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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
FOR THE QUARTER ENDED MARCH 31, 1996
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 No. 0-15474
AMERALIA, INC.
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(Exact name of Company as specified in its charter)
1155 KELLY JOHNSON BLVD., COLORADO SPRINGS, CO 80920
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(Address of Principal Executive Offices)
(719) 260 6011
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(Company's telephone number, including area code)
A Utah Corporation
I.R.S. Employer Identification No. 87-0403973
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.
The number of shares outstanding of the Company's $.01 par value common stock
as of May 1, 1996 was 2,693,271. Shares of preference stock, $0.05 par
value, outstanding as of May 1, 1996 was 719,626.
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AMERALIA, INC.
INDEX TO FORM 10-Q
PAGE
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PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheets - March 31,
1996 and June 30, 1995 1
Consolidated Statements of Operations for
the Quarters and Nine Months
ending March 31, 1996 & 1995 3
Consolidated Statements of Cash Flows for
the Nine Months ending March 31, 1996 & 1995 4
Notes to Consolidated Financial Statements 5
Item 2: Management's Discussion and Analysis of
Financial Condition and Results
of Operations. 6
SIGNATURE 9
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AMERALIA INC
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands of Dollars ($)
Mar 31 June 30
1996 1995
(Unaudited) (Audited)
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ASSETS
Current Assets:
Cash at bank $ 172 $ 5
Accounts receivable - 5
Related party receivables 44 28
Net realizable value of
notes receivable - current 105 300
Note receivable - net 139 139
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Total Current Assets: $ 460 $ 477
Non Current Assets:
Lease exploration & development costs 2,500 2,060
Investment in Rural Investment Trust 460 413
Property & equipment 28 35
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Total Assets: $3,448 $2,985
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(Continued over page)
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AMERALIA INC
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands of Dollars ($)
Mar 31 June 30
1996 1995
(Unaudited) (Audited)
----------- ---------
LIABILITIES & SHAREHOLDERS' FUNDS
Current liabilities:
Accounts payable $ 128 $ 261
Due to related parties 26 116
Notes payable - current portion 840 821
Interest payable 349 341
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Total Current Liabilities $1,343 $1,539
Other liabilities
Notes payable - long term 13 14
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Total other liabilities 13 14
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Total Liabilities: $1,356 $1,553
Commitments and contingent liabilities - -
SHAREHOLDERS' EQUITY
Preferred stock, US$0.05 par value;
1,000,000 authorized; 719,626 issued
at March 31, 1996 and 717,666
at June 30, 1995 36 36
Common stock, US$.01 par value;
100,000,000 shares authorised;
Issued at Mar 31, 1996: 2,693,271;
Issued at June 30, 1995: 2,609,756: 2 27 26
Additional paid in capital 9,130 7,944
Accumulated deficit (7,224) (6,697)
Foreign currency translation adjustment 123 123
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Total Shareholders' Funds: $ 2,092 $1,432
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Total Liabilities & Shareholders' Equity: $ 3,448 $2,985
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AMERALIA INC
CONSOLIDATED STATEMENTS OF OPERATIONS
Amounts in Thousands of Dollars ($)
(Unaudited)
QTR QTR NINE MTHS NINE MTHS
ENDING ENDING ENDING ENDING
MAR 31 MAR 31 MAR 31 MAR 31
1996 1995 1996 1995
------ ------ --------- ---------
REVENUES
Rural Investment Trust 9 4 9 4
Interest 1 - 1 11
----- ----- ----- -----
Total Revenues from operations: $ 10 $ 4 $ 10 $ 15
EXPENSES
General & administrative 151 81 400 489
Depreciation & amortization 3 3 9 10
Interest paid 33 27 96 79
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Total Expenses: $ 187 $ 111 $ 505 $ 578
INCOME/(LOSS) from operations $(177) $(107) $(495) $(563)
Loss on disposal of assets - - - (1)
Foreign currency gain/(loss) (30) (12) (32) 6
----- ----- ----- -----
NET INCOME /(LOSS) $(207) $(119) $(527) $(558)
----- ----- ----- -----
Net loss per share $(0.08) $(.05) $(0.20) $(.23)
Weighted average
number of shares ('000) 2,652 2,454 2,652 2,454
3
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AMERALIA INC
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts in Thousands of Dollars ($)
(Unaudited)
NINE MTHS NINE MTHS
ENDING ENDING
MAR 31 MAR 31
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ (527) $(558)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 9 10
Exchange (gain) loss 32 (6)
(Increase) decrease in:
Accounts receivable 5 5
Notes receivable 210 86
Related parties receivables (16) 1
Interest receivable - (6)
Increase (decrease) in:
Bank overdraft - 6
Accounts payable (133) (131)
Notes payable - short-term (36) 385
Due to related parties (90) (16)
Interest payable (31) 63
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Net cash used in operating activities (577) (161)
CASH FLOWS FROM INVESTING ACTIVITIES
Lease exploration & development expenditure (440) (97)
Purchase of plant & equipment (2) -
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Cash flows from investing activities (442) (97)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of preferred stock 1,210 -
Issuance of common stock 126 270
Payment of dividends (149) (111)
Receipt of subscriptions receivable - 78
Cash received from loan proceeds 145
Cash payments on loans (1) (147)
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Cash flows from financing activities 1,186 235
NET INCREASE (DECREASE) IN CASH 167 (23)
Cash at beginning of period 5 23
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Cash at end of period $ 172 $ -
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4
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AMERALIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 1996 and June 30, 1995
and for the Periods ended March 31, 1996 and 1995
NOTE 1. MANAGEMENT ADJUSTMENTS
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 June
30, 1995 Annual Report on Form 10-K. The results of operations for the
periods ended March 31, 1996 and 1995 are not necessarily indicative of
operating results for the full years.
The Consolidated Financial Statements and other information furnished
herein reflect all adjustments which are, in the opinion of management of the
Registrant, necessary for a fair presentation of the results of the interim
periods covered by this report.
5
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AMERALIA, INC.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
(Amounts in Dollars, $)
LIQUIDITY AND CAPITAL RESOURCES
In October, 1995 the company received an application for an issue of
preferred stock to the value of $2 million from its major stockholder. By
end March, 1996 the Company had received $1,130,000 and, subsequently, an
additional $100,000 of these funds. The Company has an agreement with the
stockholder for the receipt of the balance as expenditures are incurred in
advancing the development of the Company's Rock School Lease. During the
quarter a core hole was drilled in accordance with the requirements of the
Bureau of Land Management. Also in October, another $80,000 was subscribed
for an additional application for preferred stock from another, existing
stockholder. These stock subscriptions have substantially alleviated the
Company's liquidity difficulties and will enable the Company to progress its
investment in the Rock School Lease with the preparation of a comprehensive
business plan for the purpose of seeking funding for the construction of an
operating plant. Effective January 1, 1996 the Company has also received
confirmation from the Bureau of Land Management of its assignment of the Rock
School Lease, thereby finalizing the transfer of the lease ownership to the
Company.
In addition, the Company received $195,000 from the partial repayment of its
notes receivable held with an Australian, rural based institution and raised
another $19,000 from the issuance of short term notes payable. Funds were
used to repay accounts payable ($133,000) and liabilities to related parties
($90,000) but primarily to further the Company's investment in the Rock
School Lease ($440,000). Management is continuing its discussions with The
THG Partnership, a related party, which holds a note payable by the Company
and has reached an agreement in principle for the settlement of this
significant liability. Finalization of this transaction is expected in the
near future. This matter is discussed more fully in the Company's Annual
Report on Form 10K. Management has also continued its negotiations with the
Australian holders of notes payable to the Company. Management has chosen to
6
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not record the interest received on these notes because of the uncertainty
associated with their collection but is anticipating the balance of these
notes will also be recovered soon.
During the period ended March, 1996 the Company has also paid dividends on
Series A, B & D preferred stock in an amount totalling $124,765, but in
accordance with the statements of preferences has fullfilled its obligations
through the issuance of shares of common stock.
Throughout the Company's development, funding requirements have been met
through the Company's capacity to raise funds from additional equity and the
issuance of short term notes payable. Management is presently engaged in
discussions with prospective investors and lending institutions with a view
to raising additional capital, although at the date of this report, these
discussions have not come to fruition. In order to conduct mining operations
on its lease, the Company will require large amounts of capital,
significantly greater than the existing resources of the Company and there is
no assurance that this funding can be obtained.
RESULTS OF OPERATIONS
The Company's loss from operations for the period ended March, 1996 was
$527,000 compared with $558,000 for the same period in the previous year.
The reduction is due primarily to a provision made in the prior period in
anticipation that the notes receivable held with Australian institutions
might not be fully recoverable. During the current period a significant
recovery was made from these notes and no further provisons have been made.
The Company is now obliged to pay royalties and consulting fees to E. E.
Kinder Co., an unaffiliated party which was the previous owner of the Rock
School Lease. Together, these payments represent a minimum of $100,000 per
year.
The Company's results are affected by movements of the Australian dollar
relative to the United States dollar. The net foreign currency loss for the
nine months was $32,000 compared with a gain of $6,000 for the prior period.
The net loss is due to the strengthening Australian dollar against the United
States dollar as the Company is indebted in Australian dollars in an amount
greater
7
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than the value of Australian assets it owns.
IMPACT OF INFLATION
The Company believes that its activities are not materially affected by
inflation.
EXCHANGE RATE
At March 31, 1996, US$ = A$1.27.
8
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SIGNATURE
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.
AMERALIA, INC.
May 13, 1996 By: /s/ Robert van Mourik
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Robert van Mourik
Executive Vice President, Chief Financial
Officer and principal financial and
accounting officer.
9
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<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 172
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 460
<PP&E> 66
<DEPRECIATION> 38
<TOTAL-ASSETS> 3448
<CURRENT-LIABILITIES> 1343
<BONDS> 14
36
0
<COMMON> 27
<OTHER-SE> 9130
<TOTAL-LIABILITY-AND-EQUITY> 3448
<SALES> 0
<TOTAL-REVENUES> 10
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (466)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 96
<INCOME-PRETAX> (527)
<INCOME-TAX> 0
<INCOME-CONTINUING> (527)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (527)
<EPS-PRIMARY> (0.20)
<EPS-DILUTED> 0.00
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