UNITED STATES
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 Quarterly Period Ended September 30, 2002
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------- ------------
Commission File Number 0-1764
AMERICAN NUCLEAR CORPORATION
(Exact Name of Registrant In Its Charter)
Colorado 83-0178547
- ------------------------------ --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 2713
Casper, Wyoming 82602
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (307) 265-7912
Check whether the issuer (1) 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. Yes X. No .
Indicate the number of share outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report.
4 cents par value common stock: 7,696,739 shares
PAGE 2
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF OPERATION
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2001
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
------ ------ ------ ------
NET LOSS BEFORE
DISCONTINUED OPERATIONS $ -0- $ -0- $ -0- $ -0-
REVENUE FROM DISCONTINUED
OPERATIONS
Reclamation Reimbursement -0- -0- 14,842 13,519
---------- ---------- ---------- ----------
Total revenue from
discontinued operations -0- -0- 14,842 13,519
DISCONTINUED EXPENSES
General and administrative 4,870 4,347 14,148 16,575
Interest income (286) (453) (788) (1,465)
---------- ---------- ---------- ----------
Total discontinued
expenses 4,584 3,894 13,360 15,110
NET INCOME (LOSS) $ (4,584) $ (3,894) 1,482 (1,591)
PER SHARE:
NET PROFIT (LOSS) BEFORE
DISCONTINUED OPERATIONS
PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00
DISCONTINUED OPERATIONS
PER SHARE NET
PROFIT (LOSS) $ 0.00 $ 0.00 $ 0.00 $ 0.00
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,696,739 7,696,739 7,696,739 7,696,739
DIVIDENDS PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00
PAGE 3
AMERICAN NUCLEAR CORPORATION
BALANCE SHEETS
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
September 30, December 31,
2002 2001
(Unaudited) (Unaudited)
-------------- ------------
ASSETS
Current assets:
Cash $ 84,421 $ 86,938
----------- ------------
Total current assets $ 84,421 $ 86,938
Other assets:
Other 4,000 -0-
----------- ------------
Total other assets 4,000 -0-
Total assets $ 88,421 $ 86,938
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable -0- -0-
Other current liabilities -0- -0-
----------- ------------
Total current liabilities -0- -0-
Common Stockholders' equity:
Common stock 314,080 314,080
Additional paid-in capital 13,304,849 13,304,849
Retained earnings (12,901,382) (12,902,864)
Less cost of treasury stock (629,126) (629,126)
----------- ------------
Common stockholders' equity 88,421 86,938
Total liabilities and stockholders'
equity $ 88,421 $ 86,938
=========== ============
PAGE 4
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)
Nine Months Ended
September 30
2002 2001
---------- ----------
Cash flows from discontinued operations:
Net loss $ 1,482 $ (1,591)
Adjustments to reconcile net loss to net
cash used by operating activities:
(Increase) Decrease in other assets (4,000) (4,000)
----------- -----------
Total adjustments (4,000) (4,000)
----------- -----------
Net cash used in operating activities (2,518) (5,591)
Net increase (decrease) in cash during the
period (2,518) (5,591)
Cash at the beginning of the period 86,939 93,438
Cash at the end of the period $ 84,421 $ 87,847
=========== ===========
PAGE 5
AMERICAN NUCLEAR CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Liquidation Basis
The accompanying financial statements have been prepared on a
liquidation basis, which recognized the realization of assets and the
satisfaction of a portion of the liabilities. The Company's current
assets exceeded its current liabilities by $84,421 and $86,938 at
September 30, 2002 and December 31, 2001 respectively. During 1994 the
Company discontinued operations due to lack of operating capital. For
financial reporting purposes, the Company has offset contractual
liabilities totaling $392,000. These liabilities were recognized as
income because the Company has no means of repaying the obligations
under liquidation basis accounting. The remaining Company cash
deposits are being utilized to maintain compliance as long as possible
with U.S. Nuclear Regulatory Commission (NRC) license requirements
pertaining to the Company's uranium mining reclamation site. The
Company discontinued the licensing requirements by transferring this
responsibility to the Wyoming DEQ.
The state of Wyoming declared the Company in default of its
reclamation obligations when the Company terminated its business
operations in May 1994. Subsequently the reclamation bond fund of
$3,213,255 was acquired by the Wyoming DEQ through forfeiture
proceedings. The state of Wyoming has consented to perform certain
reclamation obligations, but has declined to assume the NRC license and
the associated obligations. The reclamation requirements have changed
to require more work since the bond forfeiture, and the cash
requirements to continue reclamation have increased by an undetermined
amount. There is the potential of a cost overrun in the range of $3
million or considerably more. The Company has not recognized a
contingent liability for this amount because the Wyoming DEQ and NRC
have not agreed upon a final reclamation plan upon which to base a cost
estimate. By state of Wyoming statute, the Company is liable for any
cost overruns.
The Company remains liable for completion of its reclamation
obligations even though it does not have enough assets with which to
complete those obligations. The NRC has served the Company with notice
that the Company's deliberate abandonment of its reclamation site would
constitute an intentional violation of the Atomic Energy Act of 1954
and could subject the Company to NRC enforcement actions and criminal
sanctions. The Company is complying with a NRC order to maintain and
comply with the terms of its NRC license. Further, the Company has an
PAGE 6
agreement with the Wyoming DEQ to maintain its corporate existence in
order to receive Title X reclamation reimbursement funds from the U.S.
Department of Energy and transfer agreed upon amounts to the Wyoming
DEQ. The Company has no intention of entering into other businesses or
continuing its limited operations beyond the time when it has fulfilled
its obligations under the NRC license and those required by the state of
Wyoming.
Interim Financial Statements
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. The
accompanying statements should be read in conjunction with the
unaudited financial statements included in the Company's Report on Form
10-K for the year ended December 31, 2001. In the opinion of
management, all adjustments (consisting only of normal recurring
accruals) considered necessary for a fair presentation have been
included.
Per Share Amounts
Earnings per share calculations are computed on the weighted
average number of common shares outstanding during the respective
periods. Shares under option and warrants have been disregarded
because their effect is anti-dilutive.
Discontinuance of Operations
Management began seeking a purchaser for its mining properties in
the third quarter of 1993. While potential purchasers continued to
express interest, the Company did not receive any offer greater than
the amount of the debt that was secured by the mortgage against the
properties. Inability to sell the mining properties, depletion of
capital and lack of revenues deprived the Company of operating capital.
The Company determined to discontinue operations during May 1994 and to
liquidate its miscellaneous property and to pay and discharge its
current liabilities and other expenses associated with an orderly
closing of business operations.
Marketability of Common Stock
Effective May 9, 1994 the Company's common stock was removed from
listing on the NASDAQ SmallCap Market. There are no trading markets
for the Company's common stock. Salt Ridge Energy, Inc., a corporation
PAGE 7
owned by Mr. Salisbury, President, acquired 2,893,072 shares of common
stock during June 1998 and now owns 37.6% of the Company's
outstanding stock. The Company is aware of occasional trades on the
electronic bulletin board. The basis of these transactions is unknown.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company discontinued operations during May 1994. The Company
had no operating revenues during the period subject to this report or
the earlier comparable period. See the "Discontinuance of Operations"
and the "Liquidity and Capital Resources" sections in this report
regarding additional information about the Company's cessation of
operations.
General and administrative expenses were $4,870 and $14,148 for the
three months and nine months ended September 30, 2002 compared to $4,347
and $16,575 for the comparable periods ended September 30, 2001.
There was $286 and $788 interest income for the three months and
nine months ended September 30, 2002, compared to $453 and $1,465 for
the comparable periods ending September 30, 2001. The interest is due
to the reimbursement of DOE funds to the Company. These funds will be
used for ongoing expenses as long as possible.
A net profit of $1,482 was recognized during the first nine months of
2002 compared to a loss of $1,591 for the same period in 2001. The
profit in 2002 is due to a $14,842 DOE reimbursement. The company does
not expect to receive any more DOE reimbursements in the future.
Liquidity and Capital Resources
The Company's working capital at September 30, 2002, was $84,421
while at December 31, 2001 it was $86,938. The decrease in working
capital at September 30, 2002 was due to the Company's ongoing general
and administrative expenses. During May 1994, the Company discontinued
operations because of its lack of funds. Before that decision was made,
the Company attempted to obtain additional loans, raise equity funds
through a private placement of its common stock, secure byproduct
disposal contracts, or sell its mineral properties. None of these
efforts were successful. In addition, the Wyoming Department of
Environmental Quality (DEQ) declared forfeiture of the $3.2 million
reclamation bond fund to the DEQ to be used by the DEQ for completing
reclamation of the Company's Gas Hills mill site. The total cost of
the reclamation work will not be known for many years, and the funds
held by the DEQ are not expected to cover all the expenses. The
Company remains the licensee and owner of the reclamation site, and
the Company will not be released from the obligations of reclamation
that are imposed by the license until reclamation work is completed and
accepted by the regulatory agencies. The Company has applied, under
PAGE 8
the federal program administered by the DOE, for reimbursement of some
of the reclamation work it has previously performed to clean up its
mining and milling site. The DOE program has been funded by Congress
and money has been allocated for the reimbursements. The Company
received approximately $46,000 from this program during 1999 and
approximately $107,000 during 2000, $13,000 during 2001, and $15,000
during 2002. Under the prevailing law and the terms of the order of the
U.S. Nuclear Regulatory Commission that directs the Company to continue
to reclaim and monitor its reclamation site, the funds and any future
funds that could be received under this program will be applied to
ongoing monitoring and reclamation obligations over the next several
years, including payments to the Company's independent contractors to
perform such services. None of the money will be applied to claims of
creditors, and no funds will be available for distribution to
shareholders because the reclamation obligations are projected to
substantially exceed the funds that become available. The DEQ has
entered into an agreement with the Company providing that the state will
not bring a deficiency action in court if the Company transfers Title X
funds to the state to be applied to the deficiency for use by the state
to perform reclamation. The Tennessee Valley Authority (TVA), which had
asserted a right to the funds based on its 1984 contract with the
Company, released the Company from such claims due to an agreement
between TVA and the state. The agreement between the Company and DEQ
provides that the Company and DEQ will use the DOE Title X funds toward
monitoring and reclamation of the mill site in accordance with the NRC
license.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on their behalf
by the undersigned thereunto being authorized.
AMERICAN NUCLEAR CORPORATION
Registrant
(signature)
November 13, 2002 By: ---------------------------------
William C. Salisbury
President
(signature)
November 13, 2002 By: ---------------------------------
Dennis A. Eckerdt
Secretary and Treasurer