation with the
Mexican government in an effort to open its completed hazardous waste TSD
facility in San Luis Potosi, Mexico, the Company filed a Notice of Claim
under the provisions of the North American Free Trade Agreement ("NAFTA").
The notice was filed with the International Center for the Settlement of
Investment Disputes ("ICSID") in Washington, D.C. The claim was heard by a
three-member arbitration tribunal impaneled through ICSID procedures. On
August 30, 2000, the tribunal issued its decision. It ruled that Mexico had
indirectly expropriated the Company's investment in its completed landfill
facility. The tribunal awarded compensation plus interest totaling
$16,685,000 be paid to the Company. As of the date of this filing, no
payments have been received. Effective October 15, 2000 interest at the
rate of approximately $2,800 per day accrues on the award until paid.
Counsel for the Government of Mexico (GOM) has said publicly that the
GOM intends to "appeal" the decision of the arbitration panel in the case of
Metalclad v. United Mexican States. There is no "appeal" of a NAFTA
decision. The GOM does, however, have a right to seek to have the award
revised, set aside, or annulled in a Canadian court (the country of legal
jurisdiction for the case) provided only if they can furnish proof that:
1. a party was under some incapacity,
2. the arbitration agreement is not valid,
3. a party was not given notice of the appointment of an arbitrator or
was unable to present the party's case,
4. the award dealt with a dispute outside the scope of the arbitration
(and no grounds otherwise exist for upholding the award), or,
5. the award conflicts with public policy.
The Company knows of no legitimate ground for the GOM to assert such a
right, nonetheless, it is expected that the GOM will do so. In the event
such a claim is advanced by the GOM, the Company will seek to assert its
right to request that the GOM be required to post security to the amount of
the award plus accrued interest, as well as such further costs that are
incurred in the defense of such a claim. At this point in time, the Company
cannot predict the ultimate timeframe in which this will be resolved, if
such a claim was to be filed.
Item 2. Changes in Securities
During the nine months ended September 30, 2000, the Company converted
approximately $845,000 of zero coupon notes payable into 430,000 shares of
common stock.
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
The Company announced its annual meeting will be held November 20, 2000,
with proxies being mailed out approximately October 20, 2000.
Item 6. Exhibits and Reports on Form 8-K
The Company filed Form 8-K on September 1, 2000, reporting the pro forma
results of the NAFTA arbitration.
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.
METALCLAD CORPORATION
Date: November 14, 2000
By: /s/Anthony C. Dabbene
-------------------------------
Anthony C. Dabbene
Chief Financial Officer
(Principal Accounting Officer)
