UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 29, 2016

[ ] 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 1-7602

Excalibur Industries

(Exact name of registrant as specified in its charter)

Utah		87-0292122
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Post Office Box 650, Hibbing, Minnesota		55746
(Address or principal executive offices)		(Zip Code)

218-262-6127

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the 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. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES ¨ NO x

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated files, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ¨		Accelerated filer ¨

	Non-accelerated filer ¨ (Do not check if a smaller reporting company)		Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨ NO x

Number of shares of issuer’s common stock outstanding at February 29, 2016: 6,012,361

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

CONSOLIDATED BALANCE SHEET

(Audited)

	For the Period Ended:
CURRENT ASSETS	Feb. 29, 2016			Nov. 30, 2015
Cash and Cash Equivalents	$	109,023		$	481,868
Marketable Securities		10,784			13,541
Total Prepaid Insurance		20,097			26,796
Total Prepaid Income Tax		62,500			0
Accounts Receivable		160,000			229,625
Total Current Assets	$	362,404		$	751,830

Fixed Assets
Interest in Mining Properties		70,925			72,020

Deposits		60			60

TOTAL ASSETS	$	433,389		$	823,910

LIABILITIES & SHAREHOLDERS’ EQUITY
Accounts Payable	$	51,180		$	607,979

TOTAL LIABILITIES	$	51,180		$	607,979

STOCKHOLDERS’ EQUITY
Common Stock $.01 Par Value, Authorized 10,000,000 Shares 6,012,361 Shares issued including shares in Treasury		60,124			60,124
Paid-In Capital in excess of Par		121,875			121,875
Retained Earnings		183,895			17,617
Accumulated Other Comprehensive Income		16,420			16,420
Treasury Stock		(105	)		(105	)

TOTAL SHAREHOLDERS’EQUITY	$	382,209		$	215,931

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$	433,389		$	823,910

See accompanying Notes.

CONSOLIDATED SATEMENTS OF INCOME, EXPENSE

AND RETAINED EARNINGS

FOR THE FISCAL QUARTERS ENDED

(Audited)

INCOME	Feb. 29, 2016			Feb. 28, 2015
Royalty Income	$	285,575		$	312,327

TOTAL INCOME	$	285,575		$	312,327

OPERATING EXPENSES
General and Administrative	$	48,422		$	47,657
Professional Services		68,144			25,503
Property, Payroll and Other Taxes		0			16,012
TOTAL OPERATING EXPENSES	$	116,566		$	89,172

OTHER INCOME/(EXPENSE)
Interest Expense	$	0		$	0
Interest and Dividend Income		26			417
Gain/(Loss) on Sale of Marketable Securities		(2,757	)		(5,670	)

TOTAL OTHER INCOME	$	(2,731	)	$	(5,253	)

NET INCOME/(LOSS)		166,278			217,902

Retained Earnings Beginning of Period		17,617			(813,254	)

Retained Earnings End of Period		183,895			(595,352	)

Average Shares Outstanding During Period		6,012,361			6,012,361

NET GAIN/(LOSS) PER SHARE	$	0.03059		$	(0.09902	)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies Consolidation

The consolidated financial statements presented herein include the accounts of Excalibur Industries (“Excalibur”) and its wholly owned subsidiary, Mountain West Mines, Inc. (“Mountain West”), a Nevada corporation, qualified to do business in the state of Wyoming. All significant intercompany transactions have been eliminated from these statements.

Note 2 - Mining Properties and Interests

Excalibur and its subsidiary, Mountain West Mines, Inc., hold various mineral rights interests that are carried at a gross reporting value of $100,000 and depletion of $29,075 for a net mineral rights value of $70,925.

Note 3 - Operating Funds

Excalibur entered in to a Management Services Agreement with Meriden Engineering LLC (“Meriden”) in 2012 to perform certain management and consulting services with respect to mine performance and progress and royalty payment determinations, among others. Meriden’s management fee is 5% of the gross royalty revenue received by the Company. Extraordinary events or issues beyond the scope of the budget will be negotiated between Meriden and the Company as additional compensation. In addition, as an incentive, 5% of actual gross increase in the Company’s consolidated revenues during each calendar year from all sources other than royalties shall be paid to Meriden. In the event the Company is sold, a one-time termination fee in the amount of $250,000 will be paid to Meriden.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to, statements regarding estimation of uranium production and pricing, which are based on information from the uranium producers who are planning to produce uranium from lands in which the Company holds a royalty interest. Actual results and future developments could differ materially from the results or developments expressed in or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, volatility of uranium prices, market supply and demand, competition, environmental hazards, health and safety conditions, regulation or government action, litigation and uncertainties about estimates of reserves. For a discussion of the factors, including without limitation, those that could materially and adversely affect Excalibur’s actual results and performance, see “Risk Factors” set forth on Page 4 of Excalibur’s Annual Report on Form 10-K for the fiscal year ended May 31, 2015. Excalibur undertakes no obligation, other than that imposed by law, to make any revisions to the forward-looking statements contained in this filing or to update them to reflect circumstances occurring after the date of this filing.

Background

Excalibur Industries (“Excalibur”) is a Utah corporation formed by the consolidation of Tower Enterprises (formerly Moab Uranium Company) and The Thrifty Helper on June 1, 1971. In January 1972, Excalibur purchased all of the issued and outstanding shares of capital stock of Mountain West Mines, Inc. (“Mountain West”), a Nevada corporation, which is now a wholly owned subsidiary of Excalibur. Excalibur and Mountain West are hereinafter collectively referred to as Excalibur or Company.

Excalibur is a natural resource business enterprise focused on uranium, an industry that has seen a long period of volatility in production and pricing following the 1979 incident at the Three Mile Island power station and 2011 earthquake and tsunami that struck Japan, crippling the Fukushima-Daiichi atomic power plant, and leading to the shutdown of nearly all reactors in the country. However, most industry analysts continue to forecast a positive future for the industry, including an increase in pricing of yellowcake, in the long term.

Current Activity

Excalibur’s uranium position in the Powder River Basin is maintained by royalty agreements held by Excalibur with two uranium producers, Energy Fuels, Inc., which acquired Uranerz Energy Corporation in June 2015 (“Energy Fuels”), and Cameco Corporation (“Cameco”).

With the acquisition of Uranerz Energy Corporation, Energy Fuels now operates the uranium processing facility at the Nichols Ranch property, in which Excalibur holds a royalty interest (6% or 8% depending on the spot price of uranium). The Nichols Ranch facility was commissioned in April 2014, and uranium production began in June 2014. Energy Fuels/Uranerz produced a total of 83,326.0 pounds of uranium concentrate (“yellowcake”) from the Nichols Ranch in the fourth calendar quarter of 2015, resulting in a royalty payment of $180,334.13. Production from the Nichols Ranch in calendar year 2015 was about 280,000 pounds. Energy Fuels has announced that it is increasing production at Nichols Ranch in 2016 with additional header houses scheduled to come online in March and July. The timing and amount of production by Energy Fuels/Uranez are subject to change and beyond the control of Excalibur.

Cameco continues uranium production from its facility at the North Butte property, in which Excalibur holds a 4% royalty interest. The royalty to be paid to Excalibur is based on Cameco’s quarterly average realized uranium price as reported in Cameco’s filings with the Securities and Exchange Commission. Cameco produced 94,298.6 pounds of uranium concentrate from the North Butte in the fourth calendar quarter of 2015, resulting in a royalty payment of $174,867.32. Cameco produced about 405,000 pounds of uranium concentrate from the North Butte in 2015. Cameco’s production outlook is for a decreased in production in 2016. Again, the timing and amount of production reported by Cameco are subject to change and are beyond the control of Excalibur.

Excalibur owed $100,000 to Cliffs Natural Resources under a 2009 Settlement Agreement and Release. A payment of $50,000 was made in December 2015, and the final installment of $50,000 is expected to be made in December 2016.

Executive Compensation. Effective January 1, 2016, Jay R. Mackie, Excalibur’s President and CEO, is compensated at the rate of $8,000 per month plus restrictive stock with a total aggregate market value of approximately $40,000 annually, paid quarterly, and Michael P. Johnson, Excalibur’s Secretary and Treasurer, is compensated at the rate of $1,250 per month. Beginning January 1, 1016, all Board members will be compensated $2,500 annually plus restrictive stock with a total aggregate fair market value of approximately $1,500 annually, paid quarterly.

Severance Pay. In February 2016, the final installments to satisfy the severance obligation of $300,000 to Excalibur’s former president, Joseph P. Hubert, and $100,000 to Excalibur’s former secretary/treasurer, Marguerite Emanuel were made.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

During the most recently completed fiscal quarter ended February 29, 2016, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company currently is not a party to any material legal proceedings and, to management’s knowledge, no such proceedings are threatened or contemplated.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The following exhibits are attached to this Quarterly Report on Form 10-Q:

Exhibit

Number

Description

31.1-2

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act

32.1-2

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act

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.

	Excalibur Industries

Date: March 28, 2016	By:	/s/ Jay R. Mackie
		Jay R. Mackie
		President, Chief Executive Officer (Principal Executive Officer)

Date: March 28, 2016	By:	/s/ Michael P. Johnson
		Michael P. Johnson
		Secretary and Treasurer (Principal Financial Officer)

EXCALIBUR INDUSTRIES 10-Q