UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Amendment No. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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| For the fiscal year ended: |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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| For the transition period from_______________ to______________ |
Commission file number:
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(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered under Section 12(b) of the Exchange Act: | ||||
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Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
None |
| N/A |
| N/A |
Securities registered under Section 12(g) of the Exchange Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
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Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes ☐
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
☐ | Smaller reporting company | |||
Emerging Growth Company |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
The aggregate market value of the registrant’s common stock held by non-affiliates was $
The number of shares outstanding of the registrant’s common stock as of March 31, 2022:
EXPLANATORY NOTE
We are filing this Amendment No. 1 on Form 10-K/A (“Amendment”) to amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2022 (“Form 10-K”). The sole purpose of this amendment is to reflect final clerical changes to the document that were inadvertently omitted in the Form 10-K. In addition, certain tables that did not present properly in the Form 10-K have been corrected. The following final changes have been included in this amendment:
Cover page | Market capitalization at June 30, 2021 |
Part II, Item 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Part II, Item 8 | Financial Statements, Note 10 Income Taxes (table only) |
Part III, Item 10 | Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(a) of the Exchange Act |
Part III, Item 12 | Security Ownership of Certain Beneficial Owners and Management |
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Form 10-K/A also contains new certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, which are attached hereto. This Amendment does not reflect events occurring after the filing of the Form 10-K or modify or update any disclosures in the Form 10-K that may be affected by such events.
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PART II
Item 5 Market for Common Equity and Related Stockholder Matters
Currently, our common stock is traded on the NYSE-AMERICAN under the symbol UAMY.
The approximate number of holders of record of our common stock at March 28, 2022 is 2,370.
We have not declared or paid any dividends to our stockholders during the last five years and do not anticipate paying dividends on our common stock in the foreseeable future. Instead, we expect to retain earnings for the operation and expansion of our business.
The Company issued the Board members 295,463 shares of the Company’s common stock for services provided during 2019 which was accrued at December 31, 2019, with a value of $130,483.
The Company sold units consisting of 5,742,858 from sale of shares of its common stock and 5,742,858 warrants to purchase shares of common stock for total proceeds of $2,010,000. Offering costs associated with the sale totaled $196,932.
The Company awarded, but did not issue, common stock with a value of $110,000 to its Board of Directors as compensation for their services as directors. In connection with the issuances, the Company recorded $110,000 in director compensation expense and accrued common stock payable.
The Company sold units consisting of 26,290,000 shares of its common stock and 7,650,000 warrants to purchase shares of common stock for total proceeds of $24,997,000. Offering costs associated with the sale totaled $1,654,822 and included issuance of 2,410,500 warrants to a placement agent.
The Company issued the Board members 112,610 shares of the Company’s common stock for services provided during 2020 which was accrued at December 31, 2020, with a value of $110,000.
The Company awarded, but did not issue, common stock with a value of $112,500 to its Board of Directors as compensation for their services as directors. In connection with the issuances, the Company recorded $112,500 in director compensation expense and accrued common stock payable.
Item 6 Selected Financial Data
Not Applicable.
Item 7 Management’s Discussion and Analysis or Plan of Operations
Certain matters discussed are forward-looking statements that involve risks and uncertainties, including the impact of antimony prices and production volatility, changing market conditions and the regulatory environment and other risks. Actual results may differ materially from those projected. These forward-looking statements represent our judgment as of the date of this filing. We disclaim, however, any intent or obligation to update these forward-looking statements.
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Overview
Company-wide
For the year ended December 31, 2021, we reported net loss of $60,469 after depreciation and amortization of $880,880, compared to a net loss of $3,286,804 for 2020 after depreciation and amortization of $885,843.
During the year ending December 31, 2021, the most significant factors affecting our financial performance were as follows:
| · | Two private placements of stock during the first quarter of 2021. |
| · | A significant, steady, and pronounced increase of the London Metals Bulletin price of antimony. |
| · | The efforts in sales of zeolite of our zeolite sales director, Gretchen Lawrence. |
| · | The addition of an antimony sales director, Mitzi Hart. |
| · | The complete restructuring of office and plant personnel and procedures at the Montana and BRZ facilities. |
| · | Increased trucking prices and decreasing trucking availability |
| · | Difficulties in sourcing labor due to the Covid pandemic and the relief funding to curtail the incentive to work. |
| · | The renegotiation of various supply, treatment, royalty, and tolling agreements. |
| · | The retirement of several outstanding, old, and significant debts. |
During the year ended December 31, 2021, the most significant event affecting our financial performance was the addition of over $23 million to our working capital via two capital raises of common stock. These funds allowed the Company to retire much of its outstanding debt. It also allowed the Company leverage to re-negotiate existing contracts and pursue previously prohibitive ventures. The fact that the Company could pay its bills on time resulted in a serious amount of restructuring and the ability to offer more to attract and retain labor.
Our plan for 2022 is as follows:
| · | Continue processing tons of mined rock from the Los Juarez property at our Puerto Blanco facility. |
| · | Continue to process ores and concentrates at our Madero facility. |
| · | Finish the removal of all the legacy slag at Madero (should be completed early Q2 of 2022). |
| · | Begin substantial improvements at the Madero facility including the initiation of the construction of a large set of buildings to house the furnaces, filter bags, and cooling towers in order for ability to produce finished antimony oxide. |
| · | The purchase of new forklifts and scales at Madero facility. |
| · | The relining of many of the small rotary furnaces at Madero facility. |
| · | The installation of two new electric furnaces at the Montana facility for increase production of antimony trisulfide. |
| · | The completion of the geological, geochemical, and geophysical study at the Los Juarez property (currently underway) in order to ascertain more information about the mineralization. This study is being done on an area approximately 3km in length by about 0.8 km in width to cover the entire region extending from the western limits of our mining concessions all the way to the ejido of Los Juarez. |
| · | The continued effort to source antimony from Honduras and Nicaragua and other sources in Mexico and the United States. |
| · | Continued talks with Perpetua Resources detailing a tolling or treatment charge agreement in keeping with our existing collaboration agreement. |
| · | Finalization of several negotiations with land and concession owners in Mexico regarding additional sources of antimony. |
| · | Continuation of the mining of the Soyatal claims with a particular experiment of the processing of 40 tons of hand-sorted sulfide rock for flotation in the hopes of an auxiliary source of concentrates for the production of antimony trisulfide. |
| · | Continuation of the supply of sized antimony metal to Ambri in accordance with our letter of intent of 2020. The Company also intends to formalize its collaboration agreement with Perpetua Resources in the event that the demand of antimony from Ambri follows predicted trajectory. |
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In addition to the processing goals stated above, the Company intends to continue to improve its production capacity and sales of zeolite at its subsidiary Bear River Zeolite. These goals will be aided by the additional 100’ by 50’ warehouse for the storage and stockpile of product and also its 60’ x 40’ shop building, both of which should be completed in the first half of 2022. Also, the purchase of a Caterpillar 740 haul truck is underway to replace the defunct haul truck we had. The Company plans to purchase a replacement front-end loader for the mine to replace its 988-B Caterpillar that is on its last legs. The Company plans to then update the rippers on both Cat D-8 and D-9 supplement mining. A secondary, winter-storage platform located between the mine and the mill is planned. Salt sheds for these ore storage locations are planned to eliminate the necessity of the use of tarps for keeping the zeolite dry during the winter and rainy seasons.
The following are highlights of the significant changes during 2021:
Antimony:
| · | The sale of antimony during 2021 was 911,079 pounds compared to 815,310 pounds in 2020, an increase of 11.7%. |
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| · | The average sales price of antimony during 2021 was $5.29/lb. compared with $3.61/lb. in 2020, an increase of $1.68/lb. (a 46.5% increase). During the beginning of 2022, the Rotterdam price of antimony is approximately $6.06/lb. per pound. |
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| · | We are producing and buying raw materials, which will allow us to ensure a steady flow of products for sale. Our smelter at Madero, Mexico, was producing primarily ores from the Wadley mines in 2021. Our smelter in Montana was producing material from both Mexico and our North American sources in 2021. Raw materials from our North American supplier was reduced in 2021 due to the effects of Covid and shipping difficulties. |
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| · | We produced ingots of antimony metal in 2021 to be shipped directly to customers from our Madero smelter starting in 2022. We intend to increase this for 2022 and beyond. This will significantly reduce our production and shipping costs. |
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| · | We are proceeding with the processing of Los Juarez ore in the 100 ton per day mill at Puerto Blanco. Due to the hardness of the jasperoid rock at Los Juarez, it has been determined that the actual through-put is more like 80 tons per day. |
Zeolite:
During 2021, the Company sold 11,747 tons compared to 10,661 tons in 2020, an increase of 1,086 tons (10.1%). Bear River Zeolite (“BRZ”) realized a gross profit of $340,806 (13.1% of sales) in 2021 compared to a gross profit of $323,780 (15.3% of sales) in 2020. Net income for the BRZ segment was $193,674 for the year ended December 31, 2021 compared to $262,861 for the year ended December 31, 2020.
Corporate-wide:
During the year ending December 31, 2021, the following transactions had a material impact on the Company’s net loss:
| · | On April 20, 2020, the Company received a loan of $443,400 pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. During the year ended December 31, 2021, the Company received notification that the loan had been forgiven. The amount of the loan, $443,400, was recognized as gain on forgiveness of the CARES Act loan. |
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| · | On November 7, 2014, the Company entered into an advance and concentrate processing agreement with Hillgrove Mines Pty Ltd of Australia (Hillgrove) in which the Company was advanced funds from Hillgrove to build facilities to process Hillgrove antimony concentrate. The balance of the advance liability due was $1,134,221 at December 31, 2020. In April 2021, the Company successfully negotiated a settlement with Red River for an agreed upon amount of $1,020,799 which was paid on paid on April 8, 2021. The Company recognized a gain on settlement of the advance in the amount of $113,422 during the year ended December 31, 2021 (Note 8) |
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| · | Starting in August of 2021, US Antimony negotiated with our Canadian feed source for a more favorable treatment charge contract to replace the previous one. This contract became effective in December of 2021 and represents an improvement from the previous treatment charge contract. |
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| · | Throughout 2021, the price of antimony increased steadily. |
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| · | Throughout 2021, the price of trucking, lumber (for pallets), fuel, and labor increased. The Company raised its starting wages twice at the facility in Montana and once at Bear River Zeolite. |
Operational and financial performance
Antimony Sales
Our sales volume of antimony for the years ended December 31, 2021 and 2020 were as follows:
Antimony - Combined USA and Mexico |
| 2021 |
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| 2020 |
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Total Revenue - Antimony |
| $ | 4,815,524 |
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| $ | 2,942,628 |
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Total Lbs of Antimony Metal Sold |
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| 911,079 |
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| 815,310 |
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Average Sales Price/Lb Metal |
| $ | 5.29 |
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| $ | 3.61 |
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Average cost per Lb Metal |
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| 4.99 |
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| 3.86 |
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Average gross profit per Lb Metal |
| $ | 0.30 |
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| $ | (0.25 | ) |
During 2021, we saw our average sale price for antimony increase by $1.68/lb from an average of $3.61/lb in 2020 to $5.29/lb in 2021.
In the 4th quarter 2021, the Company renegotiated a treatment-charge contract with its North American supplier of sodium antimonate. This contract renegotiation became effective in December 2021 and will result in a more favorable price of purchased antimony contained that had previously existed.
During 2020, we saw our average sale price increase by $0.13 per pound from an average of $3.48 per pound for 2019 to an average of $3.61 per pound for 2020. Following the change in management in June and the suppressed price of antimony, the Company temporarily suspended sale of antimony oxide. This decision was made principally in order to minimize the loss per pound in sales at a time for which our production acquisition contracts were being renegotiated. As consequence of these decisions, the Company was, starting in early 2021, obtaining its raw materials from its Mexican sources at a substantial savings as compared to the previous year. These savings were due to the withdrawal of overhead from the staff it had at the Wadley mine.
Additionally, the Company is now processing antimony products at its Madero facility at a substantial savings compared with all previous years. These savings were due to the renegotiating of its natural gas contract for the Madero smelter which was completed in early 2021. Furthermore, the Company has been able to produce finished antimony ingots and will sell them directly from its Madero facility starting in 2022. This saves at least $0.29/lb in shipping to and the finishing costs at Montana.
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Zeolite Sales
Our sales volume of zeolite for the years ended December 31, 2021 and 2020 were as follows:
Zeolite |
| 2021 |
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| 2020 |
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Total Revenue - Zeolite |
| $ | 2,593,641 |
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| $ | 2,118,823 |
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Tons of zeolite sold |
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| 11,747 |
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| 10,661 |
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Average Sales Price/Ton |
| $ | 220.78 |
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| $ | 198.75 |
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Average cost per ton |
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| 191.77 |
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| 168.37 |
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Average gross profit per ton |
| $ | 29.01 |
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| $ | 30.37 |
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Our sales volume of zeolite in 2021 was 1,086 tons more than we sold in 2020, an increase of 10%. Our average sales price for the year ended December 31, 2021 increased by $22.03 per ton (11.1%) from 2020. For the year ended December 31, 2021, total sales of zeolite increased by $474,818.
Precious Metals Sales
Our sales volume of precious metals for the years ended December 31, 2021 and 2020 were as follows:
Precious Metals |
| 2021 |
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| 2020 |
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Total Revenue - Precious Metals |
| $ | 338,341 |
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| $ | 174,079 |
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Ounces sold - Gold |
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| 70 |
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| 31 |
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Ounces sold - Silver |
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| 27,342 |
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| 11,434 |
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EARNINGS BEFORE INTEREST TAX DEPRECIATION AND AMORTIZATION
The Company utilizes Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) a non-GAAP financial measurement which approximates free cash flow.
Our company-wide Earnings Before Interest Taxes Depreciation Amortization (“EBITDA”) was a $825,950 for 2021, compared to a negative EBITDA of $2,382,970 for 2020.
EBIDTA schedules by business segment is presented as follows.
Antimony - Combined USA and Mexico |
| 2021 |
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| 2020 |
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Gross antimony revenue |
| $ | 4,815,524 |
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| 100.0 | % |
| $ | 2,942,628 |
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| 100.0 | % |
Cost of sales |
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| (4,548,802 | ) |
| (94.5 | %) |
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| (3,147,954 | ) |
| (107.0 | %) | ||
Gross profit |
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| 266,722 |
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| 5.5 | % |
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| (205,326 | ) |
| (7.0 | %) | |
Operating expenses |
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| (1,355,121 | ) |
| (28.1 | %) |
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| (3,134,889 | ) |
| (106.5 | %) | ||
Non-operating income (expense) |
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| 603,179 |
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| 12.5 | % |
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| 21,808 |
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| 0.7 | % |
Loss on mineral properties |
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| - |
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| 0.0 | % |
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| (318,502 | ) |
| (10.8 | %) | |
Net loss - antimony |
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| (485,220 | ) |
| (10.1 | %) |
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| (3,636,909 | ) |
| (123.6 | %) | ||
Interest expense |
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| 1,700 |
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| 0.0 | % |
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| 14,121 |
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| 0.5 | % |
Depreciation and amortization |
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| 613,202 |
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| 12.7 | % |
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| 616,388 |
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| 20.9 | % |
EBITDA - antimony |
| $ | 129,682 |
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| 2.7 | % |
| $ | (3,006,400 | ) |
| (102.2 | %) | |
Zeolite |
| 2021 |
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| 2020 | |||||||||||
Gross zeolite revenue |
| $ | 2,593,641 |
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| 100.0 | % |
| $ | 2,118,823 |
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| 100.0 | % |
Cost of sales |
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| (2,252,835 | ) |
| (86.9 | %) |
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| (1,795,043 | ) |
| (84.7 | %) | ||
Gross profit - zeolite |
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| 340,806 |
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| 13.1 | % |
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| 323,780 |
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| 15.3 | % |
Operating income (expense) |
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| (143,741 | ) |
| (5.5 | %) |
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| (57,049 | ) |
| (2.7 | %) | ||
Non-operating expenses |
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| (3,391 | ) |
| (0.1 | %) |
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| (3,870 | ) |
| (0.2 | %) | ||
Net income - zeolite |
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| 193,674 |
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| 7.5 | % |
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| 262,861 |
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| 12.4 | % |
Interest expense |
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| 3,839 |
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| 0.1 | % |
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| 3,870 |
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| 0.2 | % |
Depreciation and amortization |
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| 160,414 |
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| 6.2 | % |
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| 182,620 |
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| 8.6 | % |
EBITDA - zeolite |
| $ | 357,927 |
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| 13.8 | % |
| $ | 449,351 |
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| 21.2 | % |
Precious Metals |
| 2021 |
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| 2020 | |||||||||||
Gross precious metals revenue |
| $ | 338,341 |
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| 100.0 | % |
| $ | 174,079 |
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| 100.0 | % |
Production costs |
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| (107,264 | ) |
| (31.7 | %) |
|
| (86,835 | ) |
| (49.9 | %) | ||
Net income - precious metals |
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| 231,077 |
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| 68.3 | % |
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| 87,244 |
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| 50.1 | % |
Interest expense |
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| - |
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| 0.0 | % |
|
| - |
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|
| 0.0 | % |
Depreciation and amortization |
|
| 107,264 |
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| 31.7 | % |
|
| 86,835 |
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| 49.9 | % |
EBITDA - precious metals |
| $ | 338,341 |
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|
| 100.0 | % |
| $ | 174,079 |
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|
| 100.0 | % |
Company-wide |
| 2021 |
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| 2020 |
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Gross revenue |
| $ | 7,747,506 |
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| 100.0 | % |
| $ | 5,235,530 |
|
|
| 100.0 | % |
Production costs |
|
| (6,908,901 | ) |
| (89.2 | %) |
|
| (5,029,832 | ) |
| (96.1 | %) | ||
Operating expenses |
|
| (1,498,862 | ) |
| (19.3 | %) |
|
| (3,191,938 | ) |
| (61.0 | %) | ||
Non-operating income (expense) |
|
| 599,788 |
|
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| 7.7 | % |
|
| 17,938 |
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|
| 0.3 | % |
Loss on mineral properties |
|
| - |
|
|
| 0.0 | % |
|
| (318,502 | ) |
| (6.1 | %) | |
Net income (loss) |
|
| (60,469 | ) |
| (0.8 | %) |
|
| (3,286,804 | ) |
| (62.8 | %) | ||
Interest expense |
|
| 5,539 |
|
|
| 0.1 | % |
|
| 17,991 |
|
|
| 0.3 | % |
Depreciation and amortization |
|
| 880,880 |
|
|
| 11.4 | % |
|
| 885,843 |
|
|
| 16.9 | % |
EBITDA |
| $ | 825,950 |
|
|
| 10.7 | % |
| $ | (2,382,970 | ) |
| (45.5 | %) | |
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Financial Condition and Liquidity
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| 2021 |
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| 2020 |
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Current assets |
| $ | 23,568,992 |
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| $ | 1,808,161 |
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Current liabilities |
|
| (2,020,855 | ) |
|
| (4,477,543 | ) |
Net Working Capital |
| $ | 21,548,137 |
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| $ | (2,669,382 | ) |
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| 2021 |
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| 2020 |
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Cash provided (used) by operations |
| $ | (2,431,477 | ) |
| $ | (1,305,664 | ) |
Cash used by investing: |
|
| (653,126 | ) |
|
| (243,091 | ) |
Cash provided by financing: |
|
| 23,782,555 |
|
|
| 2,098,365 |
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Net change in cash and restricted cash |
| $ | 20,697,952 |
|
| $ | 549,610 |
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Our net working capital increased $24,217,519 for the year ended December 31, 2021 from a negative amount of $2,669,382 at the beginning of the year to $21,548,137 at the end of the year. Current assets increased due to an increase in cash and cash equivalents. Our current liabilities decreased by $2,456,688 which included a decrease of approximately $662,140 in accounts payables and payables to related parties, a decrease of $1,120,730 due to Mexican export tax liability. Capital improvements were paid for with cash.
For the year ending December 31, 2022, we are planning to use funds acquired from the two stock offerings raised in 2021 to make significant improvements to our operations at Madero, Puerto Blanco, Bear River Zeolite, and Thompson Falls facilities with the goal of increasing production and decreasing costs.
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Item 7B Critical Accounting Estimates
We have, besides our estimates of the amount of depreciation on our assets, two critical accounting estimates. The percentage of antimony contained in our unprocessed ore in inventory is based on assays taken at the time the ore is delivered, and may vary when the ore is processed. Also, the asset recovery obligation on our balance sheet is based on an estimate of the future cost to recover and remediate our properties as required by our permits upon cessation of our operations, and may differ when we cease operations.
| · | The value of unprocessed ore is based on assays taken at the time the ore is delivered, and may vary when the ore is processed. We assay the ore to estimate the amount of antimony contained per metric ton, and then make a payment based on the Rotterdam price of antimony and the % of antimony contained. Our payment scale incorporates a penalty for ore with a low percentage of antimony. It is reasonably likely that the initial assay will differ from the amount of metal recovered from a given lot. If the initial assay of a lot of ore on hand at the end of a reporting period were different, it would cause a change in our reported inventory, but would not change our accounts payable, reported cost of goods sold or net income amounts. Our net income would not be affected. Direct shipping ore (DSO) purchased at our Madero smelter is paid for at a fixed amount at the time of delivery and assaying, and is not subject to accounting estimates. The amount of the accounting estimate for purchased ore at our Puerto Blanco mill is in a constant state of change because the amount of purchased ore and the per cent of metal contained are constantly changing. Due to the amount of ore on hand at the end of a reporting period, as compared to the amount of total assets, liabilities, equity, and the ore processed during a reporting period, any change in the amount of estimated metal contained would likely not result in a material change to our financial condition. |
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| · | The asset retirement obligation and asset on our balance sheet is based on an estimate of the future cost to recover and remediate our properties as required by our permits upon cessation of our operations, and may differ when we cease operations. We make periodic reviews of the remaining life of the mine and other operations, and the estimated remediation costs upon closure, and adjust our account balances accordingly. At this time, we think that an adjustment in our asset recovery obligation is not required, and an adjustment in future periods would not have a material impact in the year of adjustment, but would change the amount of the annual accretion and amortization costs charged to our expenses by an undetermined amount. |
Item 9B Other information
None
| 10 |
PART III
Item 10 Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(a) of the Exchange Act
Identification of directors and executive officers at December 31, 2021, is as follows:
Name |
| Age |
| Affiliation |
| Expiration of Term |
|
|
|
|
|
|
|
John C. Gustavsen |
| 73 |
| CEO |
| Annual meeting |
|
|
|
|
|
|
|
Russell C. Lawrence |
| 53 |
| President & Director |
| Annual meeting |
|
|
|
|
|
|
|
Kelly J. Stopher |
| 59 |
| Chief Financial Officer |
| As contracted |
|
|
|
|
|
|
|
Alicia Hill |
| 39 |
| Secretary, Controller, and Treasurer |
| Annual meeting |
|
|
|
|
|
|
|
Hart W. Baitis |
| 71 |
| Director |
| Annual meeting |
|
|
|
|
|
|
|
Dr. Blaise Aguirre |
| 56 |
| Director |
| Annual meeting |
|
|
|
|
|
|
|
Joseph Bardswich |
| 74 |
| Director |
| Annual meeting |
|
|
|
|
|
|
|
Christopher Park |
| 47 |
| Director |
| Annual meeting |
| 11 |
Business Experience of Directors and Executive Officers
Russell C. Lawrence –President and Director - Mr. Lawrence has experience in applied physics, mining, refining, excavation, electricity, electronics, and building contracting. He graduated from the University of Idaho in 1994 with a degree in physics, and worked for the Physics Department at the University of Idaho for a period of 10 years. He has also worked as a building contractor and for USAC at the smelter and laboratory at Thompson Falls, for USAMSA in the construction and operation of the USAMSA smelter in Mexico, and for Antimonio de Mexico, S. A. de C. V. at the San Miguel Mine in Mexico.
John C. Gustavsen –Chief Executive Officer - Mr. Gustavsen graduated from Rutgers University in 1970 with a BS in chemistry and started work for Harshaw Chemical (purchased by Amspec Chemical Corporation), a major producer of antimony trioxide. Mr. Gustavsen took engineering courses from 1976 through 1980, and became president and treasurer of the company in 1983. He was to promoted CEO in 1990. Mr. Gustavsen designed a new type of production furnace for antimony trioxide that eventually produced 20 million pounds of antimony trioxide per year. Mr. Gustavsen is conversant in Spanish, Chinese, and other languages, and travelled to many countries as part of his duties as president of Amspec Chemical Corporation. Mr. Gustavsen came to work at United States Antimony Corporation in November of 2011.
Kelly J. Stopher – Chief Financial Officer - Mr. Stopher has 30 years of experience in accounting and finance. Mr. Stopher is the Managing Partner of Palouse Advisory Partners, LLC, providing Chief Financial Officer (“CFO”) services to clients. Mr. Stopher has developed strategies to implement financial management systems, internal control policies and procedures, financial reporting and modeling for numerous small-cap companies. Mr. Stopher was appointed Chief Financial Officer of Star Gold Corp., a US-based company quoted via the OTC Markets, on October 20, 2010, and still holds such position. Mr. Stopher is currently also CFO for Epilog Imaging Systems, Inc. and President of National Silver-Lead Company. Mr. Stopher was previously the CFO of Zenlabs Holdings, Inc. Mr. Stopher holds a Bachelor’s degree from Washington State University in Business Administration – Accounting. He started his career in public accounting with Langlow Tolles & Company, PS, a regional CPA firm based in Tacoma, WA and has worked in various accounting and finance positions of leadership including startups, reorganizations and mature companies. Mr. Stopher is also a Certified Financial Modeling Valuation Analyst.
Alicia Hill – Corporate Secretary/Treasurer/Controller - Ms. Hill was hired by the Company in 2006 as an accounting assistant, and was eventually promoted to chief accountant responsible for the recording of transactions for three companies. In 2011, she was appointed Company Controller, Secretary, and Treasurer. Ms. Hill has guided the Company through the listing on the NYSE-MKT, in the addition of a new division in Mexico, and has been the liaison with the Company’s auditors through a progressively complicated reporting process.
Dr. Blaise Aguirre – Director - Blaise Aguirre, MD joined the Board of Directors of United States Antimony Corp. on August 14, 2019, to replace a Director that retired for medical reasons. He received his Medical Doctor’s degree in 1989 from the University of the Witwatersrand, Johannesburg, South Africa, and performed his residency at Boston University School of Medicine from 1991 to 1994. He is an Assistant Professor of Psychiatry at Harvard Medical School and he is the founding Medical Director of 3East at McLean Hospital. Dr. Aguirre is fluent in Spanish and lectures worldwide. He was elected to the Board at Investors Capital Holdings, Ltd in 2011 and remained on the Board until it was sold to RCAP. He sits on the boards of various privately held companies. He developed and maintains enduring relationships with institutional money managers, venture capitalists, Angel investors and developed an expertise as a small cap stock analyst as a broker with series 7 and 63 securities licenses.
Hart W. Baitis - Director - Mr. Baitis graduated from the University of Oregon in 1971 with a B.S. in Geology, and was awarded a Ph. D. in Geology in 1976. He has 35 years of experience as an exploration geologist in the United States, Canada, Central America, and Mexico. Mr. Baitis is experienced in numerous geologic environments and terrains, and has been involved in all phases of exploration, ranging from field geologist, consultant, management, and acquisition team director.
Lloyd Joseph Bardswich - Mr. Bardswich has extensive experience in mining, mining engineering, management, drilling, metallurgy and plant design. He is a registered professional mining engineer, can served as a QP (qualified person) regarding reporting to NI43-101 standards and has worked as a Shift Boss, Mine Safety Engineer, Mine Foreman, Mine Manager, and Mining Consultant.
| 12 |
Christopher Park - Christopher Park was selected by the company as an additional director effective June 23, 2021. Mr. Park is a Chartered Professional Accountant (CPA, CGA) with several years of executive financial management experience within the mining industry which encompasses financial reporting, internal controls, taxation and treasury management with companies ranging from grassroots exploration to mine development to production. He has held a number of positions with mining companies which include Corporate Controller and Chief Financial Officer positions. Most recently he was Chief Financial Officer of Northern Vertex Mining Corp. during the period the Company constructed the Moss Mine and transitioned to commercial production. Mr. Park is currently the Chief Financial Officer for Northern Graphite Corporation, a company traded on the TSX-V (ticker symbol: NGC). For purposes of SEC compliance, Mr. Park is considered a financial expert and is the chairman of the Company’s audit committee.
We are not aware of any involvement by our directors or executive officers during the past five years in legal proceedings that are material to an evaluation of the ability or integrity of any director or executive officer.
Board Meetings and Committees Our Board of Directors held five (5) regular meetings during the 2021 calendar year. Each incumbent director attended all of the meetings held during the 2021 calendar year, in the aggregate, by the Board and each committee of the Board of which he was a member.
Our Board of Directors established an Audit Committee on December 10, 2011. It consisted of two members at December 31, 2020, Jeffrey Wright, and Hart Baitis. None of the Audit Committee members are involved in our day-to-day financial management. Jeffrey Wright was considered a financial expert. Jeffrey Wright resigned from the board effective January 1, 2021. Craig Thomas resigned from the board on January 13, 2021. The audit committee is currently comprised of Christopher Park, Hart Baitis and L. Joseph Bardswich.
During 2011, the Board also established a Compensation Committee and a Nominating Committee.
Board Member Compensation Following is a summary of fees, cash payments, stock awards, and other reimbursements to Directors during the year ended December 31, 2021:
Directors Compensation
Name and Principal Position |
| Fees Earned paid in Cash |
|
| Fees Earned paid in Stock |
|
| Total Fees, Awards and Other Compensation |
| |||
Russell Lawrence, President |
| $ | - |
|
| $ | 22,500 |
|
| $ | 22,500 |
|
Hartmut, Baitis, Director |
|
| - |
|
|
| 22,500 |
|
|
| 22,500 |
|
Dr. Blaise Aguirre, Director |
|
| - |
|
|
| 22,500 |
|
|
| 22,500 |
|
L. Joseph Bardswich, Director |
|
| - |
|
|
| 22,500 |
|
|
| 22,500 |
|
Christopher Park, Director |
|
| - |
|
|
| 22,500 |
|
|
| 22,500 |
|
Total |
| $ | - |
|
| $ | 112,500 |
|
| $ | 112,500 |
|
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and the holders of 10% or more of our common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and stockholders holding more than 10% of our common stock are required by the regulation to furnish us with copies of all Section 16(a) forms they have filed. Based solely on our review of copies of Forms 3, 4 and 5 furnished to us, Mr. Hart Baitis and Mr. Russell Lawrence did not file timely Forms 3, 4 or Form 5 reports during 2019 and 2018.
| 13 |
Code of Ethics
The Company has adopted a Code of Ethics that applies to the Company’s executive officers and its directors. The Company will provide, without charge, a copy of the Code of Ethics on the written request of any person addressed to the Company at: United States Antimony Corporation, P.O. Box 643, Thompson Falls, MT 59873.
Item 11 Executive Compensation
Summary Compensation Table
The Securities and Exchange Commission requires the following table setting forth the compensation paid by USAC to its principal executive officer for fiscal years ended December 31, 2021 and 2020.
Name and Principal Position |
| Year |
| Salary |
|
| Bonus |
|
| Stock awards (2) |
|
| Total |
| ||||
Russell Lawrence, President |
| 2021 |
| $ | 110,000 |
|
| $ | - |
|
| $ | 22,500 |
|
| $ | 132,500 |
|
|
| 2020 |
|
| 110,000 |
|
|
| - |
|
|
| 20,000 |
|
|
| 130,000 |
|
|
| 2019 |
|
| 110,000 |
|
|
|
|
|
|
| 25,000 |
|
|
| 135,000 |
|
John C. Gustavesen, Interim CEO |
| 2021 |
|
| 100,000 |
|
|
| - |
|
|
| - |
|
|
| 100,000 |
|
|
| 2020 |
|
| 100,000 |
|
|
| - |
|
|
| - |
|
|
| 100,000 |
|
|
| 2019 |
|
| 100,000 |
|
|
| - |
|
|
| - |
|
|
| 100,000 |
|
Compensation for all executive officers, except for the President/CEO position, is recommended to the compensation committee of the Board of Directors by the President/CEO. The compensation committee makes the recommendation for the compensation of the President/CEO. The compensation committee has identified a peer group of mining companies to aid in reviewing the President’s compensation recommendations for executives, and for reviewing the compensation of the President/CEO. The full Board approves the compensation amounts recommended by the compensation committee. Currently, the executive managements’ compensation only includes base salary and health insurance. The Company does not have annual performance-based salary increases, long term performance-based cash incentives, deferred compensation, retirement benefits, or disability benefits.
The President receives restricted stock awards for his services as Board members.
There were not any outstanding equity awards or plan based awards to officers or directors as of December 31, 2021.
John Lawrence, previous President and Chairman, exercised his warrants at a price of $0.25 per share for 250,000 shares on March 20, 2020. The receipt of $62,500 from the warrants was used to reduce advances payable to Mr. Lawrence.
Item 12 Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding beneficial ownership of our common stock as of March 26, 2021 by (i) each person who is known by us to beneficially own more than 5% of our Series B, C, and D preferred stock or common stock; (ii) each of our executive officers and directors; and (iii) all of our executive officers and directors as a group. Unless otherwise stated, each person’s address is c/o United States Antimony Corporation, P.O. Box 643, 47 Cox Gulch, Thompson Falls, Montana 59873.
Title of Class |
| Name and Address of Beneficial Owner (1) |
| Amount and Nature of Beneficial Ownership |
|
| Percent of Class (1) |
|
| Percent of all Voting Stock |
| |||
Series B Preferred |
|
|
|
|
|
|
|
|
|
|
| |||
|
| Excel Mineral Company P.O. Box 3800 Santa Barbara, CA 93130 |
|
| 750,000 |
|
|
| 100% |
|
| N/A |
| |
Series C Preferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Richard A. Woods 59 Penn Circle West Penn Plasa Apts. Pittsburgh, PA 15206 |
|
| 48,305 | (4) |
|
| 27.2% |
|
| 0.1% | ||
|
| Dr. Warren A Evans 69 Ponfret Landing Road Brooklyn, CT 06234 |
|
| 32,203 | (4) |
|
| 18.1% |
|
| 0.05% | ||
|
| Edward Robinson 1007 Spruce Street, 1st floor Philadelphia, PA 19107 |
|
| 32,203 | (4) |
|
| 18.1% |
|
| 0.05% | ||
Series C Preferred |
| All Series C Preferred Shareholders as a Group |
|
| 177,904 |
|
|
| 100% |
|
| 0.2% | ||
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| John C. Lawrence |
|
| 4,551,905 | (3) |
|
| 79.1% |
|
| 4.3% | ||
|
| Russell Lawrence |
|
| 573,974 |
|
|
| 10.0% |
|
| 0.5% | ||
|
| Hart Baitis |
|
| 520,055 |
|
|
| 9.0% |
|
| 0.5% | ||
|
| Blaise Aguirre |
|
| 40,210 |
|
|
| 0.7% |
|
| 0.0% | ||
|
| L. Joseph Bardswich |
|
| 34,031 |
|
|
| 0.6% |
|
| 0.0% | ||
|
| John C. Gustavsen |
|
| 36,200 |
|
|
| 0.6% |
|
| 0.0% | ||
Common Stock |
| All Directors and Executive Officers as a Group |
|
| 5,756,375 |
|
|
| 100% |
|
| 5.3% | ||
Series D Preferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| John C. Lawrence |
|
| 1,590,672 |
|
|
| 94.0% |
|
| 1.5% | ||
|
| Leo Jackson |
|
| 102,000 |
|
|
| 6.0% |
| * |
| ||
Series D Preferred |
| All Series D Preferred Shareholders as a Group |
|
| 1,692,672 |
|
|
| 100% |
|
| 1.5% | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock and Preferred Stock w/voting rights |
| All Directors and Executive Officers as a Group |
|
| 5,756,375 |
|
|
| 77.3% |
|
| 5.4% | ||
|
| All Preferred Shareholders that are officers or directors |
|
| 1,692,672 |
|
|
| 22.7% |
|
| 1.6% | ||
Common and Preferred Voting Stock |
|
|
|
| 7,449,047 |
|
|
| 100.0% |
|
| 7.0% | ||
(1) | Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of March 28, 2021, are deemed outstanding for computing the percentage of the person holding options or warrants but are not deemed outstanding for computing the percentage of any other person. Percentages are based on a total of 106,240,361 shares of common stock, 750,000 shares of Series B Preferred Stock, 177,904 shares of Series C Preferred Stock, and 1,692,672 shares of Series D Preferred Stock outstanding on December 31, 2021. Total voting stock of 108,110,937 shares is a total of all the common stock issued, and all of the Series C and Series D Preferred Stock outstanding at December 31, 2021. |
|
|
(2) | Includes 4,295,350 shares of common stock and no stock purchase warrants. |
|
|
(3) | Russell Lawrence is executor of the estate of John Lawrence and holds voting control over associated shares. |
|
|
(4) | The outstanding Series C and Series D preferred shares carry voting rights equal to the same number of shares of common stock. |
| 14 |
Item 13 Certain Relationships and Related Transactions
Described below are transactions during the last two years to which we are a party and in which any director, executive officer or beneficial owner of five percent (5%) or more of any class of our voting securities or relatives of our directors, executive officers or five percent (5%) beneficial owners has a direct or indirect material interest.
John Lawrence, the Company’s previous Chief Executive Officer and Chairman of the Board of Directors, rented equipment to the Company and charged the Company for lodging and meals provided to consultants, customers and other parties by an entity that Mr. Lawrence owned. The amount due to Mr. Lawrence as of December 31, 2020 was $171,017. During 2021, the Company paid the full amount of $171,017 to John Lawrence’s estate for reimbursement of these expenses. Expenses paid to Mr. Lawrence for the year ended December 31, 2020 were $1,533. During 2020, an advance of $56,215 due to John Lawrence was satisfied with the exercise of a warrant held by Mr. Lawrence for 250,000 shares of common stock at an exercise price of $0.25 or $62,500.
During the year ended December 31, 2021, Russ Lawrence, President and Director, incurred expenses of $24,510 and charged the Company for lodging and meals provided to visiting Board of Directors by an entity that Russ Lawrence owns. During the year ended December 31, 2021, the Company paid Russ Lawrence $27,290, leaving a balance due of $1,846 which is included in accounts payable on the balance sheet.
Item 14 Principal Accountant Fees and Services
The Company’s Board of Directors and audit committee reviews and approves audit and permissible non-audit services performed by Assure CPA, LLC., as well as the fees charged by Assure CPA for such services. In its review of non-audit service fees and its appointment of Assure CPA as the Company’s independent accountants, the Board of Directors considered whether the provision of such services is compatible with maintaining Assure CPA independence. All of the services provided and fees charged by Assure CPA in 2021 were pre-approved by the Board of Directors and its audit committee.
Audit Fees
The aggregate fees billed by Assure CPA for professional services for the audit of the annual financial statements of the Company and the reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q for 2021 and 2020 were $125,980 and $122,500, respectively, net of expenses.
Audit-Related Fees
There were no other fees billed by Assure CPA during the last two fiscal years for assurance and related services that were reasonably related to the performance of the audit or review of the Company’s financial statements and not reported under “Audit Fees” above.
Tax Fees
The aggregate fees billed by Assure CPA during the last two fiscal years for professional services rendered by Assure CPA for tax compliance for 2021 and 2020 were $11,500 and $12,100, respectively.
All Other Fees
There were $9,965 in other fees billed by Assure CPA during 2021 and $1,123 during 2020.
| 15 |
Item 15. Exhibits and Reports on Form 8-K
Exhibit Number |
| Description |
|
|
|
|
| Auditor Firm ID (PCAOB |
|
|
|
3.01 |
| Articles of Incorporation of USAC, filed as an exhibit to USAC's Form 10-KSB for the fiscal year ended December 31, 1995 (File No.001-08675), are incorporated herein by this reference. |
|
|
|
| ||
|
|
|
| Articles of Correction of Restated Articles of Incorporation of USAC. | |
|
|
|
| ||
|
|
|
| ||
|
|
|
Documents filed with USAC's Annual Report on Form 10-KSB for the year ended December 31, 1995 (File No. 001-08675), are incorporated herein by this reference: | ||
|
|
|
10.10 |
| Yellow Jacket Venture Agreement |
|
|
|
10.11 |
| Agreement Between Excel-Mineral USAC and Bobby C. Hamilton |
|
|
|
10.12 |
| Letter Agreement |
|
|
|
10.13 |
| Columbia-Continental Lease Agreement Revision |
|
|
|
10.14 |
| Settlement Agreement with Excel Mineral Company |
|
|
|
10.15 |
| Memorandum Agreement |
|
|
|
10.16 |
| Termination Agreement |
|
|
|
10.17 |
| Amendment to Assignment of Lease (Geosearch) |
|
|
|
10.18 |
| Series B Stock Certificate to Excel-Mineral Company, Inc. |
|
|
|
10.19 |
| Division Order and Purchase and Sale Agreement |
|
|
|
10.20 |
| Inventory and Sales Agreement |
|
|
|
10.21 |
| Processing Agreement |
|
|
|
10.22 |
| Release and settlement agreement between Bobby C. Hamilton and United States Antimony Corporation |
|
|
|
10.23 |
| Columbia-Continental Lease Agreement |
|
|
|
10.24 |
| Release of Judgment |
|
|
|
10.25 |
| Covenant Not to Execute |
|
|
|
10.26 |
| Warrant Agreements filed as an exhibit to USAC's Annual Report on Form 10-KSB for the year ended December 31, 1996 (File No. 001-08675), are incorporated herein by this reference |
|
|
|
| ||
|
|
|
| ||
| 16 |
| ||
|
|
|
Documents filed with USAC's Annual Report on Form 10-KSB for the year ended December 31, 1998 (File No. 001-08675), are incorporated herein by this reference: | ||
|
|
|
| ||
|
|
|
| ||
|
|
|
Documents filed with USAC's Quarterly Report on Form 10-QSB for the quarter ended March 31, 1999 (File No. 001-08675) is incorporated herein by this reference: | ||
|
|
|
| ||
|
|
|
| ||
|
|
|
Documents filed as an exhibit to USAC's Form 10-KSB for the year ended December 31, 1999 (File No. 001-08675) are incorporated herein by this reference: | ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
Documents filed as an exhibit to USAC's Form 10-QSB for the quarter ended June 30, 2002 (File No. 001-08675) are incorporated herein by this reference: | ||
|
|
|
| Bear River Zeolite Company Royalty Agreement, dated May 29, 2002 | |
|
|
|
| ||
|
|
|
| Assignment of Common Stock of Bear River Zeolite Company, dated May 29, 2002 | |
|
|
|
| ||
|
|
|
10.51 |
| Secured convertible note payable - Delaware Royalty Company dated December 22, 2003* |
|
|
|
10.52 |
| Convertible note payable - John C. Lawrence dated December 22, 2003* |
|
|
|
10.53 |
| Pledge, Assignment and Security Agreement dated December 22, 2003* |
|
|
|
10.54 |
| Note Purchase Agreement dated December 22, 2003* |
|
|
|
14.0 |
| Code of Ethics* |
|
|
|
| ||
|
| Certification of John C. Lawrence* |
|
|
|
| ||
|
| Certification of John C. Lawrence* |
|
|
|
44.1 |
| CERCLA Letter from U.S. Forest Service filed as an exhibit to USAC form 10-QSB for the quarter ended June 30, 2000 (File No. 001-08675) are incorporated herein by this reference and filed as an exhibit to USAC's Form 10-KSB for the year ended December 31, 1995 (File No. 1-8675) is incorporated herein by this reference |
_____________________
* Filed herewith.
| 17 |
Reports on Form 8-K
Item 5. Other Events - October 10, 2003.
Exhibit 21.01
Subsidiaries of Registrant, as of December 31, 2020
Bear River Zeolite Company
C/o Box 643
Thompson Falls, MT 59873
Antimonio de Mexico, S.A. de C.V.
C/o Box 643
Thompson Falls, MT 59873
United States Antimony, Mexico, S.A. de C.V.
C/o Box 643
Thompson Falls, MT 59873
Stibnite Holding Company US Inc.
C/o Box 643
Thompson Falls, MT 59873
Antimony Mining and Milling US LLC
C/o Box 643
Thompson Falls, MT 59873
AGUA Mines, Inc
C/0 Box 643
Thompson Falls, MT 59873
| 18 |
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//Kelly J. Stopher |
| Date: April 4, 2022 | |
|
| Kelly J. Stopher, Chief Financial Officer |
|
|
| 19 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the board of directors of United States Antimony Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of United States Antimony Corporation (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, of changes in stockholders’ equity and of cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
Evaluation of properties, plants, and equipment for impairment triggering events
As discussed in Note 2 to the consolidated financial statements, the Company evaluates properties, plants, and equipment (“PPE”) to identify events or changes in circumstances, referred to as triggering events, that indicate the carrying value of PPE may not be recoverable. An impairment loss is recorded in the period in which it is determined that the carrying amount of PPE is not recoverable. As of December 31, 2021, the carrying value of properties, plants and equipment, net was approximately $11.1 million.
We identified the evaluation of PPE for impairment triggering events as a critical audit matter. A high degree of subjective auditor judgment was required in evaluating the Company’s assessment of current operations, financial results and historical projections, current industry and market conditions, and relevant industry data for impairment indicators.
The following are the primary procedures we performed to address this critical audit matter.
| · | We evaluated the Company’s process of identifying and assessing potential triggering events, including the Company’s assessment of current operations, financial results and historical projections, current industry and market conditions, and relevant industry data. |
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| · | We evaluated the Company’s identification and assessment of triggering events by evaluating current period operations, financial results and historical projections, including current industry and market considerations. |
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| · | We compared relevant industry data used by the Company to external sources, including market index data. |
| · | We evaluated the Company’s analysis over the factors and considered whether the Company omitted any significant internal or external elements in its evaluation. |
/s/
March 31, 2022
We have served as the Company’s independent auditor since 1998.
| F-1 |
United States Antimony Corporation and Subsidiaries
Consolidated Balance Sheets
December 31, 2021 and 2020
ASSETS | ||||||||
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Current assets: |
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Cash and cash equivalents |
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Certificates of deposit |
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Accounts receivable |
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Inventories (Note 4) |
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Total current assets |
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Properties, plants and equipment, net |
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Restricted cash for reclamation bonds |
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IVA receivable and other assets |
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Total assets |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: |
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Checks issued and payable |
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Accounts payable |
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Payable to related parties |
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Accrued liabilities |
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Notes payable to bank |
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Export tax assessment payable (Note 11) |
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Hillgrove advances payable (Note 8) |
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Long-term debt, current portion |
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Total current liabilities |
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Long-term debt, net of current portion |
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Hillgrove advances payable (Note 8) |
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CARES Act note payable (Note 15) |
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Stock payable to directors for services |
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Asset retirement obligations and accrued reclamation costs |
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Total liabilities |
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Commitments and contingencies (Note 13) |
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Stockholders' equity: |
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Preferred stock $ |
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Series A: - |
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Series B: |
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(liquidation preference $ |
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Series C: |
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(liquidation preference $ |
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Series D: |
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(liquidation preference $ |
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respectively) |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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| $ |
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The accompanying notes are an integral part of these consolidated financial statements.
| F-2 |
United States Antimony Corporation and Subsidiaries
Consolidated Statements of Operations
For the years ended December 31, 2021 and 2020
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REVENUES |
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COST OF REVENUES |
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GROSS PROFIT |
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OPERATING EXPENSES: |
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General and administrative |
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Exploration expense |
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Salaries and benefits |
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Export tax assessment (Note 11) |
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Other operating expenses |
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Professional fees |
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Loss on disposal of assets |
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TOTAL OPERATING EXPENSES |
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LOSS FROM OPERATIONS |
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OTHER INCOME (EXPENSE): |
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Interest expense |
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Other income |
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Gain on forgiveness of CARES Act Debt (Note 15) |
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Gain on settlement of Hillgrove Advance (Note 8) |
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TOTAL OTHER INCOME |
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NET LOSS |
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Preferred dividends |
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Net loss available to common stockholders |
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Net loss per share of common stock: |
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Basic and diluted |
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Weighted average shares outstanding: |
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Basic and diluted |
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The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
United States Antimony Corporation and Subsidiaries
Consolidated Statement of Changes in Stockholders' Equity
For the years ended December 31, 2021 and 2020
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| Additional |
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| Total |
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| Total Preferred Stock |
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| Common Stock |
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| In Capital |
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| Deficit |
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| Equity |
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Balances, January 1, 2020 |
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| $ | ( | ) |
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Issuance of common stock upon exercise of warrants |
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Issuance of common stock to Directors |
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Issuance of common stock and warrants for cash |
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Common stock issuance costs |
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| - |
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Net loss |
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| - |
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Balances, December 31, 2020 |
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Issuance for common stock for cash (Note 9) |
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Issuance of common stock to Directors (Note 9) |
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Common stock issuance costs (Note 9) |
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| - |
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Common stock issued upon exercise of warrants (Note 9) |
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Conversion of preferred shares to common shares (Note 9) |
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Series D preferred dividend paid in common shares (Note 9) |
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Net loss |
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| - |
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Balances, December 31, 2021 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
United States Antimony Corporation and Subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31, 2021 and 2020
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| 2021 |
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| 2020 |
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Cash Flows From Operating Activities: |
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash |
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used by operating activities: |
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Depreciation and amortization |
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Loss on mineral properties |
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Accretion of asset retirement obligation |
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Common stock payable for directors' fees |
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Gain on settlement of Hillgrove advance |
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Gain of forgiveness of Cares Act debt |
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Loss on disposal of assets |
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Other non cash items |
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Change in: |
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Accounts receivable, net |
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Inventories |
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IVA receivable and other assets |
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Accounts payable |
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Accrued liabilities |
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Export tax assessment payable |
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Payables to related parties |
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Net cash used by operating activities |
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Cash Flows From Investing Activities: |
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Proceeds from redemption of certificates of deposit |
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Purchase of certificate of deposit |
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Purchases of properties, plants and equipment |
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Net cash used by investing activities |
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Cash Flows From Financing Activities: |
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Change in checks issued and payable |
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Proceeds from issuance of common stock and warrants, net of issuance costs |
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Proceeds from exercise of warrants |
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Payments on Hillgrove advances payable |
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Payments on advances from related party |
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Proceeds from note payable-SBA |
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Proceeds from notes payable to bank, net of payments |
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Principal payments on long-term debt |
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Net cash provided by financing activities |
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NET INCREASE IN CASH AND CASH EQUIVALENTS |
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Cash and cash equivalents and restricted cash at beginning of year |
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Cash and cash equivalents and restricted cash at end of year |
| $ |
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
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Interest paid in cash |
| $ |
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Noncash investing and financing activities: |
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Common stock payable issued to directors |
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Payable to related party satisfied with exercise of stock |
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purchase warrant |
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Building purchased with note payable |
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The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
1. Background of Company and Basis of Presentation
AGAU Mines, Inc., predecessor of United States Antimony Corporation (“USAC” or “the Company”), was incorporated in June 1968 as a Delaware corporation to mine gold and silver. USAC was incorporated in Montana in January 1970 to mine and produce antimony products. In June 1973, AGAU Mines, Inc. was merged into USAC. In December 1983, the Company suspended its antimony mining operations when it became possible to purchase antimony raw materials more economically from foreign sources. The principal business of the Company has been the production and sale of antimony products.
During 2000, the Company formed a
During 2005, the Company formed a
During 2006, the Company acquired
In 2018, the Company acquired
COVID-19 Coronavirus Pandemic Response and Impact
Following the outbreak of the COVID-19 coronavirus global pandemic (“COVID-19”) in early 2020, in March 2020 the U.S. Centers for Disease Control issued guidelines to mitigate the spread and health consequences of COVID-19. The Company implemented changes to its operations and business practices to follow the guidelines and minimize physical interaction, including using technology to allow employees to work from home when possible and altering production procedures and schedules, asset maintenance, and limiting discretionary spending. We continue to monitor guidance from federal, state, local and foreign governments and public health authorities and may need to take additional actions based on their recommendations. The extent of the impact of COVID-19 on our business and financial results will also depend on future developments, including the duration and spread of the outbreak and the success of the current vaccination programs, all of which are uncertain.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The Company’s consolidated financial statements include the accounts of its wholly-owned subsidiaries BRZ, USAMSA, AM, Stibnite Holding Company US Inc., and Antimony Mining and Milling US LLC. All intercompany balances and transactions are eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant and critical estimates include property, plant and equipment depreciation and potential impairment, metal content of mineral resources, accounts receivable allowance for uncollectible accounts, net realizable value of inventories, deferred income taxes, income taxes payable, environmental remediation liabilities and asset retirement obligations. Actual results could differ from those estimates.
| F-6 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
Cash and Cash Equivalents
The Company considers cash in banks and investments with original maturities of three months or less when purchased to be cash equivalents. At December 31, 2021 and 2020, restricted cash for reclamation bonds of $
Restricted Cash
Restricted cash at December 31, 2021 and 2020 consists of cash held for reclamation performance bonds and is held in certificates of deposit with financial institutions.
Accounts Receivable
Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through an allowance for doubtful accounts. Changes to the allowance for doubtful accounts are based on management’s judgment, considering historical write-offs, collections and current credit conditions. Balances which remain outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to the applicable accounts receivable. Payments received on receivables subsequent to being written off are considered a bad debt recovery.
Inventories
Inventories at December 31, 2021 and 2020 consisted of finished antimony products, antimony metal, antimony concentrates, antimony ore, and finished zeolite products, and are stated at the lower of first-in, first-out weighted average cost or estimated net realizable value. Finished antimony products, antimony metal and finished zeolite products costs include raw materials, direct labor and processing facility overhead costs and freight allocated based on production quantity. Stockpiled ore is carried at the lower of average cost or net realizable value. Since the Company’s antimony inventory is a commodity with a sales value that is subject to world prices for antimony that are beyond the Company’s control, a significant change in the world market price of antimony could have a significant effect on the net realizable value of inventories. The Company periodically reviews its inventories to identify excess and obsolete inventories and to estimate reserves for obsolete inventories as necessary to reflect inventories at net realizable value.
Translations of Foreign Currencies
All amounts in the financial statements are presented in U.S. dollars, which is the functional currency for all of the Company’s operations. Foreign translation gains and losses relating to Mexican subsidiaries are recognized as foreign exchange gain or loss in the consolidated statement of operations.
Properties, Plants and Equipment
Properties, plants and equipment are stated at historical cost and are depreciated using the straight-line method over estimated useful lives of two to thirty years. Vehicles and office equipment are stated at cost and are depreciated using the straight-line method over estimated useful lives of three to twelve years. Maintenance and repairs are charged to operations as incurred. Betterments of a major nature are capitalized. Expenditures for new property, plant, equipment, and improvements that extend the useful life or functionality of the asset are capitalized. When assets are retired or sold, the costs and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in operations.
The costs to obtain the legal right to explore, extract and retain at least a portion of the benefits from mineral deposits are capitalized as mineral rights in the year of acquisition. These capitalized costs are amortized on the statement of operations using the straight-line method over the expected life of the mineral deposit when placed into production. Mineral rights are assessed for impairment when facts and circumstances indicate that the potential for impairment exists. Mineral rights are subject to write down in the period the property is abandoned. Mineral properties are amortized over the estimated economic life of the mineral resource using the straight-line method, based upon estimated lives of the properties, or the units-of-production method, based upon estimated units of mineral resource.
| F-7 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
Impairment of Long-lived Assets
Management reviews and evaluates the net carrying value of its long-lived assets for impairment upon the occurrence of events or changes in circumstances that indicate that the related carrying amounts may not be recoverable. A test for recoverability is performed based on the estimated undiscounted future cash flows that will be generated from operations at each property and the estimated salvage value of asset. Although management has made what it believes to be a reasonable estimate of factors based on current conditions and information, assumptions underlying future cash flows, which includes the estimated value of assets, are subject to significant risks and uncertainties. Estimates of undiscounted future cash flows are dependent upon, among other factors, estimates of: (i) product and metals to be recovered from identified mineralization and other resources (ii) future production and capital costs, (iii) estimated
selling prices (considering current, historical, and future prices) over the estimated remaining life of the asset and (iv) market values of property, if appropriate. It is possible that changes could occur in the near term that could adversely affect the estimate of future cash flows to be generated from operating properties. If estimated undiscounted cash flows are less than the carrying value of an asset, an impairment loss is recognized for the difference between the carrying value and fair value of the asset.
Exploration and Development
The Company expenses exploration costs as such in the period they occur. The mine development stage begins once the Company has determined an ore body can be economically developed. Expenditures incurred during the development stage are capitalized as deferred development costs. Costs to improve, alter, or rehabilitate primary development assets which appreciably extend the life, increase capacity, or improve the efficiency or safety of such assets are also capitalized. The development stage ends when the production stage of reserves begins. Deferred development costs are amortized over the estimated economic life of the mineral resource using the straight-line method, based upon estimated lives of the properties, or the units-of-production method, based upon estimated units of mineral resource.
Asset Retirement Obligations and Reclamation Costs
All of the Company’s mining operations are subject to reclamation and remediation requirements. Minimum standards for mine reclamation have been established by various governmental agencies. Costs are estimated based primarily upon environmental and regulatory requirements and are accrued. The liability for reclamation is classified as current or noncurrent based on the expected timing of expenditures. Reclamation differs from an asset retirement obligation in that no associated asset is recorded in the case of reclamation liabilities.
It is reasonably possible that because of uncertainties associated with defining the nature and extent of environmental contamination, application of laws and regulations by regulatory authorities, and changes in remediation technology, the ultimate cost of remediation and reclamation could change in the future. The Company continually reviews its accrued liabilities for such remediation and reclamation costs as evidence becomes available indicating that its remediation and reclamation liability has changed.
The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of long-lived assets if it is probable that such costs will be incurred and they are reasonably estimable. A corresponding asset is also recorded and depreciated over the life of the assets on a straight-line basis. After the initial measurement of the asset retirement obligation, the liability will be adjusted to reflect changes in the estimated future cash flows underlying the obligation. Determination of any amounts included in determination of fair value is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates, and the Company’s credit-adjusted risk-free interest rates.
| F-8 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
Revenue Recognition
Products consist of the following:
|
| · | Antimony: includes antimony oxide, sodium antimonate, antimony trisulfide, and antimony metal |
|
| · | Zeolite: includes coarse and fine zeolite crushed in various sizes |
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| · | Precious Metals: includes unrefined and refined gold and silver |
For antimony and zeolite products, revenue is recognized upon the completion of the performance obligation which is met when the transaction price can be reasonably estimated and revenue is recognized generally at the time when risk is transferred. The Company has determined the performance obligation is met and title is transferred either upon shipment from the Company’s warehouse locations or upon receipt by the customer as specified in individual sales orders. The performance obligation is met because at that time, 1) legal title is transferred to the customer, 2) the customer has accepted the product and obtained the ability to realize all of the benefits from the product, 3) the customer has the significant risks and rewards of ownership to it, 4) it is very unlikely product will be rejected by the customer upon physical receipt, and 5) the Company has the right to payment for the product. Shipping costs related to the sales of antimony and zeolite products are recorded to cost of sales as incurred. For zeolite products, royalty expense due a third party by the Company is also recorded to cost of sales upon sale in accordance with terms of underlying royalty agreements.
For sales of precious metals, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer. Refining and shipping costs related to sales of precious metals are recorded to cost of sales as incurred.
The Company has determined that its contracts do not include a significant financing component. Prepayments, which are not common, received from customers prior to the time that products are processed and shipped, are recorded as deferred revenue. For antimony and zeolite sales contracts, the Company may factor certain receivables and receive final payment within 30 days of the performance obligation being met. For antimony and zeolite receivables not factored, the Company typically receives payment within 10 days. For precious metals sales, a provisional payment of
Common Stock Issued for Consideration Other than Cash
All transactions in which goods or services are received for the issuance of shares of the Company’s common stock are accounted for based on the fair value of the common stock issued.
Income Taxes
Income taxes are accounted for under the liability method. Under this method, deferred income tax liabilities or assets are determined at the end of each period using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized.
The Company applies generally accepted accounting principles for recognition of uncertainty in income taxes and prescribing a recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be taken in a tax return.
| F-9 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
Income (Loss) Per Common Share
Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including stock options, warrants to purchase the Company’s common stock, and convertible preferred stock. For the years ended December 31, 2021 and 2020, potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share because they were anti-dilutive are as follows:
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| December 31, 2021 |
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| December 31, 2020 |
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Warrants |
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Convertible preferred stock |
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Total possible dilution |
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Fair Value of Financial Instruments
The Company’s financial instruments include cash and cash equivalents, certificates of deposits, and restricted cash. The carrying value of these instruments approximates fair value based on their contractual terms.
Fair Value Measurements
When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.The Company has no financial assets or liabilities that are adjusted to fair value on a recurring basis.
Contingencies
In determining accruals and disclosures with respect to loss contingencies, the Company evaluates such accruals and contingencies for each reporting period. Estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.
Recent Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update contains a number of provisions intended to simplify the accounting for income taxes. The update was adopted as of January 1, 2021, and its adoption did not have a material impact on the Company’s consolidated financial statements.
Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.
| F-10 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
3. Revenue Recognition
Sales of products for the years ended December 31, 2021 and 2020, were as follows:
Year ended December 31, | ||||||||
2021 | 2020 | |||||||
Antimony | $ | $ | ||||||
Zeolite | ||||||||
Precious metals | ||||||||
| $ | $ | |||||||
All precious metals sales of $
The following is sales information by geographic area based on the location of customers for the years ended December 31, 2021 and 2020.
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| Year ended December 31, |
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| 2021 |
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| 2020 |
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United States |
| $ |
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| $ |
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Canada |
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Mexico |
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| $ |
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| $ |
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Sales of products to significant customers were as follows for the years ended December 31, 2021 and 2020:
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| For the year ended December 31, |
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Sales to largest customers |
| 2021 |
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| 2020 |
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Company A |
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| $ |
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Company B |
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Company C |
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Company D |
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| $ |
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| $ |
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% of Total Revenues |
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| % |
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Accounts receivable from the Company’s largest customers were as follows for December 31, 2021 and 2020:
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| December 31, |
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Largest Accounts Receivable |
| 2021 |
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| 2020 |
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Company C |
| $ |
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| $ |
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Company E |
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Total |
| $ |
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| $ |
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% of Total Receivables |
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| % |
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| % | ||
All precious metals sales of $
| F-11 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
4. Inventories
The major components of the Company’s inventories at December 31, 2021 and 2020 were as follows:
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| 2021 |
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| 2020 |
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Antimony Oxide |
| $ |
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| $ |
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Antimony Metal |
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Antimony Ore |
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Total antimony |
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Zeolite |
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Total inventory |
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| $ |
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At December 31, 2021 and 2020, antimony metal consisted principally of recast metal from antimony-based compounds, and metal purchased from foreign suppliers. Antimony oxide inventory consisted of finished product oxide held at the Company’s plant. Antimony concentrates and ore were held primarily at sites in Mexico and are essentially raw material. At December 31, 2020, the antimony oxide and ore inventory in Mexico was valued at estimated net realizable value resulting in write-downs of $13,137.
5. Properties, Plants and Equipment
The major components of the Company’s properties, plants and equipment by segment at December 31, 2021 and 2020 are shown below:
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| Antimony Segment |
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| Zeolite Segment |
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| Precious Metals |
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2021 |
| USAC |
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| USAMSA |
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| BRZ |
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| Segment |
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| TOTAL |
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Plant and equipment |
| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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Buildings |
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Mineral rights and interests |
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Land and other |
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Accumulated depreciation |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| Antimony Segment |
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| Zeolite Segment |
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| Precious Metals |
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2020 |
| USAC |
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| USAMSA |
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| BRZ |
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| Segment |
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| TOTAL |
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Plant and equipment |
| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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Buildings |
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Mineral rights and interests |
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Land and other |
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Accumulated depreciation |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| 2021 |
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| 2020 |
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United States |
| $ |
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| $ |
| ||
Mexico |
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Total |
| $ |
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| $ |
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| F-12 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
The Company’s precious metals segment includes properties, plants and equipment in both the United States and Mexico. In the third quarter of 2020, the Company decided not to renew the lease at the Wadley Mining district in Mexico due to continuing low market price for antimony and to reduce Mexican antimony production while seeking other lower cost sources of antimony ore and concentrates. The net carrying value of the mineral lease of $
At December 31, 2021 and 2020, the Company had $
6. Asset Retirement Obligation and Accrued Reclamation Costs
Changes to the asset retirement obligation balance during 2021 and 2020 are as follows:
Asset Retirement Obligation |
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Balance December 31, 2019 |
| $ |
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Accretion during 2020 |
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Balance December 31, 2020 |
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Accretion during 2021 |
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Balance December 31, 2021 |
| $ |
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The Company’s total asset retirement obligation and accrued reclamation costs of $
7. Debt:
Long-term debt at December 31, 2021 and 2020 is as follows:
2021 | 2020 | |||||||
Note payable to Zeo Inc., non-interest bearing, | ||||||||
payable in 11 quarterly installments of $8,300 with a final payment of $8,700; | ||||||||
maturing December 2022; uncollateralized. | $ | $ | ||||||
Note payable to Cat Financial Services, bearing interest at 6%; | ||||||||
payable in monthly installments of $778; maturing | ||||||||
December 2022; collateralized by equipment. | ||||||||
Note payable to Phyllis Rice, bearing interest | ||||||||
at 1%; payable in monthly installments of $2,000; originally maturing | ||||||||
March 2015; collateralized by equipment. | ||||||||
Promissory note payable to First Security Bank of Missoula, | ||||||||
bearing interest at 2.25%, payable in 59 monthly installments of $1,409 with | ||||||||
a final payment of $152,726 maturing November 9, 2026; collateralized by a | ||||||||
lien on Certificate of Deposit | - | |||||||
Total debt | $ | $ | 86,426 | |||||
Less current portion | ( | ) | ( | ) | ||||
Long-term portion | $ | $ | ||||||
| F-13 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
At December 31, 2021, principal payments on debt are due as follows:
12 Months Ending December 31, |
| Principal Payment |
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2022 |
| $ |
| |
2023 |
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| |
2024 |
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2025 |
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2026 |
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| $ |
| |
At December 31, 2020, the Company had a notes payable to First Security Bank of Missoula for $100,000 which was collateralized by a lien on a certificate of deposit. These notes were paid in full during 2021.
8. Hillgrove Advances Payable
On November 7, 2014, the Company entered into an advance and concentrate processing agreement with Hillgrove Mines Pty Ltd of Australia (Hillgrove) in which the Company was advanced funds from Hillgrove to build facilities to process Hillgrove antimony concentrate. The agreement required the Company to pay the advance balance after Hillgrove issues a stop notice. Payments would begin 90 days after the stop notice issue date and be made in six equal and quarterly installments. Hillgrove was acquired by Red River Resources LTD (“Red River”) during 2019. The balance of the advance liability due was $
In April 2021, the Company successfully negotiated a settlement with Red River for an agreed upon amount of $
9. Stockholders’ Equity
In December 2020, the number of authorized shares of the Company’s common stock increased from
Issuance of Common Stock for Cash
During 2020, the Company sold units consisting of
In February 2021, the Company sold shares of its common stock in two separate transactions: On February 3, 2021,
During the years ended December 31, 2021, the Company received proceeds of $
Issuance of Common Stock for Services to Officers and Directors
In June 2020, the Company issued the Board members
During the year ended December 31, 2020, the Company awarded, but did not issue, common stock with a value of $
| F-14 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
During the year ended December 31, 2021, the Company awarded, but did not issue, common stock with a value of $
Common Stock Warrants
The Company’s Board of Directors has the authority to issue stock warrants for the purchase of preferred or unregistered common stock to directors and employees of the Company.
At December 31, 2019, warrants for purchase of
In July 2020, warrants for purchase of
In February 2021, concurrent with sale of common stock, the Company issued warrants to purchase
Transactions in common stock purchase warrants for the years ended December 31, 2021 and 2020 are as follows:
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| Number of Warrants |
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| Exercise Prices |
| ||
Balance, December 31, 2019 |
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|
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| $ |
| ||
Warrants issued |
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| $ |
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Warrants exercised |
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| ( | ) |
| $ |
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Balance, December 31, 2020 |
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| $ |
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Warrants issued |
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Warrants exercised |
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| ( | ) |
| $ |
| |
Balance, December 31, 2021 |
|
| 12,489,922 |
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| $ |
| |
The composition of the Company’s warrants outstanding at December 31, 2021 is as follows:
Number of warrants |
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| Exercise price |
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| Expiration date |
| Remaining life (years) |
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| F-15 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
Preferred Stock
The Company’s Articles of Incorporation authorize
Series B
During 1993, the Board established a Series B preferred stock, consisting of
Series C
During 2000, the Board established a Series C preferred stock. The Series C preferred stock has preference over the Company’s common stock and has voting rights equal to that number of shares outstanding, but no conversion or dividend rights. In the event of dissolution or liquidation of the Company, the preferential amount payable to Series C preferred stockholders is $
Series D
During 2002, the Board established a Series D preferred stock, authorizing the issuance of up to
During the year ended December 31, 2021,
At December 31, 2021 and 2020, the cumulative dividends in arrears on the outstanding Series D shares were $
In the event of dissolution or liquidation of the Company, the preferential amount payable to Series D preferred stockholders is $
| F-16 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
10. 2000 Stock Plan
In January 2000, the Company’s Board of Directors resolved to create the United States Antimony Corporation 2000 Stock Plan (“the Plan”). The purpose of the Plan is to attract and retain the best available personnel for positions of substantial responsibility and to provide additional incentive to employees, directors and consultants to promote the success of the Company’s business. The maximum number of shares of common stock or options to purchase common stock that may be issued pursuant to the Plan is
11. Income and Other Taxes
During the year ended December 31, 2021 and 2020, the Company recognized no income tax benefit (provision).
Domestic and foreign components of net income (loss) from operations before income taxes for the years ended December 31, 2021 and 2020, are as follows:
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| 2021 |
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| 2020 |
| ||
Domestic |
| $ |
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| $ |
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Foreign |
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| ( | ) |
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| ( | ) |
Total |
| $ | ( | ) |
| $ | ( | ) |
The income tax benefit differs from the amount of income tax determined by applying the U.S. federal income tax rate to pre-tax net loss for the years ended December 31, 2021 and 2020 due to the following:
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| 2021 |
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| 2020 |
| ||
Tax benefit at federal statutory rate |
| $ | ( | ) |
|
| ( | ) |
State income tax effect |
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| ( | ) |
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| ( | ) |
Foreign income tax effect |
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| ( | ) |
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| ( | ) |
Non-deductible items |
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Non-taxable item - gain on CARES Act loan |
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| ( | ) |
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Percentage depletion |
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| ( | ) |
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Adj for prior year tax estimate to actual-domestic |
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Adj for prior year tax estimate to actual-foreign |
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| ( | ) | |
Impact on change in foreign exchange rate |
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Change in valuation allowance - Domestic |
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| ( | ) |
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| ( | ) |
Change in valuation allowance - Foreign |
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| ( | ) |
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Total |
| $ |
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| $ |
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At December 31, 2021 and 2020, the Company had net deferred tax assets as follows:
|
| 2021 |
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| 2020 |
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Deferred tax asset: |
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Domestic net operating loss carry forward |
| $ |
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| $ |
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Foreign net operating loss carry forward |
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Deferred tax asset |
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Valuation allowance (domestic) |
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| ( | ) |
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| ( | ) |
Valuation allowance (foreign) |
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Total deferred tax asset |
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Deferred tax liability: |
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Property, plant, and equipment |
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| ( | ) |
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| ( | ) |
Other |
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| ( | ) |
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| ( | ) |
Total deferred tax liability |
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| ( | ) |
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| ( | ) |
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Net deferred tax asset |
| $ |
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| $ |
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| F-17 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
At December 31, 2021 and 2020, the Company had deferred tax assets arising principally from net operating loss carry forwards for income tax purposes. As management cannot determine that it is more likely than not the benefit of the net deferred tax asset will be realized, a valuation allowance equal to 100% of the net deferred tax asset has been recorded at December 31, 2021 and 2020.
At December 31, 2021, the Company has federal net operating loss (“NOL”) carry forwards of approximately $
In 2018, the Company acquired two subsidiaries have net operating loss carryforwards in Mexico of approximately $
During the years ended December 31, 2021 and 2020, there were no material uncertain tax positions taken by the Company. The Company’s United States income tax filings are subject to examination for the years 2019 through 2021, and 2018 through 2021 in Mexico. The Company charges penalties on assessments to general and administrative expense and charges interest to interest expense.
Mexican Tax Assessment
In 2015, the Mexican tax authority (“SAT”) initiated an audit of the USAMSA’s 2013 income tax return. In October 2016, as a result of its audit, SAT assessed the Company $13.8 million pesos, which was approximately $
In early 2019, the Company was notified that SAT re-opened its assessment of USAMSA’s 2013 income tax return and, in November 2019, SAT assessed the Company $16.3 million pesos, which was approximately $
Management reviewed the 2019 assessment notice from SAT and, similar to the earlier assessment, believes the findings have no merit. An appeal was filed by the Company in November 2019 suspending SAT from taking immediate action regarding the assessment. The Company posted a guarantee of the amount in March 2020 as is required under the appeal process. In August 2020, the Company filed a lawsuit against SAT for resolution of the process and, in December 2020, filed closing arguments. Management expects the appeal process to continue through 2022.
At December 31, 2021, management assessed the possible outcomes for this tax audit and believes, based on discussions with its tax attorney in Mexico, that the most likely outcome will be that the Company will be successful in its appeal resulting in no tax due. Management determined that no amount should be accrued at December 31, 2021 or December 31, 2020 relating to this potential tax liability. There can be no assurance that the Company’s ultimate liability, if any, will not have a material adverse effect on the Company’s results of operations or financial position.
If an issue addressed during the SAT audit is resolved in a manner inconsistent with management expectations, the Company will adjust its current net operating loss carryforward, or accrue penalties, interest, and tax associated with the assessment.
| F-18 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
Other Taxes
In 2016, USAMSA imported coal from the United States to its smelter in Mexico to process Australian concentrates associated with the Hillgrove agreement (Note 9). At that time, the Company applied for and was granted a Maquiladora (IMMEX), in accordance with a Manufacturing and Export Services Industry program offered by the Mexican government to attract and promote foreign investment in Mexico. With the IMMEX, all imported goods to Mexico that are also exported in altered form are exempt from the requirement of paying the 16% tax (IVA). The Company did not pay IVA on any of the imported coal used to process the Australian concentrates. In 2020, the Company was informed by the SAT that it owed the 16% IVA money for all the coal imported for the processing of the Australian concentrates. Additionally, there were penalties and fees that SAT added to the total amount. In late 2020, the Company filed a motion before the Taxpayer’s Defense Agency (PRODECON), but the motion was denied. To avoid exorbitant penalties, the Company elected to pay the assessed amount in early 2021. For the year ended December 31, 2020, the Company recognized an export tax expense of $
12. Related-Party Transactions
John Lawrence, the Company’s previous Chief Executive Officer and Chairman of the Board of Directors, rented equipment to the Company and charged the Company for lodging and meals provided to consultants, customers and other parties by an entity that Mr. Lawrence owned. The amount due to Mr. Lawrence as of December 31, 2020 was $
During the year ended December 31, 2021, Russ Lawrence, President and Director, incurred expenses of $24,510 and charged the Company for lodging and meals provided to visiting Board of Directors by an entity that Russ Lawrence owns. During the year ended December 31, 2021, the Company paid Russ Lawrence $
13. Commitments and Contingencies
From time to time, the Company is assessed fines and penalties by the Mine Safety and Health Administration (“MSHA”). Using appropriate regulatory channels, management may contest these proposed assessments. At December 31, 2021 and 2020, the Company had accrued liabilities of $Nil and $
The Company pays various royalties on the sale of zeolite products. On a combined basis, royalties vary from
| F-19 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
14. Business Segments
The Company is currently organized and managed by four segments, which represent the three operating units: United States antimony, Mexican antimony, United States zeolite, and precious metals. The Company’s other operating costs include general and administrative expenses, freight and delivery, and other non-production related costs. Other income and expense consist primarily of non-operating income and interest expense.
The Madero smelter and Puerto Blanco mill at the Company’s Mexico operation brings antimony up to a finished product or an intermediate stage, which is then either shipped directly to customers or to the United States operation for finishing and sales at the Thompson Falls, Montana plant. The Zeolite operation produces zeolite near Preston, Idaho. Almost all of the sales of products from the United States antimony and zeolite operations are to customers in the United States. Precious metal recovered from the antimony process in the United States and Mexico is typically sold to customers in the United States and Canada.
Segment disclosures regarding sales to major customers and for property, plant, and equipment are located in Notes 3 and 6, respectively.
|
| For the years ended December 31, |
| |||||
Total Assets: |
| 2021 |
|
| 2020 |
| ||
Antimony |
|
|
|
|
|
| ||
United States |
| $ |
|
| $ |
| ||
Mexico |
|
|
|
|
|
| ||
Subtotal antimony |
|
|
|
|
|
| ||
Precious metals |
|
|
|
|
|
|
|
|
United States |
| $ |
|
| $ |
| ||
Mexico |
|
|
|
|
|
| ||
Subtotal precious metals |
|
|
|
|
|
| ||
Zeolite |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
|
| For the years ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Capital expenditures: |
|
|
|
|
|
|
|
|
Antimony |
|
|
|
|
|
|
|
|
United States |
| $ |
|
| $ |
| ||
Mexico |
|
|
|
|
|
| ||
Subtotal antimony |
|
|
|
|
|
| ||
Precious metals |
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
| ||
Mexico |
|
|
|
|
|
| ||
Subtotal precious metals |
|
|
|
|
|
| ||
Zeolite |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
| F-20 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
Segment Operations for the Year |
| Antimony |
|
| Antimony |
|
| Total |
|
| Precious |
|
|
|
|
|
|
| ||||||
Ended December 31, 2021 |
| USA |
|
| Mexico |
|
| Antimony |
|
| Metals |
|
| Zeolite |
|
| Totals |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) | |||
Segment Operations for the Year |
| Antimony |
|
| Antimony |
|
| Total |
|
| Precious |
|
|
|
|
|
|
| ||||||
Ended December 31, 2020 |
| USA |
|
| Mexico |
|
| Antimony |
|
| Metals |
|
| Zeolite |
|
| Totals |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) | |||
| F-21 |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021 and 2020
15. CARES Act Loan
On April 20, 2020, the Company received a loan of $
During the year ended December 31, 2021, the Company received notification that the loan had been forgiven. The amount of the loan, $
F-22 |