-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DbIplNrykVPgzmcHa6HRdiM6fZWRMti6XKJjkWacZexia/YcCYyadipuAFbCLJl3 RfHRdNupm3G6Pj5CatLeHA== 0000074925-06-000010.txt : 20061109 0000074925-06-000010.hdr.sgml : 20061109 20061109141307 ACCESSION NUMBER: 0000074925-06-000010 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20060930 FILED AS OF DATE: 20061109 DATE AS OF CHANGE: 20061109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORIGINAL SIXTEEN TO ONE MINE INC /CA/ CENTRAL INDEX KEY: 0000074925 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 940735390 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10156 FILM NUMBER: 061201134 BUSINESS ADDRESS: STREET 1: P O BOX 1621 CITY: ALLEGHENY STATE: CA ZIP: 95910 BUSINESS PHONE: 9162873223 MAIL ADDRESS: STREET 1: PO BOX 1621 STREET 2: PO BOX 1621 CITY: ALLEGHANY STATE: CA ZIP: 95910 10QSB/A 1 tenqsept06a.txt THIRD QUARTER FINANCIAL STATEMENT AMENDED SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 2006 Commission File No. 001-10156 ORIGINAL SIXTEEN TO ONE MINE, INC. (Exact name of registrant as specified in its charter) CALIFORNIA 94-0735390 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporated or organization Post Office Box 909, Alleghany, CA 95910 (Address of principal executive offices) (530) 287-3223 (Registrant's telephone number) (including area code) 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 past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes: x No: As of September 30, 2006, 12,883,387 shares of Common Stock, par value $.03 per share, were issued and outstanding. PART I 1. FINANCIAL INFORMATION Original Sixteen to One Mine, Inc. Condensed Balance Sheet September 30, 2006 and December 31, 2005 September 30, 2006 December 31, 2005 ASSETS Current Assets Cash $ 10,525 $ 0 Accounts receivable 0 247 Inventory 660,979 626,649 Other current assets 1,595 1,476 ---------- ---------- Total current assets 673,099 628,372 ---------- ---------- Mining Property Real estate and property rights net of depletion of $524,145 216,895 217,591 Real estate and mineral property 502,099 501,403 ---------- ---------- 718,994 718,994 ---------- ---------- Fixed Assets at Cost Equipment 982,515 982,515 Buildings 209,487 209,487 Vehicles 253,128 253,128 ---------- ---------- 1,445,130 1,445,130 Less accumulated depreciation (1,299,470) (1,272,241) ---------- ---------- Net fixed assets 145,660 172,889 ---------- ---------- Other Assets Bonds and misc. deposits 16,185 16,185 ---------- ---------- Total Assets $1,553,938 $1,536,440 ========== ========== LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities Accounts payable & accrued expenses $ 280,275 270,635 Due to related party 417,879 235,614 Notes payable due within one year 425,029 435,366 ---------- ---------- Total Current Liabilities 1,123,183 941,615 ---------- ---------- Long Term Liabilities Notes payable due after one year 93,921 107,952 ---------- ---------- Total Liabilities 1,217,104 1,049,567 ---------- ---------- Stockholders' Equity Capital stock, par value $.03: 30,000,000 shares authorized: 12,883,387 shares issued and outstanding as of Sept. 30, 2006 and 12,867,250 shares issued and outstanding as of December 31, 2005 429,413 428,869 Additional paid-in capital 1,890,307 1,875,888 (Accumulated deficit) retained earnings (1,982,886) (1,817,884) ---------- ---------- Total Stockholders' Equity 336,834 486,873 ---------- ---------- Total Liabilities and Stockholders' Equity $1,553,938 $1,536,440 ========== ========== See Accompanying Notes Original Sixteen to One Mine, Inc. Statement of Operations and Retained Earnings Three Months Ending Sept. 30, Nine Months Ending Sept. 30, 2006 2005 2006 2005 ------ ------ ------ ----- Revenues: Gold & jewelry sale s $ 83,011 $ 110,426 $ 462,181 $ 387,910 ----------- ----------- -------- -------- Total revenues 83,011 110,426 462,181 387,910 ----------- ----------- -------- -------- Operating expenses: Salaries and wages 16,854 52,885 52,995 144,415 Contract Labor 159,680 89,027 306,811 330,096 Telephone & utilities 12,959 25,357 29,471 70,854 Taxes - property & payroll 8,245 10,422 24,375 30,517 Insurance 1,162 905 2,146 1,949 Supplies 13,120 1,237 29,849 17,290 Small equipment & repairs 3,063 0 6,062 23,546 Drayage 16,940 5,306 42,606 20,289 Corporate expenses 1,000 1,154 12,488 8,417 Legal and accounting 3,844 5,809 7,254 11,435 Compliance/Safety 12,156 4,842 24,589 8,907 Depreciation & amortization 8,169 7,324 27,229 21,548 Other expenses 830 2,308 5,763 13,018 ---------- ---------- ------- ------- Total operating expenses 258,022 206,576 571,638 702,281 ---------- ---------- -------- -------- Profit (Loss) from operations (175,011) (96,150) (109,457) (314,371) Other Income & (Expense): Other income (expense) (26,206) (25,631) (54,744) (52,529) ---------- ----------- ------- -------- Profit (Loss) before taxes (201,217) (121,781) (164,201) (366,900) ---------- ----------- --------- ---------- Income tax benefit (expense) (800) (800) (800) ---------- ----------- --------- ---------- Net profit (loss) $ (202,017) $ (121,781) $ (165,001) $ (367,700) ============ =========== ========== ========== Basic and diluted (loss) earning per share $ (.016) $ (.009) $ (.013) $ (.03) ============ ============ ========= ========= Shares used in the calculation of net (loss) income per share 12,883,387 12,867,250 12,883,387 12,867,250 ============ =========== ========== =========== See Accompanying Notes Original Sixteen to One Mine, Inc. Statement of Cash Flows Nine Months Ended Sept. 30, 2006 and Sept. 30, 2005 Nine Months Ended Sept. 30, 2006 2005 -------------- -------------- Cash Flows From Operating Activities: Net profit (loss) Operating activities: ) $ (165,001) $ (367,700) Depreciation and amortization 27,229 21,548 (Increase)Decrease in accounts receivable 247 1,052 Decrease(Increase) in inventory (34,300) 313,492 (Increase)Decrease in other current assets (119) (807) (Decrease) increase in accounts payable and accrued expenses 9,839 (7,117) (Decrease) increase in short term notes 171,928 65,239 ------------ ---------- Net cash (used) provided by operating activities 9,793 25,707 ------------ ----------- Cash Flows From Investing Activities: Purchase of mining property - (124,750) Purchase of fixed assets - (18,750) Other assets bonds misc. deposits - - ----------- ----------- Net cash (used) provided by investing activities - (143,500) ----------- ----------- Cash Flows From Financing Activities Increase (decrease) bank overdraft (200) Increase (decrease) notes payable (14,031) 109,480 Proceeds from sale of common stock 544 Additional paid-in capital (14,419) ----------- ------------ Net cash provided (used) provided by financing activities 732 109,480 ------------ ------------ (Decrease) increase in cash 10,525 (8,313) Cash, beginning of period 0 9,857 ------------ ---------- Cash, end of period $ 10,525 $ 1,544 ============ ============ Supplemental schedule of other cash flows: Cash paid during the period for: Interest expense $ 57,698 $ 45,002 ============ ============ Income taxes $ 800 $ 800 ============ ============ See Accompanying Notes NOTES TO THE FINANCIAL STATEMENTS I. GENERAL NOTES 1. In accordance with directive from the Securities and Exchange Commission (SEC)and Industry Guide 7, reference for all intent and purposes to the Company's employees as miners, its properties as mines or its operation as mining does not diminish the fact that the Company has no proven reserves and is in the "exploration state" as defined in Guide 7(a)(4)(iii). 2. In the opinion of management, the financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the Company's financial position at September 30, 2006 and December 31, 2005, the results of operations and cash flows for the three-month & nine-month periods ended Sept. 30, 2006 and 2005. The unaudited financial statements have been prepared in accordance with Generally Accepted Accounting Principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION The Sixteen to One mine in the Alleghany Mining District is a unique mine and requires a unique operation, which has been recognized by its owners, its miners, geologists, engineers, and some public agencies during the last decade of the twentieth century and to the present. It is a traditional high-grade, hard rock, underground gold mine. According to statement by the federal Mines Safety Health Administration, it is the only underground single product (gold) mine in production in the United States today. The same company owns and operates the mine. Original Sixteen to One Mine Inc, (owner) was incorporated in California in 1911. Experts estimate that less than twenty percent of the proven and probable ore deposit has been mined. Production is approximately 1,500,000 ounces of gold. There are over twenty-eight miles of horizontal workings and millions of cubic feet of vertical excavations called stopes. The entire grounds are not maintained for mining. Once an area is targeted for exploration or development, travel ways and escape routes are brought into safety compliance. Personell set up a heading (face) and begin a drill-blast-muck sequence into the quartz. Gold is hosted in the quartz vein in exceedingly rich concentrations called "pockets". Metal detectors are regularly used underground as a tool for guiding the direction of the work. Metal detectors are also used as a tool to separate the ore underground. This has the positive affect of reducing the volume of material from the mine, thereby reducing cost. In 1992, the company initiated a gold marketing plan of selling gold in quartz as a gemstone. This produces revenue significantly greater than selling gold into the spot market. Demand for the Sixteen to One gold-in-quartz gemstone exceeds supply. Production has been termed a "feast or famine" situation for over 100 years. Reserves in a high-grade gold mine cannot be termed as "proven". The company hoards gold and sells it according to short-term cash needs. This fact requires an operator to manage its cash flow to operate between pockets. It is difficult to undertake major expansion plans with an uncertain supply of capital. The Company has announced general plans to build a new shaft in the northern section of its patented claims. BALANCE SHEET COMPARISONS For the nine month period ended September 30, 2006 current liabilities increased by $181,568 (19%) as the Company borrowed funds to maintain its operation. Stockholders equity decreased by $150,039 (31%) due to expenses exceeding revenues. Other changes to the balance sheet were insignificant. STATEMENT OF OPERATIONS Revenues for the three-month period ended Sept. 30, 2006 decreased by $27,415 (25%) compared to the same period in 2005 due to a lack of gold production. Revenues increased by $74,271 (20%) for the nine-month period ended Sept. 30, 2006 compared to the same period in 2005 due to increased sales and higher gold prices. Changes in the Company's operating expenses are reflected as follows: 1. For the three and nine-month periods ended Sept. 30, 2006 wages & salaries decreased by $36,031 (68%) and $91,420 (63%) respectively compared to the same periods in 2005 due to the conversion of the office staff and gold sales staff to employment with sub-contractor Morning Glory Gold Mines. 2. Contract labor increased by $70,653 (79%) for the three-month period ended Sept. 30, 2006 compared the same period in 2005 due to increased activity at the mine. For the nine-month periods the change is insignificant. 3. For the three and nine-month periods ended Sept. 30, 2006 utilities expense decreased by $12,398 (49%) and $41,383 (58%) respectively compared to the same periods in 2005 due to decreased pumping. 4. Property and Payroll taxes for both the three-month and the nine-month periods ended September 30, 2006 decreased by 20% due to decreased payroll taxes. (See #1 above) 5. For the three-month period ended Sept. 30, 2006 supplies expense increased by $11,883 (960%) due to a significantly up scaled operation in 2006. For the nine month period ended Sept. 30, 2006 supplies expense increased by $12,559 (72.6%) compared to the same period in 2005 for the same reason. 6. Small equipment and repairs increased by $3,063 for the three months ended Sept. 30, 2006 and increased $17,484 (74%) for the nine-month period due to increased activity at the mine. 7. For the three and nine-month periods ended Sept. 30, 2006 drayage increased by $11,634 (219%) and $4,071 (48%) respectively due to increases in fuel costs and increased activity at the mine. 8. For the nine-month period ended September 30, 2006 corporate expenses decreased by $4,071 (48%) due to less board meetings. For the three month period the change was insignificant. 9. For the three and nine-month periods ended Sept. 30, 2006 legal and accounting decreased by $1,965 (34%) and $4,181 (36.5%) respectively due to .... 10. For the three and nine-month periods ended Sept. 30, 2006 compliance and safety increased by $7,314 (151%) and $15,682 (176%) due to payment of penalties settled out of court and increased activity at the mine. ??? 11. For the three-month period ended Sept. 30, 2006, the Company recorded a loss of $202,017 compared to a loss of $121,781 for same period in 2005 the $80,236 (66%)difference is due primarily to increased activity resulting in higher expenses and a lack of production. For the nine-month period ended September 30, 2006 the company recorded a loss of $165,000 compared to a loss of $367,698 for the same period in 2005 the $202,698 (55%) difference is due to a downsized operation in the first half of 2006 as well as increased gold prices. SUBSEQUENT EVENTS On October 6, 2006 a small bunch of high grade gold was inventoried. Its slab value was estimated at $200,000. Additional production in October yielded approximately another $50,000 worth of gold quartz gem-stone material. LIQUIDITY AND CAPITAL RESOURCES The Company's liquidity is substantially dependent upon the results of its operations. Because of the unpredictable nature of the gold mining business, the Company cannot provide any assurance with respect to long-term liquidity. In addition, if the Company's operation does not produce meaningful additions to inventory, the Company may determine it is necessary to satisfy its working capital needs by selling gold in bullion form. The Company is dependent on continued recovery of gold and sales of gold from inventory to meet its cash needs. Although the Company has historically located an annual average of $848,000 of gold over a five year period, there can be no assurance that the Company's efforts in any particular period will provide sufficient funding for the Company to continue operations. If the Company's cash resources are inadequate and its gold inventory is depleted, the Company may seek debt or equity financing on the most reasonable terms available. PART II LEGAL PROCEEDINGS 1. Plaintiff in Superior Court of the State of California, County of Sierra against private lawyers and their employer. Case filed February 13, 2004. Case No. 6293, Complaint for Damages (Malicious Prosecution, Intentional Infliction of Emotional Distress, Intentional Interference with Perspective Advantage). Defendants appealed their loss of an anti slap motion to the California Appeals Court, Third District. OTHER INFORMATION The unaudited interim consolidated financial statements of Original Sixteen to One Mine, Inc. (the Company) have been prepared by management in accordance with generally accepted accounting practices. Such rules allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted audited accounting principles as long as the statements are not misleading. In the opinion of management, verified by signature below, all adjustments necessary for a fair presentation of these interim statements have been included. These adjustments are of a normal recurring nature. The preparation of the Company's financial statements in conformity with accounting principles accepted in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, as well as the reported amount of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions. No accounting principle upon which the Company's financial status depends, requires estimates of proven and probable reserves and/or assumptions of future gold prices. Commodity prices may significantly affect the company's profitability and cash flow. No independent accounting firm or auditors have any responsibility for the accounting and written statements of the Form 10-QSB. The Company and its president assume responsibility for the accuracy of this filing and certify the financial statements present fairly in all material respects, the financial position of Original Sixteen to One Mine, Inc. at September 30, 2005. CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 From time to time the Original Sixteen to One Mine, Inc. (the Company), will make written and oral forward-looking statements about matters that involve risks and uncertainties that could cause actual results to differ materially from projected results. Important factors that could cause actual results to differ materially include, among others: - - Fluctuations in the market prices of gold - - General domestic and international economic and political conditions - - Unexpected geological conditions or rock stability conditions resulting in cave-ins, flooding, rock-bursts or rock slides - - Difficulties associated with managing complex operations in remote areas - - Unanticipated milling and other processing problems - - The speculative nature of mineral exploration - - Environmental risks - - Changes in laws and government regulations, including those relating to taxes and the environment - - The availability and timing of receipt of necessary governmental permits and approval relating to operations, expansion of operations, and financing of operations - - Fluctuations in interest rates and other adverse financial market conditions - - Other unanticipated difficulties in obtaining necessary financing with specifications or expectations - - Labor relations - - Accidents - - Unusual weather or operating conditions - - Force majeure events - - Other risk factors described from time to time in the Original Sixteen to One Mine, Inc., filings with the Securities and Exchange Commission Many of these factors are beyond the Company's ability to control or predict. Investors are cautioned not to place undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update its forward-looking statements, whether as a result of receiving new information, the occurrence of future events or otherwise. SIGNATURE Pursuant to the requirements 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. ORIGINAL SIXTEEN TO ONE MINE, INC. (Registrant) /s/Michael M. Miller President and Director Dated: November 9, 2006 -----END PRIVACY-ENHANCED MESSAGE-----