-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HgsymnA+Oz7ZS8GBTp2JTqt+SIG60vgxv16nT8bw6TLbqYSRuORMoVsemgLWD4fx NdOw8RrtmKLM5bf+ERvwCg== 0001050502-01-500288.txt : 20010813 0001050502-01-500288.hdr.sgml : 20010813 ACCESSION NUMBER: 0001050502-01-500288 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLAS MINERALS INC CENTRAL INDEX KEY: 0000008302 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 841533604 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-02714 FILM NUMBER: 1703759 BUSINESS ADDRESS: STREET 1: 370 SEVENTEENTH ST STREET 2: STE 3140 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036292440 MAIL ADDRESS: STREET 1: 370 SEVENTEENTH STREET STREET 2: STE 3150 CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: ATLAS CORP DATE OF NAME CHANGE: 19920703 10QSB 1 atlas601.txt 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB COMMISSION FILE NO. 1-2714 (Mark One) (X) Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2001 or ( ) Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to ________ ATLAS MINERALS INC. ------------------- (Formerly Atlas Corporation) (Exact name of small business issuer as specified in its charter) COLORADO 84-1533604 - ------------------------------- ------------------- (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 2323 S. Troy St. Suite 5-210, Aurora, CO 80014 ---------------------------------------------- (Address of principal executive offices) (Zip Code) 303-306-0823 ------------ (Issuer's telephone number) Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 --- --- Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes X No --- --- As of August __, 2001, 6,063,858 shares of Common Stock, par value $0.01 per share, were issued and outstanding. Transitional Small Business Disclosure Format (Check one): Yes No X --- --- Page 1 of 13 Independent Accountants' Report The Board of Directors and Stockholders Atlas Minerals Inc. We have reviewed the accompanying consolidated balance sheet of Atlas Minerals Inc. and subsidiaries as of June 30, 2001 and the related consolidated statements of operations for the three-month and six-month periods ended June 30, 2001 and 2000 and cash flows for the six-month periods ended June 30, 2001 and 2000. These consolidated financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial statements consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 2000, and the related consolidated statements of operations, stockholders' equity and cash flows (not presented herein) for the periods described in our report dated May 9, 2001, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2000, is fairly stated in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/ HORWATH GELFOND HOCHSTADT PANGBURN, P.C. - -------------------------------------------- HORWATH GELFOND HOCHSTADT PANGBURN, P.C. Denver, Colorado August 8, 2001 2 of 13
PART I. FINANCIAL INFORMATION Item 1. Financial Statements. - ----------------------------- Atlas Minerals Inc. (Formerly Atlas Corporation) Consolidated Balance Sheets (in Thousands) June 30, December 31, 2001 2000 ------- ------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 166 $ 119 Accounts receivable - trade -- 1,310 Accounts receivable - other -- 328 Assets held for sale 300 300 Inventories -- 870 Prepaid expenses and other current assets 659 661 ------- ------- Total current assets 1,125 3,588 ------- ------- Property, plant and equipment 5 4,348 Less: accumulated depreciation, depletion and amortization (3) (744) ------- ------- 2 3,604 Assets held for sale 1,283 1,260 Other assets 340 782 ------- ------- $ 2,750 $ 9,234 ======= ======= LIABILITIES Current liabilities: Trade accounts payable $ 80 $ 761 Accrued liabilities 36 1,021 Short-term debt -- 4,226 Estimated reorganization liabilities 182 189 ------- ------- Total current liabilities 298 6,197 ------- ------- Estimated reorganization liabilities 1,082 1,125 Other liabilities, long-term 150 588 ------- ------- Total long-term liabilities 1,232 1,713 ------- ------- Total liabilities 1,530 7,910 ------- ------- Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock, par $1 per share; authorized 1,000,000; no shares issued and outstanding -- -- Common stock, par value $0.01 per share; authorized 100,000,000; issued and outstanding, 6,063,858 at June 30, 2001 and December 31, 2000 61 61 Capital in excess of par value 2,999 2,999 Deficit (1,840) (1,736) ------- ------- Total stockholders' equity 1,220 1,324 ------- ------- $ 2,750 $ 9,234 ======= ======= See notes to consolidated financial statements. 3 of 13 Atlas Minerals Inc (Formerly Atlas Corporation) Consolidated Statements of Operations (In Thousands, Except Per Share Data, Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------ 2001 2000 2001 2000 ------- ------- ------- ------- Mining revenue $ -- $ 851 $ -- $ 1,669 Costs and expenses: Production costs -- 684 -- 1,535 Depreciation, depletion and amortization -- 177 -- 355 Impairment of mineral property -- 683 -- 683 General and administrative expenses 59 110 109 239 ------- ------- ------- ------- Gross operating loss (59) (803) (109) (1,143) Other (income) and expense: Interest expense 1 108 1 209 Interest income (2) -- (5) (2) Other (1) (15) (1) (21) ------- ------- ------- ------- Loss before income taxes (57) (896) (104) (1,329) Provision for income taxes -- -- -- -- ------- ------- ------- ------- Net loss $ (57) $ (896) $ (104) $(1,329) ======= ======= ======= ======= Basic and diluted loss per share of common stock $ (0.01) $ (0.15) $ (0.02) $ (0.22) ======= ======= ======= ======= Weighted average number of common shares outstanding 6,064 6,064 6,064 6,064 ======= ======= ======= ======= See notes to consolidated financial statements. 4 of 13 Atlas Minerals Inc. (Formerly Atlas Corporation) Consolidated Statements of Cash Flows (In Thousands, Unaudited) Six Months Ended June 30, ------------------ 2001 2000 ------- ------- Operating activities: Net loss $ (104) $(1,329) Add (deduct) non-cash items: Depreciation, depletion and amortization 1 356 Impairment of mineral property -- 683 Net change in non-cash items Related to operations (Note 3) (198) (77) ------- ------- Cash used in operating activities (301) (367) ------- ------- Investing activities: Additions to property, plant and equipment -- (166) Reduction in cash resulting from abandonment of Arisur (6) -- Investment in assets held for sale and other assets (55) (63) Proceeds from sale of assets held for sale and other assets 459 186 ------- ------- Cash provided by (used in) investing activities 398 (43) ------- ------- Financing activities: Net borrowings of short-term debt -- 238 Payments of estimated reorganization liabilities (50) (5) ------- ------- Cash provided by (used in) financing activities (50) 233 ------- ------- Increase (decrease) in cash and cash equivalents 47 (177) Cash and cash equivalents: Beginning of period 119 202 ------- ------- End of period $ 166 $ 25 ======= ======= See notes to consolidated financial statements. 5 of 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. There has not been any change in the significant accounting policies of Atlas Minerals Inc. (the "Company") for the periods presented. In the opinion of Management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results for these interim periods are not necessarily indicative of results for the entire year. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000. 2. The accompanying consolidated financial statements include the accounts of Atlas Minerals Inc. ("Atlas") (formerly Atlas Corporation) and its wholly-owned subsidiary, Arisur Inc. ("Arisur") and its approximately 85% ownership of Atlas Precious Metals Inc. ("APMI"), which in turn owns approximately 63% of Atlas Gold Mining Inc. ("AGMI") (collectively the "Company" or "Reorganized Company"). 3. The components of the net change in items other than cash related to operating activities as reflected in the Consolidated Statements of Cash Flows are as follows: Six Months Ended June 30, -------------- (in thousands) 2001 2000 -------------- ---- ---- Add (deduct) items other than cash: Accounts receivable $-- $(337) Inventories -- (18) Prepaid expenses and other current assets (9) (4) Other assets -- 1 Trade accounts payable (148) 174 Accrued liabilities (34) 93 Other liabilities, long-term (7) 19 ----- ----- $(198) $ (77) ===== ===== Net cash used for operating activities reflects cash payments for interest and income taxes as follows: Six Months Ended June 30, -------------------- (in thousands) 2001 2000 -------------- ---- ---- Interest $ 1 $54 Income taxes -- -- 6 of 13 During the period ended June 30, 2001, the Company abandoned its investment in Arisur (Note 4). Assets abandoned: (thousands) Current assets, net of cash and cash equivalents $2,517 Property plant and equipment, net 3,601 Long-lived assets 17 ------ 6,135 ------ Liabilities abandoned: Current liabilities 5,710 Long-term liabilities 431 ------ 6,141 ------ Cash and cash equivalents abandoned $ 6 ====== 4. On May 9, 1999, Arisur defaulted on a payment of $478,000 due under its loan agreement with Corporacion Andina de Fomento ("CAF"). Subsequently CAF agreed to restructure the remaining balance of the debt under the condition that Arisur demonstrate that it had a minimum of four years of proven reserves at a production rate of 400 tonnes per day at Arisur's Andacaba mine. In April 2000, Latinamerican Investment Advisory Group ("LIAG"), an independent Latin American engineering firm retained by CAF, confirmed the required amount of reserves and recommended additional investment in the operation in order to assure a sustainable production rate of 400 tonnes per day. Despite this report, the Company and CAF were unable to negotiate a restructuring of the loan. The Company investigated all feasible actions to continue the Arisur operations. These actions included investigating alternative sources of debt and equity financing in order to provide additional investment to Arisur, and consideration of possible restructuring of the Arisur operations. These actions continued into the first quarter of 2001 and ultimately proved unsuccessful due to weakness in mineral prices, continuing losses from Arisur's operations, and the inability to identify alternative sources of debt or equity financing at costs acceptable to management. During the first quarter of 2001, CAF began foreclosure proceedings against Arisur and the Company's participation in Arisur's operation was terminated. Therefor the investment in Arisur was effectively abandoned as of January 1, 2001. The Company has decided to concentrate its remaining resources on other opportunities. During the year ended December 31, 2000, the Company recorded an impairment charge of $683,000 related to the Andacaba mine. The impairment charge was measured based on the amount by which the carrying value of the property exceeded its estimated fair value. Atlas Minerals, Inc. and its other subsidiaries have not guaranteed any liabilities of Arisur. All assets, liabilities, revenues and expenses of Arisur have been eliminated from the accounts of the Company effective January 1, 2001. 5. In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement, as amended, is effective for fiscal years beginning after June 15, 2000. Currently, the Company does not have any derivative financial instruments and does not participate in hedging activities. Therefore, management believes that SFAS No. 133 will not have an impact on its financial position or results of operations. 7 of 13 In December 1999, the staff of the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements. SAB No. 101, as amended by SAB No. 101A and SAB No. 101B, is effective no later than the fourth fiscal quarter of fiscal years beginning after December 15, 1999. SAB No. 101 provides the Staff's views in applying generally accepted accounting principles to selected revenue recognition issues. The Company believes that it complies with the accounting and disclosure described in SAB No. 101; therefore, management believes that SAB No. 101 will not impact the Company's financial statements. 8 of 13 Item 2. Management's Discussion and Analysis - -------------------------------------------- "SAFE HARBOR" STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Statements which are not historical facts contained in this Form 10-QSB are forward looking statements that involve risks and uncertainties that could cause actual results to differ from projected results. Factors that could cause actual results to differ materially include, among others: general economic conditions, metal and mineral prices, political events in foreign countries, the risks associated with foreign operations generally, the timing of receipt of necessary governmental permits, climatic conditions, labor relations, availability and cost of material and equipment, the actual configuration of ore bodies, delays in anticipated start-up dates, environmental risks, the results of financing efforts and other risk factors detailed in the Company's Form 10-KSB for the year ended December 31, 2000 filed with the Securities and Exchange Commission. RECENT EVENTS In September 1998, the Predecessor Entity filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court of the District of Colorado (the "Court"). On January 26, 1999, APMI and AGMI also filed for relief under Chapter 11. The Company's other subsidiary, Arisur did not file for Chapter 11 protection. Under a plan of reorganization approved by the Court on December 11, 1999 (the "Reorganization Plan"), primarily all of Atlas', APMI, and AGMI's liabilities were discharged for consideration of stock in the Reorganized Company and contingent cash distributions to be made upon the sale/realization of certain assets of the Reorganized Company. Arisur's liabilities were not affected by the reorganization. On May 9, 1999, Arisur defaulted on a payment of $478,000 due under its loan agreement with Corporacion Andina de Fomento ("CAF"). Subsequently CAF agreed to restructure the remaining balance of the debt under the condition that Arisur demonstrate that it had a minimum of four years of proven reserves at a production rate of 400 tonnes per day at Arisur's Andacaba mine. In April 2000, Latinamerican Investment Advisory Group ("LIAG"), an independent Latin American engineering firm retained by CAF, confirmed the required amount of reserves and recommended additional investment in the operation in order to assure a sustainable production rate of 400 tonnes per day. Despite this report, the Company and CAF were unable to negotiate a restructuring of the loan. The Company investigated all feasible actions to continue the Arisur operations. These actions included investigating alternative sources of debt and equity financing in order to provide additional investment to Arisur, and consideration of possible restructuring of the Arisur operations. These actions continued into the first quarter of 2001 and ultimately proved unsuccessful due to weakness in mineral prices, continuing losses from Arisur's operations, and the inability to identify alternative sources of debt or equity financing at costs acceptable to management. During the first quarter of 2001, CAF began foreclosure proceedings against Arisur and the Company's participation in Arisur's operation was terminated. Therefor the investment in Arisur was effectively abandoned as of January 1, 2001. The Company has decided to concentrate its remaining resources on other opportunities. During the year ended December 31, 2000, the Company recorded an impairment charge of $683,000 related to the Andacaba mine. Atlas Minerals, Inc. and its other subsidiaries have not guaranteed any liabilities of Arisur. 9 of 13 CAPITAL RESOURCE REQUIREMENTS Liquidity As of June 30, 2001, the Company's working capital was $827,000, compared to a deficit of $2,609,000 as of December 31, 2000. The Company's current ratio at June 30, 2001 was 3.78 to 1, compared to .58 to 1 at December 31, 2000. The deficit position at December 31, 2000 was a result of the inclusion of the Arisur balance sheet figures, which have been eliminated at June 30, 2001 as described above under "Recent Events." Without the Arisur figures, working capital would have been $578,000 with a current ratio of 2.19 to 1 at December 31, 2000. The increase was primarily a result of the receipt of several insurance settlements netting to $431,000 during the period ended June 30, 2001. This amount was offset by operating costs of $100,000, expenses for the sale of assets held for sale of $24,000 and the reclassification of estimated reorganization liabilities from long-term to short-term of approximately $43,000. As described under "Recent Events", the Company has effectively abandoned its investment in Arisur in the first quarter of 2001 and is continuing its efforts for the sale/realization of its North American assets. These assets include the salvaging of its Gold Bar mill, sale of the Grassy Mountain property and the pursuit of general liability insurance claims against various insurance carriers for costs incurred to reclaim the Moab uranium tailings pile. The Company believes that these activities should provide sufficient cash for the Company to continue operations through 2001. Results of operations The Company had mining revenue of $0 for the both the three-month and six-month periods ended June 30, 2001 compared to $851,000 and $1,669,000, respectively in the same periods of 2000. The reduction was due to the abandonment of the Arisur operation as described above. Production costs were also $0 in 2001 compared to $684,000 and $1,535,000 for the three-month and six-month periods ended June 30, 2000, also due to the abandonment of the Arisur operation as described above. General and administrative expenses for the six months ended June 30, 2001 were $109,000 compared to $239,000 for the comparable period in 2000. Salaries and benefits expenses decreased during the quarter to $41,000 from $115,000 in the same period of 2000 as a result of a reduction in personnel at the Company's headquarters in Aurora, Colorado from three employees to one. Director's fees and expenses decreased from $21,000 to $9,000. In early 2000, the Board met four times compared to two times in the first half of 2001. Insurance costs also were reduced from $31,000 in 2000 to $11,000 in 2001 as the Company reduced/eliminated unnecessary insurance coverage in late 2000. Rent expense also declined from $16,000 to $4,000 as a result of the move to smaller offices. Other cost areas reduced include travel costs and general office costs. For the three months ended June 30, 2001, general and administrative costs were $59,000 compared to $110,000 in the previous year. The reduction was primarily due to a decrease in salary and benefit costs of from $64,000 to $22,000 for the same reason as described above. Insurance also was reduced by $10,000 during the quarter and rent costs by $6,000. 10 of 13 Interest expense incurred during the three-month and six-month periods ended June 30, 2001 was $1,000 for both periods compared to $108,000 and $209,000 for the respective periods in 2000. All interest bearing debt of the Company was held by Arisur and has been written off as a result of the mine closure discussed above under "Recent Events." During the six months ended June 30, 2001 and 2000, the Company incurred $0 and $166,000 in capital expenditures, substantially all of which related to normal mine development costs at the operation in Bolivia. 11 of 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings - ------------------------- None Item 2. Changes in Securities - ----------------------------- None Item 3. Defaults upon Senior Securities - --------------------------------------- None Item 4. Submission of Matters to a Vote of Security Holders - ----------------------------------------------------------- None Item 5. Other Information - ------------------------- None Item 6. Exhibits and Reports on Form 8-K - ---------------------------------------- a. Exhibits None b. Reports on Form 8-K None 12 of 13 SIGNATURES ---------- 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. ATLAS MINERALS INC. ------------------- (Registrant) By: /s/ James R. Jensen ----------------------- James R. Jensen Chief Financial Officer Date: August 10, 2001 /s/ James R. Jensen ------------------- James R. Jensen Chief Financial Officer (Principal Financial Officer & Chief Accounting Officer) 13 of 13 -----END PRIVACY-ENHANCED MESSAGE-----