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 June 30, 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
---------------------------------
(State or other jurisdictuion
of incorporation or organization)
81-0305822
---------------------------------
P.O. Box 643, Thompson Falls,
Montana 59873
---------------------------------
(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
(Unaudited)
---------------------------
June 30, December 31,
1996 1995
------------ ------------
ASSETS
Cash assets:
Cash (bank overdraft) $ (37,003) $ 5,800
Restricted cash, payroll taxes 4,598
Accounts Receivable 142,854 110,920
Inventories 513,198 450,501
Prepaid royalty expense 10,040 10,040
------------ ------------
Total current assets 629,089 581,859
------------ ------------
Properties, plants and equipment, net 1,283,172 1,281,742
Restricted cash, reclamation bonds 170,046 170,046
------------ ------------
Total assets $ 2,082,307 $ 2,033,647
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 365,322 $ 299,446
Accrued payroll and property taxes 161,406 71,772
Accrued payroll and other 45,083 47,285
Judgments payable 145,907 147,865
Accrued interest payable 736,379 672,130
Payable to related parties 646,120 646,347
Notes payable to bank 93,378 114,824
Notes payable to Bobby C. Hamilton,
current 16,363 15,771
Debentures payable 650,000 650,000
Accrued reclamation costs, current 80,000 80,000
------------ ------------
Total current liabilities 2,939,958 2,745,440
Note payable to Bobby C. Hamilton,
noncurrent 1,732,056 1,773,948
Accrued reclamation costs, noncurrent 307,511 330,193
------------ ------------
Total liabilities 4,979,525 4,849,581
------------ ------------
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, CONTINUED
(Unaudited)
---------------------------
June 30, December 31,
1996 1995
------------ ------------
LIABILITIES AND STOCKHOLDERS' DEFICIT,
CONTINUED
Commitments and contingencies
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;
12,223,434 and 12,113,434 shares
issued and outstanding 122,234 121,134
Additional paid-in capital 13,246,944 13,190,544
Accumulated deficit (16,273,941) (16,135,157)
------------ ------------
Total stockholders' deficit (2,897,218) (2,815,934)
------------ ------------
Total liabilities and stock-
holders' deficit $ 2,082,307 $ 2,033,647
============ ============
See Notes to Conslidated Financial Statements
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six-month periods ended June 30, 1996
and June 30, 1995
Unaudited
-----------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
Revenues:
Sales of antimony products $ 970,302 $ 1,447,320 $ 2,318,832 $ 2,358,123
Sales of gold and silver 255,201 292,337 432,651 519,999
----------- ----------- ----------- -----------
Total Revenues 1,225,503 1,739,657 2,751,483 2,878,122
----------- ----------- ----------- -----------
Cost of Production:
Cost of antimony
production 819,051 1,076,576 1,972,363 1,650,905
Cost of gold and silver
production 365,318 347,187 649,740 674,777
----------- ----------- ----------- -----------
Total Cost of
Production 1,184,369 1,423,763 2,622,103 2,325,682
----------- ----------- ----------- -----------
Gross Profit 41,134 315,894 129,380 552,440
----------- ----------- ----------- -----------
Other expenses (income):
General and administrative
expenses 76,738 34,418 177,667 83,405
Gain on disposal of asset (17,500) (45,000) (17,500)
Interest expense 67,957 75,109 139,947 160,304
Interest income (1,935) (1,811) (4,450) (3,356)
----------- ----------- ----------- -----------
142,760 90,216 268,164 222,853
----------- ----------- ----------- -----------
Net income (loss) $ (101,626) $ 225,678 $ (138,784) $ 329,587
=========== =========== =========== ===========
Net Income (loss) per share $ (.01) $ .02 $ (.01) $ .03
=========== =========== =========== ===========
Weighted average common
shares outstanding 12,187,990 11,715,323 12,150,545 11,693,545
=========== =========== =========== ===========
See Notes to Consolidated Financial Statements
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six month period ended June 30, 1996
Unaudited
June 30,
1996
---------
Cash flows from operating activities:
Net loss $(138,784)
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation and amortization 102,925
Gain on disposal of equipment (45,000)
Change in:
Restricted cash 4,598
Accounts receivable (31,934)
Inventories (62,697)
Accounts payable 65,876
Accrued payroll and property taxes 89,634
Accrued payroll and other (2,202)
Judgments payable (1,958)
Accrued interest payable 64,249
Payable to related parties (227)
Accrued reclamation costs (25,735)
---------
Net cash provided by operating activities 18,745
---------
Cash flows from investing activities:
Purchase of properties, plant and equipment (101,300)
Sale of property 45,000
---------
Net cash used in investing activities: (56,300)
---------
Cash flows from financing activities:
Payments on notes payable to bank (net) (21,448)
Payments to Bobby C. Hamilton (41,300)
Proceeds from sale of common stock 57,500
Advances from bank overdraft 37,003
---------
Net cash used in financing activities 31,755
---------
Net decrease in cash (5,800)
Cash, beginning of period 5,800
---------
Cash, end of period $ -0-
=========
Supplemental disclosures:
Cash paid during the six-month period for interest $ 75,698
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
six-month period ended June 31, 1996. A comparable statement for
the six-month period ended June 30, 1995 is not presented as no
balance sheet for the six-month period ended June 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
financial 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,
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
4. COMMITMENTS AND CONTINGENCIES, CONTINUED:
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 June 30, 1996, the liability for the remaining
estimated costs to complete remediation at the site was $139,233.
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 $138,784 for the
six-month and $101,626 for the three-month periods ended June 30,
1996, compared to net income of $329,587 and $225,678 for the same
respective periods in 1995. The reduction in income is primarily due
to decreased gross profit in the antimony division, increased losses
in the gold division and increased general and administrative
expenses.
Total revenues for the first six months of 1996 were $2,751,483
compared with $2,878,122 for the comparable period in 1995, a decrease
of $126,639 or 4%. Total revenues during the second quarter of 1996
were $1,225,503 compared with $1,739,657 during the second quarter of
1995, a decrease of $514,154 or 30%. The decrease was due to
decreased antimony products and gold sales during the second quarter
of 1996. Sales of antimony products during the first six months of
1996 were $2,318,832 conisting 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. Sales of antimony products
during the first six months of 1995 were $2,358,123 consisting of
865,901 pounds at an average sale price of $2.72 per pound. During the
second quarter of 1995 sales of antimony products were $1,447,320
consisting of 563,706 pounds at an average sale price of $2.56 per
pound. The decrease in sale prices of antimony products from the
comparable six and three month periods in 1995 to those in 1996 is the
result of a corresponding decrease in antimony metal prices. Gross
profit from antimony sales during the first six months of 1996 was
$346,469, and $151,251 during the second quarter of 1996, compared
with a gross profit of $707,218 during the first six months of 1995
and $370,744 during the second quarter of 1995. The decreases in
gross profit for the six and three month periods ended June 30, 1996
are principally due to declining antimony sale prices (described
above) as compared to the cost of antimony products sold during the
respective periods.
The Company reports 50% of total antimony sales made by HoltraChem and
the Company. Accordingly, total sales of antimony products by both
companies was $4,637,664 or 2,248,124 pounds during the first six
months of 1996 and $1,940,604 or 965,938 pounds during the second
quarter of 1996. Substantially all of the antimony products sold were
produced at the Company's plant in Thompson Falls, Montana.
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 of gold and silver totaled
$519,999 during the first six months of 1995 and $292,337 during the
second quarter of 1995. Ounces of gold sold during the six and three
month periods ended June 30, 1995 were 1,341 and 751, respectively.
The decline in gold and silver sales from the six and three month
periods ended June 30, 1995 to the comparable periods of 1996 related
to decreased production due to fewer tons of ore mined and milled and
lower gold recoveries. Sale price per ounce of gold sold during the
first six months of 1996 was $390 and $386 during the second quarter
of 1996, compared with $384 and $386 for the comparable six and three
month periods in 1995. Gross losses from the gold division were
$217,089 and $110,117 for the six and three month periods ended June
30, 1996, respectively, compared with gross losses of $154,778 and
$54,850 during the same periods in 1995. The increase in gross losses
in 1996 was due to increased production costs and lower gold
production as a result of the factors described above. 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.
General and administrative expenses increased $94,262 during the first
six months of 1996 as compared to the first six months of 1995, and
$42,320 during the second quarter of 1996 as compared to the second
quarter of 1995. The increase was principally due to legal fees
relating to the company's USAMSA negotiations and increased
professional and accounting fees related to the Company's annual audit
of it's financial statements and efforts to regain compliance with
the Securities and Exchange Commission.
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 1995.
Interest expense was $139,947 and $67,957 for the six and three month
periods ended June 30, 1996, respectively, compared to $160,304 and
$75,109 for the same periods in 1995. The decrease was due to a
decrease in interest bearing obligations from 1995 to 1996.
Interest income was $4,450 and $1,935 for the six and three month
period ended June 30, 1996, respectively, compared to $3,356 and
$1,181 for the same periods in 1995. The increase in interest income
was attributable to a corresponding increase in restricted cash held
for reclamation purposes.
FINANCIAL CONDITION AND LIQUIDITY
At June 30, 1996, Company assets totaled $2,082,307, and there was a
stockholders' deficit of $2,897,218. The stockholders' deficit
increased $138,784 from December 31, 1995 due to a net loss recognized
from the Company's operations during the first two quarters 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 six months of
1996 was $18,745 and resulted primarily from increases in current
liabilities and accounts payable. Cash provided by investing
activites during the six months ended June 30, 1996 consisted of
$45,000 from the disposal of property. Purchases of property plant
and equipment in the antimony division consumed $101,300 of cash
during the first six months of 1996. Proceeds of $57,500 were
generated through sales of common stock during the second quarter of
1996. Cash used in financing activities totaled $62,748 during the
first six months of 1996 and consisted of principal payments on notes
to bank and to Bobby C. Hamilton. Advances in the form of bank
overdrafts consisted of $37,003 during the six-month period ended
June 30, 1996.
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 third quarter of
1996, the Company attempted to decrease 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 fund underground
exploration of the Yellow Jacket property.
FINANCIAL CONDITION AND LIQUIDITY, (CONTINUED)
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 adjustment, and the
resulting increase in toll fee, will help 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).
-- Servicing borrowings from the bank (see above).
-- 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.
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 10K and continued in preparing its Forms
10Q 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 13, 1997
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John C. Lawrence, Director and
President (Principal Executive,
Financial and Accounting (Officer)