United States Antimony Corp 10-Q for FY2021 Q2
United States Antimony Corp (UAMY)
About this 10-Q
United States Antimony Corp filed this 10-Q on August 16, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).
Headline figures
Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.28M
- up 43.6% from $1.59M a year earlier
- Net income
- $337.14K
- compared with a net loss of $274.28K a year earlier
- Diluted EPS
- $0.00
- compared with -$0.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One) | |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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| For the quarterly period ended |
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| OR |
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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 No.
(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.) |
(Address of principal executive offices)
Registrant’s telephone number: (
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
☐ | Small Reporting Company | ||
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| Emerging Growth Company | ☐ |
Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes
APPLICABLE ONLY TO CORPORATE ISSUERS:
At August 16, 2021, the registrant had outstanding
UNITED STATES ANTIMONY CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD
ENDED JUNE 30, 2021
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Results of Operations and Financial Condition |
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CERTIFICATIONS |
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[The balance of this page has been intentionally left blank.]
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| Table of Contents |
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
United States Antimony Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
June 30, 2021 and December 31, 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 |
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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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Accrued liabilities |
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Payables to related party |
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Notes payable to bank |
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Export tax assessment payable |
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Hillgrove advances payable (Note 12) |
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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 12) |
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CARES Act note payable |
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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 6 and 11) |
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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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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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The accompanying notes are an integral part of the consolidated financial statements.
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| Table of Contents |
United States Antimony Corporation and Subsidiaries |
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Consolidated Statements of Operations - Unaudited |
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| June 30, 2020 |
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REVENUES |
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COST OF REVENUES |
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GROSS PROFIT (LOSS) |
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OPERATING EXPENSES: |
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General and administrative |
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Salaries and benefits |
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Other operating expenses |
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Professional fees |
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TOTAL OPERATING EXPENSES |
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INCOME (LOSS) FROM OPERATIONS |
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OTHER INCOME (EXPENSE): |
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Interest income |
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Interest expense |
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Gain on forgiveness of CARES Act debt (Note 14) |
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Grant income |
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Gain on settlement of Hillgrove advance (Note 12) |
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TOTAL OTHER INCOME (EXPENSE) |
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NET INCOME (LOSS) |
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Preferred dividends |
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Net income (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 |
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Diluted |
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The accompanying notes are an integral part of the consolidated financial statements.
| 4 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries |
Consolidated Statement of Changes in Stockholders' Equity |
For the periods ended June 30, 2021 and June 30, 2020 |
(Unaudited) |
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| Total Preferred Stock |
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| Common Stock |
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| Additional Paid |
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| Accumulated |
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| Total Stockholders' |
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Three months ended June 30, 2021 |
| Shares |
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| Amount |
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| Shares |
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| In Capital |
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| Deficit |
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| Equity |
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Balances, April 1, 2021 |
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Common stock issued upon exercise of warrants |
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Net income |
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Balances, June 30, 2021 |
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| Total Preferred Stock |
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| Common Stock |
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| Additional Paid |
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| Accumulated |
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| Total Stockholders' |
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Three months ended June 30, 2020 |
| Shares |
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| Amount |
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| Amount |
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| In Capital |
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| Deficit |
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| Equity |
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Balances, April 1, 2020 |
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Issuance of common stock to Directors |
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Net loss |
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Balances, June 30, 2020 |
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| Total Preferred Stock |
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| Common Stock |
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| Additional Paid |
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| Accumulated |
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| Total Stockholders' |
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Six months ended June 30, 2021 |
| Shares |
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| Amount |
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| In Capital |
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| Deficit |
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| Equity |
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Balances, January 1, 2021 |
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Issuance of common stock for cash |
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Common stock issuance costs |
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Common stock issued upon exercise of warrants |
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Net income |
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Balances, June 30, 2021 |
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| Total Preferred Stock |
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| Common Stock |
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| Additional Paid |
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| Accumulated |
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| Total Stockholders' |
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Six months ended June 30, 2020 |
| Shares |
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| Amount |
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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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Issuance of common stock upon exercise of warrants |
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Issuance of common stock to Directors |
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Net loss |
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Balances, June 30, 2020 |
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The accompanying notes are an integral part of the consolidated financial statements.
| 5 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries | ||||||||
Consolidated Statements of Cash Flows - Unaudited | ||||||||
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Cash Flows From Operating Activities: |
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Net income (loss) |
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Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: |
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Depreciation and amortization |
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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 on forgiveness of Cares Act debt |
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Write-down of inventory to net realizable value |
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Other non-cash items |
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Change in: |
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Accounts receivable |
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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 properties, plants and equipment |
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Net cash provided (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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Payments on advances from related party |
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Proceeds from note payable-SBA |
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Proceeds from issuance of common stock, 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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Borrowing on notes payable to bank |
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Principal paid on notes payable to bank |
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Principal payments of long-term debt |
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Net cash provided by financing activities |
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NET INCREASE (DECREASE) IN CASH |
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AND CASH EQUIVALENTS AND RESTRICTED CASH |
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Cash and cash equivalents and restricted cash at beginning of period |
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| ||
Cash and cash equivalents and restricted cash at end of period |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
NONCASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Common stock payable issued to directors |
| $ |
|
| $ |
| ||
Payable to related party satisfied with exercise of stock |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of the consolidated financial statements.
| 6 |
| Table of Contents |
PART I - FINANCIAL INFORMATION, CONTINUED:
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
1. | Basis of Presentation |
|
|
| The unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10‑Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three and six month periods ended June 30, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021.
For further information refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Going Concern Consideration
At June 30, 2021, the Company’s consolidated financial statements show working capital of approximately $
In the first six months of 2021, the Company raised net proceeds of approximately $ |
2. | Developments in Accounting Pronouncements |
|
|
| Accounting Standards Updates Adopted
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. |
| 7 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
2. | Developments in Accounting Pronouncements, Continued: |
|
|
| Accounting Standards Updates to Become Effective in Future Periods
In August 2020, the FASB issued ASU No.2019-12 Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. The update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years and with early adoption permitted. Management is evaluating the impact of this update on the Company’s consolidated financial statements.
Other 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 consolidated financial statements upon adoption. |
3. | Income (Loss) Per Common Share |
|
|
| Basic income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share reflects the potential dilution that could occur if stock warrants were exercised. The following is a reconciliation of the numerator and denominator used in the basic and diluted computation of net income (loss) per share: |
|
| Three months ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income (loss) available to shareholders |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
| 106,315,419 |
|
|
| 70,177,677 |
|
|
| 99,513,378 |
|
|
| 69,937,144 |
|
Incremental shares |
|
|
|
|
| - |
|
|
| - |
|
|
| - |
| |
Diluted weighted average shares outstanding |
|
| 108,696,704 |
|
|
| 70,177,677 |
|
|
| 99,513,378 |
|
|
| 69,937,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS |
| $ | Nil |
|
| $ | ( | ) |
| $ | Nil |
|
| $ | ( | ) |
Diluted EPS |
| $ | Nil |
|
| $ | ( | ) |
| $ | Nil |
|
| $ | ( | ) |
For the three months ended June 30, 2021, common stock equivalent shares consisted of stock warrants and were included in the calculation of diluted earnings per share. For the six months ended June 30, 2021 and three and six month periods ended June 30, 2020, we had no common stock equivalent shares that were dilutive.
| 8 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
4. | 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 |
| • | Precious Metals: includes unrefined and refined gold and silver |
| Sales of products for the three and six month periods ended June 30, 2021 and 2020 were as follows: |
|
| Three Months Ended |
|
| Six Months Ended |
| ||||||||||
|
| June 30, |
|
| June 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Antimony |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Zeolite |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Precious metals |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
| The following is sales information by geographic area based on the location of customers for the three and six month periods ended June 30, 2021 and 2020: |
|
| Three Months Ended |
|
| Six Months Ended |
| ||||||||||
|
| June 30, |
|
| June 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
United States |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Canada |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
| Sales of products to significant customers were as follows for the three and six month periods ended June 30, 2021 and 2020: |
|
| For the Three Months Ended |
|
| For the Six Months Ended |
| ||||||||||
Sales to |
| June 30, |
|
| June 30, |
|
| June 30, |
|
| June 30, |
| ||||
Largest Customers |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Company A |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Company B |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Company C |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Company D |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
% of Total Revenues |
|
| % |
|
| % |
|
| % |
|
| % | ||||
| At June 30, 2021, the Company had a sales order backlog of 1,922 tons of zeolite and 287,000 pounds of antimony. |
| 9 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
4. | Revenue Recognition, Continued: |
|
|
| Accounts receivable from largest customers were as follows at June 30, 2021 and December 31, 2020: |
|
|
|
| |||||
Largest Accounts Receivable |
| June 30, 2021 |
|
| December 31, 2020 |
| ||
| Company B |
| $ |
|
| $ |
| ||
| Company E |
|
|
|
|
|
| ||
| Company F |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
| % of Total Receivables |
|
| % |
|
| % | ||
| Our trade accounts receivable balance related to contracts with customers was $ |
5. | Inventories |
|
|
| Inventories at June 30, 2021 and December 31, 2020 consisted primarily of finished antimony products, antimony metal, antimony ore, and finished zeolite products that are stated at the lower of first-in, first-out 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. Inventories at June 30, 2021 and December 31, 2020 are as follows |
|
| June 30, 2021 |
|
| December 31, 2020 |
| ||
Antimony Metal |
| $ |
|
| $ |
| ||
Antimony Oxide |
|
|
|
|
|
| ||
Antimony Ore |
|
|
|
|
|
| ||
Total antimony |
|
|
|
|
|
| ||
Zeolite |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
| Antimony oxide inventory consisted of finished product oxide held at the Company’s plants in Montana and Mexico. Antimony concentrates and ore were held primarily at sites in Mexico and are essentially raw material. The Company’s zeolite inventory consists of salable zeolite material. |
|
|
| At June 30, 2021 and December 31, 2020, the antimony inventory in Mexico was valued at estimated net realizable value. |
| 10 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
6. | Commitments and Contingencies |
|
|
| The Company pays various royalties on the sale of zeolite products. On a combined basis, royalties vary from 8%-13%. During the three and six month periods ended June 30, 2021, the Company had royalty expense of $ |
7. | Notes Payable to Bank |
|
|
| At June 30, 2021 and December 31, 2020, the Company had the following notes payable to bank: |
|
| 2021 |
|
| 2020 |
| ||
Promissory note payable to First Security Bank of Missoula, |
|
|
|
|
|
| ||
bearing interest at 3.150%, payable on demand, collateralized |
|
|
|
|
|
| ||
by a lien on Certificate of Deposit |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Promissory note payable to First Security Bank of Missoula, |
|
|
|
|
|
|
|
|
bearing interest at 3.150%, payable on demand, collateralized |
|
|
|
|
|
|
|
|
by a lien on Certificate of Deposit |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total notes payable to the bank |
| $ |
|
| $ |
| ||
| The notes are paid in full as of June 30, 2021 and the lien on the Certificate of Deposit has been released. An amount of $ |
| 11 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
8. | Debt |
|
|
| Long-Term debt at June 30, 2021 and December 31, 2020 is as follows: |
| June 30, |
|
| December 31, |
| |||
|
| 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. |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Less current portion |
|
| (25,300 | ) |
|
| (52,122 | ) |
Long-term portion |
| $ |
|
| $ |
| ||
| At June 30, 2021, principal payments on debt are due as follows: |
12 Months Ending June 30, |
| Principal Payment |
| |
2022 |
|
|
| |
2023 |
|
|
| |
|
| $ |
| |
9. | Related Party Transactions |
|
|
| The Company’s previous President and Chairman rented equipment to the Company and charged the Company for lodging and meals provided to consultants, customers and other parties by an entity that he owned. The amount due to his estate as of June 30, 2021 and December 31, 2020 was $
During 2019, the Company’s previous President and Chairman advanced funds to the Company that had a balance at December 31, 2020 of $
The Interim Chief Executive Officer of the Company has an advance due from the Company of $
During the six months ended June 30, 2021, the Interim President of the Company incurred expenses of $ |
| 12 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
10. | Stockholder’s Equity |
|
|
| In February 2021, the Company sold shares of its common stock in two separate transactions: On February 3, 2021,
At June 30, 2021 and December 31, 2020, the Company accrued $
During the three month period ended June 30, 2021, the Company issued
During the six-month period ended June 30, 2021, the Company issued
Warrants
Concurrent with the February 3, 2021 sale of common stock, the Company sold warrants to purchase
Transactions in common stock purchase warrants for the six month period ended June 30, 2021 and the year ended December 31, 2020 are as follows: |
|
| Number of Warrants |
|
| Exercise Prices |
| ||
Balance December 31, 2019 |
|
|
|
| $0.25 - $0.65 |
| ||
Issued |
|
|
|
| $ |
| ||
Exercised |
|
| ( | ) |
| $ |
| |
Balance December 31, 2020 |
|
| 6,194,899 |
|
| $ |
| |
Issued |
|
|
|
| $ |
| ||
Exercised |
|
| ( | ) |
| $ |
| |
Balance June 30, 2021 |
|
|
|
| $ |
| ||
| These warrants expire as follows: |
Shares |
|
| Exercise Price |
|
| Expiration Date | |||
|
|
| $ |
|
| ||||
|
|
| $ |
|
| ||||
|
|
| $ |
|
| ||||
|
|
| $ |
|
| ||||
|
|
|
|
|
|
|
| ||
| 13 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
11. | Income and Other Taxes |
|
|
| Mexican Tax Assessment
In 2015, the Mexican tax authority (“SAT”) initiated an audit of the USAMSA’s 2013 income tax return.
In early 2019, the Company was notified that SAT re-opened its audit of USAMSA’s 2013 income tax return and, in November 2019,
At June 30, 2021 and December 31, 2020, 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 June 30, 2021 and 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.
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 12). 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 $ |
| 14 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
12. | 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 Company has not processed Hillgrove concentrate for more than two years. The agreement requires 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 $ |
13. | Business Segments |
|
|
| The Company is currently organized and managed by four segments, which represent our operating units: United States antimony operations, Mexican antimony operations, precious metals recovery and United States zeolite operations.
The Puerto Blanco mill and the Madero smelter at the Company’s Mexico operation bring antimony up to an intermediate or finished stage, which may be sold directly or shipped to the United States operation for finishing at the Thompson Falls, Montana plant. The Puerto Blanco mill in Mexico is the site of our crushing and flotation plant, and a cyanide leach plant which will recover precious metals after the ore goes through the crushing and flotation cycles. A precious metals recovery plant is operated in conjunction with the antimony processing plant at Thompson Falls, Montana, where a 99% precious metals mix will be produced. 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, although the Company does have a sales operation in Canada.
Segment disclosure regarding sales to major customers is located in Note 4. |
Properties, plants and equipment, net: |
| June 30, 2021 |
|
| December 31, 2020 |
| ||
Antimony |
|
|
|
|
|
| ||
United States |
| $ |
|
| $ |
| ||
Mexico |
|
|
|
|
|
| ||
Subtotal Antimony |
|
|
|
|
|
| ||
Precious metals |
|
|
|
|
|
| ||
Zeolite |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
| At June 30, 2021 and December 31, 2020, the Company had $ |
| 15 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
13. | Business Segments, Continued: |
|
| For the Three Months Ended |
|
| For the Six Months Ended |
| ||||||||||
Capital expenditures: |
| June 30, 2021 |
|
| June 30, 2020 |
|
| June 30, 2021 |
|
| June 30, 2020 |
| ||||
Antimony |
|
|
|
|
|
|
|
|
|
|
|
| ||||
United States |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Mexico |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Subtotal Antimony |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Precious Metals |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Zeolite |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Segment Operations for the three |
| Antimony |
|
| Antimony |
|
| Total |
|
| Precious |
|
| Bear River |
|
|
|
| ||||||
months ended June 30, 2021 |
| USAC |
|
| Mexico |
|
| Antimony |
|
| Metals |
|
| Zeolite |
|
| Totals |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operations for the three |
| Antimony |
|
| Antimony |
|
| Total |
|
| Precious |
|
| Bear River |
|
|
|
|
| |||||
months ended June 30, 2020 |
| USAC |
|
| Mexico |
|
| Antimony |
|
| Metals |
|
| Zeolite |
|
| Totals |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) | |||
| 16 |
| Table of Contents |
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
13. | Business Segments, Continued: |
Segment Operations for the six |
| Antimony |
|
| Antimony |
|
| Total |
|
| Precious |
|
| Bear River |
|
|
|
| ||||||
months ended June 30, 2021 |
| USAC |
|
| Mexico |
|
| Antimony |
|
| Metals |
|
| Zeolite |
|
| Totals |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operations for the six |
| Antimony |
|
| Antimony |
|
| Total |
|
| Precious |
|
| Bear River |
|
|
|
|
| |||||
months ended June 30, 2020 |
| USAC |
|
| Mexico |
|
| Antimony |
|
| Metals |
|
| Zeolite |
|
| Totals |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) | |||
14. | Note Payable-Small Business Administration Loan |
|
|
| On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (the “CARES Act”) Act was signed into United States law.
On April 20, 2020, the Company received a loan of $ |
| 17 |
| Table of Contents |
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition
COVID-19 Coronavirus Pandemic Response and Impact
One of the principal recent challenges facing the Company in 2021 as a result of stimulus funding from COVID-19 has been the evaporation of available labor. This issue has seriously impacted both operations in Montana and at its zeolite operation in Idaho. The following measures are being taken in an attempt to obtain and retain laborers:
| 1. | The Company has raised the starting wage both in Montana and Idaho and as a result increased its labor costs for existing laborers. |
| 2. | The Company has advertised on multiple job search platforms and is also advertising in two languages on conventional job search platforms as well as on multiple social media sites. |
| 3. | The Company is increasing capacity at the Mexican smelter where labor is not a problem. |
| 4. | The Company is investigating hiring from alternative potential labor pools. |
It is difficult to hire people if they are getting paid more not to work, which is the reality in many cases but is hopeful that the situation(s) fueling this crisis will end soon.
General
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.
| 18 |
| Table of Contents |
|
| Three Months |
|
| Three Months |
|
| Six Months |
|
| Six Months |
| ||||
|
| Ended |
|
| Ended |
|
| Ended |
|
| Ended |
| ||||
Antimony - Combined USA and Mexico |
| June 30, 2021 |
|
| June 30, 2020 |
|
| June 30, 2021 |
|
| June 30, 2020 |
| ||||
Lbs of Antimony Metal USA |
|
| 329,117 |
|
|
| 119,559 |
|
|
| 511,086 |
|
|
| 286,467 |
|
Lbs of Antimony Metal Mexico: |
|
| 10,000 |
|
|
| 114,139 |
|
|
| 10,000 |
|
|
| 242,684 |
|
Total Lbs of Antimony Metal Sold |
|
| 339,117 |
|
|
| 233,698 |
|
|
| 521,086 |
|
|
| 529,151 |
|
Average Sales Price/Lb Metal |
| $ | 4.21 |
|
| $ | 3.90 |
|
| $ | 4.00 |
|
| $ | 3.84 |
|
Net income (loss)/Lb Metal |
| $ | 0.28 |
|
| $ | (1.83 | ) |
| $ | (0.68 | ) |
| $ | (1.72 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross antimony revenue - net of discount |
|
| 1,428,939 |
|
|
| 910,484 |
|
|
| 2,086,046 |
|
|
| 2,031,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales - domestic |
|
| (951,790 | ) |
|
| (534,638 | ) |
|
| (1,495,112 | ) |
|
| (1,067,926 | ) |
Cost of sales - Mexico |
|
| (539,371 | ) |
|
| (563,666 | ) |
|
| (565,689 | ) |
|
| (1,247,727 | ) |
Operating expenses |
|
| (413,499 | ) |
|
| (245,549 | ) |
|
| (958,203 | ) |
|
| (629,338 | ) |
Non-operating income (expenses) |
|
| 570,147 |
|
|
| 4,739 |
|
|
| 576,782 |
|
|
| 1,824 |
|
|
|
| (1,334,513 | ) |
|
| (1,339,114 | ) |
|
| (2,442,222 | ) |
|
| (2,943,167 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) - antimony |
|
| 94,426 |
|
|
| (428,630 | ) |
|
| (356,176 | ) |
|
| (911,258 | ) |
Depreciation,& amortization |
|
| 152,892 |
|
|
| 153,495 |
|
|
| 305,735 |
|
|
| 306,988 |
|
EBITDA - antimony |
| $ | 247,318 |
|
| $ | (275,135 | ) |
| $ | (50,441 | ) |
| $ | (604,270 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Precious Metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ounces sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
| 14 |
|
|
| 10 |
|
|
| 22 |
|
|
| 24 |
|
Silver |
|
| 6,221 |
|
|
| 3,983 |
|
|
| 9,608 |
|
|
| 9,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross precious metals revenue |
| $ | 130,195 |
|
| $ | 61,992 |
|
| $ | 206,428 |
|
| $ | 124,198 |
|
Production costs, royalties, and shipping costs |
|
| (28,226 | ) |
|
| (20,683 | ) |
|
| (55,830 | ) |
|
| (44,281 | ) |
Net income (loss) - precious metals |
|
| 101,969 |
|
|
| 41,309 |
|
|
| 150,598 |
|
|
| 79,917 |
|
Depreciation |
|
| 28,226 |
|
|
| 20,683 |
|
|
| 55,830 |
|
|
| 44,281 |
|
EBITDA - precious metals |
| $ | 130,195 |
|
| $ | 61,992 |
|
| $ | 206,428 |
|
| $ | 124,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zeolite |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons sold |
|
| 3,305 |
|
|
| 3,045 |
|
|
| 5,778 |
|
|
| 5,854 |
|
Average Sales Price/Ton |
| $ | 216.77 |
|
| $ | 201.22 |
|
| $ | 213.98 |
|
| $ | 200.22 |
|
Net income (Loss)/Ton |
| $ | 42.59 |
|
| $ | 37.12 |
|
| $ | 35.87 |
|
| $ | 42.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross zeolite revenue |
| $ | 716,428 |
|
| $ | 612,715 |
|
| $ | 1,236,375 |
|
| $ | 1,172,075 |
|
Cost of sales |
|
| (559,777 | ) |
|
| (482,265 | ) |
|
| (1,003,663 | ) |
|
| (883,132 | ) |
Operating expenses |
|
| (15,089 | ) |
|
| (16,265 | ) |
|
| (24,268 | ) |
|
| (38,591 | ) |
Non-operating income (expenses) |
|
| (816 | ) |
|
| (1,147 | ) |
|
| (1,213 | ) |
|
| (2,176 | ) |
Net income (loss) - zeolite |
|
| 140,746 |
|
|
| 113,038 |
|
|
| 207,231 |
|
|
| 248,176 |
|
Depreciation |
|
| 38,826 |
|
|
| 49,189 |
|
|
| 80,843 |
|
|
| 98,379 |
|
EBITDA - zeolite |
| $ | 179,572 |
|
| $ | 162,227 |
|
| $ | 288,074 |
|
| $ | 346,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-wide |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenue |
| $ | 2,275,562 |
|
| $ | 1,585,191 |
|
| $ | 3,528,849 |
|
| $ | 3,328,182 |
|
Production costs |
|
| (2,079,164 | ) |
|
| (1,601,252 | ) |
|
| (3,120,294 | ) |
|
| (3,243,066 | ) |
Operating expenses |
|
| (428,588 | ) |
|
| (261,814 | ) |
|
| (982,471 | ) |
|
| (667,929 | ) |
Non-operating income (expenses) |
|
| 569,331 |
|
|
| 3,592 |
|
|
| 575,569 |
|
|
| (352 | ) |
Net income (loss) |
|
| 337,141 |
|
|
| (274,283 | ) |
|
| 1,653 |
|
|
| (583,165 | ) |
Depreciation,& amortization |
|
| 219,944 |
|
|
| 223,367 |
|
|
| 442,408 |
|
|
| 449,648 |
|
EBITDA |
| $ | 557,085 |
|
| $ | (50,916 | ) |
| $ | 444,061 |
|
| $ | (133,517 | ) |
| 19 |
| Table of Contents |
PART I - FINANCIAL INFORMATION, CONTINUED:
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued: |
Company-Wide
For the second quarter of 2021, we recognized net income of $337,141 on sales of $2,275,562 and other income of $569,331, after depreciation and amortization of $219,944. We reported a net loss of $274,283 in the second quarter of 2020 on sales of $1,585,191, after depreciation and amortization of $223,367.
For the first six months of 2021, we recognized net income of $1,653 on sales of $3,528,849 and other income of $575,569, after depreciation and amortization of $442,408. We reported a net loss of $583,165 for the first six months of 2020 on sales of $3,328,182, after depreciation and amortization of $449,648.
For the three and six months ended June 30, 2021, EBITDA was a positive $557,085 and $444,061 compared to a negative $50,916 and $133,517 for the same periods in 2020.
Non-cash items included in net income was a net gain of $299,568 and a net gain of $442,208 for the three and six months ended June 30, 2021.
Non-cash expense items totaled $258,707 and $223,367 for the three and six months ended June 30, 2020.
For the three and six months ended June 30, 2021, general and administrative expenses were $290,111 and $460,161 compared to $117,959 and $319,922 for the same periods of 2020.
Antimony
For the three and six month periods ended June 30, 2021, we sold 339,117 and 521,086 of antimony compared to 233,698 and 529,151 pounds for the three and six month periods ended June 30, 2020. The raw material received from our North American supplier increased by approximately 117,053 and 174,118 for the three and six month periods ended June 30, 2021, compared to the same periods for 2020. We had a decrease in raw material from Mexico of approximately 63,002 for the three month period and an increase of 34,975 for the six month period ended June 30, 2021, compared to the same periods for 2020.
The average sales price of antimony during the three an six month periods ended June 30, 2021 was $4.21 and $4.00 per pound compared to $3.90 and $3.84 during the same periods in 2020.
Precious Metals
The caustic leach of flotation concentrates from Los Juarez has been successful. The Company is delaying the processing of the ore from Los Juarez pending its survey. The impact of Covid-19 has forced a delay in the geological, geophysical, and geochemical study of the Los Juarez property, however the Company has sent data to a junior mining company with expertise in exploration. The Company is awaiting their review of this material as a potential exists for a partnership wherein another company would conduct the geological evaluation of the Los Juarez property.
For the three and six month periods ended June 30, 2021, income for precious metals from North American sources was $130,195 and $206,428 compared to $61,992 and $124,198 for the same periods of 2020.
| 20 |
| Table of Contents |
Current and prior periods’ revenue from precious metals is as follows:
Precious Metal Sales |
| For the three months ended June 30, |
|
| For the six months ended June 30, |
| ||||||||||
Montana |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Ounces Gold Shipped (Au) |
|
| 14.14 |
|
|
| 9.80 |
|
|
| 21.52 |
|
|
| 24.71 |
|
Ounces Silver Shipped (Ag) |
|
| 6,220.79 |
|
|
| 3,983.46 |
|
|
| 9,607.98 |
|
|
| 9,031.12 |
|
Total Revenues |
| $ | 130,195 |
|
| $ | 61,992 |
|
| $ | 206,428 |
|
| $ | 124,198 |
|
Bear River Zeolite (BRZ)
For the three and six month periods ended June 30, 2021, BRZ sold 3,305 and 5,778 tons of zeolite compared to 3,045 and 5,854 tons in the same periods of 2020.
For the three and six month periods ended June 30, 2021, BRZ realized net income of $140,746 and $207,231 after depreciation of $38,826 and $80,843 compared to a net income of $113,038 and $248,176 after depreciation of $49,189 and $98,379 for the same period of 2020.
The Company has halted sales of low-volume product as its associated packaging and shipping costs did not justify them. It is concentrating on larger-volume sales and has received many orders recently from new clients. With the addition of improved management, the addition of an excellent sales person, the installation of a new hammermill, the addition of an on-site manager and an on-demand mechanic for its rolling stock, improvement in its crushing and sorting circuits, and the improvement in its dust-collection systems, the Company anticipates substantial growth in zeolite sales.
BRZ realized an EBITDA for the three and six month periods ended June 30, 2021 of $179,572 and $288,074 compared to $162,227 and $346,555 for the same periods in 2020.
Financial Position
Financial Condition and Liquidity |
| June 30, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Current assets |
| $ | 23,576,661 |
|
| $ | 1,808,161 |
|
Current liabilities |
|
| (1,942,297 | ) |
|
| (4,477,543 | ) |
Net Working Capital |
| $ | 21,634,364 |
|
| $ | (2,669,382 | ) |
| 21 |
| Table of Contents |
|
| For the Three Months Ended |
| |||||
|
| June 30, 2021 |
|
| June 30, 2020 |
| ||
Cash provided (used) by operations |
| $ | (2,236,609 | ) |
| $ | (279,322 | ) |
Cash provided by collection of note receivable |
|
|
|
|
|
|
|
|
Cash provided (used) by investing: |
|
|
|
|
|
|
|
|
Cash used for capital outlay |
|
| (115,127 | ) |
|
| (200,166 | ) |
Proceeds from redemption of certificates of deposit |
|
| 210,184 |
|
|
| - |
|
Cash provided (used) by financing: |
|
|
|
|
|
|
|
|
Payments on notes payable to bank |
|
| (100,000 | ) |
|
| (31,135 | ) |
Payments on Hillgrove advances payable |
|
| (1,020,799 | ) |
|
| - |
|
Proceeds from common stock issued, net |
|
| 23,342,180 |
|
|
| - |
|
Proceeds from exercise of warrants |
|
| 1,790,703 |
|
|
| - |
|
Principal paid on long-term debt |
|
| (27,926 | ) |
|
| (21,238 | ) |
Payments on advances from related party |
|
| (56,416 | ) |
|
| (46,160 | ) |
Proceeds from note payable-SBA |
|
| - |
|
|
| 443,400 |
|
Change in checks issued and payable |
|
| (86,685 | ) |
|
| 142,530 |
|
Net change in cash, cash equivalents and restricted cash |
| $ | 21,699,505 |
|
| $ | 7,909 |
|
Our net working capital increased by $24,303,746 from December 31, 2020 to June 30, 2021. Our cash and cash equivalents increased by $21,699,505 during the same period. We spent $115,127 for capital items, our debt decreased by $1,672,347 including $1,020,799 paid to Hillgrove, and our accrued liabilities decreased by $1,943,665 including $1,120,730 paid to eliminate our export tax assessment payable. During the first six months of 2021, we raised approximately $23.3 million from sale of shares of common stock and approximately $1.8 million for the exercise of warrants.
We have estimated commitments and improvements of less than $100,000 to finish building and installing the precious metals leach circuits. However, this funding will be implemented after its geological study of the Los Juarez property. The Company plans to conduct a proper study of the Los Juarez property and its tailings at its flotation plant and pending the results of these studies decide how to proceed regarding a drill program and/or mining of the property. The study may involve a partnership with a junior mining Company in order to assist US Antimony in the proper characterization of the deposit. Should the deposit be of great value, the Company will likely move the flotation plant closer to the mine. We believe that with our current cash balance, along with the future cash flow from operations and operating agreements, we have adequate liquid assets to meet these commitments and service our debt for the next twelve months.
At June 30, 2021, the Company’s consolidated financial statements show working capital of approximately $21.6 million and an accumulated deficit of approximately $32.7 million. The Company continues to search for areas to reduce production costs, and expects improvement in cash flow for the remainder of the year from the sale of antimony and zeolite along with the increased price of antimony as the price of antimony has been increasing during the past 6 months.
In the first half of 2021, the Company raised net proceeds of approximately $23.3 million from sale of shares of its common stock and approximately $1.8 million from the exercise of stock purchase warrants. These funds have been and will continue to be used for general corporate purposes, working capital, hiring of additional labor, leverage for reducing legacy contracts, a geochemical, geological, and geophysical study of the Los Juarez property, additional managerial staff at USAC and BRZ headquarters, a revised website including measures aimed at increased visibility for advertising, more labor at its Mexican smelter, repair and improved infrastructure at the Mexican smelter, potential securement of additional antimony mine reserves in Mexico, and improvement of furnaces in Montana. With the funds raised, management believes the Company has sufficient funds to sustain its operations and meet its financial obligations during the 12 months following the date of issuance of these consolidated financial statements.
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ITEM 3.
None
ITEM 4. Controls and Procedures
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, as appropriate, to allow timely decisions regarding required disclosure. Our Interim President & Director conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of June 30, 2021. It was determined that there were material weaknesses affecting our disclosure controls and procedures and, as a result of those weaknesses, our disclosure controls and procedures were not effective as of June 30, 2021. These material weaknesses are as follows:
| • | Inadequate design of internal control over the preparation of the financial statements and financial reporting processes; |
| • | Inadequate monitoring of internal controls over significant accounts and processes including controls associated with domestic and Mexican subsidiary operations and the period-end financial reporting process; and |
| • | The absence of proper segregation of duties within significant processes and ineffective controls over management oversight, including antifraud programs and controls. |
We are aware of these material weaknesses and will develop procedures to ensure that independent review of material transactions is performed. The Interim President & Director will develop internal control measures to mitigate the lack of inadequate documentation of controls and the monitoring of internal controls over significant accounts and processes including controls associated with the period-ending reporting processes, and to mitigate the segregation of duties within significant accounts and processes and the absence of controls over management oversight, including antifraud programs and controls.
We plan to consult with independent experts when complex transactions are entered into.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no significant changes made to internal controls over financial reporting for the quarter ended June 30, 2021.
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
The registrant has no outstanding senior securities.
Item 4. MINE SAFETY DISCLOSURES
The information concerning mine safety violations or other regulatory matters required by Section 1503 (a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Annual Report.
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Certifications
Certifications Pursuant to the Sarbanes-Oxley Act
Reports on Form 8-K None
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(b) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
UNITED STATES ANTIMONY CORPORATION
(Registrant)
By: | /s/ John C. Gustaven |
| Date: August 16, 2021 |
| John C. Gustaven, Interim CEO (Principal Executive) |
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By: | /s/ Russell Lawrence |
| Date: August 16, 2021 |
| Russell C. Lawrence, Interim President & Director |
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EXHIBIT 31.1
CERTIFICATIONS
I, John C. Gustaven, Interim CEO certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of United States Antimony Corporation. |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: |
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| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
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| (b) | Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | I have disclosed, based on my most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ John C. Gustaven | Date: August 16, 2021 | |
| John C. Gustaven Interim CEO |
EXHIBIT 31.2
CERTIFICATIONS
I, Russell C Lawrence, Interim President & Director, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of United States Antimony Corporation. |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: |
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| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
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| b. | Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | I have disclosed, based on my most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Russell C. Lawrence |
| Date: August 16, 2021 |
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| Russell C. Lawrence Interim President & Director |
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EXHIBIT 32.1
CERTIFICATION PURSUANT TO THE SARBANES-OXLEY ACT
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, John C. Gustaven, Interim CEO of United States Antimony Corporation (the “Company”) do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
This Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended June 30, 2021, as filed with the Securities and Exchange Commission (the “report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ John C. Gustaven |
| Date: August 16, 2021 |
| John C. Gustaven Interim CEO |
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EXHIBIT 32.2
CERTIFICATION PURSUANT TO THE SARBANES-OXLEY ACT
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, Russell C. Lawrence, Interim President & Director of United States Antimony Corporation (the “Company”) do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
This Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended June 30, 2021, as filed with the Securities and Exchange Commission (the “report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Russell C. Lawrence |
| Date: August 16, 2021 |
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| Russell C. Lawrence Interim President & Director |
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