-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DyphzLGpyIjhpJMHBNbgHs7rxAu6TVqyhPWiSdEbb1yiqXTdUGXnXLzYTrSZ6o9+ 1FCD4YWwSkXIdGsUisDfRQ== 0000101538-01-500008.txt : 20010813 0000101538-01-500008.hdr.sgml : 20010813 ACCESSION NUMBER: 0000101538-01-500008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED STATES ANTIMONY CORP CENTRAL INDEX KEY: 0000101538 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330] IRS NUMBER: 810305822 STATE OF INCORPORATION: MT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-08675 FILM NUMBER: 1704173 BUSINESS ADDRESS: STREET 1: P O BOX 643 CITY: THOMPSON FALLS STATE: MT ZIP: 59873 BUSINESS PHONE: 4068273523 MAIL ADDRESS: STREET 1: PO BOX 643 CITY: THOMPSON FALLS STATE: MT ZIP: 59873-0643 FORMER COMPANY: FORMER CONFORMED NAME: AGAU MINES INC DATE OF NAME CHANGE: 19740728 10QSB 1 usa.txt USAC 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 July 17, 2001, the registrant had outstanding 19,134,564 shares of par value $.01 common stock. PART I-FINANCIAL INFORMATION Item 1. Financial Statements United States Antimony Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) June 30, December 31, 2001 2000 ASSETS Current assets: Restricted cash $ 5,966 $ 8,518 Inventories 153,688 221,457 Accounts receivable, less allowance for doubtful accounts of $30,000 152,518 119,568 ------- ------- Total current assets 312,172 349,543 ------- ------- Investment in USAMSA, net 102,905 111,088 Properties, plants and equipment, net 293,439 246,250 Restricted cash for reclamation bonds 130,750 123,250 Deferred financing charges, net 43,163 63,789 ------- ------- Total assets $ 882,429 $ 893,920 ======= ======= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Checks issued and payable $ 80,454 $ 107,133 Accounts payable 609,152 429,654 Accrued payroll and property taxes 146,622 241,588 Accrued payroll and other liabilities 212,597 89,680 Judgment payable 45,002 43,480 Accrued debenture interest payable 98,474 47,324 Due to related parties 46,802 10,307 Notes payable to bank, current 236,896 150,625 Accrued reclamation costs, current 67,569 80,000 --------- --------- Total current liabilities 1,543,568 1,199,791 --------- --------- Debentures payable, net of discount 1,003,771 997,449 Notes payable to bank, noncurrent 187,876 205,377 Accrued reclamation costs, noncurrent 206,888 199,388 --------- --------- Total liabilities 2,942,103 2,602,005 --------- --------- 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 7,500 7,500 Series C: 177,904 shares issued and outstanding 1,779 1,779 Common stock, $.01 par value, 30,000,000 shares authorized; 19,134,564 and 18,375,564 shares issued and outstanding 191,345 183,755 Additional paid-in capital 14,962,495 14,818,285 Accumulated deficit (17,222,838) (16,719,449) ---------- ---------- Total stockholders' deficit (2,059,674) (1,708,085) ---------- ---------- Total liabilities and stockholders' deficit $ 882,429 $ 893,920 ========== ========== The accompanying notes are an integral part of the financial statements United States Antimony Corporation and Subsidiaries Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2001 2000 2001 2000 Revenues: Sales of antimony products and other $ 1,076,909 $ 1,190,413 $ 2,038,040 $ 2,363,463 Sales of zeolite products 2,655 2,655 ----------- ----------- ----------- ----------- 1,079,564 1,190,413 2,040,695 2,363,463 Cost of antimony production 821,401 995,888 1,623,769 1,844,043 Freight and delivery 118,921 142,363 222,535 243,977 ----------- ----------- ----------- ----------- 940,322 1,138,251 1,846,304 2,088,020 Gross profit 139,242 52,162 194,391 275,443 Other operating expenses: Bear River Zeolite 119,425 165,668 Care, maintenance, and reclamation-Yellow Jacket 2,500 50,105 2,860 77,906 General and administrative 156,921 91,351 330,608 344,195 Sales expenses 34,342 84,286 72,838 194,351 ----------- ----------- ----------- ----------- 313,188 225,742 571,974 616,452 Other (income) expense: Interest expense 41,714 40,129 81,600 81,239 Factoring expense 23,911 24,827 47,175 49,288 Interest income and other (1,488) (2,507) (2,969) (4,647) ----------- ----------- ----------- ----------- 64,137 62,449 125,806 125,880 ----------- ----------- ----------- ----------- Net loss $ (238,083) $ (236,029) $ (503,389)$ (466,889) =========== =========== =========== =========== Basic net loss per share of common stock $ (0.01) $ (0.01) $ (0.03)$ (0.03) =========== =========== =========== =========== Basic weighted average shares outstanding 18,948,294 17,625,252 18,608,177 17,334,092 =========== =========== =========== =========== The accompanying notes are an integral part of the financial statements. 2 United States Antimony Corporation and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) For the six months ended June 30, June 30, 2001 2000 Cash flows from operating activities: Net loss $ (503,389) $ (466,889) Adjustments to reconcile net loss to net cash used by operations: Depreciation and amortization 83,131 66,000 Accrued reclamation costs 7,500 Provision for doubtful accounts (20,000) Issuance of common stock for consulting services 153,000 Change in: Restricted cash 2,552 (3) Accounts receivable (32,950) 10,243 Inventories 67,769 56,410 Restricted cash for reclamation bonds (7,500) 7,170 Prepaid expenses (1,747) Accounts payable 194,510 64,612 Accrued payroll and property taxes (94,966) (8,166) Accrued payroll and other 73,214 (32,029) Judgments payable 1,522 1,422 Accrued debenture interest payable 51,150 Payable to related parties (3,505) (11,209) Accrued reclamation costs (12,431) (35,300) ---------- ----------- Net cash used by operating activities (173,393) (216,486) Cash flows from investing activities: Purchase of properties, plants and equipment (92,689) (35,079) ---------- ----------- Net cash used in investing activities (92,689) (35,079) Cash flows from financing activities: Proceeds from issuance of common stock and warrants 149,300 155,000 Proceeds from related party advances 40,000 70,000 Proceeds from notes payable to bank, net 68,770 53,846 Proceeds from factoring company, net 34,691 Change in checks issued and payable (26,679) 12,749 Payments on note payable to Bobby C. Hamilton (40,030) ---------- ----------- Net cash provided by financing activities 266,082 251,565 Net change in cash 0 0 Cash, beginning of period 0 0 ---------- ----------- Cash, end of period $ 0 $ 0 ========== =========== Supplemental disclosures: Cash paid during the period for interest $ 19,068 $ 79,159 ========== =========== Non-cash investing activities: Common stock and warrants issued for plant construction $ 2,500 ========== The accompanying notes are an integral part of the financial statements. 3
PART I - FINANCIAL INFORMATION, CONTINUED: United States Antimony Corporation and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation: The unaudited consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles for interim financial information, as well as the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company's management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the six-month period ended June 30, 2001 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2001. Certain consolidated financial statement amounts for the six-month period ended June 30, 2000, have been reclassified to conform to the 2001 presentation. These reclassifications had no effect on the net loss or accumulated deficit as previously reported. For further information refer to the financial statements and footnotes thereto in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2000. 2. Loss Per Common Share The Company accounts for its income (loss) per common share according to the Statement of Financial Accounting Standards No. 128 "Earnings Per Share" ("SFAS No. 128"). Under the provisions of SFAS No. 128, primary and fully diluted earnings per share are replaced with basic and diluted earnings per share. Basic earnings per share is arrived at by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding, and does not include the impact of any potentially dilutive common stock equivalents. Common stock equivalents, including warrants to purchase the Company's common stock and common stock issuable upon the conversion of debentures are excluded from the calculations when their effect is antidilutive. 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 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. In 1996, the Company signed a consent decree with the Idaho Department of Environmental Quality relating to completing the reclamation and remediation at the Preachers Cove mill. The Company's management believes that USAC is currently in substantial compliance with environmental regulatory agencies and that its accrued environmental reclamation costs are representative of management's estimate of costs required to fulfill its reclamation obligations. The Company recognizes, however, that in some cases future environmental expenditures cannot be reliably determined due to the uncertainty of specific remediation methods, conflicts between regulating agencies relating to remediation methods and environmental law interpretations, and changes in environmental laws and regulations. Such costs are accrued at the time the expenditure becomes probable and the costs can reasonably be estimated. 4 United States Antimony Corporation and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) 3. Commitments and Contingencies, Continued: During 2000, the Company issued 150,000 shares of its common stock to Thomson Kernaghan & Co., Ltd., and 150,000 shares of its common stock to Blue Water Partners, Inc. as compensation for fiscal advisory and consulting services to be provided the Company. The shares were issued pursuant to the Company's 2000 Stock Plan, and were believed by the Company to be registered under a Form S-8 registration statement filed in connection with the 2000 Stock Plan. The stock certificates issued to the two companies therefore did not bear a restrictive legend. Subsequent to the issuance of the shares, management was informed by its legal counsel that Form S-8 cannot be used to register stock issued to consultants whose services involve promotion of the Company's stock. In response to this information, management immediately contacted both companies and requested that the unlegended shares of common stock be returned to the Company in exchange for a certificate bearing a restrictive legend. In March of 2001, Thomson Kernaghan & Co., Ltd. returned 150,000 shares to the Company in exchange for 150,000 restricted shares, that the Company agreed to register in conjunction with a Form SB-2 registration statement it is preparing. No response has been received from Blue Water Partners, Inc. As a result of the issuance, the Company may be subject to civil liabilities, including fines and other penalties imposed by federal and state securities agencies. At June 30, 2001, the Company had not recorded any liability associated with the issuance of these shares, as management believes the likelihood of a claim and the ultimate outcome if a claim is asserted cannot be ascertained at this time. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition General This report contains both historical and prospective statements concerning the Company and its operations. Prospective statements (known as "forward-looking statements") may or may not prove true with the passage of time because of future risks and uncertainties. The Company cannot predict what factors might cause actual results to differ materially from those indicated by prospective statements. Results of Operations During the second quarter of 2001 the Company's sales of antimony products continued to be depressed due to a general slowdown of economic conditions being experienced by a majority of the Company's customers. During the first six months of 2001, approximately 31% of the Company's sales of antimony products were to an individual customer and approximately 16% of sales of antimony products were to a second individual customer, compared with approximately 22% of the Company's sales of antimony products to an individual customer during the six-month period ended June 30, 2000. During the second quarter of 2001, the Company's 75% owned subsidiary, Bear River Zeolite Company ("BRZ") delivered its first sales of zeolite, consisting of approximately 36 tons of crushed zeolite material at an average sales price of $74 per ton, or $2,655. To date, significant interest in BRZ's zeolite products has been expressed by several potential users, and management believes the BRZ will be an important contribution to the Company's business in the near future. During the second quarter of 2001, the Company continued pursuing the preparation and filing of a registration statement to register shares of common stock and warrants relating to a financing arrangement entered into with Thomson Kernaghan & Co., Ltd. during 2000. During the second quarter of 2001, reclamation work at the Company's Yellow Jacket mine site recommenced and substantial progress was made in reclamation of the pit area. As a result of the reclamation work performed, the Company expects to receive funds from the release of reclamation bonds held by regulating agencies during the third quarter of 2001. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition, Continued: For the three-month period ended June 30, 2001 compared to the three-month period ended June 30, 2000 The Company's operations resulted in a net loss of $238,083, or $0.01 per basic weighted average share outstanding, for the three-month period ended June 30, 2001 compared with a net loss of $236,029 or $0.01 per basic weighted average share outstanding for the three-month period ended June 30, 2000. The increase in loss for the second quarter of 2001 compared to the similar quarter of 2000 is primarily due to: 1) decreased antimony product sales and corresponding decreases in gross profit (due to slowing economic conditions) 2) legal and accounting expenses associated with the preparation of a registration statement pursuant to a financing agreement with Thomson Kernaghan & Co., Ltd. ("TK") and, 3) development, production and start-up costs relating to the Company's newly formed 75% owned subsidiary, Bear River Zeolite. Total revenues from antimony product sales for the second quarter of 2001 were $1,076,909 compared with $1,190,413 for the comparable quarter of 2000, a decrease of $113,504. Sales of antimony products during the second quarter of 2001 consisted of 1,184,110 pounds at an average sale price of $0.91 per pound. During the second quarter of 2000 sales of antimony products consisted of 1,312,372 pounds at an average sale price of $0.91 per pound. Costs of antimony production and costs of freight and delivery were $821,401 and $118,921, or $0.69 and $0.10 per pound sold, respectively, for the three-month period ended June 30, 2001 as compared to costs of antimony production and costs of freight and delivery of $995,888 and $142,363, or $0.76 and $0.11 per pound sold, respectively, for the three-month period ended June 30, 2000. The decrease in cost of antimony production per pound during the first quarter of 2001 as compared to the first quarter of 2000, resulted from a corresponding decrease in antimony metal prices. During the second quarter of 2001, the Company incurred expenses totaling $119,425 associated with its newly formed 75% owned subsidiary, Bear River Zeolite Company ("Bear River Zeolite" or "BRZ"). No such costs were incurred during the second quarter of 2000, as the subsidiary did not yet exist. In addition to the second quarter Bear River Zeolite production, start-up and development expenses, the Company capitalized $40,613 in BRZ plant construction costs during the second quarter of 2001. Care, maintenance, and reclamation costs at the Company's Yellow Jacket property decreased from $50,105 during the second quarter of 2000 to $2,500 during the second quarter of 2001. The decrease was primarily due to the decrease of accrued reclamation cost adjustments during the second quarter of 2001, and the property nearing its final reclamation phase. General and administrative expenses were $156,921 during the second quarter of 2001, compared to $91,351 during the second quarter of 2000. The increase in general and administrative costs during the second quarter of 2001 compared to the same quarter of 2000 was principally due to legal costs related to the preparation of a registration statement of approximately $48,000 that were accrued during the second quarter of 2001, and no such accrual during the comparable period of 2000. Sales expenses were $34,342 during the second quarter of 2001 compared with $84,286 in the second quarter of 2000. The decrease was due to management's restructuring of its sales staff with less costly and fewer employees. Interest expense was $41,714 during the second quarter of 2001, and was comparable to interest expense of $40,129 incurred during the second quarter of 2000. Included in interest expense during the second quarter of 2001 was $25,575 accrued on debentures payable and $3,161 of amortized debenture discounts. Accounts receivable factoring expense was $23,911 during the second quarter of 2001 and was comparable to $24,827 of factoring expense incurred during the second quarter of 2000. Interest income decreased from $2,507 during the second quarter of 2000 to $1,488 during the second quarter of 2001 due to a corresponding decrease in reclamation bonds held during 2001. 6 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition, Continued: For the six-month period ended June 30, 2001 compared to the six-month period ended June 30, 2000 The Company's operations resulted in a net loss of $503,389, or $0.03 per basic weighted average share outstanding, for the six-month period ended June 30, 2001 compared with a net loss of $466,889 or $0.03 per basic weighted average share outstanding for the six-month period ended June 30, 2000. Total revenues from antimony product sales for the six-month period ended June 30, 2001 were $2,038,040 compared with $2,363,463 for the comparable period of 2000, a decrease of $325,423. The major factor in the decrease in sales of antimony products during the six-month period ended June 30, 2001, compared to the same period of 2000, is substantially decreased sales volume experienced in the first quarter of 2001. Sales of antimony products during the six-month period ended June 30, 2001, consisted of 2,129,434 pounds at an average sale price of $0.96 per pound. During the six-month period ended June 30, 2000, sales of antimony products consisted of 2,559,961 pounds at an average sale price of $0.92 per pound. Costs of antimony production and costs of freight and delivery were $1,623,769 and $222,535, or $0.76 and $0.10 per pound sold, respectively, for the six-month period ended June 30, 2001, as compared to costs of antimony production and costs of freight and delivery of $1,844,043 and $243,977, or $0.72 and $0.09 per pound sold, respectively, for the six-month period ended June 30, 2000. The decrease in sales price and cost of antimony production per pound during the six months ended June 30, 2001, is due to a corresponding decrease in antimony metal prices. During the six-month period ended June 30, 2001, the Company incurred expenses totaling $165,668 associated with Bear River Zeolite. No such costs were incurred during the six-month period ended June 30, 2000, as the subsidiary did not yet exist. Care, maintenance, and reclamation costs at the Company's Yellow Jacket property decreased from $77,906 during the six-month period ended June 30, 2000 to $2,860 during the six-month period ended June 30, 2001. The decrease was primarily due to the decrease of accrued reclamation cost adjustments during the six-month period ended June 30, 2001, and the property nearing its final reclamation phase. General and administrative expenses were $330,608 during the six-month period ended June 30, 2001, compared to $344,195 during the six-month period ended June 30, 2000. Included in general and administrative expenses during the six-month period ended June 30, 2000, were $153,000 of expenses relating to financial consulting services provided the Company during the first quarter of 2000. General and administrative expenses during the six-month period ended June 30, 2001, included legal costs relating primarily to the preparation of a registration statement of approximately $94,000. Also included in general and administrative costs during the six-month period ended June 30, 2001 was $70,000 related to the accrual of late filing penalties associated with the registration statement. Sales expenses were $72,838 during the six-month period ended June 30, 2001, compared with $194,351 during the six-month period ended June 30, 2000. The decrease was due to management's restructuring of its sales staff, with less costly and fewer employees. Interest expense was $81,600 during the six-month period ended June 30, 2001, and was comparable to interest expense of $81,239 incurred during the six-month period ended June 30, 2000. Included in interest expense during the six-month period ended June 30, 2001 was $51,150 accrued on debentures payable and $6,322 of amortized debenture discounts. Accounts receivable factoring expense was $47,175 during the six-month period ended June 30, 2001 and was comparable to $49,288 of factoring expense incurred during the six-month period ended June 30, 2000. Interest income decreased from $4,647 during the six-month period ended June 30, 2000 to $2,969 during the same period of 2001 due to a corresponding decrease in reclamation bonds held during 2001. 7 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition, Continued: Financial Condition and Liquidity At June 30, 2001, Company assets totaled $882,429, and there was a stockholders' deficit of $2,059,674. The stockholders' deficit increased $351,589 from December 31, 2000, primarily due to the net loss incurred during 2001. At June 30, 2001, the Company's total current liabilities exceeded its total current assets by $1,231,396. Due to the Company's operating losses, negative working capital, and stockholders' deficit, the Company's independent accountants included a paragraph in the 2000 financial statements relating to a going concern uncertainty. To continue as a going concern the Company must generate profits from its antimony and zeolite sales and acquire additional capital resources through the sale of its securities or from short and long-term debt financing. Without financing and profitable operations, the Company may not be able to meet its obligations, fund operations and continue in existence. While management is optimistic there can be no assurance that the Company will be able to sustain profitable operations and meet its financial obligations. Cash used by operating activities during the first six months of 2001 was $173,393, and resulted primarily from the six-month loss of $503,389 as adjusted by decreasing inventories, increasing accounts payable, the non-cash effects of depreciation and amortization, and changes in other current assets and liabilities. Cash used in investing activities during the first six months of 2001 was $92,689, of which $78,923 related to construction of capital assets to be used at the Bear River Zeolite facility, and the majority of the remaining expenditures related to improving the Company's propane fuel storage facilities. The Company was able to fund its operating loss and its acquisition of plant and equipment for the six-month period ended June 30, 2001, from net cash provided from financing activities of $266,082. During the six-month period ended June 30, 2001, $149,300 was generated from sales of 746,500 shares of unregistered common stock and warrants. Net borrowings from a bank provided $68,770 of cash during the first six months of 2001 and net advances from an accounts receivable factoring company provided $34,691 during the first six months of 2001. John C. Lawrence, the Company's president and a director, had also advanced a net amount of $40,000 to the Company during the six-month period ended June 30, 2001. 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 On June 15, 2001, the Company filed a current report on Form 8-K dated June 14, 2001; Under Item 9, the Company disclosed certain information pursuant to regulation FD. 8 SIGNATURE 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: August 13, 2001 John C. Lawrence, Director and President (Principal Executive, Financial and Accounting Officer) 9 -----END PRIVACY-ENHANCED MESSAGE-----