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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
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
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 November 20, 1996 was 2,875,791. Shares of preference stock, $.05 par value,
outstanding as of November 20, 1996: 720,496.
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AMERALIA, INC.
INDEX TO FORM 10-Q
Page
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PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheets - September 30,
1996 and June 30, 1996 1-2
Consolidated Statements of Operations for
the Quarters ending September 30, 1996 & 1995 3
Consolidated Statements of Cash Flows for
the Quarters ending September 30, 1996 & 1995 4
Notes to Consolidated Financial Statements 5
Item 2: Management's Discussion and Analysis of
Financial Condition and Results
of Operations. 5
PART II: OTHER INFORMATION
Item 1: Legal Proceedings 7
Item 2: Changes in Securities 7
SIGNATURE 8
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AMERALIA INC
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands of Dollars ($)
Sept 30 June 30
1996 1996
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ASSETS
Current Assets:
Cash at bank $ 10 $ 21
Accounts receivable 6 39
Related party receivables 54 69
Note receivable, net 103 103
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Total Current Assets: $ 173 $ 232
Non Current Assets:
Note receivable 131 131
Lease exploration & development costs 2,749 2,735
Investment in Rural Investment Trust 485 485
Property & equipment 22 25
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Total Assets: $ 3,560 $ 3,608
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(Continued over page)
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AMERALIA INC
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands of Dollars ($)
<TABLE>
<CAPTION>
Sept 30 June 30
1996 1996
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<S> <C> <C>
LIABILITIES & SHAREHOLDERS' FUNDS
Current liabilities:
Accounts payable $ 229 $ 201
Due to related parties 62 53
Notes payable - current portion 862 844
Interest payable 409 383
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Total Current Liabilities 1,562 1,481
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Other liabilities
Notes payable - long term 7 9
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Total other liabilities: 7 9
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Total liabilities 1,569 1,490
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Commitments and contingent liabilities - -
SHAREHOLDERS' EQUITY
Preferred stock, US$0.05 par value; 1,000,000 authorized;
720,496 issued at Sept 30 and June 30, 1996: 36 36
Common stock, US$.01 par value; 100,000,000 shares
authorised; Issued @ Sept 30: 2,827,601 and
June 30, 1996: 2,717,041: 28 27
Additional paid in capital 9,671 9,486
Unrealized gain (loss) on securities available for sale 25 25
Accumulated deficit (7,892) (7,579)
Foreign currency translation adjustment 123 123
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Total Shareholders' Funds: $1,991 $ 2,118
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Total Liabilities & Shareholders' Equity: $ 3,560 $ 3,608
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</TABLE>
2
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AMERALIA INC
CONSOLIDATED STATEMENTS OF OPERATIONS
Amounts in Thousands of Dollars ($)
(Unaudited)
Qtr Qtr
ending ending
Sept 30 Sept 30
1996 1995
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REVENUES
Interest $ - $ -
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Total Revenues from Operations: - -
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EXPENSES
General & administrative 233 80
Depreciation & amortisation 3 3
Interest paid 31 33
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Total Expenses: 267 116
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LOSS FROM OPERATIONS (267) (116)
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OTHER INCOME/(EXPENSES)
Foreign Currency gain/(loss) - 79
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NET INCOME /(LOSS) $ (267) $ (37)
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Net loss per share $ (.095) $ (.014)
Weighted average
number of shares ('000) 2,796 2,610
3
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AMERALIA INC
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts in Thousands of Dollars ($)
Qtr ending Qtr ending
Sept 30 Sept 30
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income ($267) ($37)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 3 3
Exchange (gain) loss - (79)
(Increase) decrease in:
Accounts receivable 33 5
Related party receivables 15 20
Prepayments - (75)
Increase (decrease) in:
Accounts payable 28 34
Notes payable - short-term 18 47
Due to related parties 9 (27)
Interest payable 26 31
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Net cash used in operating activities (135) (78)
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CASH FLOWS FROM INVESTING ACTIVITIES
Investment in Rock School Lease development (14) (38)
Cash received from notes receivable - 113
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Cash flows from investing activities (14) 75
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CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from issuance of common stock 111 -
Cash received from issuance of preferred stock 75 -
Common stock paid in lieu of dividends (46) -
Cash payments on long term loans (2) (2)
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Cash flows from financing activities 138 (2)
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NET INCREASE (DECREASE) IN CASH (11) (5)
Cash at beginning of period 21 5
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Cash at end of period $ 10 $ -
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4
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AMERALIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, $)
Note 1. - Basis of Presentation.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Rule 10-01 of Regulation S-X 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 (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. Operating results for the three
month period ended September 30, 1996, are not necessarily indicative of the
results that may be expected for the fiscal year ended June 30, 1997. These
consolidated statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-K for the fiscal year ended June 30, 1996.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
(Amounts in US Dollars, $)
LIQUIDITY AND CAPITAL RESOURCES
As reported in the Company's filings on Form 10K, funds are held in an
escrow account pursuant to an agreement between the Company and the Jacqueline
Badger Mars Trust. Since June 30, 1996 an additional $175,000 has been
withdrawn from this account, of which $75,000 was withdrawn during the September
quarter, leaving a balance of $470,000 in the escrow account available to the
Company.
In September 1996 a secured creditor, NZI Securities Australia Ltd.
("NZI"), declared a default on indebtedness due to it and advised the Company
that it intended to immediately exercise its power of sale over the RIT units
held as collateral. This matter was resolved with the assistance of the THG
Partnership in a related party transaction as fully described in Item 13(a):
"Related Party Transactions" of the Company's filing on Form 10K for the fiscal
year ended June 30, 1996. After negotiations between THG and NZI, THG acquired
the Company's debt to NZI on October 5, 1996 and then the Company's independent
directors engaged in negotiations with THG which resulted in an agreement to
fully satisfy the full NZI debt effective as of November 19, 1996 by
transferring to THG the following:
5
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two Notes Receivable from unaffiliated
parties (book value) A$ 460,100
shareholder receivables (Tiscornia
and Hudson) 45,000
Investment in RIT (present value) 562,500
In addition, the Company agreed to issue to THG 100 shares of its Series
D Convertible Preferred Stock in partial settlement of this pre-existing debt.
THG has an option until November 30, 1998, to sell the RIT units to the Company
for $450,000 payable by the issue of 450 shares of Series D Preferred Stock. If
THG chooses not to exercise this option, THG may, in its discretion during the
option period pay $450,000 in cash to purchase 450 shares of Series D Preferred
Stock.
The net effect of this settlement to the Company is to record a net
profit of approximately $92,000 over book value on the recovery of the assets
assigned to THG. In particular, it has enabled the Company to recover in excess
of written down values of notes receivable held by the Company.
During the quarter the Company received $18,000 as proceeds from the
issuance of short term notes payable, $33,000 from receipt of accounts
receivable, $15,000 from related party receivables and $18,000 from the issuance
of short term notes receivable. Additional funds were received from an increase
in accounts payable of $33,000 and an increase in liabilities to related parties
of $9,000. Funds were applied, principally, to the continuing development of
the Company's investment in the Rock School Lease and to funding the Company's
operating loss for the quarter.
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. The Company 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.
RESULTS OF OPERATIONS
The Company's loss from operations for the quarter was $267,000 compared
with $116,000 for the same quarter for the previous year. This increased loss
is primarily due to additional work being undertaken to advance the Company's
development of its proposed mining activities which, however, cannot be
capitalized. The result also included an officer compensation payment of
$65,000
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which was satisfied through the issuance of a bonus stock grant. Compared with
the same quarter for the previous year when the Company gained $79,000 from
foreign currency gains, there were no material changes in the exchange rate
between the United States and Australian dollars during the current quarter to
affect results.
IMPACT OF INFLATION
The Company believes that its activities are not materially affected by
inflation.
EXCHANGE RATE
At September 30, 1995, US$ = A$1.27
PART II: OTHER INFORMATION
Item 1: Legal Proceedings
None.
Item 2: Changes in Securities
During the quarter, 65,000 shares of common stock were granted as a bonus
to an officer of the Company and a further 45,560 shares of common stock were
issued in lieu of dividends of $45,560 on Series D Preferred Stock.
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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.
By: /s/ Robert van Mourik
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Robert van Mourik
Executive Vice President,
Chief Financial Officer
Signing on behalf of the Registrant as principal
financial and accounting officer.
Date: 29 November 1996
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<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 10
<SECURITIES> 0
<RECEIVABLES> 163
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 173
<PP&E> 67
<DEPRECIATION> 45
<TOTAL-ASSETS> 3560
<CURRENT-LIABILITIES> 1562
<BONDS> 7
28
36
<COMMON> 0
<OTHER-SE> 1927
<TOTAL-LIABILITY-AND-EQUITY> 3560
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 236
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31
<INCOME-PRETAX> (267)
<INCOME-TAX> 0
<INCOME-CONTINUING> (267)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (267)
<EPS-PRIMARY> (.095)
<EPS-DILUTED> 0
</TABLE>
