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 March 31, 2003
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-1764
AMERICAN NUCLEAR CORPORATION
(Exact Name of Registrant In Its Charter)
Colorado 83-0178547
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(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
Indicate by check mark 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 by check mark whether the registrant is an accelerated
Filer (as defined in Rule 12b-2 of the Exchange Act). Yes . No X.
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 MONTHS ENDED
MARCH 31, 2003 AND MARCH 31, 2002
(UNAUDITED)
Three Months Ended
March 31,
2003 2002
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NET LOSS BEFORE
DISCONTINUED OPERATIONS $ -0- $ -0-
REVENUE FROM DISCONTINUED
OPERATIONS
Reclamation Reimbursement -0- 1,613
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Total revenue from
discontinued operations -0- 1,613
DISCONTINUED EXPENSES
General and administrative 4,443 4,982
Interest income (116) (239)
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Total discontinued
expenses 4,327 4,743
NET INCOME (LOSS) $ (4,327) $ (3,130)
PER SHARE:
NET PROFIT (LOSS) BEFORE
DISCONTINUED OPERATIONS
PER SHARE $ 0.00 $ 0.00
DISCONTINUED OPERATIONS
PER SHARE NET
PROFIT (LOSS) $ 0.00 $ 0.00
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,696,739 7,696,739
DIVIDENDS PER SHARE $ 0.00 $ 0.00
PAGE 3
AMERICAN NUCLEAR CORPORATION
BALANCE SHEETS
MARCH 31, 2003 AND DECEMBER 31, 2002
March 31, December 31,
2003 2002
(Unaudited) (Unaudited)
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ASSETS
Current assets:
Cash $ 67,525 $ 83,853
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Total current assets $ 67,525 $ 83,853
Other assets:
Other 12,000 -0-
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Total other assets 12,000 -0-
Total assets $ 79,525 $ 86,938
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable -0- -0-
Other current liabilities 13,519 13,519
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Total current liabilities 13,519 13,519
Common Stockholders' equity:
Common stock 314,080 314,080
Additional paid-in capital 13,304,849 13,304,849
Retained earnings (12,923,797) (12,919,469)
Less cost of treasury stock (629,126) (629,126)
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Common stockholders' equity 66,006 70,334
Total liabilities and stockholders'
equity $ 79,525 $ 83,853
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PAGE 4
AMERICAN NUCLEAR CORPORATION
STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)
Three Months Ended
September 30
2002 2001
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Cash flows from discontinued operations:
Net loss $ (4,327) $ (3,130)
Adjustments to reconcile net loss to net
cash used by operating activities:
(Increase) Decrease in other assets (12,000) (12,000)
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Total adjustments (12,000) (12,000)
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Net cash used in operating activities (16,327) (15,130)
Net increase (decrease) in cash during the
period (16,327) (15,130)
Cash at the beginning of the period 83,853 86,939
Cash at the end of the period $ 67,525 $ 71,809
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PAGE 5
AMERICAN NUCLEAR CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE 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 $54,006 and $70,334 at
March 31, 2003 and December 31, 2002 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, 2002. 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.
ITEM 2. 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 $4,443 for the three months
ended March 31, 2003 compared to $4,982 for the comparable period ended
March 31, 2002.
There was $116 interest income for the three months ended March 31,
2003, compared to $239 for the comparable periods ending March 31, 2002.
The interest is due to the reimbursement of DOE funds to the Company.
These funds will be used to pay ongoing expenses as long as possible.
A net loss of $4,327 was recognized during the first three months of
2003 compared to a loss of $3,130 for the same period in 2002. The
company does not expect to receive any more DOE reimbursements in the
future.
Liquidity and Capital Resources
The Company's working capital at March 31, 2003, was $54,006 while
at December 31, 2002 it was $70,334. The decrease in working capital at
March 31, 2003 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 the federal program
PAGE 8
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
The Company's Chief Executive Officer and Chief Financial Officer
have evaluated the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in Rules
13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as
amended). This evaluation was made within 90 days prior to the filing of
this quarterly report (the Evaluation Date). Based on this evaluation,
the Chief Executive Officer and Chief Financial Officer concluded that,
as of the Evaluation Date, the Company's disclosure controls and
procedures are adequate and effective and designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to them by others within these entities.
There were no significant changes in the Company's internal controls
or in other factors that could significantly affect these controls
subsequent to the Evaluation Date. As no significant deficiencies or
material weaknesses were found, no corrective actions were taken.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
None.
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)
May 13, 2003 By: ---------------------------------
William C. Salisbury
President
(signature)
May 13, 2003 By: ---------------------------------
Dennis A. Eckerdt
Secretary and Treasurer