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 June 30, 1997
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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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 share 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 9 pages including one page constituting the cover
page.<PAGE>
PAGE
<TABLE>
<CAPTION> PAGE 2
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF OPERATION
FOR THE THREE MONTHS ENDED
JUNE 30, 1997 AND JUNE 30, 1996
(UNAUDITED)
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
NET LOSS BEFORE DISCONTINUED
OPERATIONS $ -0- $ -0- $ -0- $ -0-
REVENUE FROM DISCONTINUED
OPERATIONS
Reclamation Reimbursement -0- -0- 21,048 -0-
---------- ---------- ---------- ----------
Total revenue from
discontinued operations -0- -0- 21,048 -0-
DISCONTINUED EXPENSES
General and administrative 15,992 12,249 28,798 19,498
Reclamation expense 11,636 18,621 19,722 36,740
Interest income <2,221> <779> <2,221> <1,558>
---------- ---------- ---------- ----------
Total discontinued expenses 25,407 30,091 46,299 54,680
NET INCOME (LOSS) $ <25,407> $ <30,091> <25,251> <54,680>
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) $ <0.00> $ <0.00> $ <0.00> $ <0.01>
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
<TABLE>
<CAPTION>
AMERICAN NUCLEAR CORPORATION
BALANCE SHEETS
June 30, 1997 and December 31, 1996
June 30, Dec. 31,
1997 1996
(Unaudited) (Unaudited)
-------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 132,181 $ 154,138
----------- ------------
Total current assets $ 132,181 $ 154,138
Other assets:
Other 99,406 102,700
----------- ------------
Total other assets 99,406 102,700
Total assets $ 231,587 $ 256,838
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable -0- -0-
Other current liabilities -0- -0-
----------- ------------
Total current liabilities -0- -0-
Common Stockholders' equity:
Common stock 314,080 314,080
Additional paid-in capital 13,304,849 13,304,849
Retained earnings <12,758,216> <12,732,965>
Less cost of treasury stock <629,126> <629,126>
----------- ------------
Common stockholders' equity 231,587 256,838
Total liabilities and stockholders'
equity $ 231,587 $ 256,838
=========== ============
/TABLE
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PAGE 4
<TABLE>
<CAPTION>
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED June 30, 1997 AND 1996
(UNAUDITED)
Six Months Ended
June 30
1997 1996
---------- ----------
<S> <C> <C>
Cash flows from discontinued operations:
Net loss $ <25,251> $ <54,680>
Adjustments to reconcile net loss to net
cash used by operating activities:
(Increase) Decrease in other assets 3,294 56,185
----------- -----------
Total adjustments <21,957> 56,185
----------- -----------
Net cash used in operating activities <21,957> 1,505
Net increase (decrease) in cash during the
period <21,957> 1,505
Cash at the beginning of the period 154,138 3,974
Cash at the end of the period $ 132,181 $ 5,479
=========== ===========
/TABLE
<PAGE>
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PAGE 5
AMERICAN NUCLEAR CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 1996 AND 1995
(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
assets exceeded its current liabilities by $132,181 and $154,138 at June
30, 1997 and December 31, 1996 respectively. During 1994 the Company
discontinued operations due to lack of operating capital. For financial
reporting purposes, the Company has offset contractual liabilities
totaling $392,000. These liabilities were recognized as income because
the Company has no means of repaying the obligations under liquidation
basis accounting. The remaining Company cash deposits are being utilized
to maintain compliance as long as possible with U.S. Nuclear Regulatory
Commission (NRC) license requirements pertaining to the Company's uranium
mining reclamation site. The Company expects to be able to continue in
compliance with the licensing requirements through 1999.
The state of Wyoming declared the Company in default of its
reclamation obligations when the Company terminated its business
operations in May 1994. Subsequently the reclamation bond fund of
$3,213,255 was acquired by the Wyoming DEQ through forfeiture
proceedings. The state of Wyoming has consented to perform certain
reclamation obligations, but has declined to assume the NRC license and
the associated obligations. The reclamation requirements have changed to
require more work since the bond forfeiture, and the cash requirements to
continue reclamation have increased by an undetermined amount. There is
the potential of a cost overrun in the range of $3 million. The Company
has not recognized a contingent liability for this amount because the
Wyoming DEQ and NRC have not agreed upon a final reclamation plan upon
which to base a cost estimate. By state of Wyoming statute, the Company
is liable for any cost overruns.
The Company remains liable for completion of its reclamation
obligations even though it does not have enough assets with which to
complete those obligations. The 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 is complying with a NRC order to maintain and
comply with the terms of its NRC license. Further, the Company has an
agreement with the Wyoming DEQ to maintain its corporate existence in
order to receive Title X reclamation reimbursement funds from the U.S.
Department of Energy and transfer agreed upon amounts to the Wyoming DEQ.
The Company intends to monitor its reclamation site for as long as
possible in order to comply with the requirements of its license. For
these reasons, the Company is unable to dissolve. The Company has no
intention of entering into other businesses or continuing its limited
operations beyond the time when it has fulfilled its obligations under
the NRC license and those required by the state of Wyoming.
PAGE
PAGE 6
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, 1996. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered
necessary for a fair presentation have been included.
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.
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 that was secured by the mortgage against the
properties. Inability to sell the mining properties, depletion of
capital and lack of 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 and discharge its current
liabilities and other expenses associated with an orderly closing of
business operations.
PAGE
PAGE 7
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.
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 two
quarters of 1997 or 1996. See the "Discontinuance of Operations" and the
"Liquidity and Capital Resources" sections in this report regarding
additional information about the Company's cessation of operations.
General and administrative expenses were $15,992 and $28,798 for the
three and six months ended June 30, 1997 compared to $12,249 and $19,498
for the periods ended June 30, 1996. This represents increases of 30%
and 47% for the three and six months ended June 30, 1997 from the
comparable 1996 periods. The increase was due to the increased activity
between the Company, the NRC and Wyoming DEQ.
Reclamation expenses of $19,722 and $36,740 for the six months ended
June 30, 1997 and 1996 were recognized because of the continuing
reclamation work of the Company. These costs represent the ongoing costs
of monitoring the Company's mill site during reclamation.
There was $2,221 interest income for the first half of 1997 compared
to $1,558 for the six month period ending June 30, 1996. The increase is
due to the reimbursement of DOE funds to the Company. These funds will
be used to monitor the reclamation site.
A net loss of $25,251 was recognized during the first half of 1997
compared to a $54,680 loss for the same period in 1996. The losses are
expected to remain in the range of $25,000 per quarter as long as the
Company continues to receive some of the reclamation reimbursements for
continued monitoring of the reclamation site.
Liquidity and Capital Resources
The Company's working capital at June 30, 1997 was $132,181, while
at December 31, 1996 it was $154,138. The decrease in working capital at
June 30, 1997 was due to the ongoing cost of limited operations.
PAGE
PAGE 8
During May 1994, the Company discontinued operations because of its
lack of funds. Before that decision was made, the Company attempted to
obtain additional loans, raise equity funds through a private placement
of its common stock, secure byproduct disposal contracts, or sell its
mineral properties. None of these efforts were successful. These
financial statements are prepared on the basis that the mineral
properties were foreclosed when the Company did not pay the mortgage due
June 30, 1994. The foreclosure sale actually occurred in 1995. In
addition, the Wyoming Department of Environmental Quality (DEQ) declared
forfeiture of the $3.2 million reclamation bond fund to the DEQ to be
used by the DEQ for completing 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 are not expected to cover all
the expenses. 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 federal program administered by the
U.S. Department of Energy (DOE), for reimbursement of some of the
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 received
approximately $229,000 from this program during the last quarter of 1995
and approximately $176,000 during the third quarter of 1996. If Congress
continues funding this Title X program, of which there is no assurance,
the Company may receive additional DOE reimbursements during 1997. Under
the prevailing law and 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
reclamation 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 the funds that become
available. The DEQ has entered into an agreement with the Company
providing that the state will not bring a deficiency action in court if
the Company transfers Title X funds to the state to be applied to the
deficiency for use by the state to perform reclamation. The Tennessee
Valley Authority (TVA), which had asserted a right to the funds based on
its 1984 contract with the Company, released the Company from such claims
due to an agreement between TVA and the state. The agreement between the
Company and DEQ provides that the Company and DEQ will use the DOE Title
X funds toward monitoring and reclamation of the mill site in accordance
with the NRC license.
PAGE
PAGE 9
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
(signature)
August 12, 1997 By: -----------------------------------
William C. Salisbury
President
(signature)
August 12, 1997 By: -----------------------------------
Dennis A. Eckerdt
Secretary and Treasurer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statement of financial condition at June 30, 1997
(unaudited) and the consolidated statement of income for the six months
ended June 30, 1997(unaudited) and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1997
<PERIOD-END> Jun-30-1997
<CASH> 132,181
<SECURITIES> -0-
<RECEIVABLES> -0-
<ALLOWANCES> -0-
<INVENTORY> -0-
<CURRENT-ASSETS> 132,181
<PP&E> -0-
<DEPRECIATION> -0-
<TOTAL-ASSETS> 231,587
<CURRENT-LIABILITIES> -0-
<BONDS> -0-
-0-
-0-
<COMMON> 314,080
<OTHER-SE> <82,493>
<TOTAL-LIABILITY-AND-EQUITY> 231,587
<SALES> -0-
<TOTAL-REVENUES> 21,048
<CGS> -0-
<TOTAL-COSTS> -0-
<OTHER-EXPENSES> 46,299
<LOSS-PROVISION> -0-
<INTEREST-EXPENSE> -0-
<INCOME-PRETAX> -0-
<INCOME-TAX> -0-
<INCOME-CONTINUING> -0-
<DISCONTINUED> <25,251>
<EXTRAORDINARY> -0-
<CHANGES> -0-
<NET-INCOME> <25,251>
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
