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 September 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
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ITEM 1. Financial Statements and Supplementary Data
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1996 1995
------------- ------------
ASSETS
Cash assets:
Cash (bank overdraft) $ (43,189) $ 5,800
Restricted cash, payroll taxes 4,598
Accounts Receivable 71,882 110,920
Inventories 560,289 450,501
Prepaid expenses 16,618 10,040
------------ ------------
Total current assets 605,600 581,859
Properties, plants and equipment, net 1,246,873 1,281,742
Restricted cash, reclamation bonds 170,046 170,046
------------ ------------
Total assets $ 2,022,519 $ 2,033,647
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 307,419 $ 299,446
Accrued payroll and property taxes 45,888 71,772
Accrued payroll and other 42,107 47,285
Judgments payable 136,651 147,865
Accrued interest payable 752,290 672,130
Payable to related parties 648,666 646,347
Notes payable to bank 301,832 114,824
Note payable to Bobby C. Hamilton,
current 16,659 15,771
Debentures payable 650,000 650,000
Accrued reclamation costs, current 80,000 80,000
------------ ------------
Total current liabilities 2,981,512 2,745,440
Note payable to Bobby C. Hamilton,
noncurrent 1,723,138 1,773,948
Accrued reclamation costs, noncurrent 264,331 330,193
------------ ------------
Total liabilities 4,968,981 4,849,581
Commitments and contingencies
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, CONTINUED
(Unaudited)
September 30, December 31,
1996 1995
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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;
12,573,434 and 12,113,434
shares issued and outstanding 125,734 121,134
Additional paid-in capital 13,313,504 13,190,544
Accumulated deficit (16,393,245) (16,135,157)
------------ ------------
Total stockholders' deficit (2,946,462) (2,815,934)
------------ ------------
Total liabilities and
stockholders' deficit $ (2,022,519) $ 2,033,647
============ ============
See Notes to Consolidated Financial Statements
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and nine-month periods ended
September 30, 1996 and September 30, 1995
Unaudited
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
Revenues:
Sales of antimony products $1,101,688 $1,527,538 $3,420,520 $3,885,661
Sales of gold and silver 234,034 225,809 666,685 745,808
---------- ---------- ---------- ----------
Total Revenues 1,335,722 1,753,347 4,087,205 4,631,469
---------- ---------- ---------- ----------
Cost of Production:
Cost of antimony production 1,040,662 1,268,189 3,013,025 2,919,094
Cost of gold and silver
production 285,308 326,073 935,048 1,000,850
---------- ---------- ---------- ----------
Total Cost of Production 1,325,970 1,594,262 3,948,073 3,919,944
---------- ---------- ---------- ----------
Gross Profit 9,752 159,085 139,132 711,525
---------- ---------- ---------- ----------
Other expenses (income):
General and administrative
expenses 74,277 77,425 251,944 160,830
Gain on disposal of asset (45,000) (17,500)
Interest expense 57,504 65,916 197,451 226,220
Interest income (2,725) (1,900) (7,175) (5,256)
---------- ---------- ---------- ----------
129,056 141,441 397,220 364,294
---------- ---------- ---------- ----------
Net income (loss) $ (119,304) $ 17,644 $ (258,088) $ 347,231
========== ========== ========== ==========
Net Income (loss) per share $ (.01) Nil $ (.02) $ .03
========== ========== ========== ==========
Weighted average common shares
outstanding 12,543,399 11,731,434 12,281,496 11,706,175
========== ========== ========== ==========
See Notes to Consolidated Financial Statements
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
for the nine-month period ended September 30, 1996
Unaudited
September 30,
1996
-------------
Cash flows from operating activities:
Net loss $(258,088)
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation and amortization 155,626
Gain on disposal of equipment (45,000)
Change in:
Restricted cash 4,598
Accounts receivable 39,038
Inventories (109,788)
Prepaid expenses (6,578)
Accounts payable 7,973
Accrued payroll and property taxes (25,884)
Accrued payroll and other (5,178)
Judgments payable (11,214)
Accrued interest payable 80,160
Payable to related parties 2,319
Accrued reclamation costs (70,607)
---------
Net cash used in operating activities (242,623)
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Cash flows from investing activities:
Purchase of properties, plant and equipment (116,012)
Sale of property 45,000
---------
Net cash used in investing activities (71,012)
---------
Cash flows from financing activities:
Payments on notes payable to bank (net) (51,289)
Proceeds from long-term bank debt 238,297
Payments to Bobby C. Hamilton (49,922)
Proceeds from sale of common stock 127,560
Advances from bank overdraft 43,189
---------
Net cash provided by financing activities 307,835
---------
Net decrease in cash (5,800)
Cash, beginning of period 5,800
---------
Cash, end of period $ -0-
=========
Supplemental disclosures:
Cash paid during the nine-month period for
interest $ 117,291
See Notes to Consolidated Financial Statements
PART I - FINANCIAL INFORMATION (Continued)
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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
nine-month period ended September 30, 1996. A comparable
statement for the nine-month period ended September 30, 1995, is
not presented because no balance sheet for the nine-month period
ended September 30, 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 nine
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
UNITED STATES ANTIMONY CORPORATION and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
4. COMMITMENTS AND CONTINGENCIES:
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 September 30, 1996, the liability for the
remaining estimated costs to complete remediation at the site was
$94,355.
On November 15, 1996, the Bureau of Land Management (BLM) notified
the Company that it may be a responsible party as defined under
CERCLA for hazardous substance release from uncontained mining
tailings at a mining site near Pine Creek, Idaho. The Company was
one of 13 companies that had received a similar notification.
In response to the notification, the Company informed the BLM that
the Company is neither a current or former owner of a site, has
never been an operator, nor has it shipped hazardous substances or
arranged for the disposal or treatment of hazardous substances in
the Pine Creek area. Accordingly, the Company does not consider
itself a potentially responsible party under CERCLA for the Pine
Creek site.
Although no additional notification has been received from the
BLM, the Company believes it does not have a material liability
relating to this site.
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 $258,088 for the
nine-month and $119,304 for the three-month periods ended September
30, 1996, compared to net income of $347,231 and $17,644 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 nine months of 1996 were $4,087,205
compared to $4,631,469 for the comparable period in 1995, a decrease
of $544,264. Total revenues during the third quarter of 1996 were
$1,335,722 compared to $1,753,347 during the third quarter of 1995, a
decrease of $417,625. The decrease in revenues during 1996 was due to
decreased antimony products and gold sales. Sales of antimony
products during the first nine months of 1996 were $3,420,520
consisting of 1,802,402 at an average sale price of $1.90 per pound.
During the third quarter of 1996 sales of antimony products were
$1,101,688 consisting of 678,340 pounds at an average sale price of
$1.62 per pound. Sales of antimony products during the first nine
months of 1995 were $3,885,661 consisting of 1,537,035 pounds at an
average sale price of $2.53 per pound. During the third quarter of
1995 sales of antimony products were $1,527,538 consisting of 671,134
pounds at an average sale price of $2.28 per pound. The decrease in
sale prices of antimony products from the comparable nine and three
month periods in 1995 compared to those in 1996 is the result of a
corresponding decrease in antimony metal prices. Gross profit from
antimony sales during the first nine months of 1996 was $407,495, and
$61,026 during the third quarter of 1996, compared with gross profit
of $966,567 during the first nine months of 1995 and $259,349 during
the third quarter of 1995. The decreases in gross profit for the nine
and three month periods ended September 30, 1996, compared to the same
periods of 1995 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 $6,841,040 or 3,604,803 pounds during the first nine
months of 1996 and $2,203,376 or 1,356,679 pounds during the third
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 $666,685 during the first nine months
of 1996 and $234,034 during the third quarter of 1996. Ounces of gold
sold during the nine and three month periods ended September 30, 1996,
were 1,726 and 631, respectively. Sales of gold and silver totaled
$745,808 during the first nine months of 1995 and $225,809 during the
third quarter of 1995. Ounces of gold sold during the nine and three
month periods ended September 30, 1995, were 1,925 and 584,
respectively. The decline in gold and silver sales from the nine and
three month periods ended September 30, 1995, compared to the same
periods of 1996 is related to decreased production and the placing the
Yellow Jacket mine on a care and maintenance basis in August 1996.
Gross losses from the gold division were $268,363 and $51,274 for the
nine and three month periods ended September 30, 1996, respectively,
compared with gross losses of $255,042 and $100,264 during the same
periods in 1995. The increase in gross loss for the nine month period
in 1996 compared with the same period in 1995 was due to increased
production costs and lower gold production as a result of the factors
described above. The decrease in gross loss during the three month
period ended September 30, 1996 compared to the same period in 1995
was due to placing the Yellow Jacket mine on a care-and-maintenance
status during the third quarter of 1996.
General and administrative expenses increased $91,114 during the nine
months of 1996 as compared to the first nine months of 1995, and
decreased $3,148 during the third quarter of 1996 as compared to the
third quarter of 1995. The increase during the nine month period 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 nine 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 $197,451 and $57,504 for the nine and three month
periods ended September 30, 1996, respectively, compared to $226,220
and $65,916 for the same periods in 1995. The decrease was due to a
decrease in interest bearing obligations from 1995 to 1996.
Interest income was $7,175 and $2,725 for the nine and three month
periods ended September 30, 1996, respectively, compared to $5,256 and
$1,900 for the same periods in 1995. The increase in interest income
was attributable to a corresponding increase in restricted cash held
for reclamation purposes and greater yields received on restricted
cash.
FINANCIAL CONDITION AND LIQUIDITY
At September 30, 1996, Company assets totaled $2,022,519 , and there
was a stockholders' deficit of $2,946,462. The stockholders' deficit
increased $258,088 from December 31, 1995 due to a net loss recognized
from the Company's operations during the first nine months 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 consumed by operating activities during the first nine months of
1996 was $242,623 and resulted primarily from operating losses and
cash consumed by payments of delinquent payroll and property taxes.
Cash provided by investing activities during the nine months ended
September 30, 1996, consisted of $45,000 from the disposal of
property. Purchases of property plant and equipment in the antimony
division consumed $116,012 of cash during the first nine months of
1996. Proceeds of $127,560 were generated through sales of common
stock during the third quarter of 1996. Borrowings of $238,297
pursuant to a five-year note payable provided additional cash during
the third quarter of 1996. Cash used in financing activities totaled
$101,211 during the first nine months of 1996 and consisted of
payments on notes to a bank and Bobby C. Hamilton. Advances in the
form of bank overdrafts consisted of $43,189 during the nine-month
period ended September 30, 1996.
At September 30, 1996, the Company completed its investment in its 50%
share of antimony inventory. Correspondingly, the Company began
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 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.
-- 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 its responsibilities with environmental regulatory and
financial reporting agencies.
-- Annual care and maintenance costs at the Yellow Jacket mine.
-- Minimum annual royalty payments of $52,500 to Geosearch and Yellow
Jacket mines.
-- Providing antimony profits to fund its antimony 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 10-KSB and continued in preparing its Forms
10-QSB 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, approximately $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 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 II - OTHER INFORMATION
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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 20, 1997
-------------------------------------
John C. Lawrence, Director and
President (Principal Executive,
Financial and Accounting Officer)