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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 DECEMBER 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 February 1, 1997 was 2,935,791. Shares of preference stock, $.05 par value,
outstanding as of February 1, 1997: 720,596.
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AMERALIA, INC.
INDEX TO FORM 10-Q
Page
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PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheets - December 31,
1996 and June 30, 1996 1
Consolidated Statements of Operations for
the Quarters and Half Years
ending December 31, 1996 & 1995 3
Consolidated Statements of Cash Flows for
the Half Years ending December 31, 1996 & 1995 4
Notes to Consolidated Financial Statements 5
Item 2: Management's Discussion and Analysis of
Financial Condition and Results
of Operations. 6
PART II: OTHER INFORMATION
Item 2: Changes in Securities
SIGNATURE 8
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AMERALIA INC
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands of Dollars ($)
Dec 31 June 30
1996 1996
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ASSETS
Current Assets:
Cash at bank -- 21
Accounts receivable -- 39
Related party receivables -- 69
Note receivable - net -- 103
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Total Current Assets: $ -- $ 232
Non Current Assets:
Note receivable -- 131
Lease exploration & development costs 2,755 2,735
Investment in Rural Investment Trust -- 485
Property & equipment 19 25
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Total Assets: $ 2,774 $ 3,608
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(Continued over page)
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AMERALIA INC
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands of Dollars ($)
Dec 31 June 30
1996 1996
------ -------
LIABILITIES & SHAREHOLDERS' FUNDS
Current liabilities:
Bank overdraft 4 --
Accounts payable 244 201
Due to related parties 65 53
Notes payable - current portion 352 844
Interest payable 10 383
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Total Current Liabilities $ 675 $ 1,481
Other liabilities
Notes payable - long term 6 9
Total other liabilities 6 9
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Total Liabilities: $ 681 $ 1,490
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Commitments and contingent liabilities -- --
SHAREHOLDERS' EQUITY
Preferred stock, US$0.05 par value;
1,000,000 authorized; 720,596 and
720,496 issued at December 31
and June 30, 1996: 36 36
Common stock, US$.01 par value;
100,000,000 shares authorised;
Issued @ Dec 31, 1996: 2,935,791
and @ June 30, 1996: 2,717,041: 29 27
Additional paid in capital 9,977 9,486
Unrealized gain(loss) on securities
available for sale -- 25
Accumulated deficit (8,072) (7,579)
Foreign currency translation adjustment 123 123
Total Shareholders' Funds: $ 2,093 $ 2,118
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Total Liabilities & Shareholders' Equity: $ 2,774 $ 3,608
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2
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AMERALIA INC
CONSOLIDATED STATEMENTS OF OPERATIONS
Amounts in Thousands of Dollars ($)
(Unaudited)
Qtr Qtr Half yr Half yr
ending ending ending ending
Dec 31 Dec 31 Dec 31 Dec 31
1996 1995 1996 1995
------ ------ ------ -------
REVENUES
Recovery of bad debts 134 -- 134 --
Interest 2 -- 2 --
------- ------- ------- -------
Total Revenues from operations: $ 136 $ -- $ 136 $ --
EXPENSES
General & administrative 171 168 404 248
Depreciation & amortization 3 3 6 6
Interest paid 16 39 47 72
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Total Expenses: $ 190 $ 210 $ 457 $ 326
INCOME/(LOSS) from operations ($54) ($210) ($321) ($326)
Loss on disposal of assets (10) -- (10) --
Foreign currency gain/(loss) (9) (82) (9) (3)
------- ------- ------- -------
NET INCOME /(LOSS) ($73) ($292) ($340) ($329)
------- ------- ------- -------
Net loss per share ($0.02) ($.11) ($0.12) ($.13)
Weighted average
number of shares ('000) 2,881 2,609 2,826 2,609
3
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AMERALIA INC
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts in Thousands of Dollars ($)
(Unaudited)
Half yr Half yr
ending ending
Dec 31 Dec 31
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income ($340) ($329)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 6 6
Exchange (gain) loss 9 3
(Increase) decrease in:
Accounts receivable 39 5
Prepayments -- (37)
Notes receivable 234 227
Related parties receivables 69 11
Increase (decrease) in:
Bank overdraft 4 --
Accounts payable 43 (194)
Notes payable - short-term (547) 25
Due to related parties 12 (105)
Interest payable (368) (19)
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Net cash used in operating activities (839) (407)
CASH FLOWS FROM INVESTING ACTIVITIES
Lease exploration & development expenditure (20) (89)
Disposal of RIT Investment 450 --
Purchase of office equipment -- (2)
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Cash flows from investing activities 430 (91)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of preferred stock 275 580
Issuance of common stock 218 --
Dividends paid (153) (23)
Cash received from loan proceeds 45 --
Cash payments on loans 3 (57)
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Cash flows from financing activities 388 500
NET INCREASE (DECREASE) IN CASH (21) 2
Cash at beginning of period 21 5
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Cash at end of period $ -- $ 7
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----- -----
4
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AMERALIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at December 31 and June 30, 1996
and for the Periods ended December 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, 1996 Annual Report on Form
10-K. The results of operations for the periods ended December 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
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. During the half year to December 31, 1996 an additional
$175,000 has been withdrawn from this account, leaving a balance of $470,000
available to the Company even though the existance of these funds is not
reflected in the Company's financial statements. Subsequent to December 31,
1996 a further $55,000 has been withdrawn from the escrow account to meet the
Company's immediate working capital needs.
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 NZI debt effective as of November 19, 1996 by transferring to
THG two Notes Receivable from unaffiliated parties, two shareholder receivables
and the Company's investment in the Rural Investment Trust.
In addition, the Company agreed to issue to THG 100 shares of its Series D
Convertible Preferred Stock. THG also 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 that it has enabled the
Company to recover in excess of written down values of notes receivable held by
the Company and record a net profit of $117,000 over book value on the recovery
of the assets assigned to THG.
In summary, during the half year the Company received funds from the
following sources: $45,000 as proceeds from the issuance
6
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of short term notes payable, $39,000 from receipt of accounts receivable,
$69,000 from related party receivables and $234,000 from the repayment of
deposits. Additional funds were received from an increase in accounts
payable of $43,000, bank overdraft of $4,000 and an increase in liabilities
to related parties of $13,000. Funds were applied to the repayment of the
outstanding debt due to THG in the amount of $915,000, $20,000 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, even though it has a history of
working capital deficiencies, 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. The Company is in default on a note payable of $17,000 which has
been called but not repaid. Management is negotiating with the note holder and
arranging settlement of the obligation.
RESULTS OF OPERATIONS
The Company's loss from operations for the quarter was $73,000 compared
with $292,000 for the same quarter for the previous year ($340,000 and $329,000
for the respective half years). This reduced loss for the quarter is primarily
due to the recovery of bad debt provisions totalling $134,000 made in previous
years on notes receivable held by the Company as discussed above. Compared with
the same quarter for the previous year when the Company lost $82,000 from
foreign currency movements, the foreign currency loss for the quarter was $9,000
as there were no material changes in the exchange rate between the United States
and Australian dollars during the current quarter to affect results.
As the Company no longer has any significant assets or liabilities measured
in Australian dollars, there will not be any further forseeable foreign currency
gains or losses.
During the half year an officer of the Company allegedly violated Section
16(b) of the Securities Exchange Act of 1934 and made a short swing trading
profit estimated to be $52,000. Following negotiations between the officer and
the Company a settlement was reached on January 17, 1996 and the profit
recovered for the benefit of the Company.
IMPACT OF INFLATION
The Company believes that its activities are not materially affected by
inflation.
EXCHANGE RATE
At December 31, 1996, US$ = A$1.27
7
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PART II: OTHER INFORMATION
Item 1: Legal Proceedings
None.
Item 2: Changes in Securities
During the half year, 65,000 shares of common stock were granted as a bonus
to an officer of the Company and a further 153,750 shares of common stock were
issued in lieu of dividends on Series A, B, and D Preferred Stock.
In addition, an agreement was reached to issue 100 shares of Series D
Preferred Stock valued at $100,000 in part settlement of the debt due to The THG
Partnership as discussed above.
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.
February 7, 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.
8
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<PAGE>
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<S> <C>
<PERIOD-TYPE> 6-MOS
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<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
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<ALLOWANCES> 0
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<PP&E> 67
<DEPRECIATION> 48
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<CURRENT-LIABILITIES> 675
<BONDS> 6
36
0
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<TOTAL-LIABILITY-AND-EQUITY> 2774
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<INCOME-PRETAX> (340)
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<INCOME-CONTINUING> (340)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (340)
<EPS-PRIMARY> (.12)
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