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 (fee required)
For the quarterly period ended March 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (no fee required)
For the transition period to
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Commission file number 33-00215
UNITED STATES ANTIMONY CORPORATION
(Name of small business issuer in its charter)
Montana
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(State or other jurisdictuion
of incorporation or organization)
81-0305822
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P.O. Box 643, Thompson Falls,
Montana 59873
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(Address of principal
executive offices)
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 No X
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At January 10, 1997, the registrant had outstanding 12,573,434 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
March 31, December 31,
1996 1995
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(Unaudited)
ASSETS
Cash assets:
Cash (Bank overdraft) $ (25,092) $ 5,800
Restricted cash, payroll taxes 4,598
Accounts Receivable 60,027 110,920
Inventories 506,334 450,501
Prepaid royalty expense 10,040 10,040
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Total current assets 551,309 581,859
Properties, plants and equipment, net 1,319,070 1,281,742
Restricted cash, reclamation bonds 170,046 170,046
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Total assets $ 2,040,425 $ 2,033,647
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LIABILITIES AND STOCKHOLDERS DEFICIT
Current liabilities:
Accounts payable $ 347,924 $ 299,446
Accrued payroll and property taxes 105,062 71,772
Accrued payroll and other 45,271 47,285
Judgments payable 144,162 147,865
Accrued interest payable 704,204 672,130
Payable to related parties 642,107 646,347
Notes payable to bank 78,851 114,824
Notes payable to Bobby C. Hamilton,
current 16,067 15,771
Debentures payable 650,000 650,000
Accrued reclamation costs, current 80,000 80,000
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Total current liabilities 2,813,648 2,745,440
Note payable to Bobby C. Hamilton,
noncurrent 1,749,526 1,773,948
Accrued reclamation costs, noncurrent 330,343 330,193
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Total liabilities 4,893,517 4,849,581
Commitments and contingencies
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, CONTINUED
March 31, December 31,
1996 1995
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(Unaudited)
LIABILITIES AND STOCKHOLDERS DEFICIT,
CONTINUED
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 (liquidation
preference $765,000 at
December 31, 1995) 7,500 7,500
Common stock, $.01 par value, 20,000,000
shares authorized; 12,113,434 shares
shares issued and outstanding 121,134 121,134
Additional paid-in capital 13,190,544 13,190,544
Accumulated deficit (16,172,315) (16,135,157)
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Total stockholders deficit ( 2,853,092) ( 2,815,934)
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Total liabilities and
stockholders deficit $ 2,040,425 $ 2,033,647
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See Notes to Consolidated Financial Statements
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three-month periods ended March 31, 1996 and March 31, 1995
March 31,
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1996 1995
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Revenues:
Sales of antimony products $ 1,348,530 $ 910,803
Sales of gold and silver 177,450 227,662
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1,525,980 1,138,465
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Expenses:
Cost of antimony production 1,142,936 574,329
Cost of gold and silver production 282,727 327,590
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1,425,663 901,919
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Gross Profit 100,317 236,546
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Other expenses (income):
General and Administrative 104,209 48,987
Gain on disposal of property (45,000)
Interest expense 80,784 85,195
Interest income (2,515) (1,545)
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137,475 132,937
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Net income (loss) $ (37,158) $ 103,909
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Net income (loss) per common share $ NIL $ .01
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Weighted average common shares
outstanding 12,113,434 11,681,434
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See Notes to Consolidated Financial Statements
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three-month period ended March 31, 1996
Cash flows from operating activities:
Net loss $(37,158)
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation 49,200
Gain on disposal of equipment (45,000)
Change in:
Restricted cash 4,598
Accounts receivable 50,893
Inventories (55,833)
Accounts payable 48,478
Accrued payroll and property taxes 33,290
Accrued payroll and other (2,014)
Judgments payable (3,703)
Accrued interest payable 32,074
Payable to related parties (4,240)
Accrued reclamation costs (1,081)
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Net cash provided by operating activities 69,504
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Cash flows from investing activities:
Purchase of properties, plant and equipment (85,297)
Sale of property 45,000
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Net cash used in investing activities: (40,297)
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Cash flows from financing activities:
Payments on notes payable to bank (35,973)
Payments to Bobby C. Hamilton (24,126)
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Net cash used in financing activities (60,099)
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Net increase (decrease) in cash (30,892)
Cash, beginning of period 5,800
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Bank overdraft, end of period $(25,092)
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Supplemental disclosures:
Cash paid during the three-month period for interest $ 39,916
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See Notes to Consolidated Financial Statements
PART I - FINANCIAL INFORMATION (Continued)
UNITED STATES ANTIMONY CORPORATION and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. NOTES TO DECEMBER 31, 1995 CONSOLIDATED FINANCIAL STATEMENTS:
The notes to the consolidated financial statements as of December
31, 1995, as set forth in the Company s 1995 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, 1995, was derived from the audited consolidated
balance sheet referred to in Note 1 above.
3. PRESENTATION OF FINANCIAL STATEMENTS:
The financial statements include a statement of cash flows for the
three-month period ended March 31,1996. A comparable statement
for the three-month period ended March 31, 1995 is not presented
as no balance sheet for the three-month period ended March 31,
1995 was prepared. Accordingly, the statement of cash flows for
the twelve month period ended December 31, 1995, as set forth in
the Company s Form 10-KSB should be read in conjunction with these
statements.
4. 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 as of September 30, 1996,
management estimates that the cyanide cleanup is approximately 75%
complete. Approximately two-thirds of the mill has also been
removed. The Company anticipates having the cyanide contamination
remediated and the mill removed by 1998. In 1996, the Idaho
Department of Environmental Quality requested the Company sign a
consent decree related to completing the reclamation and
remediation at the Preachers Cove mill. The Company plans to enter
into the consent decree upon completion of the cyanide
remediation. At March 31, 1996, the liability for the remaining
estimated costs to complete remediation at the site was $163,888.
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 $37,158 for the
three-month period ending March 31, 1996 compared to net income of
$103,900 for the comparable period in 1995. The reduction in income
is primarily due to a decreased gross profit in the antimony division
and increased general and administration expenses.
Total revenues for the first quarter of 1996 were $1,525,980 compared
with $1,138,465 for the comparable quarter in 1995, an increase of
$387,515 or 34%. The increase is attributable to increased sales of
antimony products. Sales of antimony products during the first
quarter of 1996 were $1,348,530 consisting of 641,094 pounds at an
average sale price of $2.10 per pound. Sales of antimony products
during the first quarter of 1995 were $910,803 consisting of 302,195
pounds at an average sale price of $3.02 per pound. Gross profit from
antimony product sales was $205,594, or 15% of sales during the first
quarter of 1996 compared with a gross profit of $336,474, or 37% of
sales during the comparable quarter of 1995. The decrease in gross
profit is primarily due to the decrease in sale price per pound during
the first quarter of 1996 compared to the first quarter of 1995.
The Company reports 50% of total antimony sales made by HoltraChem and
the Company. Accordingly, total sales of antimony products by both
companies was $2,697,060 or 1,282,187 pounds during the first quarter
of 1996 and $1,1821,606 or 604,390 pounds during the first quarter of
1995. In both quarters all of the antimony products sold were
produced at the Company s plant in Thompson Falls, Montana.
Sales of gold and silver totaled $177,450 during to first quarter of
1996 and consisted of 441 ounces of gold and 198 ounces of silver.
Sales of gold and silver during the comparable period in 1995 were
$227,662 and consisted of 590 ounces of gold and 300 ounces of silver.
The Company realized $397 per ounce of gold sold during the first
quarter of 1996 and $381 during the comparable period in 1995. The
decrease in gold and silver sales was approximately 22% from the first
quarter of 1995 to the first quarter of 1996, and was primarily
attributable to decreased gold and silver production. The Yellow
Jacket mine continued to operate at a loss due to low production
volumes, high costs of operations and insufficient capital for mine
and mill processing improvements. The operating loss, excluding the
allocation of any general and administrative expenses, was $105,277
and $99,928 during the first quarter of 1995 and 1996, respectively.
The Yellow Jacket production has been plagued since its inception by a
lack of operating capital that has prevented the Company from bringing
its production to capacity. In August 1996, the Company placed the
Yellow Jacket mine on a care-and-maintenance status. Continuing annual
costs while on a care-and-maintenance status are estimated to be
approximately $136,000, excluding any revenues from ongoing gold
recoveries.
General and administrative expenses increased from $48,987 during the
first quarter of 1995 to $104,209 in the comparable quarter of 1996,
an increase of $55,222. The increase was principally due to legal fees
relating to the company s USAMSA negotiations and increased office
labor and accounting fees related to the Company s efforts to regain
compliance with Securities and Exchange Commission ( SEC ) reporting
regulations.
During the first quarter 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 1995.
Interest expense decreased from $85,195 during the first quarter of
1995 to $80,784 during the comparable quarter of 1996. The decrease
relates to a corresponding decrease in the Company s interest bearing
obligations from the first quarter of 1995 to the first quarter of
1996. Interest income increased from $1,545 during the first quarter
of 1995 to $2,515 during the comparable quarter in 1996. The increase
was due to an increase in restricted cash balances and interest rates
from the first quarter of 1995 to 1996.
FINANCIAL CONDITION AND LIQUIDITY
At March 31, 1996, Company assets totaled $2,040,425, and there was a
stockholders' deficit of $2,853,092. The stockholders' deficit
increased $37,158 from the December 31, 1995 due to a net loss
recognized from the Company's operations during the first quarter of
1996. 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.
Cash provided by operating activities during the first quarter of 1996
was $69,504 and resulted primarily from increases in current
liabilities and accounts payable. Cash provided by investing during
the first quarter activities consisted of $45,000 from the disposal of
property. Purchases of property plant and equipment in the antimony
division consumed $85,297 of cash during the first quarter of 1996.
Cash used in financing activities totaled $60,099 during the first
quarter of 1996 and consisted of principal payments on notes to bank
and to Bobby C. Hamilton.
During the third quarter of 1996, the Company borrowed $238,297
pursuant to a five-year note payable and $75,000 under an operating
line of credit with a bank, which are guaranteed by John C. Lawrence.
The borrowings paid certain current obligations of the Company and
funded operating activities. In addition, during the second quarter of
1996, the Company decreased its operating losses at the Yellow Jacket
mine by placing the property on a care-and-maintenance basis. This
care-and-maintenance basis still provides for a limited amount of gold
production that will partially offset the care-and-maintenance costs
and help finance the Company's environmental obligation costs at the
Preacher's Cove Millsite and underground exploration of the Yellow
Jacket property.
At September 30, 1996, the Company completed its investment in its 50%
share of antimony inventory. Correspondingly, the Company will begin
receiving a greater percentage of profits from antimony sales with
HoltraChem. These resources will be available to meet the Company's
obligations and fund operations. In addition, during the fourth
quarter of 1996, the Company realized cash from a retroactive
adjustment in the tolling fee it charges to convert antimony metal
into antimony products. The adjustment resulted from costs of
production exceeding toll fees received during the first, second and
third quarters of 1996. The increase in toll fee has helped the
Company to cover more of its costs of antimony products production.
Significant financial commitments for future periods will include:
- Providing $5,000 per month for a "sinking fund" to pay defaulted
debentures and accrued interest, which are not ultimately
converted (see Note 18 to the December 31, 1995 consolidated
financial statements). Assuming only 70% of the accrued interest
is converted, the total remaining accrued interest to be paid will
be approximately $207,000.
- Servicing borrowings from the bank
- Servicing the Hamilton note payable at a minimum of $150,000
annually (see Note 11 to the December 31, 1995 consolidated
financial statements).
- Keeping current on payroll tax liabilities and accounts payable.
- Fulfilling reclamation responsibilities with regulatory agencies.
- Annual care and maintenance costs of approximately $136,000 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 and tolling fee deficiencies as they arise.
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 1996, the Company completed its Form 10-K and continued in
preparing its Forms 10-Q and other reports required by SEC
regulations. It is the Company's intention that as these reports are
available and as the Company regains compliance with SEC regulations
to seek additional financing to expand its business operations and
satisfy its obligations. In 1996, $127,500 was generated through
sales of 460,000 shares of unregistered common stock to existing
stockholders and others to help finance the preparation of financial
information and fund operations. In the fourth quarter of 1996, the
Company sought and is obtaining sponsorship from a market maker to
list the Company s stock on NASD s Electronic Bulletin Board trading
exchange.
Upon re-establishing a market for its common stock, the Company plans
to issue additional shares to investors to help finance the
finalization of its investment in USAMSA and fund production from the
Mexican properties.
PART I I - 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
Reports on Form 8-K
A form 8-K was filed by the Company on January 10, 1997 to report
under Item 5, the resignation of Jeffrey R. Maichel and Walter L.
Maguire, Jr. from the Board of Directors.
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 Date: January 10, 1997
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John C. Lawrence, Director and
President (Principal Executive,
Financial and Accounting Officer)