United States Antimony Corp 10-Q for FY2020 Q3
United States Antimony Corp (UAMY)
10-Q
2020-11-16
For: 2020-09-30
View Original
Added on
April 10, 2026
About this 10-Q
United States Antimony Corp filed this 10-Q on November 16, 2020, covering the quarter ended September 30, 2020 (FY2020 Q3).
Headline figures
Quarter ended September 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.01M
- down 43.7% from $1.79M a year earlier
- Net loss
- $993.24K
- compared with a net loss of $568.59K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10-Q
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(Mark
One)
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x
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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 September 30, 2020
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OR
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☐
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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
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Commission File No.
001-08675
UNITED STATES ANTIMONY CORPORATION
(Exact
name of Registrant as specified in its charter)
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Montana
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81-0305822
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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P.O. Box 643, Thompson Falls, Montana
(Address
of principal executive offices)
Registrant’s telephone number: (406 )827-3523
Securities
registered pursuant to Section 12(g) of the Act:
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common
Stock, $0.01 par value
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UAMY
|
NYSE
American
|
Check
whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
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). Yes ☒ No
☐
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
☐
|
|
Non-Accelerated
Filer ☐
|
Small
Reporting Company ☒
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
☐ No ☒
APPLICABLE
ONLY TO CORPORATE ISSUERS:
At
November 16, 2020, the registrant had outstanding 75,949,757 shares
of par value $0.01 common stock.
UNITED STATES ANTIMONY CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD
ENDED SEPTEMBER 30, 2020
TABLE OF CONTENTS
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Page
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1-15
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16-21
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21
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21
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22
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22
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22
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22
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22
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22
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23
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CERTIFICATIONS
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24-27
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[The
balance of this page has been intentionally left
blank.]
PART
I-FINANCIAL INFORMATION
Item 1. Financial Statements
United States Antimony Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
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ASSETS
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||
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September
30,
2020
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December
31,
2019
|
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Current
assets:
|
|
|
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Cash and cash
equivalents
|
$1,435,225
|
$115,506
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Certificates of
deposit
|
254,213
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253,552
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Accounts
receivable
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222,054
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284,453
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Inventories
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565,050
|
626,244
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Total current
assets
|
2,476,542
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1,279,755
|
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Properties, plants
and equipment, net
|
11,421,503
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12,186,848
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Restricted cash for
reclamation bonds
|
57,261
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57,261
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IVA receivable and
other assets
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159,992
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170,111
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Total
assets
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$14,115,298
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$13,693,975
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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Current
liabilities:
|
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Checks
issued and payable
|
$14,754
|
$17,633
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Accounts
payable
|
2,076,794
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2,328,977
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Due to
factor
|
5,848
|
10,880
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Accrued payroll,
taxes and interest
|
215,973
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260,800
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Other accrued
liabilities
|
404,804
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334,208
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Payable to related
parties
|
253,564
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359,309
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Deferred
revenue
|
32,400
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32,400
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Notes payable to
bank
|
150,796
|
197,066
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Hillgrove advances
payable (Note 10)
|
378,074
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378,074
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Long-term debt,
current portion
|
55,956
|
56,334
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|
Total current
liabilities
|
3,588,963
|
3,975,681
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Long-term debt, net
of current portion
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46,264
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76,762
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Hillgrove advances
payable (Note 10)
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756,147
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756,147
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Note payable-SBA
(Note 15)
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443,400
|
-
|
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Stock payable to
directors for services
|
93,750
|
134,375
|
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Asset retirement
obligations and accrued reclamation costs
|
289,986
|
283,868
|
|
Total
liabilities
|
5,218,510
|
5,226,833
|
|
Commitments and
contingencies (Note 4 and 10)
|
|
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Stockholders'
equity:
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Preferred stock
$0.01 par value, 10,000,000 shares authorized:
|
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|
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Series A: -0-
shares issued and outstanding
|
-
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-
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Series B: 750,000
shares issued and outstanding
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|
|
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(liquidation
preference $937,500 and $930,000
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respectively)
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7,500
|
7,500
|
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Series C: 177,904
shares issued and outstanding
|
|
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(liquidation
preference $97,847 both years)
|
1,779
|
1,779
|
|
Series D: 1,751,005
shares issued and outstanding
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|
(liquidation
preference $5,043,622 and $5,002,473
|
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respectively)
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17,509
|
17,509
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Common stock, $0.01
par value, 90,000,000 shares authorized;
|
|
|
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75,949,757 and
69,661,436 shares issued and outstanding, respectively
|
759,496
|
696,614
|
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Additional paid-in
capital
|
39,050,899
|
37,107,730
|
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Accumulated
deficit
|
(30,940,395)
|
(29,363,990)
|
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Total stockholders'
equity
|
8,896,788
|
8,467,142
|
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Total liabilities
and stockholders' equity
|
$14,115,298
|
$13,693,975
|
The accompanying notes are an integral part of the consolidated
financial statements.
1
United
States Antimony Corporation and Subsidiaries
Consolidated
Statements of Operations (Unaudited)
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For
the three months ended
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For
the nine months ended
|
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September 30,
2020
|
September 30,
2019
|
September 30,
2020
|
September 30,
2019
|
|
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|
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REVENUES
|
$1,007,231
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$1,787,934
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$4,335,413
|
$6,516,582
|
|
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|
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COST
OF REVENUES
|
1,442,322
|
2,058,751
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4,685,388
|
7,029,647
|
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GROSS
PROFIT (LOSS)
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(435,091)
|
(270,817)
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(349,975)
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(513,065)
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OPERATING
EXPENSES:
|
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General
and administrative
|
108,643
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139,456
|
425,174
|
498,539
|
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Salaries
and benefits
|
82,308
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91,178
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288,455
|
424,208
|
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Other
operating expenses
|
-
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-
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24,250
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86,630
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Professional
fees
|
43,557
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40,010
|
161,167
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163,204
|
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Loss
on abandonment of mineral properties
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318,502
|
-
|
318,502
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-
|
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TOTAL OPERATING
EXPENSES
|
553,010
|
270,644
|
1,217,548
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1,172,581
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INCOME (LOSS) FROM
OPERATIONS
|
(988,101)
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(541,461)
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(1,567,523)
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(1,685,646)
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OTHER INCOME
(EXPENSE):
|
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Interest
income
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19
|
19
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854
|
791
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Interest
expense
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(3,750)
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(24,444)
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(14,937)
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(71,160)
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Grant income (Note
15)
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-
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-
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10,000
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-
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Factoring
expense
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(1,408)
|
(2,706)
|
(4,799)
|
(6,076)
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TOTAL OTHER INCOME
(EXPENSE)
|
(5,139)
|
(27,131)
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(8,882)
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(76,445)
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NET
INCOME (LOSS)
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(993,240)
|
(568,592)
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(1,576,405)
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(1,762,091)
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Preferred
dividends
|
(12,162)
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(12,162)
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(36,487)
|
(36,487)
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Net
income (loss) available to common stockholders
|
$(1,005,402)
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$(580,754)
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$(1,612,892)
|
$(1,798,578)
|
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Net income (loss)
per share of common stock:
|
|
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Basic and
diluted
|
$(0.01)
|
$(0.01)
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$(0.02)
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$(0.03)
|
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|
Weighted average
shares outstanding:
|
|
|
|
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Basic and
diluted
|
73,240,218
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69,224,297
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71,033,733
|
68,818,050
|
2
United
States Antimony Corporation and Subsidiaries
Consolidated
Statement of Changes in Stockholders' Equity
(Unaudited)
|
For the three
month periods ended September 30, 2020 and 2019
|
|||||||
|
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Additional
|
|
Total
|
|
|
Total Preferred
Stock
|
Common
Stock
|
Paid
|
Accumulated
|
Stockholders'
|
||
|
Three months
ended September 30, 2020
|
Shares
|
Amount
|
Shares
|
Amount
|
In
Capital
|
Deficit
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Balances, July 1,
2020
|
2,678,909
|
$26,788
|
70,206,899
|
$702,068
|
$37,295,259
|
$(29,947,155)
|
$8,076,960
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock and
warrants for cash
|
|
|
5,742,858
|
57,428
|
1,952,572
|
|
2,010,000
|
|
Common stock issuance
costs
|
|
|
|
|
(196,932)
|
|
(196,932)
|
|
Net loss
|
|
|
|
|
|
(993,240)
|
(993,240)
|
|
Balances, September 30,
2020
|
2,678,909
|
$26,788
|
75,949,757
|
$759,496
|
$39,050,899
|
$(30,940,395)
|
$8,896,788
|
|
|
|
|
|
|
Additional
|
|
Total
|
|
|
Total Preferred
Stock
|
Common
Stock
|
Paid
|
Accumulated
|
Stockholders'
|
||
|
Three months
ended September 30, 2019
|
Shares
|
Amount
|
Shares
|
Amount
|
In
Capital
|
Deficit
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Balances, July 1,
2019
|
2,678,909
|
$26,788
|
68,757,354
|
$687,573
|
$36,712,572
|
$(26,884,598)
|
$10,542,335
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for
cash
|
|
|
904,082
|
9,041
|
422,281
|
|
431,322
|
|
Net loss
|
|
|
|
|
|
(568,592)
|
(568,592)
|
|
Balances, September 30,
2019
|
2,678,909
|
$26,788
|
69,661,436
|
$696,614
|
$37,134,853
|
$(27,453,190)
|
$10,405,065
|
|
For the nine
month periods ended September 30, 2020 and 2019
|
|||||||
|
|
|
|
|
|
Additional
|
|
Total
|
|
|
Total Preferred
Stock
|
Common
Stock
|
Paid
|
Accumulated
|
Stockholders'
|
||
|
Nine months
ended September 30, 2020
|
Shares
|
Amount
|
Shares
|
Amount
|
In
Capital
|
Deficit
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Balances, January 1,
2020
|
2,678,909
|
$26,788
|
69,661,436
|
$696,614
|
$37,107,730
|
$(29,363,990)
|
$8,467,142
|
|
Issuance of common stock upon
exercise of warrants (Note 10)
|
|
|
250,000
|
2,500
|
60,000
|
|
62,500
|
|
Issuance of common stock to
Directors
|
|
|
295,463
|
2,954
|
127,529
|
|
130,483
|
|
Issuance of common stock and
warrants for cash
|
|
|
5,742,858
|
57,428
|
1,952,572
|
|
2,010,000
|
|
Common stock issuance
costs
|
|
|
|
|
(196,932)
|
|
(196,932)
|
|
Net loss
|
|
|
|
|
|
(1,576,405)
|
(1,576,405)
|
|
Balances, September 30,
2020
|
2,678,909
|
$26,788
|
75,949,757
|
$759,496
|
$39,050,899
|
$(30,940,395)
|
$8,896,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
Total
|
|
|
Total Preferred
Stock
|
Common
Stock
|
Paid
|
Accumulated
|
Stockholders'
|
||
|
Nine months
ended September 30, 2019
|
Shares
|
Amount
|
Shares
|
Amount
|
In
Capital
|
Deficit
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Balances, January 1,
2019
|
2,678,909
|
$26,788
|
68,227,171
|
$682,271
|
$36,406,874
|
$(25,691,099)
|
$11,424,834
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to chief
financial officer
|
|
|
200,000
|
2,000
|
134,000
|
|
136,000
|
|
Issuance of common stock to
Directors
|
|
|
330,183
|
3,302
|
171,698
|
|
175,000
|
|
Issuance of common stock for
cash
|
|
|
904,082
|
9,041
|
422,281
|
|
431,322
|
|
Net loss
|
|
|
|
|
|
(1,762,091)
|
(1,762,091)
|
|
Balances, September 30,
2019
|
2,678,909
|
$26,788
|
69,661,436
|
$696,614
|
$37,134,853
|
$(27,453,190)
|
$10,405,065
|
The accompanying notes are an integral part of the consolidated
financial statements.
3
United
States Antimony Corporation and Subsidiaries
Consolidated
Statements of Cash Flows (Unaudited)
|
|
For the nine
months ended
|
|
|
|
September 30,
2020
|
September 30,
2019
|
|
Cash Flows From
Operating Activities:
|
|
|
|
Net income
(loss)
|
$(1,576,405)
|
$(1,762,091)
|
|
Adjustments to
reconcile net income (loss) to net cash
|
|
|
|
provided (used) by
operating activities:
|
|
|
|
Depreciation and
amortization
|
667,298
|
732,702
|
|
Loss on abandonment
of mineral properties
|
318,502
|
|
|
Amortization of
debt discount
|
-
|
54,110
|
|
Accretion of asset
retirement obligation
|
6,118
|
4,611
|
|
Common stock issued
for services
|
-
|
136,000
|
|
Common stock
payable for directors' fees
|
89,858
|
96,875
|
|
Other non cash
items
|
(661)
|
(598)
|
|
Change
in:
|
|
|
|
Accounts
receivable, net
|
62,399
|
115,451
|
|
Inventories
|
61,194
|
47,187
|
|
IVA receivable and
other assets
|
10,119
|
39,501
|
|
Accounts
payable
|
(252,183)
|
134,237
|
|
Accrued payroll,
taxes and interest
|
(44,827)
|
41,325
|
|
Other accrued
liabilities
|
70,596
|
47,465
|
|
Payables to related
parties
|
21,405
|
29,683
|
|
Net cash provided
(used) by operating activities
|
(566,587)
|
(283,542)
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Payment received on
note receivable for sale of land
|
-
|
400,000
|
|
Purchases of
properties, plants and equipment
|
(220,455)
|
(677,837)
|
|
Net cash used by
investing activities
|
(220,455)
|
(277,837)
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Change in checks
issued and payable
|
(2,879)
|
42,580
|
|
Net proceeds from
(payments to) factor
|
(5,032)
|
(14,777)
|
|
Proceeds from
issuance of common stock and warrants, net of issuance
costs
|
1,813,068
|
431,322
|
|
Advances from
related party
|
-
|
237,400
|
|
Payments on
advances from related party
|
(64,650)
|
(17,387)
|
|
Proceeds from note
payable-SBA
|
443,400
|
-
|
|
Proceeds from notes
payable to bank, net of payments
|
(46,270)
|
14,311
|
|
Principal payments
on long-term debt
|
(30,876)
|
(116,961)
|
|
Net cash provided
(used) by financing activities
|
2,106,761
|
576,488
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
1,319,719
|
15,109
|
|
Cash and cash
equivalents and restricted cash at beginning of period
|
172,767
|
113,897
|
|
Cash and cash
equivalents and restricted cash at end of period
|
$1,492,486
|
$129,006
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
Noncash investing
and financing activities:
|
|
|
|
Common stock
payable issued to directors
|
$130,483
|
$175,000
|
|
Payable
to related party satisfied with exercise of stock
|
|
|
|
purchase
warrant
|
$62,500
|
|
..
The accompanying notes are an integral part of the consolidated
financial statements.
4
4
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 nine month periods
ended September 30, 2020 are not necessarily indicative of the
results that may be expected for the full year ending December 31,
2020.
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, 2019.
Going Concern Consideration
At
September 30, 2020, the Company’s consolidated financial
statements show negative working capital of approximately $1.1
million and an accumulated deficit of approximately $30.9
million. With the exception of 2018, the Company has incurred
losses for the past several years. The net income in 2018 was
primarily due to non-recurring events which contributed
approximately $2.5 million to net income. These factors indicate
that there is substantial doubt regarding the ability to continue
as a going concern for the next twelve months.
Over
the past several years, the Company has been able to make required
principal payments on its debt from cash generated from
operations. The abandonment of the mineral properties in
Mexico in November 2019 resulted in the removal of approximately
$1,500,000 of debt and the related payments which were $86,000 in
2019 and $193,000 in 2018. In March of 2020, the Company
applied for and received funds from a note payable-Small Business
Administration (“SBA”) for $443,400. Management
believes that the Company can make debt payments when due. In
August 2019 and in July 2020 the Company was successful in raising
$404,199 and $1,813,068, respectively, from the sale of shares of
common stock to fund capital projects in
Mexico.
The
continuing losses are principally a result of the Company’s
antimony operations, due to both depressed antimony prices and high
production costs incurred in Mexico. To improve conditions,
the Company plans to continue searching for areas to reduce
production costs, and we have decided to de-emphasize our antimony
production and concentrate our resources on finishing the precious
metals system in Mexico to take advantage of the current high
prices for silver and gold. Management expects improvement in
cash flow in 2021 from the sale of precious metals extracted from
the leach circuit scheduled to come on line in Mexico in the second
half of 2021.
There
can be no assurance that management plans will alleviate the doubt
regarding the Company’s ability to continue as a going
concern over the next twelve months, particularly during the
current period of market instability related to the COVID-19
pandemic. If the going concern assumption were not
appropriate for these financial statements, then adjustments would
be necessary to the carrying values of the assets and liabilities,
the reported revenues and expenses, and the balance sheet
classifications used.
5
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
2.
Developments
in Accounting Pronouncements
Accounting Standards Updates Adopted
In
August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement
(Topic 820): Disclosure Framework - Changes to the Disclosure
Requirements for Fair Value Measurement. The update removes,
modifies and makes additions to the disclosure requirements on fair
value measurements. The update was adopted as of January 1, 2020,
and its adoption did not have a material impact on the
Company’s consolidated financial statements.
Accounting Standards Updates to Become Effective in Future
Periods
In
December 2019, the FASB issued 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 is effective for fiscal years
beginning after December 15, 2020, with early adoption permitted.
Management is evaluating the impact of this update on the
Company’s consolidated financial statements.
3.
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 warrants to purchase
the Company's common stock and convertible preferred
stock.
At
September 30, 2020 and 2019, the potentially dilutive common stock
equivalents not included in the calculation of diluted earnings per
share as their effect would have been anti-dilutive are as
follows:
|
|
September 30,
2020
|
September 30,
2019
|
|
Warrants
|
6,194,899
|
702,041
|
|
Convertible
preferred stock
|
1,751,005
|
1,751,005
|
|
Total possible
dilution
|
7,945,904
|
2,453,046
|
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
6
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
4.
Revenue
Recognition, Continued:
Sales
of products for the three and nine month periods ended September
30, 2020 and 2019, were as follows:
|
|
Three Months Ended
|
Nine Months Ended
|
||
|
|
September 30,
|
September 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
Antimony
|
$477,273
|
$1,080,871
|
$2,509,183
|
$4,294,281
|
|
Zeolite
|
481,126
|
651,563
|
1,653,201
|
2,081,751
|
|
Precious
metals
|
48,832
|
55,500
|
173,029
|
140,550
|
|
|
$1,007,231
|
$1,787,934
|
$4,335,413
|
$6,516,582
|
The
following is sales information by geographic area based on the
location of customers for the three and nine month periodss ended
September 30, 2020 and 2019:
|
|
Three Months Ended
|
Nine Months Ended
|
||
|
|
September 30,
|
September 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
United
States
|
$891,090
|
$1,570,364
|
$3,893,374
|
$5,498,640
|
|
Canada
|
116,141
|
217,570
|
442,039
|
544,350
|
|
Mexico
|
-
|
-
|
-
|
473,592
|
|
|
$1,007,231
|
$1,787,934
|
$4,335,413
|
$6,516,582
|
Sales
of products to significant customers were as follows for the three
and nine month periods ended September 30, 2020 and
2019:
|
|
For the
Three Months Ended
|
For the
Nine Months Ended
|
||
|
Sales
to Three
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
Largest
Customers
|
2020
|
2019
|
2020
|
2019
|
|
Axens North
America
|
|
$128,805
|
|
|
|
GE Chaplin,
Inc.
|
$114,075
|
-
|
$404,447
|
|
|
Mexichem Specialty
Compounds Inc.
|
-
|
314,008
|
523,660
|
$1,373,533
|
|
Kohler
Corporation
|
131,360
|
-
|
345,899
|
1,028,624
|
|
Nyacol
Nanotechnologies
|
105,865
|
374,070
|
-
|
778,394
|
|
|
$351,300
|
$816,883
|
$1,274,006
|
$3,180,551
|
|
%
of Total Revenues
|
35%
|
46%
|
29%
|
49%
|
7
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 September 30, 2020 and
December 31, 2019:
|
Largest Accounts
Receivable
|
September
30,
2020
|
December
31,
2019
|
|
Nutreco Canada
Inc.
|
$14,172
|
$21,219
|
|
Earth Innovations
Inc.
|
24,570
|
-
|
|
Axens North America
Inc.
|
15,770
|
-
|
|
Lake Shore
Gold
|
-
|
27,854
|
|
Commerce Industrial
Chemical
|
-
|
54,684
|
|
|
$54,512
|
$103,757
|
|
%
of Total Receivables
|
24.55%
|
36.48%
|
Our
trade accounts receivable balance related to contracts with
customers was $222,054 at September 30, 2020 and $284,453 at
December 31, 2019. Our products do not involve any warranty
agreements and product returns are not typical.
5.
Inventories
Inventories at
September 30, 2020 and December 31, 2019 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 September 30, 2020 and
December 31, 2019, are as follows:
|
|
September
30,
2020
|
December
31,
2019
|
|
Antimony
Oxide
|
$47,981
|
$204,550
|
|
Antimony
Metal
|
28,807
|
5,654
|
|
Antimony
Ore
|
151,841
|
151,841
|
|
Total
antimony
|
228,629
|
362,045
|
|
Zeolite
|
336,421
|
264,199
|
|
|
$565,050
|
$626,244
|
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
September 30, 2020 and December 31, 2019, the antimony inventory in
Mexico was valued at estimated net realizable value resulting in
write-downs of $7,502 and $16,396, respectively.
8
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Factoring fees paid
by the Company for the three and nine month periods ended September
30, 2020 were $1,408 (2019: $2,706) and $4,799 (2019: $6,076),
respectively. For the three and nine month periods ended September
30, 2020, net accounts receivable of approximately $70,350 (2019:
$135,300) and $239,950 (2019: $303,800), respectively, were sold
under the agreement with the factor.
We
present the receivables, net of allowances, as current assets and
we present the amount potentially due to the Factor as secured
financing in current liablities.
|
Accounts
Receivble
|
September
30,
2020
|
December
31,
2019
|
|
Accounts receivable
- non factored
|
$216,206
|
$273,573
|
|
Accounts receivable
- factored with recourse
|
5,848
|
10,880
|
|
Accounts
receivable - net
|
$222,054
|
$284,453
|
7.
Commitments
and Contingencies
In June
of 2013, the Company entered into a lease to mine antimony ore from
concessions located in the Wadley Mining district in Mexico. The
lease called for a term of one year and required payments of
$10,000, plus a tax of $1,700, per month. The lease was renewable
each year with a 15 day notice to the lessor and agreement of
terms. The lease renewal was scheduled for renewal in June 2020.
Subsequent to quarter end, and after discussions with the lessor,
in July 2020, the Company decided not to renew the lease due to the
continuing low market price for antimony and to reduce Mexican
antimony production while seeking other lower cost sources of
antimony ore and concentrates. The Company wrote off $318,502 of
assets at the Wadley mine, which was determined to be impaired as
of September 30, 2020.
8.
Notes
Payable to Bank
|
At September 30, 2020
and December 31, 2019, the Company had the following notes payable
to bank:
|
||
|
|
September
30,
|
December
31,
|
|
|
2020
|
2019
|
|
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
|
$88,585
|
$97,067
|
|
|
|
|
|
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
|
62,211
|
99,999
|
|
|
|
|
|
Total notes payable
to the bank
|
$150,796
|
$197,066
|
These
notes were personally guaranteed by John C. Lawrence, the
Company’s previous Chief Executive Officer and Chairman of
the Board of Directors. The maximum amount available for borrowing
under each note is $99,999. Mr. Lawrence passed away on June 16,
2020. The Company and the bank are considering changes to the
guarantee.
9
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited),
Continued:
9.
Debt
|
Long-Term debt at
September 30, 2020 and December 31, 2019 is as
follows:
|
September
30,
|
December
31,
|
|
|
2020
|
2019
|
|
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.
|
$75,100
|
$100,000
|
|
Note payable to Cat
Financial Services, bearing interest at 6%;
|
|
|
|
payable in monthly
installments of $778; maturing
|
|
|
|
December 2022;
collateralized by equipment.
|
20,974
|
26,250
|
|
Note payable to De
Lage Landen Financial Services,
|
|
|
|
bearing interest at
3.51%; payable in monthly installments of $655;
|
|
|
|
maturing September
2019; collateralized by equipment.
|
|
700
|
|
Note payable to
Phyllis Rice, bearing interest
|
|
|
|
at 1%; payable in
monthly installments of $2,000; originally maturing
|
|
|
|
March 2015;
collateralized by equipment.
|
6,146
|
6,146
|
|
|
102,220
|
133,096
|
|
Less current
portion
|
(55,956)
|
(56,334)
|
|
Long-term
portion
|
$46,264
|
$76,762
|
At
September 30, 2020, principal payments on debt are due as
follows:
|
12 Months Ending
September 30,
|
Principal
Payment
|
|
2021
|
55,956
|
|
2022
|
41,920
|
|
2023
|
4,344
|
|
|
$102,220
|
10.
Related
Party Transactions
On June
16, 2020, John C. Lawrence, the Company’s founder, Chief
Executive officer, and Chairman of the Board of Directors, passed
away. The Company’s Executive Vice-President, John C.
Gustaven, has been appointed to Interim Chief Executive
Officer.
The
Company’s previous President and Chairman, John Lawrence,
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 owns. The amount due to Mr.
Lawrence’s estate as of September 30, 2020 and December 31,
2019 was $178,380 and $156,974, respectively. For the three and
nine months ended September 30, 2020, the Company paid $0 and
$1,532, respectively, compared to $1,764 and $8,034 for the three
and nine months ended September 30, 2019, respectively, to John
Lawrence, our previous President and Chief Executive Officer, as
reimbursement for equipment used by the Company.
During
2019, Mr. Lawrence advanced funds to the Company that had a balance
at December 31, 2019 of $192,134. During the three and nine month
periods ended September 30, 2020, the Company paid First Security
Bank on behalf of Mr. Lawrence $18,490 and $117,150, respectively,
on these advances. A portion of this amount was in the form of 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. The balance
of the advances due to Mr. Lawrence at September 30, 2020 is
$74,984.
10
United States Antimony
Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited),
Continued:
10.
Related
Party Transactions, Continued:
John C.
Gustaven, Interim Chief Executive Officer of the Company, has an
advance due from the Company of $200 and $10,200, respectively, at
September 30, 2020 and December 31, 2019. During the three and nine
month periods ended September 30, 2020, the Company paid Mr.
Gustaven $0 and $10,000, respectively, on these
advances.
11.
Stockholder’s Equity
During
the nine month periods ended September 30, 2020 and September 30,
2019, the Company accrued $89,858 and $96,875, respectively, in
directors’ fees payable that will be paid in common
stock.
During
the nine months ended September 30, 2020, the Company issued
250,000 shares of common stock to John Lawrence, the
Company’s previous president, upon exercise of a
warrant.
Warrants
At
December 31, 2019, warrants for purchase of 250,000 shares of the
Company’s common stock for $0.25 per share were outstanding
and have no expiration date. These warrants were owned by the
Company’s previous president. The warrants were exercised on
March 18, 2020.
Warrants for
purchase of 452,041 shares of the Company’s common stock were
sold with shares of common stock in 2019. The
warrants have an exercise price of $0.65 per share and expire in
2022. None have been exercised and all are outstanding
at September 30, 2020 and December 31, 2019.
Warrants for
purchase of 5,742,858 shares of the Company’s common stock
were sold with shares of common stock in July of
2020. The warrants have an exercise price of
$0.46 per share and expire in 2025. None have been
exercised and all are outstanding at September 30, 2020. The
warrants can be exercised on a cashless basis. The warrants contain
a repricing provision whereby if the Company raises at leaset
$6,000,000 in gross proceeds from the sale of its common stock at
an effective price per share less than the warrants’ exercise
price, the exercise price of the warrants will be repriced to the
lower price.
12.
Income
Taxes
During
the three and nine month periods ended September 30, 2020 and year
ended December 31, 2019, the Company determined that a valuation
allowance equal to 100% of any deferred tax asset was appropriate,
as management of the Company cannot determine that it is more
likely than not the Company will realize the benefit of its net
deferred tax asset. The net effect is that the deferred tax asset
is fully reserved for at September 30, 2020 and December 31, 2019.
Management estimates the effective tax rate at 0% for the current
year.
In
early 2019, the Company was notified by the Mexican tax authority
(“SAT”) began its re-assessment of USAMSA’s 2013
income tax return. In November 2019, SAT assessed the Company $16.3
million pesos, which was approximately $738,000 USD as of September
30, 2020.
Management
has reviewed the 2019 assessment notice from SAT and believes the
findings have no merit. The Company has engaged a tax attorney in
Mexico to defend its position. 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.
Management expects the appeal process to continue through 2020 and
into 2021.
11
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited),
Continued:
12.
Income
Taxes,
Continued:
At
September 30, 2020, management assessed the possible outcomes for
this tax audit and believes, based on its 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 September
30, 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 net operating loss carryforward, or accrue penalties, interest,
and tax associated with the assessment.
13. 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. The balance of the advance
liability due to Hillgrove was $1,134,221 at both September 30,
2020 and December 31, 2019. Hillgrove was acquired by Red River
Resources LTD (“Red River”) during 2019. Although the
Company has not received a stop notice through the date these
financial statements were issued, management has determined that
one might be forthcoming during the next twelve months. Based on
management’s assessment of likelihood and the payment terms
of the agreement, $378,074 of the balance is classified as current
as of September 30, 2020 and December 31, 2019.
14.
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.
12
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited),
Continued:
14.
Business
Segments. Continued:
Segment
disclosure regarding sales to major customers is located in Note
4.
|
Properties,
plants
and
equipment, net: |
September
30,
2020
|
December
31,
2019
|
|
Antimony
|
|
|
|
United
States
|
$1,641,364
|
$1,631,100
|
|
Mexico
|
7,782,821
|
8,800,820
|
|
Subtotal
Antimony
|
9,424,185
|
10,431,920
|
|
Precious
metals
|
934,312
|
567,738
|
|
Zeolite
|
1,063,006
|
1,187,190
|
|
Total
|
$11,421,503
|
$12,186,848
|
At
September 30, 2020 and December 31, 2019, the Company had $841,503
and $1,306,579, respectively, of assets that were not yet placed in
service and have not yet been depreciatied.
|
|
For the Three
Months Ended
|
For the Nine
Months Ended
|
||
|
|
September 30,
2020
|
September 30,
2019
|
September 30,
2020
|
September 30,
2019
|
|
Capital
expenditures:
|
|
|
|
|
|
Antimony
|
|
|
|
|
|
United
States
|
|
|
$32,448
|
$2,713
|
|
Mexico
|
$2,923
|
$190,861
|
33,585
|
607,564
|
|
Subtotal
Antimony
|
2,923
|
190,861
|
66,033
|
610,277
|
|
Precious
Metals
|
17,366
|
4,095
|
138,211
|
17,247
|
|
Zeolite
|
|
9,304
|
16,211
|
50,313
|
|
Total
|
$20,289
|
$204,260
|
$220,455
|
$677,837
|
13
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited),
Continued:
14.
Business
Segments, Continued:
|
Segment
Operations for the three
|
Antimony
|
Antimony
|
Total
|
Precious
|
|
|
|
months ended
September 30, 2020
|
USA
|
Mexico
|
Antimony
|
Metals
|
Zeolite
|
Totals
|
|
|
|
|
|
|
|
|
|
Total revenues
|
$477,273
|
$-
|
$477,273
|
$48,832
|
$481,126
|
$1,007,231
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$7,395
|
$146,099
|
$153,494
|
$22,141
|
$42,015
|
$217,650
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$(208,676)
|
$(904,337)
|
$(1,113,013)
|
$26,691
|
$98,221
|
$(988,101)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
(2,883)
|
(4)
|
(2,887)
|
-
|
(2,252)
|
(5,139)
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
$(211,559)
|
$(904,341)
|
$(1,115,900)
|
$26,691
|
$95,969
|
$(993,240)
|
|
Segment
Operations for the three
|
Antimony
|
Antimony
|
Total
|
Precious
|
|
|
|
months ended
September 30, 2019
|
USA
|
Mexico
|
Antimony
|
Metals
|
Zeolite
|
Totals
|
|
|
|
|
|
|
|
|
|
Total revenues
|
$1,080,871
|
$-
|
$1,080,871
|
$55,500
|
$651,563
|
$1,787,934
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$10,935
|
$210,766
|
$221,701
|
$17,630
|
$46,825
|
$286,156
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$227,712
|
$(921,965)
|
$(694,253)
|
$37,869
|
$114,923
|
$(541,461)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
(4,602)
|
(18,037)
|
(22,639)
|
-
|
(4,492)
|
(27,131)
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
$223,110
|
$(940,002)
|
$(716,892)
|
$37,869
|
$110,431
|
$(568,592)
|
14
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited),
Continued:
14.
Business
Segments, Continued:
|
Segment
Operations for the nine
|
Antimony
|
Antimony
|
Total
|
Precious
|
|
|
|
months ended
September 30, 2020
|
USA
|
Mexico
|
Antimony
|
Metals
|
Zeolite
|
Totals
|
|
|
|
|
|
|
|
|
|
Total revenues
|
$2,509,183
|
$-
|
$2,509,183
|
$173,029
|
$1,653,201
|
$4,335,413
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$22,184
|
$438,297
|
$460,481
|
$66,422
|
$140,395
|
$667,298
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$156,884
|
$(2,182,979)
|
$(2,026,095)
|
$106,607
|
$351,965
|
$(1,567,523)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
(1,058)
|
(4)
|
(1,062)
|
-
|
(7,820)
|
(8,882)
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
$155,826
|
$(2,182,983)
|
$(2,027,157)
|
$106,607
|
$344,145
|
$(1,576,405)
|
|
|
|
|
|
|
|
|
|
Segment
Operations for the nine
|
Antimony
|
Antimony
|
Total
|
Precious
|
|
|
|
months ended
September 30, 2019
|
USA
|
Mexico
|
Antimony
|
Metals
|
Zeolite
|
Totals
|
|
|
|
|
|
|
|
|
|
Total revenues
|
$3,820,689
|
$473,592
|
$4,294,281
|
$140,550
|
$2,081,751
|
$6,516,582
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$32,690
|
$508,934
|
$541,624
|
$51,652
|
$139,426
|
$732,702
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
$1,083,360
|
$(3,318,053)
|
$(2,234,693)
|
$88,898
|
$460,149
|
$(1,685,646)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
(10,388)
|
(54,375)
|
(64,763)
|
-
|
(11,682)
|
(76,445)
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
$1,072,972
|
$(3,372,428)
|
$(2,299,456)
|
$88,898
|
$448,467
|
$(1,762,091)
|
15. Note Payable-Small Business Administration Loans and
Grant
On
March 27, 2020, the Coronavirus Aid, Relief, and Economic Security
(the “CARES Act”) Act was signed into United States
law.
On
April 22, 2020, the Company received a loan of $443,400 pursuant to
the Paycheck Protection Program (the “PPP”) under
Division A, Title I, Section 1102 and 1106 of the CARES Act.
The loan, which was in the form of a promissory note, as
amended, dated April 22, 2020 issued by the Company (the
“Note”); the Note matures on April 13, 2022 and bears
interest at a rate of 1% per annum. The Note may be prepaid by the
Company at any time prior to maturity with no prepayment penalties.
Under the terms of the PPP, certain amounts of the loan may be
forgiven if they are used for qualifying expenses as described in
the CARES Act. Qualifying expenses include payroll costs, costs
used to continue group health care benefits, mortgage payments,
rent, and utilities. As of September 30, 2020, the Company has used
funds from the loan to pay qualifying expenses. The Company
intends to apply for forgiveness of the loan when it receives
instructions from the lender at which time grant income of $443,400
will be recognized.
During
the three months ended September 30, 2020, the Company received
$10,000 under Division A, Title I, Section 1110 of the CARES Act.
The Company is not required to pay this amount back and thus
recognized $10,000 as government grant income during the
period.
16.
Subsequent Events
None
15
ITEM
2.
Management’s Discussion and Analysis of Results
of Operations and FinancialCondition
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. As long as they are required, the
operational practices implemented could have an adverse impact on
our operating results due to deferred production and revenues or
additional costs. The negative impact of COVID-19 remains
uncertain, including on overall business and market
conditions. There is uncertainty related to the potential
additional impacts COVID-19 could have on our operations and
financial results for the year.
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.
16
|
|
Three Months
Ended
|
Three Months
Ended
|
Nine Months
Ended
|
Nine Months
Ended
|
|
Antimony - Combined USA and
Mexico
|
September 30,
2020
|
September 30,
2019
|
September 30,
2020
|
September 30,
2019
|
|
Lbs of Antimony
Metal USA
|
89,052
|
187,889
|
375,519
|
597,308
|
|
Lbs of Antimony
Metal Mexico
|
57,790
|
155,549
|
300,474
|
607,407
|
|
Total
Lbs of Antimony Metal Sold
|
146,842
|
343,438
|
675,993
|
1,204,715
|
|
Average Sales
Price/Lb Metal
|
$3.25
|
$3.15
|
$3.71
|
$3.56
|
|
Net
loss/Lb Metal
|
$(7.60)
|
$(2.09)
|
$(3.00)
|
$(1.91)
|
|
|
|
|
|
|
|
Gross antimony
revenue
|
$477,273
|
$1,080,871
|
$2,509,183
|
$4,294,281
|
|
|
|
|
|
|
|
Cost of sales -
domestic
|
(491,092)
|
(628,050)
|
(1,559,018)
|
(2,271,512)
|
|
Cost of sales -
Mexico
|
(557,399)
|
(892,714)
|
(1,805,127)
|
(3,138,309)
|
|
Operating
expenses
|
(223,293)
|
(254,360)
|
(852,631)
|
(1,119,153)
|
|
Non-operating
expenses
|
(2,887)
|
(22,639)
|
(1,062)
|
(64,763)
|
|
Loss on abandonment
of mineral properties
|
(318,502)
|
-
|
(318,502)
|
-
|
|
|
(1,593,173)
|
(1,797,763)
|
(4,536,340)
|
(6,593,737)
|
|
|
|
|
|
|
|
Net
loss - antimony
|
(1,115,900)
|
(716,892)
|
(2,027,157)
|
(2,299,456)
|
|
Depreciation,&
amortization
|
153,494
|
221,701
|
460,481
|
541,624
|
|
EBITDA
- antimony
|
$(962,406)
|
$(495,191)
|
$(1,566,676)
|
$(1,757,832)
|
|
|
|
|
|
|
|
Precious
Metals
|
|
|
|
|
|
Ounces
sold
|
|
|
|
|
|
Gold
|
6
|
12
|
31
|
36
|
|
Silver
|
2,403
|
3,445
|
11,434
|
8,333
|
|
|
|
|
|
|
|
Gross precious
metals revenue
|
$48,832
|
$55,500
|
$173,029
|
$140,550
|
|
Production
costs
|
(22,141)
|
(17,631)
|
(66,422)
|
(51,652)
|
|
Net
income - precious metals
|
26,691
|
37,869
|
106,607
|
88,898
|
|
Depreciation
|
22,141
|
17,630
|
66,422
|
51,652
|
|
EBITDA
- precious metals
|
$48,832
|
$55,499
|
$173,029
|
$140,550
|
|
|
|
|
|
|
|
Zeolite
|
|
|
|
|
|
Tons
sold
|
2,500
|
3,483
|
8,354
|
10,924
|
|
Average Sales
Price/Ton
|
$192.45
|
$187.07
|
$197.89
|
$190.57
|
|
Net
income (Loss)/Ton
|
$38.39
|
$31.71
|
$41.20
|
$41.05
|
|
|
|
|
|
|
|
Gross zeolite
revenue
|
$481,126
|
$651,563
|
$1,653,201
|
$2,081,751
|
|
Cost of
sales
|
(371,690)
|
(520,356)
|
(1,254,823)
|
(1,568,174)
|
|
Operating
expenses
|
(11,215)
|
(16,284)
|
(46,414)
|
(53,428)
|
|
Non-operating
expenses
|
(2,252)
|
(4,492)
|
(7,820)
|
(11,682)
|
|
Net
income - zeolite
|
95,969
|
110,431
|
344,145
|
448,467
|
|
Depreciation
|
42,015
|
46,825
|
140,395
|
139,426
|
|
EBITDA
- zeolite
|
$137,985
|
$157,256
|
$484,539
|
$587,893
|
|
|
|
|
|
|
|
Company-wide
|
|
|
|
|
|
Gross
revenue
|
$1,007,231
|
$1,787,934
|
$4,335,413
|
$6,516,582
|
|
Production
costs
|
(1,442,322)
|
(2,058,751)
|
(4,685,390)
|
(7,029,647)
|
|
Operating
expenses
|
(234,508)
|
(270,644)
|
(899,045)
|
(1,172,581)
|
|
Non-operating
expenses
|
(5,139)
|
(27,131)
|
(8,882)
|
(76,445)
|
|
Loss on abandonment
of mineral properties
|
(318,502)
|
-
|
(318,502)
|
-
|
|
Net
income (loss)
|
(993,240)
|
(568,592)
|
(1,576,405)
|
(1,762,091)
|
|
Depreciation,&
amortization
|
217,650
|
286,156
|
667,298
|
732,702
|
|
EBITDA
|
$(775,590)
|
$(282,436)
|
$(909,108)
|
$(1,029,389)
|
17
PART I - FINANCIAL INFORMATION, CONTINUED:
ITEM
2.
Management’s
Discussion and Analysis of Results of Operations and
FinancialCondition, continued:
Company-Wide
For the
third quarter of 2020, we recognized a net loss of $993,240 on
sales of $1,007,231, after depreciation and amortization of
$217,650. We reported a net loss of $568,592 in the third quarter
of 2019 on sales of $1,787,834, after depreciation and amortization
of $286,156.
For the
first nine months of 2020, we recognized a net loss of $1,576,405
on sales of $4,335,413, compared to a net loss of $1,762,091 in the
first nine months of 2019, on sales of $6,516,582. In addition to
normal operating costs, the loss in the first nine months of 2020
was significantly impacted by supply constrictions and the decrease
in the market price for antimony.
For the
three and nine months ended September 30, 2020, EBITDA was a
negative $775,590 and a negative $909,108 compared to a negative
$282,436 and $1,029,389 for the same periods in 2019.
Net
non-cash expense items totaled $1,081,115 for the nine months ended
September 30, 2020 and included $667,298 for depreciation and
amortization, $318,502 for impairment loss on mining activities,
$89,858 for director compensation and $5,457 for other items Net
non-cash expense items totaled $1,023,700 for the first nine months
of 2019 and included $732,702 for depreciation and amortization,
$136,000 for common stock issued for services, $96,875 for director
compensation, $54,110 for amortization of debt discount and $4,013
for other items.
For the
three and nine months ended September 30, 2020, general and
administrative expenses were $108,643 and $425,174, respectively,
compared to $139,456 and $498,539 for the same periods of
2019.
Antimony
For the
three and nine month periods ended September 30, 2020, we sold
146,842 and 675,993 pounds, respectively, of antimony compared to
343,438 and 1,204,715 pounds, respectively, for the three and nine
month periods ended September 30, 2019, respectively. The raw
material received from our North American supplier decreased by
approximately 99,000 and 222,000 pounds, respectively, for the
three and nine month periods ended September 30, 2020, compared to
the same quarter for 2019. We had a decrease in raw material from
Mexico of approximately 98,000 and 307,000 pounds from Mexico for
for the three and nine month periods ended September 30, 2020,
compared to the same quarter for 2019.
As a
condition for reducing our antimony related work force in Mexico,
we were obligated by Mexican law to provide a termination fee to
workers at both our Wadley mine and our Madero smelter. This was a
one-time fee and substantially increased our loss in Mexico for the
third quarter of 2020.
The
average sales price of antimony during the three and nine month
periods ended September 30, 2020 was $3.25 and $3.71 per pound,
respectively, compared to $3.15 and $3.56, respectively, during the
same period in 2019.
18
Precious Metals
The
caustic leach of flotation concentrates from Los Juarez has been
successful, and the cyanide leach plant at Puerto Blanco is on
schedule to start the pilot production of Los Juarez gold, silver,
and antimony during the first half of 2021.
For the
three and nine month periods ended September 30, 2020, income for
precious metals from North American sources was $48,832 and
$173,029, compared to $55,500 and $140,550 for the same periods of
2019.
From
the Los Juarez deposit, the estimated recovery value of precious
metals per metric ton, after the caustic leach and cyanide leach
circuits, is as follows:
|
Schedule of
recovery values
|
|
|
|
|
|
Metal
|
Assay
|
Recovery
|
Value
|
Value/Mt
|
|
Gold
|
0.035
opmt
|
90%
|
$1900/oz
|
$59.85
|
|
Silver
|
3.27
opmt
|
90%
|
$24.0/oz
|
$70.63
|
|
Antimony
|
0.652%
|
70%
|
2.70/lb
|
$27.11
|
|
Total
|
|
|
|
$157.59
|
Current
and prior periods’ revenue from precious metals is as
follows:
|
Precious
Metal Sales Silver/Gold
|
For the three
months ended September 30,
|
For the nine
months ended September 30,
|
||
|
Montana
|
2020
|
2019
|
2020
|
2019
|
|
Ounces Gold Shipped
(Au)
|
6.08
|
12.53
|
30.79
|
27.67
|
|
Ounces Silver
Shipped (Ag)
|
2,402.68
|
3,444.68
|
11,433.80
|
7,604.84
|
|
Total
Revenues
|
$48,832
|
$55,500
|
$173,029
|
$117,979
|
|
|
|
|
|
|
|
Mexico
|
2020
|
2019
|
2020
|
2019
|
|
Ounces Gold Shipped
(Au)
|
-
|
|
-
|
8.21
|
|
Ounces Silver
Shipped (Ag)
|
-
|
|
-
|
727.88
|
|
Total
Revenues
|
$0
|
$0
|
$0
|
$22,571
|
Bear River Zeolite (BRZ)
For the
three and nine month periods ended September 30, 2020, BRZ sold
2,500 and 8,354 tons of zeolite, respectively, compared to 3,483
and 10,924 tons in the same periods of 2019.
For the
three and nine month periods ended September 30, 2020, BRZ realized
net income of $95,969 and $344,145, respectively, after
depreciation of $42,015 and $140,395, respectively, compared to a
net income of $110,431 and $448,467, after depreciation of $46,825
and $139,426, respectively, for the same periods of
2019.
A large
part of our zeolite sales were generated by the use of swimming
pools, and that activity has been severely impacted by the
pandemic. We expect a resumption of normal sales to this industry
in the future.
BRZ
realized an EBITDA for the three and nine month periods ended
September 30, 2020 of $137,985 and $484,539, respectively, compared
to $157,256 and $587,893, respectively, for the same periods in
2019.
We are
anticipating growth in all areas of zeolite sales.
19
Financial Position
|
Financial
Condition and Liquidity
|
September
30,
2020
|
December
31,
2019
|
|
|
|
|
|
Current
assets
|
$2,476,542
|
$1,279,755
|
|
Current
liabilities
|
(3,588,963)
|
(3,975,681)
|
|
Net
Working Capital
|
$(1,112,421)
|
$(2,695,926)
|
|
|
|
|
|
|
For the
Three Months Ended
|
|
|
|
September 30,
2020
|
September 30,
2019
|
|
Cash provided
(used) by operations
|
$(566,587)
|
$(283,542)
|
|
Cash provided
(used) by investing:
|
|
|
|
Cash used for
capital outlay
|
(220,455)
|
(677,837)
|
|
Payment received on
note receivable
|
-
|
400,000
|
|
Cash provided
(used) by financing:
|
|
|
|
Net payments (to)
from factor
|
(5,032)
|
42,580
|
|
Proceeds from notes
payable to bank, net of payments
|
(46,270)
|
14,311
|
|
Principal paid on
long-term debt
|
(30,876)
|
(116,961)
|
|
Advances from
related party
|
-
|
237,400
|
|
Payments on
advances from related parties
|
(64,650)
|
(17,387)
|
|
Proceeds from note
payable-SBA
|
443,400
|
-
|
|
Stock issued for
cash
|
1,813,068
|
431,322
|
|
Checks issued and
payable
|
(2,879)
|
(14,777)
|
|
Net
change in cash and restricted cash
|
$1,319,719
|
$15,109
|
Our net
working capital increased by $1,583,505 from December 31, 2019 to
September 30, 2020. Our cash and cash equivalents increased by
$1,319,719 during the same period. We spent approximately $220,000
for capital items, and our debt, excluding the SBA loan which we
anticipate not having to pay, decreased by approximately $77,000.
We have estimated commitments for construction and improvements of
less than $100,000 to finish building and installing the precious
metals leach circuits. 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. We
have lines of credit of $199,998 which have been drawn down by
$150,796 at September 30, 2020.
At
September 30, 2020, the Company’s consolidated financial
statements show negative working capital of approximately $1.1
million and an accumulated deficit of approximately $30.9
million. With the exception of 2018, the Company has incurred
losses for the past several years. The net income in 2018 was
primarily due to non-recurring events which contributed
approximately $2.5 million to net income. These factors indicate
that there is substantial doubt regarding the ability to continue
as a going concern for the next twelve months.
Over
the past several years, the Company has been able to make required
principal payments on its debt from cash generated from
operations. The abandonment of the mineral properties in
Mexico in November 2019 resulted in the removal of approximately
$1,500,000 of debt and the related payments which were $86,000 in
2019 and $193,000 in 2018. In March of 2020, the Company
applied for and received funds from a note payable-Small Business
Administration (“SBA”) for $443,400. Management
believes that the Company can make debt payments when due. In
August 2019 and in July 2020 the Company was successful in raising
$404,199 and $1,813,068, respectively, from the sale of shares of
common stock to fund capital projects in
Mexico.
20
The
continuing losses are principally a result of the Company’s
antimony operations, due to both depressed antimony prices and high
production costs incurred in Mexico. To improve conditions,
the Company plans to continue searching for areas to reduce
production costs, and we have decided to de-emphasize our antimony
production and concentrate our resources on finishing the precious
metals system in Mexico to take advantage of the current high
prices for silver and gold. Management expects improvement in
cash flow in 2021 from the sale of precious metals extracted from
the leach circuit scheduled to come on line in Mexico in the second
half of 2021.
There
can be no assurance that management plans will alleviate the doubt
regarding the Company’s ability to continue as a going
concern over the next twelve months, particularly during the
current period of market instability related to the COVID-19
pandemic. If the going concern assumption were not
appropriate for these financial statements, then adjustments would
be necessary to the carrying values of the assets and liabilities,
the reported revenues and expenses, and the balance sheet
classifications used.
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 chief financial
officer 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 September 30, 2020. 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 September 30, 2020. 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 chief financial officer 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 September 30,
2020.
21
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
22
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: November 16,
2020
|
|
|
John C. Gustaven,
Director and President
(Principal
Executive)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: /s/ Daniel L.
Parks
|
|
|
Date: November 16, 2020 |
|
|
Daniel L. Parks,
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
Exhibit 31.1
CERTIFICATIONS
I, John
C. Gustaven, President and Chief Executive Officer, certify
that:
1.
I have reviewed
this quarterly report on Form 10-Q of United States Antimony
Corporation.
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;
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;
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:
(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;
(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;
(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
(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):
(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
(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:
November 16, 2020
John C.
Gustaven
President
and Chief Executive Officer
Exhibit 31.2
CERTIFICATIONS
I,
Daniel L. Parks, Chief Financial Officer, certify
that:
1.
I have reviewed
this quarterly report on Form 10-Q of United States Antimony
Corporation.
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;
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;
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:
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;
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;
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
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):
(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
(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/ Daniel L.
Parks
Date:
November 16, 2020
Daniel
L. Parks
Chief
Financial Officer
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, President, and Chief Executive Officer 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 September 30, 2020, 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:
November 16,
2020
John C.
Gustaven
President
and Chief Executive Officer
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,
Daniel L. Parks, Chief Financial Officer 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 September 30, 2020, 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/ Daniel L.
Parks
Date:
November 16,
2020
Daniel
L. Parks
Chief
Financial Officer