SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
(x)ANNAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (no fee required)
For the fiscal year ended December 31, 2004
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.
Yes: x No: .
As of December 31, 2004, 12,867,250 shares of Common Stock, par value $.03 per
share, were issued and outstanding.
<page>
PART I
GENERAL NOTE
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 and
is in the "exploration state" as defined in Guide 7(a)(4)(iii).
ITEM 1: BUSINESS
Description of Business
Original Sixteen to One Mine, Inc. (the Company) mines gold on properties it
owns in fee simple or on which it has claims, in the Alleghany Mining District,
about 65 miles northeast of the intersection of I-80 and California State
Route 49.
The primary operation is the Sixteen to One mine from which more than 1,111,069
troy ounces of gold have been retrieved since the mine commenced operation in
1896. The Company began doing business in its present form in 1911 and has
operated continuously since. It is a traditional hard rock underground mine
where miners create horizontal levels at various elevations and raise into
favorable areas. The geology of the mineral deposit is well documented.
Current activities are focused on the 1,100 foot level. Crews of miners
average about five linear feet of progress per day. Gold is not distributed
evenly within the quartz veins; however, concentrations of gold deposits are
found scattered within these quartz veins. Because the gold appears
intermittently, the Company has never declared reserves according to
contemporary industry standards.
Operations are characterized by significant amounts of preparation, tunneling,
underground property maintenance and upgrading, all of which are necessary to
permit access to and extraction of the gold. The Company from time to time
focuses substantially all of its resources on infrastructure development and
maintenance, and during these periods, little gold is mined. At other times,
miners are primarily searching for gold. Accordingly, business is subjected to
two very different cycles, one dependent on whether the Company is directing
its resources towards infrastructure or underground development and the other
as a function of gold production. The operation resembles the classical "boom
or bust" cycles regardless of outside influences.
Metal detection technology enables miners to detect gold from 20 to 48 inches
from quartz faces in the wall rock. (The size of the concentration is a
factor). Miners work with other companies interested in developing new
technologies for deeper penetration. These arrangements allow the Company to
benefit from research activities without incurring the full costs associated
with research and development.
Advancement in metal detection technology has steadily progressed over the past
ten years. Greater sensitivity in metal detection has historically increased
gold production throughout the mine. Since the Company lacks the funds to
carry forth scientific research, it is impossible to predict when a new device
will be developed; however, the hardware used in advanced gold detection has
continued to improve. Also the same physics principles are used in
governmental programs for Directed Energy Weapons, which may stimulate research
and development.
For accounting purposes gold revenues are accrued when the metal has been
recovered. For tax purposes revenues are not recognized until the gold is sold.
Rare highgrade gold and quartz is sold at a premium to museums, collectors and
jewelry manufacturers. This market has become a significant financial factor
since its beginning in 1993. Demand for the Sixteen to One gemstone is
currently greater than the amount mined.
The Company lacks sufficient funds to implement major construction projects to
significantly increase production of gold. Sinking of a new shaft in the
center of the mine is one project. The company has plans to raise working
capital for this project. No extraordinary working capital requirements exist
to maintain the current level of operation. Nor is there a dependency on any
particular customer, as gold bullion has multiple markets. Business generally
reflects the efficiency and timeliness in which gold is located rather than the
international spot bullion price. Future development and testing of advanced
metal detection will likely increase the production of gold.
Supplies and equipment used for underground exploration are commonly available.
Labor requirements are available. The Company believes that within the Sixteen
to One mine substantial numbers of attractive exploration opportunities are
accessible.
In 1994, following a long-standing practice of acquiring inactive productive
mines, the Company purchased the Brown Bear mine in Trinity County, located
outside Lewiston, California. The property, 540 timbered and patented acres
and twenty-two unpatented claims, has yielded 500,000 troy ounces of
gold. The mine is underground, yet no excavation exists below the tunnel
entrance (adit level). During the 1980's the property was extensively core
drilled by Santa Fe Mineral. These results indicate that within the Brown Bear
mine attractive exploration opportunities exist. When funding is available,
one specific target has been selected for exploration and development. In
1999, the Company acquired the Plumbago mine in the Alleghany Mining District,
which is located approximately two miles southeast of the Sixteen to One mine.
The property includes a twenty acre patented claim, mineral rights to eight
patented claims and sixteen unpatented claims. The property has a history of
rich gold production. The Company will pursue the potential within this
property when funding becomes available for exploration and development.
No particular seasonality exists for the marketing of gold (other than the
Company's gold jewelry sales for which some modest bias toward the fourth
quarter is recorded). Business is not seasonal except for the generally modest
effect of winter storms on the ability of the miners to access the mine.
Management believes it is in substantial compliance with all applicable federal,
state and local laws and regulations relating to the environment. The Company
does not presently anticipate any material capital expenditures for
environmental control facilities, either for the remainder of its current fiscal
year or for the succeeding fiscal year.
The Company is a California corporation formed October 11, 1911. On December
31, 2004, it had three full-time employees plus one permanent part-time
employee and ten contract miners working underground. The Company's
executive office is located at 527 Miners Street, Alleghany, California
95910. The Company's phone number is (530) 287-3223. The Internet address is:
www.origsix.com.
Risk Factors
(a) Price of Gold
The price of gold has increased significantly from the low of $254 in 1999. Any
significant drop in the price of gold may have a materially adverse effect on
the results of the Company's operations unless the Company is able to offset
such a price drop by increasing production or jewelry sales.
(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 arises. Caution is
recommended in using the doctrines of reserves as an economic tool for valuing
the Sixteen to One mine. While (i) the Company has recovered over one million
ounces of gold and (ii) management believes that substantial additional virgin
veins exists in the Sixteen to One mine, the Company has no ability to measure
or prove its belief that a greater amount of gold remains in the approximately
eighty percent (80%) of its unmined vein system.
(c) Governmental Regulation
The financial statements for the years 2003 and 2004 have not been audited by a
Securities Exchange Commission (SEC) accounting firm due to the existence of an
unpaid bill. Therefore, the Company is not in compliance with SEC regulations.
Mining is generally subject to regulation by state and federal authorities.
State and federal statutes regulate environmental quality, safety, exploration
procedures, reclamation, employees 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. Questionable
interpretation of and implementation of regulations have become significant
threats to the natural resource industry.
The Company is in compliance with all known safety and environmental standards
and regulations. There can be no assurance that future changes in the laws,
regulations or reckless interpretations thereof will not have a material adverse
effect. The company is emerging from six years of extreme and questionable
executions of laws and regulations by state and federal government agencies and
others. If these practices were allowed to continue unabated, they would
substantially depress the value of the company.
(d) Liquidity
Gold inventory at December 31, 2004, was $942,796, primarily as specimens or
gold held for jewelry. While history of actual cash sales supports inventory
exceeding the spot price, no such increases are used to compute the inventory.
The difference in the recorded value and the actual cash value is a significant
factor in determining asset value but cannot be included on the balance sheet
due to accounting rules. Periodic shortfalls in liquidity occur which are not
likely to be bridged by institutional debt financing. Management addresses
these issues as they arise. All inventory of raw material is recorded at spot
price per troy ounce. In addition, contract manufacturing costs of jewelry are
included in the finished jewelry inventory.
(e) Price of Stock
Bids and offers are publicly recorded on the stock page of the Company's web
site. Exposure is limited. The price of stock may not accurately reflect its
fair market value because of the limited market place. The company maintains
no program to support or promote its stock and is unlikely to conduct a program
until a public market place is secured.
ITEM 2: PROPERTIES
Properties
The Sixteen to One mine was incorporated into Original Sixteen to One Mine, Inc.
in 1911. Properties acquired prior to 1925 are carried on the Company's books
at their original purchase price and are fully amortized through depletion. The
Company acquired additional mining properties for $405,517. No depletion has
been applied to those properties.
In 1991, the Company purchased leasehold interests and a mill permitted for 200
tons per day, which it upgraded in 1996. The mine is accessed by a road owned
and maintained by the Company. The mouth of the mine is approximately one-half
mile from a county road.
The Alleghany properties consist of 25 patented claims (452 acres) and an
additional 69 unpatented claims and 160 acres of mineral rights on patented
claims. In 1994, the Company purchased the Brown Bear Mine in the French Gulch
Mining District, consisting of 34 patented claims (540 acres) 22 unpatented
claims (440 acres). The following table sets forth further information
with respect to the Company's mining claims.
ALLEGHANY DISTRICT:
PATENTED MINING CLAIMS OWNED 100% BY THE COMPANY
NAME OF CLAIM NAME OF CLAIM
Belmont Rainbow Fraction
Number Three Twenty-One
Eclipse Quartz Eclipse Extension
Tightner Extension Contract
Alene Valentine
Red Star Bartlett
Farnham Gold Quartz Mine Belmont #2
Contract Extension Hanley Quartz Mine
Noble Sixteen to One
Groves Gold Quartz Mine Denver
Happy Jack Extension Ophir
Rainbow Extension Happy Jack
Marion Lode
UNPATENTED MINING CLAIMS OWNED 100% BY THE COMPANY
NAME OF CLAIM NAME OF CLAIM
La Jard Lode Tightner No. 4 Lode
Tagalog Lode Bald Mountain Placer #2
Tightner # 5 Lode Cumberland Lode
Oversight Lode Tightner No. 6 Lode
Aurora Lode Tightner No. 1 Lode
East Bartlett Lode Copeland Two Lode
Tightner No. 2 Lode Red Star Ext Placer
Antique Lode Tightner No. 3 Lode
Buckeye Placer Bullion Lode
Alene Ext Lode Amethyst Lode
Lava #1 Lode Bartlett Ext Lode
Amethyst Ext Lode Lava #2 Lode
Illocano Lode Mabel Lode
Lava #3 Lode Bal Lode
Margaret Lode Alling One Lode
Verde Lode Phoebe Lode
Alling Two Lode Butterfly Lode
Blue Jay Lode Lady Bug Lode
North Star Lode Triple M Lode
South Fork Placer Honey Bee Lode
Mayflower Lode Copeland One Lode
Bald Mountain Placer Parkman Placer
Oregon Creek Placer Apache
Patriot Patriot Extension
Tomahawk Thunderbolt
Bradley Hercules
Hercules Extension
MINERAL RIGHTS - PATENTED CLAIMS
NAME OF CLAIM NAME OF CLAIM
Standard Lode Standard Lode Extension
Gold Beater Lode Clute Lode
Hope Extension Lode Crafts Lode
Plumbago Mine Mill Site Enterprise Quartz
MINERAL RIGHTS - UNPATENTED CLAIMS
NAME OF CLAIM NAME OF CLAIM
Rattlesnake Quartz Eclipse
Eclipse Extension White Oak
Dog Wood Highview
Lucky Cross Aetna
Marion Extension Vaughn #1
Harold #1 Vaughn #2
Harold #2 Reliance
Fighting Bob Plumbago
FRENCH GULCH DISTRICT:
PATENTED MINING CLAIMS OWNED 100% BY THE COMPANY
NAME OF CLAIM NAME OF CLAIM
Dreadnaught Quartz Lode Coon Dog Quartz Lode
North Fork Quartz Lode Madison Quartz Lode
North Fork No. 2 Quartz Mine Martin Quartz Lode
Gem Quartz Lode Brown Bear Ext. Qtz. Lode
Slide Quartz Lode Red Diamond Quartz Lode
Abernathy Quartz Lode New World Quartz Lode
North Pole Quartz Lode Cube Quartz Lode
White Bear Quartz Lode Highland Mary Quartz Lode
Comet Quartz Lode Dead Horse Quartz Lode
Monte Cristo Gold Lode Belmont Quartz Lode
Rising Sun Quartz Lode Capital Gold Quartz Lode
Enterprise Gold Quartz Lode New World Quartz Lode
Last Chance Gold Lode Black Bear Gold Lode
Barted Gold Quartz Mine Queen Gold Quartz Gold
Brown Bear Gold Quartz Mine Shoofly Gold Mining Claim
Watt Quartz Lode Melton Quartz Lode
Deadwood Placer Mining Lode Sebastian Placer Quartz
Lode
UNPATENTED MINING CLAIMS OWNED 100% BY THE COMPANY
NAME OF CLAIM NAME OF CLAIM
Lost Hope Cardinal No. 1
Cardinal No. 2 Cardinal No. 3
Cardinal No. 4 Cardinal No. 5
Cardinal Fraction No. 1 Cardinal Fraction No. 2
Cardinal Fraction No. 3 Cardinal Fraction No. 4
Cardinal Fraction No. 5 Cardinal Fraction No. 6
Cardinal Fraction NO. 7 Cardinal Fraction No. 8
Cardinal Fraction No. 9 Cardinal Fraction No.10
Coon Dog Extension Golden Bear No. 1
Golden Bear No. 2 Luck Boy
Sunny Point Sunny Point No. 2
ITEM 3: LEGAL PROCEEDINGS
1. Petition in United States Court of appeals for the Ninth Circuit, filed
March 23, 2004 contesting MSHA's interpretation of its standard. Docket
Number 04-71301.
2. Plaintiff in Superior Court of the State of California, County of Sierra
against private lawyers and their employer. Case filed February 13, 2004.
Case No. 6293, Complaint for Damages (Malicious Prosecution, Intentional
Infliction of Emotional Distress, Intentional Interference with Perspective
Advantage)
PART II
ITEM 4: MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Market Information
There is no current public market place for the Company's common stock. 2002,
2003 and 2004 market data is based upon activity on the OAU X-Mart posted on
the Company's web-site.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
High Low High Low High Low High Low
------ ----- ------ ----- ------ ----- ------ -----
2004 $ .83 $ .62 $ .75 $ .72 $ 1.00 $ .60 $ .75 $ .42
2003 .90 .85 .83 .38 .70 .50 .60 .60
2002 .86 .22 .86 .60 .32 .20 .55 .20
2001 .234 .167 .400 .250 .300 .267 .400 .150
2000 .333 .187 .354 .210 .397 .210 .333 .127
1999 .357 .230 .417 .167 .354 .230 .354 .210
1998 .730 .544 .687 .520 .687 .294 .417 .294
1997 1.294 1.084 1.417 .960 1.334 .960 1.000 .627
1996 1.544 1.250 1.584 1.437 1.520 1.377 1.334 1.250
1995 1.314 1.084 1.250 .877 1.750 1.044 1.627 1.250
1994 2.500 1.584 2.084 1.834 1.917 1.417 1.250 1.127
Note: The Company offered a 3 for 1 stock split in 2001. Accordingly, share
and per share data has been restated for all periods presented to give effect
to the split.
ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Balance Sheet
Original Sixteen to One Mine, Inc. is a distinct company in that it is the
only operating company of its kind remaining in the United States. Management
believes that the assets of the Company are understated. For example, in 2001,
the Company incurred a loss of approximately $800,000 in the writing down of
development costs of the 2283 Winze. The development costs were capitalized
based on gold production. Due to more favorable locations for short-term gold
production the Company made changes in its plan of operation. While the
immediate future holds no promise for operation in this area of the mine, the
development still proves to be a valuable asset to the infrastructure of the
property.
No value is recorded on the balance sheet for timber. The company owns 1,000
acres of 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 stock piled on the property.
No value is recorded on the balance sheet for goodwill. Fixed assets are
recorded at cost less depreciation.
Comparisons of 2004 with 2003
Current Assets increased by $313,999 (50%) during the twelve-month period ended
December 31, 2004 primarily as a result of a pocket of gold found and mined in
July.
Liabilities decreased by $74,204 (8%) as the Company continued to pay down its
debts.
Retained earnings increased by $399,863 the net profit for 2004.
Other changes in the comparisons between 2004 and 2003 on the balance sheet are
deemed insignificant and immaterial.
Statement of Operations
(a) Comparison of 2003 with 2004
Revenues increased by $976,308 (243%) as a result of a roughly 1,400 oz pocket
found in July as well as revenue from mill sulfides that were processed and
increased slab sales as a direct result of the pocket mined in July.
Salaries and wages increased $59,899 (75%) due to annual wages of $60,000 being
booked (not paid) as owing to Michael M. Miller.
Contract Labor increased $323,959 (607%) due in part to the production
percentage owed to the contract miners for gold mined in July as well as
expanded operations by the contract miners.
Supplies expense increased by $48,989 (317%) as a result of restocking and an
expanded operation.
Small equipment & repairs expense increased by $23,904 (125%) as worn out
equipment was repaired or replaced.
Legal and accounting expense increased by $8,212 (252%) due to the cost of
pending lawsuits.
Compliance & safety expense increased by $5,603 (97%) as two regulatory
agencies increased their fees.
Operating expenses as a whole increased by $495,734 (119%) primarily as a
result of an expanded operation.
The company showed a net profit of $399,863 for the twelve-month period ended
December 31, 2004 compared to a loss of $80,815 for the same period ending
December 31, 2003. This represents an increase of $480,678 (594%) primarily as
a result of the pocket mined in July and a large percentage of the material
being sold as value-added slab.
The basic and diluted gain per share for 2004 totaled .03 compared with a
loss of (.006) per share in 2003.
(b) Comparison of 2003 with 2002
Revenues decreased by $185,577 (32%) as a result of a downsized operation and
the resulting decrease in mine production. It should be noted that consistent
with accounting practices established by our auditors in previous years,
inventory valuation adjustments resulting from the fluctuation of the price of
gold are either added (gold price increases) or subtracted (gold price
decreases) to revenues.
Salaries and Wages decreased by $220,891 (73%) while contract labor increased
$33,565 (169%). This is due to the involvement of accredited miners becoming
independent contractors as participants in a lease with the Company.
Insurance decreased by $30,035 (82%) due to a decrease in worker's
compensation insurance premiums as well as a decrease in coverage.
Operating Expenses as a whole decreased by $378,367 (48%) as a direct result of
a downsized operation.
The basic and diluted loss per share for 2003 totaled (.006) compared with a
loss of (.02) per share in 2002.
SUBSEQUENT EVENTS
None
ITEM 6: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The unaudited financial statements of the Company are attached at the end of
this document.
PART III
ITEM 7: DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Officers and Directors
The following table sets forth the Officers and Directors of the Company. The
directors listed below will serve until the next annual shareholders meeting to
be held on June 26, 2004. All of the officers of the Company serve at the
pleasure of the board of directors.
Name Age Position Officer Since Director Since
Michael M. Miller 62 President
& Director 1983 1977
Scott K. Robertson 48 Treasurer
& Director 1999 1999
Hugh Daniel O'Neill 62 Director N/A 2002
Rae Bell Arbogast 39 Secretary 2002 N/A
Michael M. Miller-Director, President and CEO
As President and Chief Executive Officer, Mr. Miller is responsible for the
day to day operations of the Company. In 1975, Mr. Miller became the sole
proprietor of Morning Glory Gold Mines. Prior to that, he was self-employed in
Santa Barbara County, California from 1965 to 1974. Mr. Miller served
as a trustee and President of the Sierra County Board of Education (1979 to 1983
trustee) (President in 1983). In 1991 he served as a member of the Sierra County
Planning Commission (Chairman in 1992, 1993, 1999 and 2000) until 2001. Mr.
Miller is licensed as a California Class A general engineering contractor. He
is a member of the American Institute of Mining Engineers. In 1965, Mr.
Miller received a B.A. from the University of California at Santa Barbara in
combined Social Sciences-Economics. He was born in Sacramento, California.
Scott K. Robertson- Treasurer ~ Director
Scott K. Robertson has been active in the Company since 1984 as an outside
accountant. In 1992, Mr. Robertson co-founded the CPA and business development
firm Robertson, Woodford, & Summers LLP, located in Grass Valley, California.
He is currently active as the director and owner of several companies.
Mr. Robertson is also a past president of the Economic Resource Council, Rotary
Club of Grass Valley and Nevada County Business Association, all located in
Nevada County, California. He was an instructor at Sierra College for twelve
years.
Mr. Robertson received his bachelor's degree in Business Economics in 1981 from
the University of California at Santa Barbara, and his CPA certificate in 1986
Hugh Daniel O'Neill III ~ Director
Mr. O'Neill was born April 21, 1942 at a naval base in Virginia. He was raised
in seventeen states over a fourteen-year period, settling in Nevada City,
California. He attended the University of San Francisco, where he created Odd
Bodkins in 1961. The San Francisco Chronicle syndicated Odd Bodkins in 1963
making Mr. O'Neill the youngest cartoonist ever hired by a national syndicate
It was published in 350 newspapers. At its peak readership was 50 million
daily. Dan is an historian, an accomplished journalist and a former war
Correspondent.
Rae Bell Arbogast ~ Secretary
Rae Bell has worked for the Sixteen to One Mine since 1996. In 1998 she
completed an Accounting Course from the University of Nevada at Reno and
several computer courses. She is an Administrative Assistant for the company
and serves as the Corporate Secretary.
Rae Bell is a Director and Vice-Chair of the newly formed Pliocene Ridge
Community Services District, a Director of the Alleghany County Water District,
and Director and Curator of Underground Gold Miners Museum. She is a volunteer
Emergency Medical Technician with the Fire Department. She was born in
Southern California and moved to the Alleghany area with her family in 1975.
Her father worked as a miner at the Ruby and Carson Mines. Prior to employment
with the Company she was self-employed.
ITEM 8: EXECUTIVE COMPENSATION
Remuneration of Directors and Executive Officers
Total compensation for each Director, excluding the President, consists of $750
per meeting attended and an annual $2,000 retainer effective January 1, 1994,
and remains unchanged.
The Company has not paid or distributed and does not pay or distribute cash or
non-cash compensation to officers, directors or employees under any retirement
or pension plans, and has no intent to do so in the future.
In April 1996, the Board of Directors adopted, subject to shareholders
approval the Company's Stock Incentive Plan for employees and directors
Shareholders approved the plan on June 22, 1996.
Management Remuneration for the Period Ended December 31, 2004
Name/
Principal Annual
Position Year Salary Bonus Compensation Securities
- --------- ------ ------ ----- ------------ ----------
Michael Miller/ 2004 $ 60,000 0 0 0
President & CEO 2003 $ Deferred 0 0 0
2002 $ Deferred 0 0 0
The following table summarizes incentive options granted to the president:
Issued Sept.24, 1999 450,000 shares $ .230 per share
Issued June 30, 1998 150,000 shares $ .710 per share
Note: No options were granted in the years 2004 or 2003.
These options vest ratably over a five-year period beginning one year from the
date of grant.
Non-qualified Stock Options granted to board members are summarized in the
following table:
SHARES EXERCISE PRICE FULLY VESTED
------ -------------- ------------
Issued June 30, 2001 45,000 $ .3400 June 30, 2005
Issued June 30, 2000 45,000 $ .3125 June 30, 2004
Issued June 30, 1999 45,000 $ .3750 June 30, 2003
Issued June 30, 1998 30,000 $ .6250 June 30, 2002
These options vest ratably over a four-year period beginning one-year from the
date of grant and expire ten years after the date of grant.
ITEM 9: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners and Management
Title of Name and Address Amount and Nature Percent
Class of Beneficial Owner of Beneficial Owner of Class
- ------- ------------------- ------------------- --------
Common M. Blair Hull 1,989,507 15.5%
Hull Trading Co.
401 So. LaSalle, Suite. 505
Chicago, IL 60605
Common Kathy N. Hull 1,490,250 12%
11 Sierra Ave.
Piedmont, CA 94611
Common Michael M. Miller 1,032,597 8%
Officer and Director
P.O. Box 941
Alleghany, CA 95910
Common Scott K. Robertson 132,442 1%
Officer and Director
12391 Deer Park Drive
Nevada City, CA 95945
Common Hugh Daniel O'Neill 7,639 .06%
Director
227 Prospect St.
Nevada City, CA 95959
Common Rae Bell Arbogast 13,158 .1%
Secretary
P.O. Box 919
Alleghany, CA 95910
Common All Officers & Directors 4,665,593 36%
(as a group)
PART IV
ITEM 10: UNAUDITED FINANCIAL STATEMENTS
In the opinion of management, the financial statements contain all adjustments
(consisting only of normal recurring accruals) necessary to present fairly the
Company's financial position at December 31, 2004 and December 31, 2003, the
results of operations and cash flows for the twelve-month periods ended
December 30, 2004, 2003 and 2002. The unaudited financial statements have been
prepared in accordance with Generally Accepted Accounting Principles.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
From time to time the Original Sixteen to One Mine, Inc. (the Company), will
make written and oral forward-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 and political
conditions
- - Unexpected geological conditions or rock stability conditions
resulting in cave-ins, flooding, rock-bursts or rock slides
- - Difficulties associated with managing complex operations in remote areas
- - Unanticipated milling and other processing problems
- - The speculative nature of mineral exploration
- - Environmental risks
- - Changes in laws and government regulations, including those
relating to taxes and the environment
- - The availability and timing of receipt of necessary governmental
permits and approval relating to operations, expansion of operations,
and financing of operations
- - Fluctuations in interest rates and other adverse financial market conditions
- - Other unanticipated difficulties in obtaining necessary financing with
specifications or expectations
- - Labor relations
- - Accidents
- - Unusual weather or operating conditions
- - Force majeure events
- - Other risk factors described from time to time in the Original Sixteen to One
Mine, Inc., filings with the Securities and Exchange Commission
Many of 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 disclaims any intent or obligation to update its
forward-looking statements, whether as a result of receiving new information,
the occurrence of future events or otherwise.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Annual Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
ORIGINAL SIXTEEN TO ONE MINE, INC.
Registrant
By: /s/Michael M. Miller
Michael M. Miller
President and Director
March 4, 2005
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Balance Sheet
December 31, 2004 and December 31, 2003
ASSETS
2004 2003
Current Assets
Cash $ 9,857 $ 40
Accounts receivable 3966 3204
Inventory 927,812 620,778
Other current assets 1,161 5,775
------- -------
Total current assets 942,796 629,797
------- -------
Mining Property
Real estate and property rights
net of depletion of $524,145 181,091 181,091
Real estate and mineral property 473,403 473,403
------- -------
Total Mining Property 654,494 654,494
------- -------
Fixed Assets at Cost
Equipment 953,515 909,983
Buildings 159,487 159,487
Vehicles 253,128 252,128
--------- ---------
Total fixed assets a cost 1,366,130 1,321,598
--------- ---------
Less accumulated depreciation (1,243,368) (1,211,496)
----------- -----------
Net fixed assets 122,762 110,102
----------- -----------
Other Assets
Bonds and misc. deposits 16,185 16,185
--------- -------
Total Assets $1,736,237 $1,410,578
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
2004 2003
Current Liabilities
Bank Overdraft $ 0 0
Accounts payable & accrued expenses $ 256,621 352,797
Due to related party 156,291 101,397
Notes payable due within one year 421,421 434,013
-------- -------
Total Current Liabilities 834,333 888,207
-------- -------
Long Term Liabilities
Notes payable due after one year 7,267 27,597
-------- -------
Total Liabilities 841,600 915,804
-------- -------
Stockholders' Equity
Capital stock, par value $.03 : 30,000,000
shares authorized:12,867,250 shares
issued and outstanding as of
December 31, 2004
and December 31,2003 428,869 428,869
Additional paid-in capital 1,875,888 1,875,888
(Accumulated deficit)
Retained earnings (1,410,120) (1,809,983)
------------ -----------
Total Stockholders' Equity 894,637 494,774
------------ -----------
Total Liabilities and Stockholders' Equity $1,736,237 $1,410,578
============ ============
Original Sixteen to One Mine, Inc.
Statement of Operations
2004 2003 2002
Revenues:
Gold & jewelry sales 1,374,247 397,903 588,030
Other Sales 3,211 3,247 -
------ ------- -------
Total Revenues 1,377,458 401,150 588,030
Operating expenses:
Salaries and wages 139,571 79,672 300,563
Contract Labor 377,346 53,387 19,822
Telephone & utilities 102,888 123,831 141,738
Taxes - property & payroll 38,497 35,939 52,539
Insurance 6,162 6,619 36,654
Supplies 64,445 15,456 56,737
Small equipment & repairs 43,017 19,113 18,095
Drayage 27,836 21,514 18,262
Corporate expense 10,705 15,218 13,608
Legal and accounting 11,471 3,259 29,633
Compliance/Safety 11,363 5,760 21,073
Depreciation & amortization 31,872 23,823 73,660
Other expenses 45,666 11,518 11,088
------- ------ ------
Total operating expenses 910,839 415,109 793,472
Profit (Loss) from operations 466,619 (13,959) (205,442)
Other Income & (Expense):
Interest Expense and Late Charges (64,522) (67,928) (78,543)
Other expense (4,041) (2,528) (11,513)
Other income 2,607 4,400 16,213
--------- -------- ---------
Total other (expense) income (65,956) (66,056) (73,843)
Profit (Loss) before taxes 400,663 (80,015) (279,285)
Income tax expense 800 800 800
Net (loss) income $ 399,863 $ (80,815) $ (280,085)
========= ========== =========
Basic and diluted gain (loss) per share $ .03 $ (.006)$ (.02)
Shares used in the calculation of net
(loss) income per share 12,867,250 12,867,250 12,744,046
======== ========= ========
<page>
Original Sixteen to One Mine, Inc.
Statement of Cash Flow
For the Years Ended December 31, 2004, 2003, 2002
Cash Flows From Operating Activities:
2004 2003 2002
Net profit (loss) $ 399,863$ (80,815)$ (280,085)
Operating activities:
Depreciation and amortization 31,872 23,823 73,660
Decrease(Increase) in accounts receivable (762) 4,117 12,635
Decrease(Increase) in inventory (307,034) (15,728) 101,583
Decrease (Increase) in other current assets 4,614 1,463 6,101
(Decrease) Increase in accounts payable
accrued expenses and short term notes (53,874) 27,534 148,370
-------- ------- ---------
Net cash (used) provided by operating activities 74,679 (39,606) 62,264
Cash Flows From Investing Activities:
Purchase of fixed assets (44,532) - (11,935)
Other assets Bonds Misc. deposits - - (16,185)
--------- -------- --------
Net cash (used)provided by investing activities (44,532) - (28,120)
Cash Flows From Financing Activities
Bank overdraft increase (decrease) - (81) (12,349)
Increase (decrease) notes payable (20,330) (30,286) (45,264)
Proceeds from sale of common stock - 4,001 -
Paid in Capital from Shareholders - 66,012 -
-------- -------- --------
Net cash provided (used) by financing activities (20,330) 39,646 (57,613)
(Decrease)increase in cash 9,817 40 (23,469)
Cash, beginning of period 40 0 23,469
------ ------- --------
Cash, end of period $ 9,857 $ 40 $ 0
======== ======= ========