FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal quarter ended February 28, 1997 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 0-8773
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CRESTED CORP.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-0608126
- ------------------------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
877 North 8th West, Riverton, WY 82501
- ------------------------------------------------- -----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone Number, including area code: (307) 856-9272
-----------------------
NONE
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at April 17, 1997
- --------------------------------------- ------------------------------------
Common stock, $.001 par value 10,221,094 Shares
<PAGE>
CRESTED CORP.
INDEX
Page No.
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements.
Condensed Consolidated Balance Sheets
February 28, 1997 and May 31, 1996............................3-4
Condensed Consolidated Statements of Operations
Three and Nine Months Ended February 28, 1997
and February 29, 1996........................................5-6
Condensed Consolidated Statements of Cash Flows
Nine Months Ended February 28, 1997
and February 29, 1996.........................................7-8
Notes to Condensed Consolidated Financial Statements............9-10
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...............10-12
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings..............................................12-13
ITEM 4. Submission of Matters to a Vote of Security Holders............13-14
ITEM 5. Other Information.................................................14
ITEM 6. Exhibits and Reports on Form 8-K..................................14
Signatures........................................................15
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CRESTED CORP. AND AFFILIATE
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
February 28, May 31,
1997 1996
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 62,300 $ 52,600
Accounts receivable
Trade 57,400 58,200
Affiliates 351,700 141,600
Current portion of long-term receivable
Related parties 297,000 210,100
Other 183,200 100,100
Inventory and other 82,300 33,600
----------- -----------
TOTAL CURRENT ASSETS 1,033,900 596,200
LONG-TERM NOTES RECEIVABLE 657,300 689,200
INVESTMENTS IN AFFILIATES 4,579,100 4,344,700
PROPERTIES AND EQUIPMENT 5,224,900 5,189,400
Less accumulated depreciation,
depletion and amortization (2,972,200) (2,832,800)
----------- -----------
2,252,700 2,356,600
OTHER ASSETS 148,000 145,800
----------- -----------
$ 8,671,000 $ 8,132,500
=========== ===========
See notes to Condensed Consolidated Financial Statements.
</TABLE>
3
<PAGE>
CRESTED CORP. AND AFFILIATE
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
February 28, May 31,
1997 1996
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 250,600 $ 300,000
Line of credit (Note 4) -- 88,000
Deferred income (Note 7) 2,103,800 --
Current portion of long-term debt (Note 4)
Affiliates 5,785,600 6,460,300
Others 30,500 --
----------- -----------
TOTAL CURRENT LIABILITIES 8,170,500 6,848,300
LONG-TERM DEBT 26,200 --
ACCRUED RECLAMATION COSTS (Note 5) 725,900 725,900
COMMITMENTS AND CONTINGENCIES
FORFEITABLE COMMON STOCK, $.001 par value;
issued 65,000 and 57,000 shares, respectively 37,100 36,400
SHAREHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value;
authorized, 100,000 shares;
none issued or outstanding -- --
Common stock, $.001 par value;
authorized 20,000,000 shares;
issued 10,156,094 shares 10,100 10,100
Additional paid-in capital 6,319,400 6,319,400
Accumulated deficit (6,618,200) (5,807,600)
----------- -----------
(288,700) 521,900
----------- -----------
$ 8,671,000 $ 8,132,500
=========== ===========
See notes to Condensed Consolidated Financial Statements.
</TABLE>
4
<PAGE>
CRESTED CORP. AND AFFILIATE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
February February
------------------------------- --------------------------------
28, 1997 29, 1996 28, 1997 29, 1996
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
REVENUES:
Mineral property transactions
and mineral sales $ 26,900 $ 296,200 $ 75,300 $ 1,383,400
Oil and gas sales 31,400 27,600 62,500 68,600
Interest 12,800 21,900 27,700 30,000
Commercial operations 98,900 73,900 228,000 315,600
Gain on sale of assets -- 12,400 -- 37,400
Management fees 85,300 20,300 217,000 77,300
Other 38,700 176,100 70,500 209,800
----------- ----------- ----------- -----------
294,000 628,400 681,000 2,122,100
COSTS AND EXPENSES:
Cost of mineral sales -- 471,100 -- 1,383,300
Cost of sales 25,100 21,600 74,300 69,800
Mineral operations 114,300 200,500 272,800 301,200
Interest 8,800 20,600 22,500 44,700
General and
administrative 375,400 396,000 812,600 952,700
Depreciation and
amortization 46,400 59,000 139,500 183,200
----------- ----------- ----------- -----------
570,000 1,168,800 1,321,700 2,934,900
LOSS BEFORE EQUITY
LOSS OF AFFILIATES,
PROVISION FOR
INCOME TAXES AND
EXTRAORDINARY ITEM (276,000) (540,400) (640,700) (812,800)
EQUITY LOSS OF
AFFILIATES (43,000) (67,700) (169,900) (345,400)
----------- ----------- ----------- -----------
LOSS BEFORE
PROVISION FOR
INCOME TAXES (319,000) (608,100) (810,600) (1,158,200)
PROVISION FOR
INCOME TAXES -- -- -- --
----------- ----------- ----------- -----------
(continued)
See notes to Condensed Consolidated Financial Statements.
</TABLE>
5
<PAGE>
CRESTED CORP. AND AFFILIATE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
February February
------------------------------- --------------------------------
28, 1997 29, 1996 28, 1997 29, 1996
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
NET LOSS $ (319,000) $ (608,100) $ (810,600) $(1,158,200)
=========== =========== ============ ===========
NET LOSS PER SHARE $ (.03) $ (0.06) $ (.08) $ (.11)
=========== =========== ============ ===========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 10,217,805 10,208,112 10,214,647 10,208,112
========== ========== ============ ==========
See notes to Condensed Consolidated Financial Statements.
6
<PAGE>
CRESTED CORP. AND AFFILIATE
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
February
--------------------------------
28, 1997 29, 1996
------------- ------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (810,600) $ (1,158,200)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation, depletion and amortization 139,500 183,200
Equity loss from investments 169,900 345,400
Gain on sale of assets -- (21,800)
Other (2,200) --
Deferred income (Note 7) 2,103,800 --
Non-cash compensation 700 1,600
Net changes in components
of working capital (395,400) 1,653,600
----------- ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,205,700 1,003,800
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable (174,400) (6,700)
Proceeds from collection
of notes receivable 36,300 27,600
Investments in affiliates (404,300) (398,200)
Purchase of property and equipment (35,600) (191,700)
Proceeds from sale of assets -- 33,700
----------- ------------
NET CASH (USED IN)INVESTING ACTIVITIES (578,000) (535,300)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in debt 112,600 49,000
Payment on long-term debt (730,600) (536,000)
----------- ------------
NET CASH (USED IN) FINANCING ACTIVITIES (618,000) (487,000)
----------- ------------
(Continued)
See notes to Condensed Consolidated Financial Statements.
</TABLE>
7
<PAGE>
CRESTED CORP. AND AFFILIATE
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
<TABLE>
<CAPTION>
Nine Months Ended
February
----------------------------------
28, 1997 29, 1996
-------------- ------------
(Unaudited) (Unaudited)
<S> <C> <C>
NET DECREASE IN CASH
AND CASH EQUIVALENTS 9,700 (18,500)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 52,600 24,400
-------------- ------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 62,300 $ 5,900
============== ============
SUPPLEMENTAL DISCLOSURES:
Income tax paid $ -- $ --
============== ============
Interest paid $ 22,500 $ 44,700
============== ============
See notes to Condensed Consolidated Financial Statements.
</TABLE>
8
<PAGE>
CRESTED CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1) The Condensed Consolidated Balance Sheet as of February 28, 1997, the
Condensed Consolidated Statements of Operations for the nine months and the
three months ended February 28, 1997 and February 29, 1996, and Condensed
Consolidated Statements of Cash Flows for the nine months ended February 28,
1997 and February 29, 1996, have been prepared by the Registrant "Crested"
without audit. The Condensed Consolidated Balance Sheet of May 31, 1996, has
been taken from the audited financial statements included in the Registrant's
Annual Report on Form 10-K filed for the year then ended. In the opinion of the
Registrant, the accompanying financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to fairly present the
financial position of the Registrant and its affiliate as of February 28, 1997
and May 31, 1996, the results of operations for the three months and nine months
ended February 28, 1997 and February 29, 1996, and the cash flows for the nine
months then ended.
2) Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these financial
statements be read in conjunction with the Registrant's May 31, 1996 Form 10-K.
The results of operations for the periods ended February 28, 1997 and February
29, 1996 are not necessarily indicative of the operating results for the full
year.
3) The condensed consolidated financial statements of the Registrant
include its proportionate share of the accounts of USECB Joint Venture ("USECB"
or "USECC") which is owned 50% by Registrant and 50% by Registrant's parent,
U.S. Energy Corp. ("USE"). All material intercompany profits and balances have
been eliminated.
4) Debt at February 28, 1997 and February 29, 1996 consists primarily of
an account payable to the Registrant's parent USE of $5,785,600 and $6,460,300,
respectively. The remaining debt is for various equipment.
5) Accrued reclamation obligations of $725,900 are the Registrant's
share of the reclamation liability at the Crooks Gap Mining District. This
reclamation work may be performed over several years.
6) Certain reclassifications have been made in the May 31, 1996
financial statements to conform to the classifications used in February 28,
1997.
7) On November 4, 1996, the U.S. District Court of Colorado confirmed
the Order and Award in the Arbitration proceedings with Nukem and its subsidiary
CRIC. The Arbitration Panel issued the Order and Award on April 18, 1996 and
clarified the Award on July 3, 1996. As a result, USECC received a partial
distribution of the funds held in escrow and in the SMP account in Riverton,
Wyoming, of $4,367,500 on November 5, 1996. A portion of these funds, $159,800
was paid directly to USE for U3O8 it had purchased for a SMP delivery and
interest
9
<PAGE>
thereon. The Registrant's independent accountant has advised that one-half of
the balance, to-wit $2,103,800, recieved as a distribution of SMP profits,
should be carried as a deferred income item on the liability section of the
balance sheet, which means that as of February 28,1997, it is not included in
the Registrant's net income or earnings per share. When a more definitive
resolution is reached in the arbitration/litigation the $2,103,800 will be
included as income, assuming the conclusion is favorable to the Registrant and
USE.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following is Management's Discussion and Analysis of significant
factors which have affected the Registrant's liquidity, capital resources and
results of operations during the periods included in the accompanying financial
statements.
LIQUIDITY AND CAPITAL RESOURCES
Working capital declined during the nine months ended February 28, 1997
by $884,500 to a working capital deficit of $7,136,600. This decrease was
primarily caused by deferred income of $2,103,800 being recorded during the nine
months ended February 28, 1997. On November 4 and 5, 1996, the U. S. District
Court in Denver, CO confirmed the April 18, 1996 Order and Award as clarified on
July 3, 1996. Based on the Court's judgment, the First Interstate Bank of
Riverton and the Norwest Bank of Denver released $367,475 and $4,000,000,
respectively, to the Registrant and USE. A similar amount was made available to
Nukem. To date of this filing, Nukem/CRIC has only withdrawn its share of the
funds from the First Interstate Bank of Riverton. All remaining funds,
approximately $15 million, remain in the SMP Norwest Bank escrow account. These
funds are in dispute and a decision on the distribution is pending. Of the
$4,367,475 received by USECC, USE was paid $159,800 for its cost with interest
for a delivery of uranium concentrates to an SMP customer. One-half of the
balance of $4,207,700 or $2,103,800, is carried as a current deferred income
item pending final resolution of the SMP arbitration.
The reduction of working capital was partially offset by a net reduction
in accounts payable to USE of $618,000. As of February 28, 1997, the Registrant
and USE had repaid all advances under their line of credit of $1,000,000 with a
financial institution. There were also changes in current asset balances.
Accounts receivable-affiliates, prepaid insurance and the current portion of
long-term receivable-other increased by $210,100, $48,700 and $83,100,
respectively. The increase in accounts receivable affiliates consists primarily
of amounts due from SMP for holding costs. The receivable from SMP increased by
$362,300, which is 50% of the total due from SMP for holding costs for the SMP
mineral properties for the period from June 1, 1996 through February 28, 1997.
One-half of this amount, or $181,200, is represented through the consolidation
of USECB financials. Cash and cash equivalents increased by $9,700 during the
nine months ended February 28, 1997. This increase was primarily as a result of
operating activities.
The Registrant utilized $578,000 in its investing activities during the
nine months ended February 28, 1997. This was primarily as a result of the
Registrant and its parent USE funding
10
<PAGE>
the standby costs of the Sheep Mountain Partners mining properties, and the
operational expenses of Energx Limited ("Energx") and Sutter Gold Mining Company
("SGMC"). As the Registrant and USE provide various services for GMMV and SMP,
these non-affiliated participants are invoiced for their proportionate share of
the operating and care and maintenance costs of the mineral properties of GMMV
and SMP. Through February 28, 1997, GMMV is current on its reimbursements to the
Registrant and USE for all the operating costs. Due to disputes existing between
the SMP partners, the Registrant and USE have not been reimbursed for care and
maintenance costs expended on the SMP mineral properties in Wyoming since the
spring of 1991. As a result of the uncertainty of the receivable from SMP, it is
being reported on the Financial Statements as an investment in affiliates.
Financing activities consumed a net of $618,000 as a result of increased
long-term debt of $112,600 and payment of long-term debt of $730,600.
During the nine months ended February 28, 1997, the Registrant also
invested $30,000 in Yellowstone Fuels, Inc. ("YFI") to acquire 15% of YFI and
$26,300 in USE. The investment in YFI was approved by the joint board of
directors of the Registrant and USE. The president of YFI is a son of the
chairman of the Registrant. YFI is a start-up uranium exploration company which
is acquiring properties that are suitable for underground mining by fluid
circulation techniques ("in situ"), as compared with conventional open pit
excavation or shaft mining. The investment in USE came as a result of the
purchase of 2,000 shares of USE common stock in the open market.
The primary requirements for the Registrant's working capital continue
to be funding of the on-going administrative expenses of USECC, uranium delivery
costs, and property holding costs of SMP. As a result of the disputes between
the SMP partners, the Registrant and USE had been delivering certain of their
respective portions of the uranium concentrates required to fill various SMP
delivery requirements on long-term U3O8 contracts with domestic utilities. The
Registrant and USE made one U3O8 delivery during the nine months ended February
28, 1996, but no deliveries were made by USECC during the nine months ended
February 28, 1997. There will be no capital requirements to fill the
Registrant's and USE's portion of the remaining U3O8 commitments of SMP in
fiscal 1997.
The primary source of the Registrant's capital resources for the
remainder of fiscal 1997 will be cash on hand; continued borrowing from USE and
from financial institutions (primarily the line of credit); possible proceeds
from the sale of uranium under the SMP contracts; and the sale of equity or
interests in investment properties. Fees from oil production, rentals of various
real estate holdings and equipment, and the sale of aviation fuel will also
provide cash. Additional sources of capital will be required to hold and
maintain mineral properties, permitting, the construction of a gold processing
mill and mine development of SGMC, and administrative costs. The Registrant and
USE are currently seeking other financing for the construction of the gold
processing mill and mine development at SGMC. The funding of SMP care and
maintenance costs may require additional funding, depending on the outcome of
the SMP arbitration.
11
<PAGE>
RESULTS OF OPERATIONS
NINE MONTHS ENDED FEBRUARY 28, 1997 COMPARED TO NINE MONTHS ENDED
FEBRUARY 29, 1996
Total revenues for the nine months ended February 28, 1997 decreased by
$1,441,100 compared to the same period of the previous year. Revenues during the
nine month period ended February 28, 1997 decreased primarily as a result of the
Registrant reporting revenues of $1,383,400 in the nine months ended February
29, 1996 from the sale of U3O8 to fill delivery contracts on behalf of SMP. No
such revenues were recorded during the nine months ended February 28, 1997.
Commercial revenues decreased by $87,600 primarily as a result of the
Registrant and USE selling Wind River Estates during fiscal 1996. These
decreases in revenues were offset by an increase of $75,300 in royalties
received from Cyprus/AMAX on the Mt. Emmons molybdenum property. No royalties
were received during the nine months ended February 29, 1996 as a result of the
Registrant and USE exchanging six quarters of the molybdenum royalty for certain
real estate property in Gunnison County, CO.
Costs and expenses decreased by $1,613,200 during the nine months ended
February 28, 1997, compared to the same period of the previous year, when the
Registrant recorded costs of U3O8 sold under the SMP contracts of $1,383,300
during the nine months ended February 29, 1996. There were no sales of U3O8
recorded by the Registrant during the nine months ended February 28, 1997.
Mining operations costs, interest expense and general and administrative costs
decreased by $28,400, $22,200 and $140,100, respectively.
Operations for the nine months ended February 28, 1997 resulted in a
pre-tax loss of $640,700 before equity in loss of affiliates of $169,900 as
compared to a loss of $812,800 before equity in income of affiliates of $345,400
during the same period of the previous year. After recognizing equity losses,
the Registrant recognized a net loss of $810,500 compared to a loss of
$1,158,200 for the comparative period of the previous year. Registrant's
independent accountant has recommended that the $2,103,800 received as
distribution of SMP profits, be recorded as a deferred income item on the
balance sheet, which means that as of February 28, 1997, it is not included in
the Registrant's net income or earnings per share. When a more definitive
resolution is reached in the arbitration/litigation proceedings, the $2,103,800
will become income, assuming the conclusion is favorable to the Registrant and
USE.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The information called for in this Item 1 has been previously reported
in: the Registrant's Form 10-K (Item 3) for the fiscal year ended May 31, 1996;
Registrant's Forms 10-Q (Item 1 of Part II) for the fiscal quarters ended August
31, 1996 and November 30, 1996, and the Form 8-K dated March 6, 1997. These
reports disclose the status of the consensual arbitration/litigation in the U.S.
District Court of Colorado involving the Registrant and USE d/b/a USECC and
Nukem, Inc. and its wholly-owned subsidiary Cycle Resource Investment
12
<PAGE>
Corp. (CRIC) over disputes involving the Sheep Mountain Partners (SMP)
partnership concerning the marketing and sale of uranium and mining operations
in Wyoming. As was reported earlier, an Amended Judgment was entered on March 6,
1997 by Judge Lewis T. Babcock of the U.S. District Court of Colorado, wherein
the Court confirmed the Arbitration Award ordering Nukem to pay USECC a net of
approximately $8,465,000 as monetary damages. In November 1996, USECC received
$4,367,000 out of the SMP escrowed funds and its bank account per the Court's
earlier November 5, 1996 Judgment.
Despite the rulings of the Panel imposing a constructive trust in favor
of SMP on the rights to purchase CIS uranium, the uranium acquired pursuant to
those rights and the profits therefrom, the defendants-appellants Nukem/CRIC
continue to assert in both Court filings and public news releases that the
Arbitration Panel did just the opposite and in fact, "denied" SMP's rights to
the CIS contracts in constructive trust.
In the March 6, 1997 Amended Judgment, Judge Babcock again confirmed the
Arbitration Panel's Awards and denied Nukem's motion to modify and/or vacate
portions of the Award; denied Nukem's objections to the confirmation of the
Order and Award, and granted USECC's motion to modify the Award by deducting
$265,213 from the amounts Nukem and CRIC claimed to have advanced to purchase
uranium for the SMP Partnership.
The Amended Judgment of March 6, 1997 did not specifically address the
Panel's Award to SMP of a supply contract Nukem had entered into with another
utility, or Nukem's uranium purchase contracts with three CIS Republics. USECC
filed a motion for an order of limited remand to the Arbitration Panel for its
reaffirmation of its findings on the issue of placing the CIS contracts in
constructive trust for SMP. The Court found that the Panel's Awards were not
ambiguous and denied the motion. The Court may still reconsider the denial of
this motion. In order to preserve USECC's rights, Registrant and USE filed a
Notice of Appeal with the Tenth Circuit Court of Appeals on the omission of
these equitable awards and filed a motion with the U.S. District Court to
correct a clerical omission in the Amended Judgment.
On or about March 21, 1997, defendants Nukem and CRIC filed a motion to
stay enforcement of USECC's monetary judgment pending the appeal of Nukem/CRIC
and posted a supersedeas bond in the amount of $8,613,600. On March 25, 1997,
USECC filed a motion objecting to defendants' motion on the posting of that
amount for its supersedeas bond and requested the Court to order the defendants
to increase the bond to cover the value of the CIS contracts. This motion is
pending.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On December 13, 1996, an annual meeting of shareholders was held and
five directors, John L. Larsen, Max T. Evans, Daniel P. Svilar, Michael D.
Zwickl and Kathleen R. Martin were reelected for a term expiring at the next
succeeding annual meeting and until their successors are duly elected or
appointed and qualified. With respect to the election of the five directors, the
votes cast were as follows.
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Name of Director For Against Abstain Withheld
- ---------------- --- ------- ------- --------
John L. Larsen 8,575,616 11,000 9,720 3,075
Max T. Evans 8,578,216 10,500 9,620 1,075
Daniel P. Svilar 8,578,216 10,500 9,720 975
Michael D. Zwickl 8,578,216 10,500 9,620 1,075
Kathleen R. Martin 8,576,091 11,000 9,720 2,600
ITEM 5. OTHER INFORMATION
On November 22, 1996, the Registrant and Registrant's parent USE (the
"USE Parties") signed a letter of intent with Kennecott Energy and Coal Company
("Kennecott") for Registrant and USE to acquire Kennecott's 50% interest in the
Green Mountain Mining Venture (GMMV) through the acquisition of the stock of a
Kennecott subsidiary within 18 months. Although the letter of intent was
extended and has since expired, the parties are continuing negotiations for the
USE Parties to acquire Kennecott's interest in the GMMV. The GMMV was formed in
1990 to explore for and if warranted, to develop the uranium deposits in
south-central Wyoming. The proposed change in the GMMV would make U.S. Energy
Corp. and Crested Corp., dba USECC, 100% owners of the GMMV if the USE Parties
can arrange the necessary financing to exercise the option. USECC has moved
forward to prepare the portal and other workings at the proposed Jackpot Mine to
accommodate the installation of a conveyor system for driving the double
declines (tunnels) at a -17% decline, to a length of up to 8,000 feet to reach
the first of several horizons of the uranium deposits.
Such change in ownership is subject to Kennecott and the USE Parties
renewing the letter of intent and finalizing terms of a definitive agreement,
and the USE Parties arranging the necessary financing to close such an
agreement. There is no assurance such steps will be successfully achieved.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. None.
(b) Reports on Form 8-K. There were no Reports filed by the Registrant
on Form 8-K during the quarter ended February 28, 1997.
14
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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.
CRESTED CORP.
(Registrant)
Date: April 17, 1997 By: s/ Max T. Evans
-----------------------------------
MAX T. EVANS, President
Date: April 17, 1997 By: s/ Robert Scott Lorimer
-----------------------------------
ROBERT SCOTT LORIMER,
Principal Financial Officer
and Chief Accounting Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CRESTED CORP. FORM 10-Q FOR THE PERIOD ENDED FEBRUARY 28, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000025657
<NAME> CRESTED CORP.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 62,300
<SECURITIES> 0
<RECEIVABLES> 409,100
<ALLOWANCES> 0
<INVENTORY> 82,300
<CURRENT-ASSETS> 1,033,900
<PP&E> 5,224,900
<DEPRECIATION> (2,972,200)
<TOTAL-ASSETS> 8,671,000
<CURRENT-LIABILITIES> 8,170,500
<BONDS> 0
0
0
<COMMON> 10,100
<OTHER-SE> (298,800)
<TOTAL-LIABILITY-AND-EQUITY> 8,671,000
<SALES> 75,300
<TOTAL-REVENUES> 681,000
<CGS> 0
<TOTAL-COSTS> 74,300
<OTHER-EXPENSES> 1,224,900
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,500
<INCOME-PRETAX> (810,600)
<INCOME-TAX> 0
<INCOME-CONTINUING> (810,600)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (810,600)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
