<PAGE>
PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September 30, 1995 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 0-1764
AMERICAN NUCLEAR CORPORATION
(Exact Name of Registrant as Specified In Its Charter)
Colorado 83-0178457
_______________________________ ____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 2713
Casper, Wyoming 82602
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (307) 265-7912
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X. No .
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this report.
4 cents par value common stock: 7,696,739 shares
This report consists of twelve pages including one page constituting the cover
page.
<PAGE>
PAGE 2
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF OPERATION
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
_________________________ ___________________________
1995 1994 1995 1994
___________ __________ __________ ___________
<S> <C> <C> <C> <C>
NET LOSS BEFORE DISCONTINUED
OPERATIONS................... $ -0- $ -0- $ -0- $ -0-
REVENUE FROM DISCONTINUED
OPERATIONS
Sale of Assets -0- 101,443 10,000 135,272
___________ ___________ __________ ___________
Total revenue from
discontinued operations ... -0- 101,443 10,000 135,272
DISCONTINUED EXPENSES
General and administrative ... 13,889 33,045 46,962 195,771
Mineral property impairment .. -0- -0- -0- 4,200,000
Reclamation expense .......... 1,726 44,299 48,216 460,885
Interest income .............. -0- <15,579> <2,549> <62,190>
Interest expense ......... -0- 26,609 -0- 125,660
___________ ___________ __________ ___________
Total discontinued expenses .. 15,615 88,374 92,629 4,919,406
NET INCOME (LOSS) .............. $ <15,615> $ 13,069 $ <82,629> $<4,784,134>
PER SHARE:
NET PROFIT (LOSS) BEFORE
DISCONTINUED OPERATIONS PER
SHARE ........................ $ 0.00 $ 0.00 $ 0.00 $ 0.00
DISCONTINUED OPERATIONS PER
SHARE NET PROFIT (LOSS)....... $ <0.01> $ <0.00> $ <0.01> $ <0.62>
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING............ 7,696,739 7,696,739 7,696,739 7,696,739
DIVIDENDS PER SHARE............. $ 0.00 $ 0.00 $ 0.00 $ 0.00
</TABLE>
<PAGE>
PAGE 3
AMERICAN NUCLEAR CORPORATION
BALANCE SHEETS
September 30, 1995 and December 31, 1994
<TABLE>
<CAPTION>
September 30, Dec. 31,
1995 1994
(Unaudited) (Unaudited)
____________ ____________
<S> <C> <C>
ASSETS
Current assets:
Cash ................................. $ 3,656 $ 16,121
____________ ____________
Total current assets ............... 3,656 16,121
Other assets:
Other ................................ 15,677 55,841
____________ ____________
Total other assets ................. 15,677 55,841
Total assets .......................... $ 19,333 $ 71,962
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable .............. 44,724 14,724
Deferred revenue .................... 219,000 219,000
Other current liabilities ........... 173,000 173,000
____________ ____________
Total current liabilities ......... 436,724 406,724
Common Stockholders' equity:
Common stock ........................ 314,080 314,080
Additional paid-in capital .......... 13,304,849 13,304,849
Retained earnings ................... <13,407,194> <13,324,565>
Less cost of treasury stock ......... <629,126> <629,126>
____________ ____________
Common stockholders' equity ....... <417,391> <334,762>
Total liabilities and stockholders'
equity............................... $ 19,333 $ 71,962
============ ============
</TABLE>
<PAGE>
PAGE 4
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1995 1994
____________ ____________
<S> <C> <C>
Cash flows from discontinued operations:
Net loss ................................. $ <82,629> $<4,784,134>
Adjustments to reconcile net loss to net
cash used by operating activities:
Mineral property impairment .............. -0- 4,200,000
Reclamation expense ...................... -0- 300,000
Depreciation ............................. -0- 6,544
(Increase) Decrease in current assets..... -0- 24,245
(Increase) Decrease in reclamation deposit -0- 3,011,871
(Increase) Decrease in other assets ...... 40,164 <16,635>
(Increase) Decrease in plant equipment (net) -0- 85,176
(Decrease) Increase in accounts payable .. 30,000 <7,806>
(Decrease) Increase in reclamation payable -0- <3,040,290>
(Decrease) Increase in interest payable .. -0- <142,930>
(Decrease) Increase in other liabilities -0- 16,500
____________ ____________
Total adjustments ....................... 70,164 4,436,675
____________ ____________
Net cash used in operating activities .... <12,465> <347,459>
Cash flows from investing activities:
Exploration and development costs of
mining properties ...................... -0- <688>
____________ ____________
Net cash provided by investing activities -0- <688>
Cash flows from financing activities:
Pending foreclosure on mineral properties -0- 2,297,811
Net borrowings (payments) under note
payable-shareholder.................... -0- 2,031,200
Payments under notes payable-equipment ... -0- 63,800
____________ ____________
Net cash provided by (used for) financing
activities ............................. -0- 202,811
<PAGE>
PAGE 5
Net increase (decrease) in cash during the
period ................................... <12,465> <145,336>
Cash at the beginning of the period ........ 16,121 164,302
Cash at the end of the period............... $ 3,656 $ 18,966
============ =============
</TABLE>
<PAGE>
PAGE 6
AMERICAN NUCLEAR CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Liquidation Basis
The accompanying financial statements have been prepared on a
liquidation basis, which recognized the realization of assets and the
satisfaction of a portion of the liabilities. The Company's current
liabilities exceeded its current assets by $433,068 and $390,603 at
September 30, 1995 and December 31, 1994 respectively. Due to continued
unfavorable uranium market conditions, and despite extensive marketing
efforts that continued through May 1994, the Company did not receive
purchase offers for its mineral properties that exceeded the mortgage
against the properties. Therefore, these financial statements show the
mineral properties being lost through foreclosure at June 30, 1994 to
Cycle Resource Investment Corporation (CRIC) to satisfy CRIC's mortgage
against the properties in the approximate balance of $2.3 million.
Inability to sell the mineral properties after exhausting efforts
to market them meant that the Company was not able to produce the
capital necessary to fund future operations. The Company was not able
to obtain additional waste disposal revenues or waste disposal
contracts. Because of its inability to generate sufficient cash to
continue operations, the Company announced on May 9, 1994 that it was
discontinuing operations immediately due to lack of funds. The Company's
reclamation bond fund in the approximate amount of $3.2 million was
declared forfeited by the Wyoming Department of Environmental Quality
(DEQ). The Company expects that the DEQ will complete reclamation of
the Company's Gas Hills mill site, using the forfeited bond fund.
The Company remains liable for completion of its reclamation
obligations even though its has no assets with which to complete those
obligations. The U.S. Nuclear Regulatory Commission (NRC) has served
the Company with notice that the Company's deliberate abandonment of its
reclamation site would constitute an intentional violation of the Atomic
Energy Act of 1954 and could subject the Company to NRC enforcement
actions and criminal sanctions. The Company intends to monitor its
reclamation site for as long as possible in order to comply with
requirements of its license.
The Company has liquidated all its assets, which consisted
primarily of office furniture and equipment and other miscellaneous
property, to pay outstanding expenses and liabilities, and the Company
has prepared these financial statements on the basis that all such
marketable assets have been liquidated. Because liabilities exceed
assets, there will be no distribution of assets to shareholders.
<PAGE>
PAGE 7
Interim Financial Statements
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. The
accompanying statements should be read in conjunction with the unaudited
financial statements included in the Company's Report on Form 10-K for
the year ended December 31, 1994. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered
necessary for a fair presentation have been included.
Mining Properties Held for Sale
In December 1993, the Company determined that its decision to sell
its primary mineral properties rather than hold the properties for
future potential development required greater consideration be given to
in-ground market values and the Company's present financial position.
The Company determined its range of potential loss for the mineral
properties to be from approximately $3 million to approximately $7
million. Because of the Company's continuing solicitation of bids for
its mineral properties, the lack of an active market for in-ground
uranium reserves, and uncertainties as to the ultimate intention of the
major shareholder which holds the mortgage against the properties,
management was unable to determine at that time whether any amount in
that range provided a better estimate than any other amount. Therefore,
in accordance with the requirements of Statement of Financial Accounting
Standards No. (Statement) 5, Accounting for Contingencies, a $3 million
mineral property impairment was recognized during December 1993 which
represented a 31% reduction in the mineral property valuation at
December 31, 1993. Due to the lack of acceptable offers on the mineral
properties through May 6, 1994, the Company recognized an additional
$4.2 million mineral property impairment during March 1994. At March
31, 1994, the mineral property was valued at the approximate amount of
the mortgage for financial reporting purposes. These financial
statements have been prepared on the basis that the foreclosure of the
mineral properties occurred as of June 30, 1994 to satisfy an
approximate $2.3 million debt to CRIC.
PER SHARE AMOUNTS
Earnings per share calculations are computed on the weighted
average number of common shares outstanding during the respective
periods. Shares under option and warrants have been disregarded because
their effect is anti-dilutive.
<PAGE>
PAGE 8
DISCONTINUANCE OF OPERATIONS
Management began seeking a purchaser for its mining properties in
the third quarter of 1993. While potential purchasers continued to
express interest, the Company did not receive any offer greater than the
amount of the debt due to CRIC that is secured by the mortgage against
the properties. Inability to sell the mining properties and lack of
capital and revenues deprived the Company of operating capital. The
Company determined to discontinue operations during May 1994 and to
liquidate its miscellaneous property and to pay a portion of its current
liabilities and other expenses associated with an orderly closing of
business operations. These financial statements were prepared on the
basis that the mineral properties were foreclosed upon as of June 30,
1994, when the debt was due, because the Company was unable to pay the
mortgage and continues to be unable to pay it.
NOTE PAYABLE TO STOCKHOLDER
The Company has two separate loans from Cycle Resource Investment
Corporation (CRIC), a stockholder, evidenced by promissory notes. The
two notes total $2,031,200 plus interest and were due on June 30, 1994.
The notes are collateralized by a mortgage against the Peach uranium
properties plus revenues from certain contracts for byproduct disposal,
which contracts are no longer in effect. These financial statements are
prepared on the basis that the Company has lost its most valuable
assets, the Peach mineral properties, through foreclosure by CRIC. See
the "Discontinuance of Operations" and "Liquidity and Capital Resources"
sections of this report for further details about these circumstances
and the Company's financial condition. CRIC began formal foreclosure
proceedings against the Company during the third quarter of 1995.
MARKETABILITY OF COMMON STOCK ON NASDAQ SMALL CAP MARKET
Effective May 9, 1994 the Company's common stock was removed from
listing on the NASDAQ Small Cap Market. There are no trading markets
for the Company's common stock. Isolated trades may occur on the
electronic bulletin board.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company discontinued operations during May 1994. There were
no operating revenues or operating losses reported during the first,
second or third quarters of 1995 or 1994. See the "Discontinuance of
Operations" and the "Liquidation and Capital Resources" sections
regarding additional information about the Company's ceasing operations.
<PAGE>
PAGE 9
General and administrative expenses were $19,156 or 58% less for
the current quarter ended September 30, 1995 compared to the comparable
quarter ended September 30, 1994. General and Administrative expenses
were $148,809 or 76% less for the nine months ended September 30, 1995
compared to the comparable nine-month period ended September 30, 1994.
The reductions were due to the termination of the remaining employees
during May 1994 and discontinuance of operations.
A $4.2 million property impairment was recognized during March
1994 to value the mineral properties near the amount of the CRIC
mortgage against the properties. This impairment was recognized during
March 1994 because the Company did not receive any offers greater than
the $2.3 million mortgage held by CRIC. The Company was not able to pay
the mortgage when due on June 30, 1994. Therefore, these financial
statements were prepared on the basis that the mineral properties were
forfeited as of June 30, 1994 through foreclosure by CRIC, a major
shareholder, which holds the mortgage. CRIC began formal foreclosure
proceedings against the Company during the third quarter of 1995. See
the "Note Payable to Stockholder" for additional information.
Reclamation expenses of $1,726 and $48,216 for the three months
ended September 30, 1995 and 1994 were recognized because of the
continuing reclamation obligations of the Company. The $1,726 and
$44,299 expended in the third quarters of 1995 represents the ongoing
costs of site monitoring and NRC charges, while the $460,855 for the
nine months ended September 30, 1994 includes a $300,000 expense during
the first quarter of 1994, recognizing the forfeiture of the Company's
reclamation bond in the amount of approximately $3.2 million to the
Wyoming Department of Environmental Quality, thus eliminating any
potential cost saving the Company would have realized if it had
performed the reclamation work.
Interest income for the third quarter of 1995 declined by 100%
from the comparable period of 1994. This decrease is due to the
forfeiture of the certificates of deposit in the Company's reclamation
deposit held by the Wyoming Department of Environmental Quality.
Interest income ceased during the second quarter of 1995 since total
forfeiture of the reclamation bonds to the Wyoming DEQ had been
completed.
Interest expense decreased by 100% for 1995 compared to the
comparable periods of 1994. The decrease is related directly to the
foreclosure upon the mineral properties by CRIC, the mortgage holder.
The outstanding loans from stockholders decreased from $2,031,200 at
September 30, 1994 to zero because the Company recognized the mineral
properties would be acquired by CRIC through foreclosure proceedings
which began during the third quarter 1995. The foreclosure sale is
scheduled to occur on November 28, 1995.
A net loss of $15,615 was recognized during the third quarter of
1995 compared to a $13,609 profit for the same period in 1994. The net
loss for the nine months ended September 30, 1995 was $82,629 compared
to a $4,784,134 loss for the same period in 1994 due primarily to the
$4,200,000 mineral property impairment.
<PAGE>
PAGE 10
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital deficit at September 30, 1995 was
$433,068, while at December 31, 1994 it was $390,603. The increased
working capital deficit at September 30, 1995 was due to limited ongoing
activities for an orderly dissolution of the company.
During May 1994, the Company discontinued operations because of
the lack of funds. Before that, the Company used its best efforts to
obtain additional loans, raise equity funds through a proposed private
placement of its common stock, secure byproduct disposal contracts, or
sell its mineral properties. All of these efforts failed, leaving the
Company without the capital necessary to continue operations and leading
to discontinuance of business and liquidation. Liabilities exceed
assets, therefore, there will be no shareholder distributions.
These financial statements are prepared on the basis that CRIC
foreclosed upon the mineral properties when the Company did not pay the
mortgage due June 30, 1994. In addition, the Wyoming Department of
Environmental Quality (DEQ) declared forfeiture of the $3.2 million
reclamation bond fund to the DEQ in order for the DEQ to complete
reclamation of the Company's Gas Hills mill site. The total cost of the
reclamation work will not be known for many years, and the funds held by
the DEQ will not cover all the expenses, for which the Company will
remain liable. The Company remains the licensee and owner of the
reclamation site, and the Company will not be released from the
obligations of reclamation that are imposed by the license until
reclamation work is completed and accepted by the regulatory agencies.
The Company has applied, under the Title X federal program administered
by the U.S. Department of Energy (DOE), for reimbursement of some of the
expenses of reclamation work it has previously performed to clean up its
mining and milling site. The DOE program has been funded by Congress
and money has been allocated for the reimbursements. The Company hopes
that its application will be approved and that it will receive money
from this program during the last quarter of 1995. If the Company's
application is approved by the DOE and Congress continues funding this
Title X program, of which there is no assurance, the Company may receive
approximately $650,000 over the next three years. The first part of such
funds, if any are received, could be received during late 1995. Under
the prevailing law, as understood by the Company, and under the terms of
the order of the U.S. Nuclear Regulatory Commission that directs the
Company to continue to reclaim and monitor its reclamation site, the
funds, and any future funds that could be received under this program,
will be applied to ongoing monitoring and maintenance obligations over
the next several years, including payments to the Company's independent
contractors to perform such services. None of the money will be applied
to claims of creditors, and no funds will be available for distribution
to shareholders because the reclamation obligations are projected to
substantially exceed any of those funds that become available. The DEQ
has notified the Company that the reclamation bond may be deficient by
as much as $3 million. The DEQ intends to take statutory actions
against the Company to collect the bond deficiency if the Company does
not voluntarily turn over the Title X funds. The Tennessee Valley
Authority has also asserted a right to the funds based on its 1984
contract with the Company and has commenced a contract dispute
<PAGE>
PAGE 11
procedure under federal regulations in an attempt to enforce its claim
or attach the funds. Enforcement of such a claim by TVA or other
unsecured general creditors would be contrary to the NRC order to the
Company that controls use of its funds, and the Company expects to
resist such claims. If litigation does occur, the Company might file
for dissolution under bankruptcy law, after which the bankruptcy court
would control use and distribution of any reclamation
funds that might have been received. Upon bankruptcy or any other
dissolution, the Company would cease to be able to hold the NRC license
and would thereupon become ineligible to obtain any additional
reimbursements of Title X reclamation funds under the DOE program.
<PAGE>
PAGE 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on their behalf by
the undersigned thereunto being authorized.
AMERICAN NUCLEAR CORPORATION
Registrant
November 13, 1995 Dennis A. Eckerdt
(Signature)
President and Chief Financial
Officer
November 13, 1995 William C. Salisbury
(Signature)
Secretary and Treasurer
