UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (no fee required)
For the transition period to
Commission file number 33-00215
UNITED STATES ANTIMONY CORPORATION
(Name of small business issuer in its charter)
Montana 81-0305822
(State or other jurisdiction
of incorporation or organization) (I.R.S. Employer Identification No.)
P.O. Box 643, Thompson Falls, Montana, 59873
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (406) 827-3523
Check whether the issuer (1) 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
At June 30, 1997, the registrant had outstanding 13,065,434 shares of par
value $.01 common stock.
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
Unaudited
June 30, December 31,
1997 1996
ASSETS
Current assets:
Restricted cash $73,000
Accounts Receivable $33,837
Inventories 445,052 556,249
Prepaid expenses 4,849 21,085
--------- ---------
Total current assets 522,901 611,171
Properties, plants and equipment, net 649,053 670,081
Restricted cash, reclamation bonds 170,046 170,046
--------- ---------
Total assets 1,342,000 1,451,298
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Checks issued and outstanding 87,210 29,491
Reserve for production costs 50,000
Accounts payable 122,630 306,636
Accrued payroll and property taxes 46,128 93,454
Accrued payroll and other 32,487 39,823
Judgments payable 139,070 131,764
Accrued interest payable 852,313 792,240
Payable to related parties 613,373 644,752
Note payable to bank, current 81,842 125,397
Note payable to Bobby C. Hamilton, current 21,263 20,494
Debentures payable 650,000 650,000
Accrued reclamation costs, current 100,000 100,000
---------- ---------
Total current liabilities 2,796,316 2,934,051
---------- ---------
Note payable to bank, non-current 139,576 185,607
Note payable Bobby C. Hamilton, non-current 1,659,697 1,706,257
Accrued reclamation costs, noncurrent 290,942 315,212
---------- ---------
Total liabilities $4,886,531 $5,141,127
========== =========
Commitments and contingencies (Note 3)
The accompanying notes are an integral part of the financial statements. Notes
to the financial statements for the year ended December 31, 1996 substantially
apply to these interim statements and are not repeated here.
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, continued
Unaudited
June 30, December 31,
1997 1996
Stockholders' deficit:
Preferred stock, $.01 par value, 10,000,000 shares
authorized:
Series A: 4,500 shares issued and outstanding 45 45
Series B: 750,000 shares issued and outstanding 7,500 7,500
Common stock, $.01 par value, 20,000,000 shares
authorized; 13,043,434 and 12,627,434
shares issued and outstanding 130,654 126,274
Additional paid-in capital 13,537,147 13,326,464
Accumulated deficit (17,219,877) (17,150,112)
Total stockholders' deficit ( 3,544,531) (3,689,829)
Total liabilities and ------------ ------------
stockholders' deficit $1,342,000 $1,451,298
============ ============
The accompanying notes are an integral part of the financial statements. Notes
to the financial statements for the year ended
December 31, 1996 substantially apply to these interim statements and are not
repeated here.
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATION
for the three and six-month periods ended June 30, 1997 and June 30, 1996
Unaudited Unaudited
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Revenues:
Sales of antimony products $1,100,425 $ 970,302 $2,213,835 $2,318,832
Sales of gold and silver 225,201 432,651
---------- --------- ---------- ----------
Total Revenues 1,100,425 1,225,503 2,213,835 2,751,483
---------- --------- ---------- ----------
Cost of Production:
Cost of antimony production 866,115 819,051 1,846,902 1,972,363
Cost of gold and silver production 365,318 649,740
---------- ---------- ----------- ----------
Total cost of production: 866,115 1,184,369 1,846,902 2,622,103
---------- ---------- ----------- ----------
Gross Profit 234,310 41,134 366,933 129,380
---------- ---------- ----------- ----------
Other operating expenses:
Care and maintenance -
Yellow Jacket 33,121 109,613
Exploration and evaluation 42,043 78,292
General and administrative 71,465 76,738 146,168 177,667
---------- ---------- ---------- ---------
146,629 76,738 334,073 177,667
---------- ---------- ---------- ---------
Other (income) expenses:
Gain on disposal of asset (45,000)
Gain from payables adjustment (37,386) (37,386)
Interest expense 76,863 67,957 148,729 139,947
Interest income (2,906) (1,935) (8,718) (4,450)
---------- --------- --------- ---------
36,571 68,022 102,625 90,497
---------- ---------- --------- ---------
Net Income (Loss) $51,110 $(101,626) $(69,765) $(138,784)
========== ========== ========== ==========
Net Income (Loss) per share NIL $(.01) NIL $(.01)
========== ========== ========== ==========
Weighted average common shares
outstanding 13,055,434 12,187,990 12,896,478 12,150,545
The accompanying notes are an integral part of the financial statements. Notes
to the financial statements for the year ended December 31, 1996 substantially
apply to these interim statements and are not repeated here.
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six-month periods ended June 30, 1997 and June 30, 1996
Unaudited June 30, June 30,
1997 1996
Cash flows from operating activities:
Net loss $( 69,765) $(138,784)
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation and amortization 81,533 102,925
Issuance of common stock to
directors as compensation 5,063
Reservation for production costs 50,000
Gain on adjustment to payables (37,386)
Gain on disposal of equipment (45,000)
Change in:
Restricted cash ( 73,000) 4,598
Accounts Receivable 33,837 (31,934)
Inventories 111,197 (62,697)
Prepaid expenses 16,236
Accounts Payable (146,620) 65,876
Accrued payroll and property taxes (47,326) 89,634
Accrued payroll and other (7,336) (2,202)
Judgments payable 7,306 (1,958)
Accrued interest payable 60,073 64,249
Payable to related parties (31,379) ( 227)
Accrued reclamation costs ( 24,271) (25,735)
Net cash provided by (used in) --------- ---------
operating activities (71,838) 18,745
--------- ---------
Cash flows from investing activities:
Purchase of properties,
plant and equipment (60,505) (101,300)
Sale of property 45,000
--------- ---------
Net cash used in
investing activities (60,505) (56,300)
--------- ---------
Cash flows from financing activities:
Checks issued and outstanding 57,719 37,003
Payments on notes payable to bank (net) (89,585) (21,448)
Payments to Bobby C. Hamilton (45,791) (41,300)
Proceeds from sale of common stock 210,000 57,500
--------- ---------
Net cash provided by
financing activities 132,343 31,755
--------- ---------
Net decrease in cash 0 ( 5,800)
Cash, beginning of period 0 5,800
--------- ---------
Cash, end of period $0 $0
========= =========
Supplemental disclosures:
Cash paid during the six-month
period for interest $88,656 $75,698
========= =========
The accompanying notes are an integral part of the financial statements. Notes
to the financial statements for the year ended December 31, 1996 substantially apply to these interim statements and
are not repeated here.
PART I - FINANCIAL INFORMATION (Continued)
UNITED STATES ANTIMONY CORPORATION and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Notes to December 31, 1996 consolidated financial statements:
The notes to the consolidated financial statements as of December 31, 1996, as
set forth in the Company's 1996 Annual Report on Form 10-KSB, substantially
apply to these interim consolidated financial statements and are not repeated
here.
2. Adjustments to financial statements:
The financial statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the interim
periods reported. All such adjustments are of a normal recurring nature. All
financial statements presented herein are unaudited. However, the balance
sheet as of December 31, 1996, was derived from the audited consolidated
balance sheet referred to in Note 1 above.
3. Commitments and Contingencies:
Until 1989, the Company mined, milled and leached gold and silver in
the Yankee Fork Mining District in Custer County, Idaho. The metals were
recovered by a 150-ton per day gravity and flotation mill, and the
concentrates were leached with cyanide to produce a bullion product at the
Preachers Cove mill, which is located six miles north of Sunbeam, Idaho on the
Yankee Fork of the Salmon River. In 1994, the U.S. Forest Service, under the
provisions of the Comprehensive Environmental Response Liability Act of 1980
(CERCLA), designated the cyanide leach plant as a contaminated site requiring
cleanup of the cyanide solution. The Company has been reclaiming the property
and anticipates having the cyanide contamination remediated and the mill
removed by 1998. In 1996, the Idaho Department of Quality requested the
Company sign a consent decree related to completing the reclamation and
remediation at the Preachers Cove mill. The Company signed the consent decree
in December of 1996. At June 30, 1997, the liability for the remaining
estimated costs to complete remediation at the site was $91,747.
ITEM 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
GENERAL
The Company's operations resulted in a net loss of $69,765 for the six-month
period and net income of $51,110 for the three-month period ended June 30,
1997, compared to net losses of $138,784 and $101,626 for the same respective
periods in 1996.
Total revenues for the first six months of 1997 were $2,213,835 compared with
$2,751,483 for the comparable period in 1996. Total revenues during the
second quarter of 1997 were $1,100,425 compared with $1,225,503 during the
second quarter of 1996. The decrease in revenues during both periods was
primarily due to the absence of gold sales in 1997 compared to 1996. Sales
of antimony products during the first six months of 1997 were $2,213,835
consisting of 1,571,953 pounds at an average sale price of $1.41 per pound.
Sales of antimony products for the three months ended June 30, 1997 were
$1,100,425 consisting of 810,296 pounds at an average sale price of $1.35 per
pound. Sales of antimony products in the first six months of 1996 were
$2,318,832 consisting of 1,124,062 pounds at an average sale price of $2.06
per pound. During the second quarter of 1996 sales of antimony products were
$970,302 consisting of 482,969 pounds at an average sale price of $2.01 per
pound. The decrease in sale prices of antimony products from the six and three
month periods in 1996 to those comparable in 1997 are the direct result of
a decrease in antimony metal prices. Gross profit from antimony sales during
the first six months and the second three months ended June 30, 1997 was
$366,933 and $234,310, respectively. compared with gross profit of $346,469
and $151,251 for the same periods of 1996. The increases in gross profit for
the six and three month periods ended June 30, 1997 compared to the same
periods of 1996 are due principally to increased sales of more profitable
antimony products.
The Company reports 50% of total antimony sales made by HoltraChem and the
Company. Accordingly, total sales of antimony products by both companies was
$4,606,212 or 3,143,906 pounds during the first six months of 1997 and
$2,200,850 or 1,620,592 pounds during the second quarter. Substantially all
of the antimony products sold were produced at the Company's plant in Thompson
Falls, Montana.
In August 1996, the Company placed the Yellow Jacket mine on a
care-and-maintenance status due to decreasing gold prices and sustained
operating losses. Accordingly, no sales of gold or silver were made during
1997. Care and maintenance expenses for the first six months of 1997 were
$109,613 and $33,121 during the second quarter of 1997. The decrease in care
and maintenance costs from the first quarter of 1997 to the second related
primarily to the accrual of an annual royalty due during the first quarter.
Underground exploration costs were $78,292 during the six months ended June
30, 1997 and $42,043 for the three month period ended June 30, 1997.
Sales of gold and silver totaled $432,651 during the first six months of 1996
and $255,201 during the second quarter of 1996. Ounces of gold sold during
the six and three month periods ended June 30, 1996 were 1,095 and 654,
respectively. Sales price per ounce of gold sold during the first six months
of 1996 was $390 and $386 during the second quarter of 1996. Gross losses from
the gold division were $217,089 and $110,117 for the six and three
month periods ended June 30, 1996, respectively.
ITEM 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition (Continued)
General and administrative expenses decreased from $177,667 during the first
six months of 1996 to $146,168 during the comparable period of 1997, the
decrease was due to costs related to regaining the Company's compliance with
securities regulations incurred during 1996.
During the six months of 1996 the Company recognized a gain on the disposal of
property of $45,000. There were no gains or losses on disposition of assets
for the comparable period in 1997, the Company did, however, recognize a gain
from an adjustment made to accounts payable during the second quarter of 1997
of $37,386.
Interest expense was $148,729 and $76,863 for the six and three month periods
ended June 30, 1997, respectively, compared to $139,947 and $67,957 for the
same periods in 1996. The increase was due to a increase in financial
obligations due a bank from 1996 to 1997.
Interest income was $8,718 and $2,906 for the six and three month period
ended June 30, 1997, respectively, compared to $4,450 and $1,935 for the same
periods in 1996. The increase in interest income was attributable to the
increase in restricted cash held for USAMSA development.
Financial Condition and Liquidity
At June 30, 1997, Company assets totaled $1,342,000, and there was a
stockholders' deficit of $3,544,531. At June 30, 1997 stockholders' deficit
had decreased $145,298 from December 31, 1996 due to proceeds received from the
sale of the Company's common stock during the first six months of 1997.
In order to continue as a going concern, the Company is dependent upon (1)
the planned conversion of certain debt and accrued interest to equity (2)
profitable operations from the antimony division, (3) additional equity
financing, and (4) continued availability of bank financing.
Without such debt conversions and additional financing, the Company may not be
able to meet its obligations, fund operations and continue in existence. There
can be no assurance that management will be successful in its plans to improve
the financial condition of the Company. The Company has scheduled it's first
annual meeting since 1989 on October 3, 1997. Items for the approval of
shareholders include the ratification of a proposal to convert a substantial
amount of debenture holder and director debt to the Company's Series "C"
preferred stock. The proposal, if ratified by the shareholders and accepted
by the debtors, will substantially reduce the Company's interest expense and
decrease the stockholders' deficit.
Cash used by operating activities during the first six months of 1997 was
$71,838 and resulted primarily from reductions in current liabilities and
accounts payable. Purchases of property plant and equipment in the antimony
division consumed $60,505 of cash during the first six months of 1997. Of the
total amount expended for property plant and equipment in the antimony
division during the first six months of 1997, approximately $33,000 related
to the Company's USAMSA project in Mexico. Proceeds of $210,000 were
generated through sales of common stock during the six months ended June 30,
1997. Cash used in financing activities totaled $135,376 during the first six
months of 1996 and consisted of principal payments on notes to bank and to
Bobby C. Hamilton. During the first six months of 1997 the Company had cash
flows from financing activities related to checks issued and outstanding of
$57,719.
Financial Condition and Liquidity, (Continued)
Total sales of pounds of antimony products as reported by HoltraChem Inc. and
the Company increased from 2,248,124 during the first six months of 1996 to
3,143,906 during the comparable period in 1997. This increase is projected
to continue as HoltraChem fulfils its goal to grow sales to 10,000,000
pounds per year and as the Company continues to improve and develop its
antimony processing operations. The projected growth will enable the Company
to strengthen its ability to weather the financial risks of changes in the
antimony metal market and help provide resources to meet the Company's
obligations and fund operations.
Significant financial commitments for future periods will include:
Providing $5,000 per month for a "sinking fund" to pay defaulted
debentures a portion of accrued interest, that is not ultimately converted
(see Note 9 to the December 31, 1996 consolidated financial statements).
Servicing borrowings from the bank.
Servicing the Hamilton note payable at a minimum of $150,000
annually (see Note 10 to the December 31, 1996 consolidated financial
statements).
Keeping current on payroll tax liabilities and accounts payable.
Fulfilling reclamation responsibilities with regulatory agencies.
Annual care and maintenance costs of at the Yellow Jacket mine.
Minimum annual royalty payments of $52,500 to Geosearch and Yellow
Jacket mines.
Providing antimony profits to fund the remaining portion of the
Company's antimony inventory up until the Company's share of antimony
inventory amounts to $750,000 or 50% of the total inventory.
The Company plans to address these and other financial requirements by
enhancing the value of its gold properties through an exploration program
begun in 1996. The Company hopes to develop additional reserves from
exploration and generate funds from the sale, joint venture or eventual
production from the property. During 1997 substantial progress was made
developing an underground exploration tunnel. The Company hopes that this
tunnel will intercept mineralized material sometime during the third or
fourth quarter of 1997.
The Company has been filing reports required by Securities agencies since
1995. It is the Company's intention to maintain its compliance with
Securities regulators to help enhance the marketability and value of it's
stock, and prepare it for financing opportunities to fund it's investment in
USAMSA. In the fourth quarter of 1996, the Company sought and obtained
sponsorship from a market maker to list the Company's stock on NASD's
Electronic Bulletin Board trading exchange.
PART II - OTHER INFORMATION
Items 1,2,3,4, and 5 are omitted from this report as inapplicable
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 28. Financial Data Schedule
b. Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(b) 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.
UNITED STATES ANTIMONY CORPORATION
(Registrant)
By:/s/ John C. Lawrence
John C. Lawrence, President, Director and Principal
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By:/s/ John C. Lawrence Date: August 13,1997
John C. Lawrence, Director and President
(Prinicpal Executive, Financial and Accounting Officer)
By:/s/ Walter L. Maguire, Sr. Date: August 13, 1997
Walter L. Maguire, Sr., Director
By:/s/ Robert A. Rice Date: August 13, 1997
Robert A. Rice, Director