<PAGE>
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, 1997
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, 1998 was 4,325,751. Shares of preference stock, $.05 par value,
outstanding as of February 1, 1998: 2,536.
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AMERALIA, INC.
INDEX TO FORM 10-Q
Page
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PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheets - December 31,
1997 and June 30, 1997 1
Consolidated Statements of Operations for
the Quarters and Half Years
ending December 31, 1997 & 1996 3
Consolidated Statements of Cash Flows for
the Half Years ending December 31, 1997 & 1996 4
Notes to Consolidated Financial Statements 5
Item 2: Management's Discussion and Analysis of
Financial Condition and Results
of Operations. 6
PART II: OTHER INFORMATION
Item 2: Changes in Securities 7
SIGNATURE 8
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AMERALIA INC
CONSOLIDATED BALANCE SHEETS
Amounts in Thousands of Dollars ($)
Dec 31 June 30
1997 1997
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ASSETS
Current Assets:
Cash at bank 66 2
Accounts receivable 5 -
Related party receivables 11 10
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Total Current Assets: $ 82 $ 12
Non Current Assets:
Lease exploration & development costs 2,762 2,755
Deferred stock offering costs 225 225
Property & equipment 12 16
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Total Assets: $ 3,081 $ 3,008
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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
1997 1997
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LIABILITIES & SHAREHOLDERS' FUNDS
Current liabilities:
Accounts payable $ 295 $ 263
Due to related parties 190 80
Notes payable - current portion 300 284
Interest payable 35 23
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Total Current Liabilities $ 820 $ 650
Other liabilities
Notes payable - long term 3 4
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Total other liabilities 3 4
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Total Liabilities: $ 823 $ 654
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Commitments and contingent liabilities - -
SHAREHOLDERS' EQUITY
Preferred stock, US$0.05 par value;
1,000,000 authorized; 28,930 and
720,596 issued at December 31
and June 30, 1997: 1 36
Common stock, US$.01 par value;
100,000,000 shares authorised;
Issued @ Dec 31, 1997: 4,289,418
and @ June 30, 1997: 3,309,331: 43 33
Additional paid in capital 11,202 10,744
Accumulated deficit (9,111) (8,582)
Foreign currency translation adjustment 123 123
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Total Shareholders' Funds: $ 2,258 $ 2,354
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Total Liabilities & Shareholders' Equity: $ 3,081 $ 3,008
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AMERALIA INC
CONSOLIDATED STATEMENTS OF OPERATIONS
Amounts in Thousands of Dollars ($)
(Unaudited)
<TABLE>
Qtr Qtr Half yr Half yr
ending ending ending ending
Dec 31 Dec 31 Dec 31 Dec 31
1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES
Interest - 2 - 2
------- ------- ------- -------
Total Revenues from operations: $ - $ 2 $ - $ 2
EXPENSES
General & administrative 208 171 311 404
Depreciation & amortization 1 3 4 6
Interest paid 10 16 22 47
------- ------- ------- -------
Total Expenses: $ 219 $ 190 $ 337 $ 457
INCOME/(LOSS) from operations $ (219) $ (188) $ (337) $ (455)
NET INCOME /(LOSS) $ (219) $ (188) $ (337) $ (455)
------- ------- ------- -------
Net loss per share $ (0.06) $ (.07) $ (0.09) $ (.16)
Weighted average
number of shares ('000) 3,822 2,881 3,800 2,826
</TABLE>
3
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AMERALIA INC
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts in Thousands of Dollars ($)
(Unaudited)
<TABLE>
Half yr Half yr
ending ending
Dec 31 Dec 31
1997 1996
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ($337) ($455)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 4 6
(Increase) decrease in:
Accounts receivable (5) 39
Notes receivable - 234
Related parties receivables (1) 69
Increase (decrease) in:
Bank overdraft - 4
Accounts payable 32 43
Notes payable - short-term 17 54
Due to related parties 110 12
Interest payable 12 (179)
-------- ---------
Net cash used in operating activities (168) (173)
CASH FLOWS FROM INVESTING ACTIVITIES
Lease exploration & development expenditure (7) (20)
-------- ---------
Cash flows from investing activities (7) (20)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of preferred stock 240 175
Cash payments on loans (1) (3)
-------- ---------
Cash flows from financing activities 239 172
NET INCREASE (DECREASE) IN CASH 64 (21)
Cash at beginning of period 2 21
-------- ---------
Cash at end of period $ 66 $ -
-------- ---------
-------- ---------
</TABLE>
4
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AMERALIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at December 31 and June 30, 1997
and for the Periods ended December 31, 1997 and 1996
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 December 31, 1997 and 1996
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 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.
In addition, during the half year, the Company received $17,000 as proceeds
from the issuance of short-term notes payable, $110,000 from related party
advances, $32,000 from an increase in accounts payable and $12,000 from an
increase in interest payable. Funds were applied to the continuing development
of the Company's investment in the Rock School Lease and to funding the
Company's operating loss for the period.
As set out below, there have been conversions of preferred stock into
common stock and exchanges between classes of preferred stock. The effect of
these changes is that the Series A, B, C and D classes of preferred stock have
been either converted into common stock or exchanged for one class of preferred
stock, i.e. 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 was $219,000 compared
with $188,000 for the same quarter for the previous year ($337,000 and $455,000
for the respective half years). 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.
6
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IMPACT OF INFLATION
The Company believes that its activities are not materially affected by
inflation.
PART II: OTHER INFORMATION
Item 1: Legal Proceedings
None.
Item 2: Changes in Securities
During the half year the Company issued 193,421 shares of common stock in
lieu of dividends of $193,421 on Series A, B, C and D classes of Preferred
Stock.
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.
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
their ownership of the Series D stock. These actions extinguished the
remaining Series D stock on issue.
On January 12, 1998 the Company negotiated with the 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 now 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. There are no more
shares of Series A,
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B, C or D Preferred Stock outstanding.
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 10, 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
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 66
<SECURITIES> 0
<RECEIVABLES> 16
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 82
<PP&E> 67
<DEPRECIATION> 55
<TOTAL-ASSETS> 3,081
<CURRENT-LIABILITIES> 820
<BONDS> 3
1
0
<COMMON> 43
<OTHER-SE> 2,214
<TOTAL-LIABILITY-AND-EQUITY> 3,081
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 315
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22
<INCOME-PRETAX> (337)
<INCOME-TAX> 0
<INCOME-CONTINUING> (337)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (337)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.04)
</TABLE>
