SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31,June 30, 2021
Commission File No. 001-10156
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0735390
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporated or organization)
Post Office Box 909, Alleghany, CA 95910
(Address of principal executive offices)
(530) 287-3223
(Registrant's telephone number)
(including area code)
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 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 requirement for the past 90 days.
N/A Voluntary Filer
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, 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 smaller reporting
company)
Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-d of the Exchange Act). Yes
[ ] N0 [X]
As of March 31,June 30, 2021, 14,390,63114,870,631 shares of Common Stock, par
value $.033 per share, were issued and outstanding.
Item 1. PART I
Original Sixteen to One Mine, Inc.
Condensed Balance Sheet
March 31,June 30, 2021 & December 31, 2020
ASSETS
2021 2020
Current Assets
Cash $ 20,02822,781 $ 21,82222,126
Accounts receivable 58,012111,614 55,775
Inventory (see Note 1) 279,650 309,425211,906 309,576
Other current assets - -
------- -------
Total current assets 357,690 387,022346,301 387,477
------- -------
Mining Property
Real estate and property rights
net of depletion of $524,145 230,401 230,401
Mineral property 47,976 47,976
------- -------
Total Mining Property (see Note 2) 278,377 278,377
------- -----
---------
Fixed Assets at Cost
Equipment 597,602 597,602
Buildings 209,487 209,487
Vehicles 168,925 168,925
--------- ---------
Total fixed assets at cost 976,014 976,014
--------- ---------
Less accumulated depreciation (938,434) (937,727)(970,468) (969,054)
----------- -----------
Net fixed assets 37,580 38,2875,546 6,960
----------- -----------
Other Assets
Bonds and misc. deposits 14,869 14,869
--------- -------
Total Assets $ 688,516645,093 $ 718,555687,683
========== ==========
?
Original sixteen to One Mine, Inc.
Condensed Balance Sheet Continued
LIABILITIES & STOCKHOLDERS' EQUITY
2021 2020
Current Liabilities
Accounts payable & accrued expenses (see Note 3)$ 1,343,753 1,323,8971,257,898 1,327,532
Due to related party (see Note 4) 303,753 286,248215,762 279,237
Notes payable Short-term (see Note 6) 538,558 538,558
-------- -------
Total Current Liabilities 2,186,064 2,148,7032,012,218 2,145,327
-------- -------
Long Term Liabilities
Notes payable due after one year (see Note 7) 97,236 97,236126,836 126,836
-------- -------
Total Liabilities 2,283,300 2,245,9392,139,054 2,272,163
---------- ---------
Stockholders' Equity
Capital stock, par value $.033:
30,000,000 shares authorized: 14,342,09714,390,631
issued and outstanding as of Dec. 31, 20182020
and 14,870,631 as of June 30, 2019
(see Note 8) 474,8912021
490,731 474,891
Additional paid-in capital 2,222,892 2,222,8922,446,044 2,221,884
(Accumulated deficit)
Retained earnings (4,292,567) (4,225,167)(4,430,736) (4,281,255)
------------ -----------
Total Stockholders' Equity (1,594,784) (1,527,384)(1,493,961) (1,584,480)
------------ -----------
Total Liabilities and
Stockholders' Equity $ 688,516645,093 $ 718,555
============687,683
=========== ============
See Accompanying Notes
?
Original Sixteen to One Mine, Inc.
Statement of Operations and Retained Earnings
Three Months Ending March 31,June 30, Six Months Ending June 30,
2021 2020 2021 2020
------ ------ ------ ------
Revenues:
Gold & Jewelry
Sales (24,174) 50,13055,507 21,196 31,426 71,121
Other Revenue
--------- --------- --------- --------
Total revenues $ (24,174)55,507 $ 50,13021,196 $ 31,426 71,121
--------- --------- ---------- --------
Operating expenses:
Salaries and wages 15,000 15,00011,049 30,000 26,049
Contract Labor 4,133 34,5175,040 7,980 9,172 42,497
Utilities 19,750 18,66121,405 17,878 41,386 36,539
Taxes - property & payroll 412 4,7624,841 4,892 5,252 9,654
Supplies 47 448789 2,447 1,831 2,896
Insurance 381 1,1272,871 2,027 5,845 4,445
Small equipment equip.&
repairs 1,284 2,6001,276 1,021 3,586 3,621
Drayage 1,005 3,9675,870 1,745 9,449 5,712
Corporate expenses - 1,22119,304 3,002 19,537 4,223
Legal and Compliance - 4,201635 12,878 635 18,079
Mine Maintenance - 1,2712,172 91 3,187 1,362
Depreciation & amortizationamort. 707 2,442 1,414 4,883
Other expenses 329 8465,298 774 5,808 1,809
- ------- ------- --------- ----------
Total operating
expenses 43,048 91,06385,208 68,226 137,102 161,769
-------- -------- --------- ----------
Profit (Loss) from
operations (67,222) (40,933)Operations (29,701) (47,030) (105,676) (90,648)
Other Income: 1,200 1,200 2,400 2,400
Other Expense: - -1,887 1,274 3,605 3,203
--------- -------- --------- ----------
Total Other income(expense) 1,200 1,200income (687) (74) (1,205) (803)
-------- -------- --------- ----------
Profit (Loss)
before taxes (66,022) (39,733)(30,388) (47,104) (106,881) (91,451)
---------- --------- --------- ---------
Income tax benefit
(expense) - -(1,600) (800) (1,600) (800)
---------- --------- --------- ---------
Net profit
(loss) $ (66,022)(31,988) $ (39,733)(47,904) (108,481) (92,251)
=========== ========== ========= =========
Basic and diluted (loss)
earnings per share $ (.005)(.002) $ (.003) $ (.007) $ (.006)
========== ========== ========= =========== =========
Shares used in the
calculation of net (loss)
income per share
14,870,631 14,390,631 14,342,09714,870,631 14,390,631
============ =========== ========== ==========
See Accompanying Notes
Original Sixteen to One Mine, Inc.
Statement of Cash Flows
ThreeSix Months Ended March 31,June 30, 2021 and March 31, 2019
ThreeJune 30, 2020
Six Months Ended March 31,June 30,
2021 2020
-------------- ------------
Net profit (loss) $ (66,022)(108,481) $ (39,733)(91,451)
Cash Flows From Operating Activities:
Depreciation and amortization 707 2,4421,414 4,883
(Increase)Decrease in
accounts receivable (2,237)(55,839) (250)
Decrease(Increase) in inventory 29,775 35,49697,671 14,865
(Increase)Decrease in other
current assets - -
(Decrease) increase in accounts payable
and accrued expenses 18,477 (52,064)(69,635) (32,289)
(Decrease)increase in related party loans
17,506 12,464
(Decrease)(63,475) (15,363)
Decrease) increase in short term notes - -
------------ -----------------
Net cash (used) provided by
operating activities (1,794) (41,645)(198,345) (119,605)
------------ ----------
Cash Flows From Investing Activities:
Fixed Asset Purchases _ -
Proceed from sale real estate - -
Other assets bonds misc. deposits - -
----------- - ----------
Net cash (used) provided by
investing activities - -
----------- -----------
Cash Flows From Financing Activities
Increase (decrease) notes payable - (50,864)(41,000) 141,006
Proceeds from sale of common stock -15,840 -
Additional paid-in capital -224,160 -
----------- -----------
Net cash provided (used) by
financing activities - 112,906199,000 141,006
------------ ------------
(Decrease) increase in cash (1,794) 20,397655 21,401
Cash, beginning of period 21,82222,126 4,433
------------ ----------
Cash, end of period $ 20,02822,781 $ 24,83025,834
============ ============
Supplemental schedule of other cash flows:
Cash paid during the period for:
Interest expense $ - $ -
============ ===========
Income taxes $ -1,600 $ -800
============ ===========
NOTES TO THE FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business: Original Sixteen to One Mine, Inc. (the
Company) incorporated in 1911, actively operates the Sixteen
to One mine in Alleghany, California.
Inventory: Inventory consists of gold bullion, specimens and
jewelry. Gold bullion is quoted at the current market price.
Jewelry and specimens are quoted at the market price for gold
content plus labor cost.
Inventory is accounted for using the average cost method. Inventory is
adjusted by gold at the spot price for the quarter.
Fixed Assets: Fixed assets are stated at historical cost.
Depreciation is calculated using straight-line and
accelerated methods over the following useful lives: Vehicles
3 to 5 years, Equipment 5 to 7 years, Buildings 18 to 31.5
years. Company does not capitalize underground expenses or
exploration.
Depletion Policy: Because of the geological formation in the
Alleghany Mining District, estimates of ore reserves cannot
be calculated, and accordingly, a cost per unit depletion
factor cannot be determined. No depletion deduction is
recorded.
Revenue Recognition: RevenueNew production of gold is recognized using quoted market prices
for gold when mined.recorded as an
asset at the current spot price (.999 fine purity). For
income tax purposes revenues are not recognized until the
gold is sold.
Use of Estimates: Preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions.
Estimates and assumptions affect reported amounts of assets
and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the
reporting period. Actual results may differ from these
estimates.
GENERAL NOTES
1. In accordance with directive from the Securities and
Exchange Commission (SEC)and Industry Guide 7, reference for
all intent and purposes to the Company's employees as miners,
its properties as mines or its operation as mining does not
diminish the fact that the Company has no proven reserves for
the period. The "exploration state" as defined in Guide
7(a)(4)(iii) may apply.
2. Financial statements contain adjustments (consisting only
of normal recurring accruals) necessary to present fairly the
Company's financial position at March 31,June 30, 2021 and December
31, 2020. The results of operations and cash flows for the
firstsecond quarter of 2021 and 2020 and showing the three-monthsix-month
year-to-date ending March 31,June 30, 2021 and 2020. Unaudited
financial statements are prepared in accordance with
Generally Accepted Accounting Principles for interim
financial information and with instructions to Form 10-Q and
Item 310(b) of Regulation S-B. Liabilities of $240,000 were
decreased through the issuance of 480,000 shares of common
stock. The shares represented by certificates have not been
registered under the securities act of 1933, and may not be
sold, transferred or otherwise disposed unless in the opinion
of counsel satisfactory to the issuer, the transfer qualifies
for an exemption from or exemption to the registration
provisions thereof.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF
OPERATION
The Sixteen to One mine in the Alleghany Mining District is a
unique gold deposit and requires an unfamiliar operation,
which is recognized by its owners, its miners, geologists,
engineers, and some public agencies for 125 years. It is a
rare California high-grade, hard rock, underground gold mine.
The Company celebrated its 100th year anniversary on Oct. 9,
2011. becoming the oldest gold mining corporation in the
United States. Experts estimate that sixty percent or more of
the gold deposit remains. Production is approximately
1,500,000 ounces of gold.
Over thirty miles of horizontal workings and millions of
cubic feet of vertical excavations called stopes exist. The
entire grounds are not maintained for mining. Once an area
is targeted for mining, travel ways and escape routes are
brought into safety compliance. Production miners set up a
heading (face) and begin a drill-blast-muck sequence into the
quartz. Gold is hosted in the quartz vein as exceedingly
rich concentrations called "pockets". Metal detectors are
regularly used underground as a tool for guiding the
direction of the work. Metal detectors are also used as a
tool to classify the ore underground. A positive effect
reduces the volume of rock taken from the mine, thereby
reducing costs.
In 1992, the company initiated a gold marketing plan of
selling gold in quartz as a gemstone. This produces revenue
significantly greater than selling gold into the spot market.
Demand for the Sixteen to One gold-in-quartz gemstone exceeds
supply.
Production has been termed a "feast or famine" situation for
over 100 years. Reserves in this high-grade gold mine cannot
be termed as "proven". At the Sixteen to One the search for
gold embraces: (1) historical maps; (2) geophysical
prospecting; (3) underground headings, drifts or tunnels.
When operations detect the presence of gold, the Company
evaluates the environment and changes from exploration to
development to production rapidly. The company hoards gold
and sells it according to short-term cash needs. These facts
create headaches for the Company managing cash flow between
pockets.
Balance Sheet notes:
Gold inventory is recorded at spot price despite proven additional
value for specimen and gem-stone material which is substantially
greater than spot price. Jewelry inventory is recorded at labor plus
gold cost.
No value is recorded on the balance sheet for timber
reserves. The company owns 470 acres of prime forested
timberland. No value is recorded on the balance sheet for
the Company owned water-rights. Reduced value is recorded on
the balance sheet for buildings, equipment and land. No
value is recorded on the balance sheet for marketable
aggregate and decorative stone currently stockpiled. No
value is recorded on the balance sheet for goodwill. Fixed
assets are recorded at historic cost less depreciation which
cloud the true value of Company assets.
BALANCE SHEET COMPARISONS
For the three-monthsix-month period ended March 31,2021, there were no
significant changes toJune 30,2021, liabilities
decreased by $240,000 through the balance sheet.issuance of 480,000 shares
of common stock. The shares represented by certificates have
not been registered under the securities act of 1933.
STATEMENT OF OPERATIONS
Revenues
Gold revenues for the three-monthsix-month period ending March 31,June 30, 2021,
decreased by $74,304 (148%$39,695 (56%) compared with the same period in
2020 due to supporting COVID-19 California and federal
restrictions, decrease in the spot price of gold,sales, and the emphasis on
maintenance instead of producing gold.
Expenses
For the three-monthsix-month period ended March 31,June 30, 2021, compared to the
same period in 2020 total operating expenses decreased by
$48,015 (53%$24,667 (15%) to support and comply with COVID-19 California
and federal restrictions to support COVID-
19 California and federal restrictions. Operations complied with COVID
19 restrictions. Planned maintenance is less costly
than mining.
For the three-monthsix-month period ended March 31,June 30, 2021, compared to the
same period in 2020, the company showed a loss of $66,022$108,481
compared to a loss of $39,733.$91,452. The $26,289 (66%$17,030 (19%) difference wasis
due to intentional changes in the operation from mining for gold
to maintenance.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
From time to time the Company makes written and oral forward-lookingforward-
looking statements about matters that involve risks and
uncertainties that could cause actual results to differ
materially from projected results. Important factors that
could cause actual results to differ materially include,
among others:
- Fluctuations in the market prices of gold
- General domestic and international economic, political and
governmental
conditions
- Unexpected geological conditions or rock stability
conditions
resulting in cave-ins, flooding, rock-bursts or rock slides
- The speculative nature of mineral exploration
- Environmental risks
- Changes in laws and government regulations, including those
relating to taxes
and the environment
- Fluctuations in interest rates and other adverse financial
market conditions
- Labor relations
- Accidents
- Unusual weather or operating conditions
- Force majeure events
These factors are beyond the Company's ability to control or
predict. Investors are cautioned not to place undue reliance
on forward-looking statements. The Company will update its
forward-looking statements, whether as a result of receiving
new information, the occurrence of future events or otherwise
if significant.
ITEM 4: CONTROLS AND PROCEDURES
Security procedures include multiple levels of gold custody,
from the mine to sales. Inventory control procedures were set
up by an SEC certified auditing firm and continue to be
followed.
PART II
Item 1 LEGAL PROCEEDINGS
Company is defendingdefended criminal allegations initiated by the
California District Attorney?sAttorney Association. On July 12, 2021
Sierra County District Attorney dismissed all criminal
charges. The decision was approved in the California Superior
Court, Sierra County on July 13, 2021. Civil charges to be
discussed with Sierra County officials at a later date.
Item 1a RISK FACTORS
(a) Price of Gold
The dailycurrent spot price of gold has no financial effect on gross revenue
if it's between $1,700 and $1,800 an
ounce. A significant drop below
$1,700 may have an adverseounce has limited financial effect on the Company'sgross revenue. Closing
spot price on December 31, 2020, was $1,803.28 and on March 31,June
30, 2021, it was $1691.05$1,763.15 an ounce. The Company's realized gold inventory
usually exceeds the bullion price.
(b) Lack of Proven Reserves
Because proven reserves are not utilized as a component for
evaluating future earnings or ore values, a sense of
uncertainty of existence is perceived by some. Caution is
always recommended in using the doctrines of reserves as an
economic tool for valuing a mining company. While (i) the
Company has recovered over one million ounces of gold and
(ii) management knows that substantial additional virgin
veins exist in the Sixteen to One mine, the Company has no
ability to measure potential gold production using the
mathematical tools generally recognized in the mining
industry; however, the company can prove that approximately
seventy percent (70%) of its vein systems have not been
developed.
(c) Governmental Regulation
The attached financial statements have not been audited by a
Securities Exchange Commission (SEC) accounting firm.
Therefore, the Company is not in full compliance with this
SEC regulation for companies listed on an exchange.
State and federal statutes regulate environmental quality,
safety, exploration procedures, reclamation, employee?s
health and safety, use of explosives, air quality standards,
pollution of stream and fresh water sources, noxious odors,
noise, dust, and other environmental protection controls as
well as the rights of adjoining property owners. Laws may
change preventing or delaying the commencement or continuance
of given operations.
The Company is substantially in compliance with all known
safety and environmental standards and regulations, however; it has faced
reoccurring unreasonable and illegal demands from theregulations. The
California Central Valley Regional Water Quality Control
Board (CVRWCB.permit was approved an additional five years in June
2021. The NPDES permit program, created in 1972 by the Clean
Water Act (C WA), helps address water pollution by regulating
point sources that discharge pollutants to waters of the
United States. The federal EPA Administration Order became
effective August 16, 2021. The Company expends working
capital and time defending excessive and punitive behavior.
There is no assurance that future changes in the laws regulations or
reckless interpretations thereof will not have a material adverse
effect. CVRWCB staff accepted invitations to visit the mine property.
A definitive plan is under mutual development to re-write the mine's
discharge permit.regulations.
(d) Liquidity
Gold inventory at March 31,June 30, 2021, was $279,650 primarily as specimens
or gold held as jewelry. While history of actual cash sales supports
an inventory value exceeding the spot price, no such increases are
used to compute the inventory. All inventory of raw$211,906. Raw material
is recorded at spot price per troy ounce. In addition, contract
manufacturing costs of jewelry are included in the finished jewelry
inventory. Periodic shortfalls in liquidity occur which are not
likely to be bridged by institutional debt financing. Management
addresses these issues as they arise.
(e) Price of Stock
Bids and offers are publicly recorded on the stock page of
the Company's web site and a gray market. There were no
trades listed for the past three years. Exposure is limited.
The price of stock may not accurately reflect its fair market
value because of the limited marketplace and the existence of
a wild and free gray market. The company deferred programs
to support or promote its stock.
There are conflicting bids, offers and trades between the Company's
website and the unregulated Pink Sheet Gray Market, ticker symbol
OSTO. Because of these discrepancies the market price is unreliable.
Item 2 UNREGISTERED SALES OF EQUITY
None
Item 3. DEFAULTS ON SECURITIES
None
Item 4. MINE SAFETY DISCLOSURES
For the three-monthsix-month ended March 31,June 30, 2021, the Mine Safety and
Health Administration (MSHA) issued no citations or orders.orders to
report.
Item 5. OTHER INFORMATION
The unaudited interim consolidated financial statements of
the Company are prepared by management in accordance with
generally accepted accounting practices. Such rules allow
the omission of certain information and footnote disclosures
normally included in financial statements prepared in
accordance with generally accepted audited accounting
principles as long as the statements are not misleading.
In the opinion of management, verified by signature below,
all adjustments necessary for a fair presentation of these
interim statements have been included. These adjustments are
of a normal recurring nature.
The preparation of the Company's financial statements in
conformity with accounting principles accepted in the United
States requires management to make estimates and assumptions.
These estimates and assumptions affect reported amounts of
assets and liabilities and disclosure of contingent
liabilities at the date of financial statements, as well as
reported amounts of revenues and expenses during the
reporting period. On an ongoing basis, management evaluates
its estimates and assumptions; however, actual amounts may
differ. No accounting principle upon which the Company's
financial status depends, requires estimates of proven and
probable reserves and/or assumptions of future gold prices.
Commodity prices may significantly affect the company's
profitability and cash flow. No independent accounting firm
or auditors have any responsibility for the accounting and
written statements of the Form 10-Q.
The Company and its president assume responsibility for the
accuracy of this filing and certify the financial statements
present fairly in all material respects, the financial
position of Original Sixteen to One Mine, Inc at March 31,June 30,
2021.
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.
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Registrant)
Michael M. Miller
President and Director
Dated: May 26,September 17, 2021