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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, 1998
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, 1998 was 4,439,151. Shares of preference stock, $0.05 par value,
outstanding as of May 1, 1998 was 2,536.
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AMERALIA, INC.
INDEX TO FORM 10-Q
Page
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PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheets - March 31,
1998 and June 30, 1997 1
Consolidated Statements of Operations for
the Quarters and Nine Months
ending March 31, 1998 & 1997 3
Consolidated Statements of Cash Flows for
the Nine Months ending March 31, 1998 & 1997 4
Notes to Consolidated Financial Statements 5
Item 2: Management's Discussion and Analysis of
Financial Condition and Results
of Operations. 6
PART II: OTHER INFORMATION
Item 2: Changes in Securities 7
SIGNATURE 8
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AMERALIA INC
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands of Dollars ($)
<TABLE>
<CAPTION>
Mar 31 June 30
1998 1997
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<S> <C> <C>
ASSETS
Current Assets:
Cash at bank $ 25 $ 2
Related party receivables 1 10
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Total Current Assets: $ 35 $ 12
Non Current Assets:
Lease exploration & development costs 2,763 2,755
Deferred stock offering costs 225 225
Property & equipment 9 16
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Total Assets: $ 3,032 $ 3,008
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</TABLE>
(Continued over page)
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AMERALIA INC
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands of Dollars ($)
<TABLE>
<CAPTION>
Mar 31 June 30
1998 1997
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<S> <C> <C>
LIABILITIES & SHAREHOLDERS' FUNDS
Current liabilities:
Accounts payable 336 263
Due to related parties 193 80
Notes payable - current portion 280 284
Interest payable 45 23
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Total Current Liabilities $ 854 $ 650
Other liabilities
Notes payable - long term 3 4
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Total other liabilities 3 4
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Total Liabilities: $ 857 $ 654
Commitments and contingent liabilities -- --
SHAREHOLDERS' EQUITY
Preferred stock, US$0.05 par value;
1,000,000 authorized; 2,536 issued
at March 31, 1998 and 720,596
at June 30, 1997 1 36
Common stock, US$.01 par value;
100,000,000 shares authorised;
Issued at Mar 31, 1998: 4,439,151;
Issued at June 30, 1997: 3,309,331: 2 44 33
Additional paid in capital 10,492 10,744
Accumulated deficit (8,485) (8,582)
Foreign currency translation adjustment 123 123
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Total Shareholders' Funds: $ 2,175 $ 2,354
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Total Liabilities & Shareholders' Equity: $ 3,032 $ 3,008
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</TABLE>
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AMERALIA INC
CONSOLIDATED STATEMENTS OF OPERATIONS
Amounts in Thousands of Dollars ($)
(Unaudited)
<TABLE>
<CAPTION>
Qtr Qtr Nine Mths Nine Mths
ending ending ending ending
Mar 31 Mar 31 Mar 31 Mar 31
1998 1997 1998 1997
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
REVENUES
Interest -- -- -- 2
---------- ---------- ---------- -----------
Total Revenues from operations: $ - $ - $ - $ 2
EXPENSES
General & administrative 121 152 433 556
Depreciation & amortization 2 3 7 9
Interest paid 10 13 30 60
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Total Expenses: $ 133 $ 168 $ 470 $ 625
NET INCOME /(LOSS) ($133) ($168) ($470) ($623)
---------- ---------- ---------- -----------
Net loss per share ($0.03) ($.055) ($0.12) ($.21)
Weighted average
number of shares ('000) 4,364 3,072 3,874 2,992
</TABLE>
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AMERALIA INC
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts in Thousands of Dollars ($)
(Unaudited)
<TABLE>
<CAPTION>
Nine Mths Nine Mths
ending ending
Mar 31 Mar 31
1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ($470) ($623)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 7 9
(Increase) decrease in:
Accounts receivable -- 39
Notes receivable -- 103
Related parties receivables -- 50
Prepayments -- (166)
Increase (decrease) in:
Bank overdraft -- 2
Accounts payable 73 64
Notes payable - short-term (4) (595)
Due to related parties 113 5
Interest payable 22 24
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Net cash used in operating activities (259) (1,088)
CASH FLOWS FROM INVESTING ACTIVITIES
Lease exploration & development expenditure (8) (20)
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Cash flows from investing activities (8) (20)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of preferred stock 240 230
Issuance of common stock 50 359
Additional capital contributed - 50
Receipt of loan proceeds 20 319
Cash received from note receivable 131
Cash payments on loans (20) (2)
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Cash flows from financing activities 290 1,087
NET INCREASE (DECREASE) IN CASH 23 (21)
Cash at beginning of period 2 21
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Cash at end of period $ 25 $ --
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</TABLE>
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AMERALIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 1998 and June 30, 1997
and for the Periods ended March 31, 1998 and 1997
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, 1997 Annual Report on Form
10-K. The results of operations for the periods ended March 31, 1998 and 1997
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.
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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 have been held in
an escrow account pursuant to an agreement between the Company and the
Jacqueline Badger Mars Trust. Since June 30, 1997 the remaining $240,000 has
been withdrawn from this account and transferred to the Company. A further
$50,000 was raised through the issuance of common stock to an unaffiliated
investor.
In addition, during the nine months ending March 31, 1998 the Company
received $20,00 as proceeds from the issuance of short-term notes payable,
$113,000 from related party advances, $73,000 from an increase in accounts
payable and $22,000 from an increase in interest payable. Funds were applied to
funding the Company's operating expenses for the period, $8,000 was capitalised
on the Rock School Lease development and $20,000 was used to repay notes
payable.
As set out below, there have been conversions of preferred stock into
common stock and exchanges between different classes of preferred stock. The
effect of these exchanges is that the Series A, B, C and D preferred stock have
been converted into either common stock or Series E Preferred Stock.
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.
RESULTS OF OPERATIONS
The Company's loss from operations for the quarter ended March 31, 1998 was
$133,000 compared with $168,000 for the same period of
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the previous year ($470,000 and $625,000 for the respective nine month
periods). The reduction in the losses for the respective periods is due
partly to the decrease in debt carried by the company and consequently the
reduction in interest paid as indicated in the Company's operations
statements. However, the principal cause for the reduction in operating
losses is a decrease in general and administrative expenditures. The Company
incurs its expenditures for the purpose of advancing the development of its
naturally occurring sodium bicarbonate resource represented by its Rock
School Lease situated in the Piceance Creek Basin in northwestern Colorado.
IMPACT OF INFLATION
The Company believes that its activities are not materially affected by
inflation.
PART II: OTHER INFORMATION
Item 2: Changes in Securities
On October 28, 1997 the Company entered into an agreement with the
Jacqueline Badger Mars Trust (the "Trust") to convert its holding of Series A
Preferred Stock into common stock on November 30, 1997 at a conversion price of
$1.50 per share of common stock. In addition, the agreement provided for the
exchange of the Trust's Series D Preferred Stock for a Series E Preferred Stock,
a new class of preferred stock having the same rights and preferences enjoyed
by the Series D Preferred Stock. The Company shall solicit the approval of the
shareholders of the Company other than the Trust for these two actions. If such
approval is not received, the Trust has the right to submit the agreement to
arbitration. The Company expects that the shareholders meeting to consider
these actions will be held in June 1998.
On October 29, 1997 the Trust converted its holding of Series B Preferred
Stock into common stock at a conversion price of $2 per share of common stock in
accordance with its rights under the statement of preferences defining the class
of Series B Preferred Stock.
Also, on November 30, 1997 the remaining holders of Series D Preferred
Stock exchanged their interests in Series D stock for an equal number of Series
E stock so maintaining the rights and privileges they enjoyed through ownership
of the Series D stock. These actions extinguished the remaining Series D stock
on issue.
Effective December 31, 1997 the Company negotiated with the
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remaining holders of Series B and C Preferred Stock an exchange of their
holdings for an issue of Series E Preferred Stock on the basis of maintaining
the liquidation values of their shareholdings.
The net effect of all these changes is that there are no more shares of
Series A, B, C or D Preferred Stock outstanding. There are 2,536 shares of
Series E Preferred Stock issued and an option outstanding until October 18, 1998
to acquire a further 450 shares of Series E Preferred Stock. During the nine
months to end March 1998, 293,154 shares of restricted common stock were issued
in lieu of dividends on Series A, B, C, D and E Preferred Stock.
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 8, 1998 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>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 25
<SECURITIES> 0
<RECEIVABLES> 10
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35
<PP&E> 67
<DEPRECIATION> 58
<TOTAL-ASSETS> 3032
<CURRENT-LIABILITIES> 854
<BONDS> 3
1
0
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<OTHER-SE> 2130
<TOTAL-LIABILITY-AND-EQUITY> 3032
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 440
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30
<INCOME-PRETAX> (470)
<INCOME-TAX> 0
<INCOME-CONTINUING> (470)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (470)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.07)
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