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UNITED STATES ANTIMONY CORP - Quarter Report: 2022 June (Form 10-Q)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

(Mark One)

 

      Quarterly Report Pursuant to Section 13 Or 15(d) Of The Securities Exchange Act of 1934

For the quarterly period ended June 30, 2022

 

      Transition Report Under Section 13 Or 15(d) Of The Securities Exchange Act of 1934

For the transition period ________ to ________

 

COMMISSION FILE NUMBER 001-08675

 

UNITED STATES ANTIMONY CORPORATION

(Exact name of small business issuer as specified in its charter)

 

Montana

 

81-0305822

(State or other jurisdiction of incorporation or organization)

 

 (IRS Employer Identification No.)

 

 

 

P.O. Box 643

Thompson Falls, MT

 

 59873

(Address of principal executive office)

 

(Postal Code)

    

 

 

(406) 827-3523

 

 

 

 

(Issuer’s telephone number)

 

 

 

 

 

 

 

Title of Each Class

 

Trading Symbol

 

Name of Each Exchange on Which Registered

Common Stock, $0.01 par value

 

UAMY

 

NYSE American

 

 

 

 

 

 

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post filed). Yes No ☐

 

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “Accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

 

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging Growth Company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of August 16, 2022, there were 106,240,361 shares of registrant’s common stock, $0.01 par value, issued and outstanding.

 

 

 

 

Contents

 

PART I - FINANCIAL INFORMATION

 

 

3

 

ITEM 1.

FINANCIAL STATEMENTS

 

 

3

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.

 

 

17

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

 

28

 

ITEM 4.

CONTROLS AND PROCEDURES

 

 

29

 

PART II - OTHER INFORMATION

 

 

 30

 

ITEM 1.

LEGAL PROCEEDINGS.

 

 

30

 

ITEM 1A.

RISK FACTORS.

 

 

30

 

ITEM 2.

RECENT SALES OF UNREGISTERED SECURITIES.

 

 

30

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

 

 

30

 

ITEM 4.

MINE SAFETY DISCOSURES.

 

 

30

 

ITEM 5.

OTHER INFORMATION.

 

 

30

 

ITEM 6.

EXHIBITS.

 

 

31

 

 

 
Page 2 of 32

Table of Contents

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

  

 

 

June 30,

2022

 

 

December 31,

2021

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$8,312,469

 

 

$21,363,048

 

Certificates of deposit

 

 

259,210

 

 

 

259,210

 

Accounts receivable

 

 

1,604,660

 

 

 

891,314

 

Prepaid expenses

 

 

60,916

 

 

 

-

 

Inventories (NOTE 5)

 

 

590,204

 

 

 

1,055,420

 

Investments (NOTE 11)

 

 

13,299,393

 

 

 

-

 

Total current assets

 

 

24,126,852

 

 

 

23,568,992

 

Properties, plants and equipment, net (NOTE 6)

 

 

11,242,721

 

 

 

11,133,733

 

Restricted cash for reclamation bonds

 

 

57,281

 

 

 

57,281

 

IVA receivable and other assets

 

 

329,163

 

 

 

242,721

 

Total assets

 

$35,756,017

 

 

$35,002,727

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$679,597

 

 

$1,385,752

 

Payable to related parties

 

 

4,084

 

 

 

-

 

Accrued liabilities

 

 

685,918

 

 

 

621,873

 

Long-term debt, current portion (NOTE 8)

 

 

91,347

 

 

 

13,230

 

Total current liabilities

 

 

1,460,946

 

 

 

2,020,855

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion (NOTE 8)

 

 

265,636

 

 

 

201,920

 

Stock payable to directors for services

 

 

187,500

 

 

 

112,500

 

Asset retirement obligations and accrued reclamation costs (NOTE 7)

 

 

325,657

 

 

 

298,649

 

Total liabilities

 

 

2,239,739

 

 

 

2,633,924

 

COMMITMENTS AND CONTINGENCIES (NOTE 9)

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 10,000,000 shares authorized:

 

 

 

 

 

 

 

 

Series A: 0 shares issued and outstanding

 

 

-

 

 

 

-

 

Series B: 750,000 shares issued and outstanding (liquidation preference $956,250 and $952,500, respectively)

 

 

7,500

 

 

 

7,500

 

Series C: 177,904 shares issued and outstanding (liquidation preference $97,847 both periods)

 

 

1,779

 

 

 

1,779

 

Series D: 1,692,672 shares issued and outstanding (liquidation preference $4,979,632 both periods)

 

 

16,926

 

 

 

16,926

 

Common stock, $0.001 par value; 300,000,000 shares authorized; 106,240,361 shares issued and outstanding

 

 

1,062,402

 

 

 

1,062,402

 

Additional paid-in capital

 

 

63,991,459

 

 

 

63,991,459

 

Accumulated deficit

 

 

(31,563,788)

 

 

(32,711,263)

Total stockholders’ equity

 

 

33,516,278

 

 

 

32,368,803

 

Total liabilities and stockholders’ equity

 

$35,756,017

 

 

$35,002,727

 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

 
Page 3 of 32

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

  

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

REVENUE

 

$3,587,925

 

 

$2,275,562

 

 

$7,168,231

 

 

$3,528,849

 

COST OF REVENUE

 

 

2,865,515

 

 

 

2,079,164

 

 

 

5,306,433

 

 

 

3,120,294

 

GROSS PROFIT

 

 

722,410

 

 

 

196,398

 

 

 

1,861,798

 

 

 

408,555

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

220,591

 

 

 

290,111

 

 

 

381,272

 

 

 

460,161

 

Salaries and benefits

 

 

72,912

 

 

 

77,278

 

 

 

146,047

 

 

 

153,937

 

Other operating expenses

 

 

14,045

 

 

 

-

 

 

 

17,960

 

 

 

184,037

 

Legal and professional fees

 

 

47,927

 

 

 

61,199

 

 

 

170,004

 

 

 

184,336

 

TOTAL OPERATING EXPENSES

 

 

355,475

 

 

 

428,588

 

 

 

715,283

 

 

 

982,471

 

INCOME (LOSS) FROM OPERATIONS

 

 

366,935

 

 

 

(232,190)

 

 

1,146,515

 

 

 

(573,916)

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,081)

 

 

(880)

 

 

(6,063)

 

 

(3,135)

Interest and investment income

 

 

30,052

 

 

 

13,389

 

 

 

39,706

 

 

 

21,882

 

Change in fair value of investments

 

 

(93,458)

 

 

-

 

 

 

(93,458)

 

 

-

 

Trademark and licensing income

 

 

60,775

 

 

 

-

 

 

 

60,775

 

 

 

 

 

Gain on forgiveness – CARES Act debt

 

 

-

 

 

 

443,400

 

 

 

-

 

 

 

443,400

 

Gain on settlement of Hillgrove advance

 

 

-

 

 

 

113,422

 

 

 

-

 

 

 

113,422

 

TOTAL OTHER INCOME (EXPENSE)

 

 

(5,712)

 

 

569,331

 

 

 

960

 

 

575,569

 

NET INCOME

 

 

361,223

 

 

 

337,141

 

 

 

1,147,475

 

 

 

1,653

 

Preferred dividends

 

 

(11,819)

 

 

(12,162)

 

 

(23,639)

 

 

(24,325)

Net income available to common stockholders

 

 

349,404

 

 

 

324,979

 

 

 

1,123,836

 

 

 

(22,672)

Net income per share of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

 Nil

 

 

$

 Nil

 

 

$0.01

 

 

$

  Nil

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

106,240,361

 

 

 

106,315,419

 

 

 

106,240,361

 

 

 

99,513,378

 

Diluted

 

 

106,240,361

 

 

 

108,696,704

 

 

 

106,240,361

 

 

 

99,513,378

 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

 
Page 4 of 32

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

For the three and six months ended June 30, 2022 and 2021

  

 

 

Total Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid in Capital

 

 

Deficit

 

 

Equity

 

BALANCE, December 31, 2020

 

 

2,678,909

 

 

$26,788

 

 

 

75,949,757

 

 

$759,496

 

 

$39,050,899

 

 

$(32,650,794)

 

$7,186,389

 

Common shares issued for cash

 

 

-

 

 

 

-

 

 

 

26,290,000

 

 

 

262,900

 

 

 

24,734,100

 

 

 

-

 

 

 

24,997,000

 

Common stock issuance costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,654,820)

 

 

-

 

 

 

(1,654,820)

Common stock issued for exercise of warrants

 

 

-

 

 

 

-

 

 

 

3,723,810

 

 

 

37,238

 

 

 

1,726,381

 

 

 

-

 

 

 

1,763,619

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(335,488)

 

 

(335,488)

BALANCE, March 31, 2021

 

 

2,678,909

 

 

$26,788

 

 

 

105,963,567

 

 

$1,059,634

 

 

$63,856,560

 

 

$(32,986,282)

 

$31,956,700

 

Common stock issued for exercise of warrants

 

 

-

 

 

 

-

 

 

 

41,667

 

 

 

417

 

 

 

26,667

 

 

 

-

 

 

 

27,084

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

337,141

 

 

 

337,141

 

BALANCE, June 30, 2021

 

 

2,678,909

 

 

$26,788

 

 

 

106,005,234

 

 

$1,060,051

 

 

$63,883,227

 

 

$(32,649,141)

 

$32,320,925

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, December 31, 2021

 

 

2,620,576

 

 

$26,205

 

 

 

106,240,361

 

 

$1,062,402

 

 

$63,991,459

 

 

$(32,711,263)

 

$32,368,803

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

786,252

 

 

 

786,252

 

BALANCE, March 31, 2022

 

 

2,620,576

 

 

$26,205

 

 

 

106,240,361

 

 

$1,062,402

 

 

$63,991,459

 

 

$(31,925,011)

 

$33,155,055

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

361,223

 

 

 

361,223

 

BALANCE, June 30, 2022

 

 

2,620,576

 

 

$26,205

 

 

 

106,240,361

 

 

$1,062,402

 

 

$63,991,459

 

 

$(31,563,788)

 

$33,516,278

 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

 
Page 5 of 32

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

   

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$1,147,475

 

 

$1,653

 

Adjustments to reconcile net income to net cash used by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

451,207

 

 

 

442,408

 

Accretion of asset retirement obligation

 

 

11,412

 

 

 

1,732

 

Common stock payable for directors fees

 

 

75,000

 

 

 

56,250

 

Gain on settlement of Hillgrove advance

 

 

-

 

 

 

(113,422)

Gain on forgiveness of Cares Act debt

 

 

-

 

 

 

(443,400)

Write down of inventory to net realizable value

 

 

136,836

 

 

 

66,054

 

Change in fair value of investments

 

 

93,458

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(713,346)

 

 

(362,681

Inventories

 

 

328,380

 

 

 

17,448

 

Prepaid expenses

 

 

(60,916)

 

 

-

 

IVA receivable and other assets

 

 

(86,442)

 

 

(15,402)

Accounts payable

 

 

(706,155)

 

 

(519,570)

Accrued liabilities

 

 

64,045

 

 

 

(92,927)

Export tax assessment payable

 

 

-

 

 

 

(1,120,730)

Payable to related parties

 

 

4,084

 

 

 

(154,022)

Net cash provided (used) by operating activities

 

 

745,038

 

 

 

(2,236,609)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from redemption of certificates of deposit

 

 

-

 

 

 

210,184

 

Purchase of investments

 

 

(13,789,772)

 

 

-

 

Proceeds from sales of investments

 

 

396,921

 

 

 

 -

 

Purchase of properties, plants and equipment

 

 

(382,999)

 

 

(115,127

)

Net cash provided (used) by investing activities

 

 

(13,775,850)

 

 

95,057

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Change in checks issued and payable

 

 

 -

 

 

 

 (86,685

Payments on advances from related party

 

 

-

 

 

 

(56,416

)

Proceeds from issuance of common stock, net of issuance costs

 

 

-

 

 

 

23,342,180

Proceeds from exercise of warrants

 

 

-

 

 

 

1,790,703

 

Payments on Hillgrove advances payable

 

 

-

 

 

 

(1,020,799

Principal paid on notes payable to bank

 

 

-

 

 

 

(100,000

)

Principal payments of long-term debt

 

 

(19,767

)

 

 

(27,926

)

Net cash provided (used) by financing activities

 

 

(19,767)

 

 

23,841,057

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(13,050,579)

 

 

21,699,505

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

 

 

21,420,329

 

 

 

722,377

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

 

$8,369,750

 

 

$22,421,882

 

 

 

 

 

 

 

 

 

 

NON-CASH FINANCING AND INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Equipment purchased with note payable

 

$161,600

 

 

$-

 

Common stock payable to directors

 

 

-

 

 

 

130,483

 

Payable to related party satisfied with exercise of stock purchase warrants

 

 

-

 

 

 

 62,500

 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

 
Page 6 of 32

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

  

NOTE 1 - NATURE OF OPERATIONS

 

AGAU Mines, Inc., predecessor of United States Antimony Corporation (“USAC” or “the Company”), was incorporated in June 1968 as a Delaware corporation to mine gold and silver. USAC was incorporated in Montana in January 1970 to mine and produce antimony products. In June 1973, AGAU Mines, Inc. was merged into USAC. In December 1983, the Company suspended its antimony mining operations when it became possible to purchase antimony raw materials more economically from foreign sources. The principal business of the Company has been the production and sale of antimony products.

 

During 2000, the Company formed a 75% owned subsidiary, Bear River Zeolite Company (“BRZ”), to mine and market zeolite and zeolite products from a mineral deposit in southeastern Idaho. In 2001, an operating plant was constructed at the zeolite site and zeolite production and sales commenced. During 2002, the Company acquired the remaining 25% of BRZ and continued to produce and sell zeolite products.

 

During 2005, the Company formed a 100% owned subsidiary, Antimonio de Mexico S.A. de C.V. (“AM”), to explore and develop potential antimony properties in Mexico.

 

During 2006, the Company acquired 100% ownership in United States Antimony, Mexico S.A. de C.V. (“USAMSA”), which became a wholly-owned subsidiary of the Company.

 

In 2018, the Company acquired 100% ownership in Stibnite Holding Company US Inc. (previously Lanxess Holding Company US Inc.), Antimony Mining and Milling US LLC (previously Lanxess Laurel US LLC), a Delaware limited liability company and Lanxess Laurel de Mexico, S.A. de C.V (“Lanxess Laurel Mexico”), a Mexico corporation, both of which became a wholly-owned subsidiary of the Company.

 

In its operations in Montana, the Company produces antimony oxide, antimony metal, and precious metals. Antimony oxide is a fine, white powder that is used primarily in conjunction with a halogen to form a synergistic flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings and paper. Antimony oxide is also used as a color fastener in paint, as a catalyst for production of polyester resins for fibers and film, as a catalyst for production of polyethylene pthalate in plastic bottles, as a phosphorescent agent in fluorescent light bulbs, and as an opacifier for porcelains. The Company also sells antimony metal for use in bearings, storage batteries and ordnance.

 

In its operations in Idaho, the Company produces zeolite, a group of industrial minerals used in a variety of purposes including soil amendment and fertilizer. Zeolite is also used for water filtration, sewage treatment, nuclear waste and other environmental cleanup, odor control, gas separation and other miscellaneous applications.

 

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2022, and its results of operations for the three and six months ended June 30, 2022, and 2021, and cash flows for the six months ended June 30, 2022 and 2021. The condensed consolidated balance sheet at December 31, 2021, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. Operating results for the three and six month periods ended June 30, 2022, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022.

 

These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (“U.S. GAAP”). These unaudited interim financial statements should be read in conjunction with the annual audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 31, 2022.

 

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to U.S. GAAP and have been consistently applied in the preparation of the financial statements.

 

 
Page 7 of 32

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

  

Reclassifications

 

Certain reclassifications have been made to conform prior periods’ amounts to the current presentation. These reclassifications have no effect on the results of operations, stockholders’ equity and cash flows as previously reported.

 

COVID -19

 

The Company’s operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic spreading throughout the United States and elsewhere, causing disruptions to the Company’s business operations and management. These disruptions are most evident in the Company’s ability to retain and house employees and properly manage them while maintaining proper social distancing and with delays in obtaining materials and supplies.

 

The effects of the continued outbreak of COVID-19 and related government responses could also include extended disruptions to supply chains and capital markets, reduced availability of contractors and a prolonged reduction in economic activity. These effects could have a variety of adverse impacts on the Company, including its ability to conduct operations.

 

The Company has taken steps to mitigate the potential risks to suppliers and employees posed by the spread of COVID-19, including work from home policies where appropriate. The Company will continue to monitor developments affecting both its workforce and contractors, and will take additional precautions as necessary. The ultimate impact of COVID-19 depends on factors beyond management’s knowledge or control, including its duration and third-party actions to contain its spread and mitigate its public health effects. Therefore, the Company cannot estimate the potential future impact to its financial position, results of operations and cash flows, but the impacts could be material.

 

Investments

 

The Company determines the appropriate classification of investments at the time of acquisition and re-evaluates such determinations at each reporting date. Equity securities that have a readily determinable fair value are carried at fair value determined using Level 1 fair value measurement inputs with the change in fair value recognized as unrealized gain (loss) in the consolidated statement of operations each reporting period. Gains and losses on the sale of securities are recognized on a specific identification basis.

 

New Accounting Pronouncements

 

Accounting standards that have been issued or proposed by the Financial Accounting Standards Board (“FASB”) that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

 

NOTE 3– EARNINGS PER SHARE

 

Basic Earnings Per Share (“EPS”) is computed as net income (loss) available to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options and warrants.

 

At June 30, 2022 and 2021, 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:

 

 

 

June 30,

2022

 

 

June 30,

2021

 

Warrants

 

 

12,489,922

 

 

 

2,471,089

 

Convertible preferred stock

 

 

1,692,672

 

 

 

1,751,005

 

TOTAL POSSIBLE DILUTIVE SHARES

 

 

14,182,594

 

 

 

4,222,094

 

 

 
Page 8 of 32

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

  

NOTE 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-months ended June 30, 2022 and 2021 were as follows:

 

 

 

For the three months ended

 

 

 

June 30,

2022

 

 

June 30,

2021

 

Antimony

 

$2,472,081

 

 

$1,428,939

 

Zeolite

 

 

1,020,391

 

 

 

716,428

 

Precious metals

 

 

95,453

 

 

 

130,195

 

TOTAL REVENUE BY PRODUCT

 

$3,587,925

 

 

$2,275,562

 

 

Sales of products for the six months ended June 30, 2022 and 2021 were as follows:

 

 

 

For the six months ended

 

 

 

June 30,

2022

 

 

June 30,

2021

 

Antimony

 

$5,301,011

 

 

$2,086,046

 

Zeolite

 

 

1,694,433

 

 

 

1,236,375

 

Precious metals

 

 

172,787

 

 

 

206,428

 

TOTAL REVENUE BY PRODUCT

 

$7,168,231

 

 

$3,528,849

 

 

For the three and six months ended June 30, 2022, the Company also received royalties related to a trademark and licensing agreement in its antimony business segment. For the three and six months ended June 30, 2022, trademark and licensing income of $60,775 is included in other income in the antimony business segment (Note 12). For the three and six months ended June 30, 2021, trademark and licensing income was $Nil.

 

The Company’s trade accounts receivable balance related to contracts with customers was $1,604,660 at June 30, 2022 and $891,314 at December 31, 2021. The Company’s products do not involve any warranty agreements and product returns are not typical.

 

NOTE 5– INVENTORIES

 

Inventories at June 30, 2022 and December 31, 2021 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, 2022 and December 31, 2021 are as follows:

 

 

 

June 30,

2022

 

 

December 31,

2021

 

Antimony Metal

 

$128,591

 

 

$234,461

 

Antimony Oxide

 

 

278,134

 

 

 

439,086

 

Antimony Ore Concentrates

 

 

28,392

 

 

 

119,046

 

Total antimony

 

 

435,117

 

 

 

792,593

 

Zeolite

 

 

155,087

 

 

 

262,827

 

 TOTAL INVENTORIES

 

$590,204

 

 

$1,055,420

 

 

 
Page 9 of 32

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

  

Inventories are valued at cost except for the portion related to Mexican operations which are valued at net realizable value because the production costs of the Mexican inventory were greater than the amount the Company expected to receive on the sale of the pounds of antimony contained in inventory. The adjustment to inventory, which is included in cost of revenue on the statements of operations was $136,836 and $66,054 for the six months ended June 30, 2022 and 2021, respectively.

 

Antimony oxide and metal inventory consisted of finished product held at the Company’s plants in Montana and Mexico. Antimony concentrates and ore were held primarily at sites in Mexico. The Company’s zeolite inventory consists of saleable zeolite material.

 

NOTE 6 – PROPERTIES, PLANTS AND EQUIPMENT

 

The major components of the Company’s properties, plants and equipment by segment at June 30, 2022 and December 31, 2021 are shown below:

 

 

 

Antimony Segment

 

 

Zeolite Segment

 

 

Precious Metals

 

 

 

June 30, 2022

 

USAC

 

 

USAMSA

 

 

BRZ

 

 

Segment

 

 

TOTAL

 

Plant and equipment

 

$1,759,271

 

 

$9,197,870

 

 

$4,051,016

 

 

$1,347,912

 

 

$16,356,069

 

Buildings

 

 

243,248

 

 

 

590,128

 

 

 

801,764

 

 

 

-

 

 

 

1,635,140

 

Construction in progress

 

 

-

 

 

 

280,406

 

 

 

332,629

 

 

 

-

 

 

 

613,035

 

Land and other

 

 

2,431,387

 

 

 

2,656,037

 

 

 

16,753

 

 

 

-

 

 

 

5,104,177

 

 

 

 

4,433,906

 

 

 

12,724,441

 

 

 

5,202,162

 

 

 

1,347,912

 

 

 

23,708,421

 

Accumulated depreciation

 

 

(2,747,396)

 

 

(5,904,748)

 

 

(3,318,286)

 

 

(495,270)

 

 

(12,465,700)

 

 

$1,686,510

 

 

$6,819,693

 

 

$1,883,876

 

 

$852,642

 

 

$11,242,721

 

 

 

 

Antimony Segment

 

 

Zeolite Segment

 

 

Precious Metals

 

 

 

December 31, 2021

 

USAC

 

 

USAMSA

 

 

BRZ

 

 

Segment

 

 

TOTAL

 

Plant and equipment

 

$1,684,977

 

 

$8,905,899

 

 

$3,853,056

 

 

$1,330,394

 

 

$15,774,326

 

Buildings

 

 

243,248

 

 

 

870,534

 

 

 

801,764

 

 

 

-

 

 

 

1,915,546

 

Construction in progress

 

 

-

 

 

 

280,406

 

 

 

184,972

 

 

 

-

 

 

 

465,378

 

Land and other

 

 

2,431,387

 

 

 

2,640,441

 

 

 

16,753

 

 

 

-

 

 

 

5,088,581

 

 

 

$4,359,612

 

 

$12,697,280

 

 

$4,856,545

 

 

$1,330,394

 

 

$23,243,831

 

Accumulated depreciation

 

 

(2,732,809)

 

 

(5,622,555)

 

 

(3,314,658)

 

 

(440,076)

 

 

(12,110,098)

 

 

$1,626,803

 

 

$7,074,725

 

 

$1,541,887

 

 

$890,318

 

 

$11,133,733

 

 

At June 30, 2022 and December 31, 2021, the Company had $613,035 and $665,175, respectively, of assets that were not yet placed in service and have not yet been depreciated.

 

 
Page 10 of 32

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

  

NOTE 7 – ASSET RETIREMENT OBLIGATION AND ACCRUED RECLAMATION COSTS

 

Changes in the asset retirement obligation for the three and six months ended June 30, 2022 and 2021 are as follows:

 

 

 

Three months ended June 30,

 

 

 

2022

 

 

2021

 

Asset retirement obligation, beginning of period

 

$192,881

 

 

$184,219

 

Change in estimate of asset retirement obligation

 

 

15,596

 

 

 

-

 

Accretion expense

 

 

9,680

 

 

 

1,732

 

Asset retirement obligation, end of period

 

$218,157

 

 

$185,951

 

 

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

Asset retirement obligation, beginning of period

 

$191,149

 

 

$184,219

 

Change in estimate of asset retirement obligation

 

 

15,596

 

 

 

-

 

Accretion expense

 

 

11,412

 

 

 

1,732

 

Asset retirement obligation, end of period

 

$218,157

 

 

$185,951

 

 

The Company’s total asset retirement obligation and accrued reclamation costs of $325,657 and $298,649, at June 30, 2022 and December 31, 2021, respectively, includes reclamation obligations for the Idaho and Montana operations of $107,500.

 

NOTE 8 – DEBT

 

Long term debt at June 30, 2022 and December 31, 2021 is as follows:

 

 

 

June 30, 2022

 

 

December 31, 2021

 

Promissory note payable to First Security Bank of Missoula, bearing interest at 2.25%, payable in 59 monthly installments of $1,409 with a final payment of $152,726 maturing November 9, 2026; collateralized by a lien on Certificate of Deposit

 

$208,046

 

 

$215,150

 

Installment contract payable to Caterpillar Financial Services, bearing interest at 6.65%, payable in 24 monthly installments of $7,210 maturing April 28, 2024; collateralized by 2007 Caterpillar 740 articulated truck

 

 

148,937

 

 

 

-

 

 

 

 

356,983

 

 

 

215,150

 

Less current portion

 

 

(91,347)

 

 

(13,230)

Long term portion

 

$265,636

 

 

$201,920

 

 

At June 30, 2022, principal payments on debt are due as follows:

 

Twelve months ending June 30,

 

Principal payment

 

2023

 

$91,347

 

2024

 

 

82,573

 

2025

 

 

12,925

 

2026

 

 

13,219

 

2027

 

 

156,919

 

 

 

$356,983

 

 

 
Page 11 of 32

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

  

NOTE 9 – COMMITMENTS AND CONTINGENCIES

 

The Company follows U.S. GAAP guidance in determining its accrual and disclosures with respect to loss contingencies, and evaluate such accruals and contingencies for each reporting period. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.

 

From time to time, the Company is assessed fines and penalties by the Mine Safety and Health Administration (“MSHA”). Using appropriate regulatory channels, management may contest these proposed assessments. At June 30, 2022 and December 31, 2021, the Company had accrued liabilities of $1,270 and $Nil, respectively, relating to such assessments.

 

The Company pays various royalties on the sale of zeolite products. On a combined basis, royalties vary from 8%-13%. During the three months ended June 30, 2022 and 2021, the Company incurred royalty expense of $85,870 and $69,437, respectively. During the six months ended June 30, 2022 and 2021, the Company incurred royalty expense of $147,900 and $131,567 respectively. Royalty expense is included in cost of goods sold on the condensed consolidated statement of operations.

 

At June 30, 2022 and December 31, 2021, the Company had accrued royalties payable of $409,887 and $346,242 respectively, which is included in accrued liabilities on the condensed consolidated balance sheets. The Company is currently in negotiations with certain royalty holders to modify the terms of the agreements.

 

NOTE 10 – STOCKHOLDERS’ EQUITY

 

During the six months ended June 30, 2021, the Company sold shares of its common stock in two separate transactions: on February 3, 2021, 15,300,000 shares were sold at $0.70 for gross proceeds of $10,710,000; and on February 18, 2021, 10,990,000 shares were sold at $1.30 for gross proceeds of $14,287,000. A total of $1,654,820 of issuance costs were incurred on these sales.

 

During the six months ended June 30, 2021, the Company issued 3,765,477 shares of common stock and received $1,790,703 in cash from the exercise of warrants.

 

During the three months ended June 30, 2022 and June 30, 2021, the Company expensed $46,875 and $28,125, respectively, in directors’ fees payable that are anticipated to be paid in common stock. During the six months ended June 30, 2022 and June 30, 2021, the Company expensed $75,000 and $28,125, respectively in directors’ fees payable

 

At June 30, 2022 and December 31, 2021, the accrued balance of stock payable to directors fees for services was $187,500 and $112,500, respectively.

 

The Company issued no shares of common stock during the three or six months ended June 30, 2022. During the three and six months ended June 30, 2022, no warrants were exercised.

 

Common stock warrants

 

In February 2021, concurrent with sale of common stock, the Company issued warrants to purchase 7,650,000 shares of common stock at an exercise price of $0.85 per share. The warrants are initially exercisable six months following issuance and expire five and one-half years from the issuance date. In connection with the February 2021 sales of common stock, the Company also issued 1,606,500 warrants with an exercise price of $0.85 and 804,000 warrants with an exercise price of $0.46 as commission to the placement agent. There were no warrants exercised during the three or six months ended June 30, 2022.

 

The Company issued no warrants to purchase common stock during the three or six months ended June 30, 2022.

 

 
Page 12 of 32

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

  

The following is a summary of the Company’s warrants to purchase shares of common stock activity:

 

 

 

Number of warrants

 

 

Exercise prices

 

Balance outstanding at December 31, 2020

 

 

6,194,899

 

 

$0.65

 

Issued

 

 

10,060,500

 

 

$0.46 - $0.85

 

Exercised

 

 

(3,765,477)

 

$0.46 - $0.65

 

Balance outstanding at December 31, 2021 and June 30, 2022

 

 

12,489,922

 

 

$0.75

 

 

The composition of the Company’s warrants outstanding at June 30, 2022 is as follows:

 

Number of warrants

 

 

Exercise Price

 

 

Expiration Date

 

Remaining life (years)

 

 

143,707

 

 

$0.65

 

 

8/12/2022

 

 

0.12

 

 

2,285,715

 

 

 

0.46

 

 

7/31/2025

 

 

3.09

 

 

804,000

 

 

 

0.46

 

 

1/27/2026

 

 

3.58

 

 

7,650,000

 

 

 

0.85

 

 

8/3/2026

 

 

4.10

 

 

1,606,500

 

 

 

0.85

 

 

2/1/2026

 

 

3.59

 

 

12,489,922

 

 

 

 

 

 

 

 

 

 

 

 

NOTE 11 – INVESTMENTS

 

In April 2022, the Company opened an investment account composed of U.S. Treasury bonds which are measured using Level 1 fair value inputs that are based on quoted prices in active markets.

 

For the three and six months ended June 30, 2022, the Company recognized $93,458 in the change in fair value of investments on the condensed consolidated statement of operations. As of June 30, 2022, the cost and fair value of the investment portion of the account was $13,492,655 and $13,431,774, respectively.

 

As of June 30, 2022, the cash and cash equivalent portion of the account was $132,380, which is included in cash and cash equivalents on the condensed consolidated balance sheet.

 

NOTE 12 – BUSINESS SEGEMENTS

 

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.

 

 

 
Page 13 of 32

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

  

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.

 

 

 

 

For the three months ended June 30,

 

 

For the six months ended June 30,

 

Capital expenditures

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Antimony

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$51,927

 

 

$-

 

 

$80,277

 

 

$-

 

Mexico

 

 

10,724

 

 

 

4,872

 

 

 

11,565

 

 

 

9,744

 

Subtotal antimony

 

 

62,651

 

 

 

4,872

 

 

 

91,842

 

 

 

9,744

 

Precious metals

 

 

9,138

 

 

 

18,921

 

 

 

17,518

 

 

 

37,347

 

Zeolite

 

 

299,865

 

 

 

68,036

 

 

 

435,239

 

 

 

68,036

 

Total

 

$371,654

 

 

$91,829

 

 

$

544,599

 

 

$115,127

 

Total Assets:

 

June 30,

2022

 

 

December 31,

2021

 

Antimony

 

 

 

 

 

 

United States

 

$24,552,558

 

 

$24,130,348

 

Mexico

 

 

7,446,054

 

 

 

7,771,515

 

Subtotal antimony

 

 

31,998,612

 

 

 

31,901,863

 

Precious metals

 

 

 

 

 

 

 

 

United States

 

 

183,713

 

 

 

107,464

 

Mexico

 

 

668,929

 

 

 

782,854

 

Subtotal precious metals

 

 

852,642

 

 

 

890,318

 

Zeolite

 

 

2,904,763

 

 

 

2,210,546

 

TOTAL

 

$35,756,017

 

 

$35,002,727

 

 

 
Page 14 of 32

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

 

Segment operations for the three months ended June 30, 2022

 

Antimony - USA

 

 

Antimony -Mexico

 

 

Total antimony

 

 

Precious Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$1,644,259

 

 

$827,822

 

 

$2,472,081

 

 

$95,453

 

 

$1,020,391

 

 

$3,587,925

 

Depreciation and amortization

 

$11,101

 

 

$143,736

 

 

$154,837

 

 

$27,674

 

 

$48,546

 

 

$231,057

 

Income from operations

 

$120,636

 

 

$24,396

 

 

$145,032

 

 

$67,779

 

 

$154,124

 

 

$366,935

 

Other income (expense)

 

 

(3,975)

 

 

-

 

 

 

(3,975)

 

 

-

 

 

 

(1,737)

 

 

(5,712)

NET INCOME

 

$116,661

 

 

$24,396

 

 

$141,057

 

 

$67,779

 

 

$152,387

 

 

$361,223

 

 

 
Page 15 of 32

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

  

Segment operations for the three months ended June 30, 2021

 

Antimony - USA

 

 

Antimony -Mexico

 

 

Total antimony

 

 

Precious Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$1,428,939

 

 

$-

 

 

$1,428,939

 

 

$130,195

 

 

$716,428

 

 

$2,275,562

 

Depreciation and amortization

 

$7,893

 

 

$144,999

 

 

$152,892

 

 

$28,226

 

 

$38,826

 

 

$219,944

 

Income (loss) from operations

 

$99,642

 

 

$(575,363 )

 

$(475,721 )

 

$101,969

 

 

$141,562

 

 

$(232,190 )

Other income (expense)

 

 

456,725

 

 

 

113,422

 

 

 

570,147

 

 

 

-

 

 

 

(816 )

 

 

569,331

 

NET LOSS

 

$556,367

 

 

$(461,941 )

 

$94,426

 

 

$101,969

 

 

$140,746

 

 

$337,141

 

 

Segment operations for the six months ended June 30, 2022

 

Antimony - USA

 

 

Antimony -Mexico

 

 

Total antimony

 

 

Precious Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$4,473,189

 

 

$827,822

 

 

$5,301,011

 

 

$172,787

 

 

$1,694,433

 

 

$7,168,231

 

Depreciation and amortization

 

$20,570

 

 

$282,193

 

 

$302,763

 

 

$55,194

 

 

$93,250

 

 

$451,207

 

Income (loss) from operations

 

$1,512,148

 

 

$(659,641)

 

$852,507

 

 

$117,593

 

 

$176,415

 

 

$1,146,515

 

Other income (expense)

 

 

3,335

 

 

-

 

 

 

3,335

 

 

-

 

 

 

(2,375)

 

 

960

NET INCOME (LOSS)

 

$1,515,483

 

 

$(659,641)

 

$855,842

 

 

$117,593

 

 

$174,040

 

 

$1,147,475

 

 

Segment operations for the six months ended June 30, 2021

 

Antimony - USA

 

 

Antimony -Mexico

 

 

Total antimony

 

 

Precious Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$2,086,046

 

 

$-

 

 

$2,086,046

 

 

$206,428

 

 

$1,236,375

 

 

$3,528,849

 

Depreciation and amortization

 

$15,784

 

 

$289,951

 

 

$305,735

 

 

$55,830

 

 

$80,843

 

 

$442,408

 

Income (loss) from operations

 

$(119,027 )

 

$(813,931 )

 

$(932,958 )

 

$150,598

 

 

$208,444

 

 

$(573,916 )

Other income (expense)

 

 

463,360

 

 

 

113,422

 

 

 

576,782

 

 

 

-

 

 

 

(1,213 )

 

 

575,569

 

NET INCOME (LOSS)

 

$344,333

 

 

$(700,509 )

 

$(356,176 )

 

$150,598

 

 

$207,231

 

 

$1,653

 

  

NOTE 13 – SUBSEQUENT EVENTS

 

On August 8, 2022, the Company executed a Purchase Option Agreement (the ‘agreement”) with SB Wadley SA de CV (“Wadley”) whereby the Company leases, with an option to acquire, mining claims located in Mexico known as the Wadley Property. Under the agreement, the Company will pay Wadley eight monthly installments of $11,600 for the right to mine and conduct geological and resource studies on the Wadley Property. At the end of the eight months, should the Company choose to exercise the option following due diligence and assessment of geological and resource studies, the Company will pay Wadley $2,230,000 and seven annual payments of $1,160,000.

 

 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This quarterly report and the exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements concern the Company’s anticipated results and developments in the Company’s operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

 

Any statement that expresses or involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates”, or “intends”, or states that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:

 

 

·

Risks related to the Company’s properties being in the exploration stage;

 

·

Risks related to the mineral operations being subject to government regulation;

 

·

Risks related to environmental concerns;

 

·

Risks related to the Company’s ability to obtain additional capital to develop the Company’s resources, if any;

 

·

Risks related to mineral exploration and development activities;

 

·

Risks related to mineral estimates;

 

·

Risks related to the Company’s insurance coverage for operating risks;

 

·

Risks related to the fluctuation of prices for precious and base metals, such as gold, silver and copper;

 

·

Risks related to the competitive industry of mineral exploration;

 

·

Risks related to the title and rights in the Company’s mineral properties;

 

·

Risks related to the possible dilution of the Company’s common stock from additional financing activities;

 

·

Risks related to potential conflicts of interest with the Company’s management;

 

·

Risks related to the Company’s shares of common stock;

 

This list is not exhaustive of the factors that may affect the Company’s forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the sections titled “Risk Factors”, “Description of Business” and “Management’s Discussion and Analysis and Plan of Operation” of this Quarterly Report. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. United States Antimony Corporation disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law. The Company advises readers to carefully review the reports and documents filed from time to time with the Securities and Exchange Commission (the “SEC”), particularly the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

 

United States Antimony Corporation qualifies all forward-looking statements contained in this Quarterly Report by the foregoing cautionary statement.

 

Certain statements contained in this Quarterly Report on Form 10-Q constitute “forward-looking statements.” These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect,” and similar expressions include the Company’s expectations and objectives regarding its future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption “Management’s Discussion and Analysis or Plan of Operation” and elsewhere in this Quarterly Report.

 

As used in this Quarterly Report, the terms “we,” “us,” “our,” “United State Antimony Corporation,”, “US Antinomy “and the “Company”, mean United States Antimony Corporation, unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.

 

 
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Management’s Discussion and Analysis is intended to be read in conjunction with the Company’s condensed consolidated financial statements and the integral notes (“Notes”) thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The following statements may be forward-looking in nature and actual results may differ materially.

 

Reports to Security Holders

 

The Registrant does not issue annual or quarterly reports to security holders other than the annual Form 10-K and quarterly Forms 10-Q as electronically filed with the SEC. Electronically filed reports may be accessed at www.sec.gov

 

DESCRIPTION OF BUSINESS

 

History

 

United States Antimony Corporation, or USAC, was incorporated in Montana in January 1970 to mine and produce antimony products. In December 1983, we suspended antimony mining operations but continued to produce antimony products from domestic and foreign sources. In April 1998, we formed United States Antimony SA de CV or USAMSA, to mine and smelt antimony in Mexico. Bear River Zeolite Company, or BRZ, was incorporated in 2000, and it is mining and producing zeolite in southeastern Idaho. On August 19, 2005, USAC formed Antimonio de Mexico, S. A. de C. V. to explore and develop antimony and silver deposits in Mexico. Our principal business is the production and sale of antimony, silver, gold, and zeolite products. On May 16, 2012, we started trading on the NYSE MKT (now NYSE AMERICAN) under the symbol UAMY.

 

Antimony Division

 

Our antimony smelter and precious metals plant is located in the Burns Mining District of Sanders County, Montana, approximately 15 miles west of Thompson Falls, MT. We hold 2 patented mill sites where the plant is located. We have no “proven reserves” or “probable reserves” of antimony.  Environmental restrictions preclude mining at this site.

 

Mining was suspended in December 1983, because antimony could be purchased more economically from foreign sources.

 

For 2021, and since 1983, we relied on foreign sources for raw materials, and there are risks of interruption in procurement from these sources and/or volatile changes in world market prices for these materials that are not controllable by us. We have sources of antimony in Mexico but we are still depending on foreign companies for raw material in the future. We expect to receive raw materials from our owned and leased properties for 2022 and later years. We continue working with suppliers in North America, Central America, and South America.

 

We currently own 100% of the common stock, equipment, and the leases on real property of United States Antimony, Mexico S.A. de C.V. or “USAMSA”, which was formed in April 1998. We currently own 100% of the stock in Antimony de Mexico SA de CV (ADM) which owns the San Miguel concession of the Los Juarez property. USAMSA has two divisions, (1) the Madero smelter in Coahuila, (2) the Puerto Blanco flotation mill and oxide circuit in Guanajuato. ADM possesses the Los Juarez mineral deposit.

 

In our existing operations in Montana, we produce antimony oxide, antimony metal, and precious metals. Antimony oxide is a fine, white powder that is used primarily in conjunction with a halogen to form a synergistic flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings and paper. Antimony oxide is also used as a color fastener in paint, as a catalyst for production of polyester resins for fibers and film, as a catalyst for production of polyethylene pthalate in plastic bottles, as a phosphorescent agent in fluorescent light bulbs, and as an opacifier for porcelains. We also sell antimony metal for use in bearings, storage batteries and ordnance.

 

 
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We estimate (but have not independently confirmed) that our present share of the domestic market and international market for antimony oxide products is approximately 4% and less than 1%, respectively. We are the only significant U.S. producer of antimony products, while China supplies 92% of the world antimony demand. We believe we are competitive both domestically and world-wide due to the following:

 

 

·

We have a reputation for quality products delivered on a timely basis.

 

 

 

 

·

We have the only two operating, permitted, antimony smelters in North and Central America.

 

 

 

 

·

We are the only domestic producer of antimony products.

 

 

 

 

·

We can ship on short notice to domestic customers.

 

 

 

 

·

We are vertically integrated, with raw materials from our own mines, mills, and smelter in Mexico, along with the raw materials from exclusive supply agreements we have with numerous ore and raw material suppliers.

 

 

 

 

·

Our smelter in Coahuila is the largest operating antimony smelter in Mexico or the United States with a current maximum capacity of about 32,600 pounds of feed per day and permitting for 50% to 70% expansion.

 

Zeolite Division

 

We own 100% of Bear River Zeolite Company, (BRZ, an Idaho corporation) that was incorporated on June 1, 2000. BRZ has a lease with Webster Farm, L.L.C. that entitles BRZ to surface mine and process zeolite on property located near Preston, Idaho, in exchange for a royalty payment. In 2010 the royalty payment was adjusted to $10 per ton sold. The current minimum annual royalty is $60,000. In addition, BRZ has more zeolite on U.S. Bureau of Land Management land. The Company pays various royalties on the sale of zeolite products. William Raymond and Nancy Couse are paid a royalty that varies from $1 to $5 per ton. On a combined basis, royalties vary from 8%-13% of sales. Shortly after inception BRZ constructed a processing plant on the property which improved its productive capacity. Ground-breaking for an additional warehouse to store additional inventory and a shop to service equipment started in 2021 and the warehouse and shop are expected to be completed by mid-2022. A vertical-shaft-impactor crusher was replaced by a hammer mill for crushing line number 1 in 2021 for increased production rate. A replacement jaw crusher was installed and put into service in 2021. The new jaw crusher was further improved with a variable-speed apron feeder in late 2021 and subsequent and substantial improvements have been made to the jaw crusher in 2022. In 2021, the Company purchased a house in Preston Idaho for the express purpose of housing workers for its zeolite operation.

 

We have no reserves nor resources of zeolite.

 

“Zeolite” refers to a group of industrial minerals that consist of hydrated aluminosilicates that hold cations such as calcium, sodium, ammonium, various heavy metals, and potassium in their crystal lattice. Water is loosely held in cavities in the lattice. BRZ zeolite is regarded as one of the best zeolites in the world due to its high CEC of approximately 180-220 meq/100 gr., its hardness and high clinoptilolite content, its absence of clay minerals, and its low sodium content. BRZ’s zeolite deposits’ characteristics which make the mineral useful for a variety of purposes including:

 

 

Soil Amendment and Fertilizer. Zeolite has been successfully used to fertilize golf courses, sports fields, parks and common areas, and high value agricultural crops

 

 

 

 

Water Filtration. Zeolite is used for particulate, heavy metal and ammonium removal in swimming pools, municipal water systems, fisheries, fish farms, and aquariums.

 

 

 

 

Sewage Treatment. Zeolite is used in sewage treatment plants to remove nitrogen and as a carrier for microorganisms.

 

 

 

 

Nuclear Waste and Other Environmental Cleanup. Zeolite has shown a strong ability to selectively remove strontium, cesium, radium, uranium, and various other radioactive isotopes from solution. Zeolite can also be used for the cleanup of soluble metals such as mercury, chromium, copper, lead, zinc, arsenic, molybdenum, nickel, cobalt, antimony, calcium, silver and uranium.

 

 

 

 

Odor Control. A major cause of odor around cattle, hog, and poultry feed lots is the generation of the ammonium in urea and manure. The ability of zeolite to absorb ammonium prevents the formation of ammonia gas, which disperses the odor.

 

 
Page 19 of 32

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Gas Separation. Zeolite has been used for some time to separate gases, to re-oxygenate downstream water from sewage plants, smelters, pulp and paper plants, and fish ponds and tanks, and to remove carbon dioxide, sulfur dioxide and hydrogen sulfide from methane generators as organic waste, sanitary landfills, municipal sewage systems, animal waste treatment facilities, and is excellent in pressure swing apparatuses.

 

 

 

 

Animal Nutrition. According to other research, feeding up to 2% zeolite increases growth rates, decreases conversion rates, and prevents scours. BRZ does not make these claims.

 

 

 

 

Miscellaneous Uses. Other uses include catalysts, petroleum refining, concrete, solar energy and heat exchange, desiccants, pellet binding, horse and kitty litter, floor cleaner and carriers for insecticides, pesticides and herbicides.

 

SELECTED FINANCIAL DATA.

 

Statement of Operations Information:

 

 

 

For the three months ended June 30,

 

 

For the six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues

 

$3,587,925

 

 

$2,275,562

 

 

$7,168,231

 

 

$3,528,849

 

Costs of revenues

 

 

2,865,515

 

 

 

2,079,164

 

 

 

5,306,433

 

 

 

3,120,294

 

Gross profit

 

 

722,410

 

 

 

196,398

 

 

 

1,861,798

 

 

 

408,555

 

Total operating expenses

 

 

355,475

 

 

 

428,588

 

 

 

715,283

 

 

 

982,471

 

Income (loss) from operations

 

 

366,935

 

 

 

(232,190)

 

 

1,146,515

 

 

 

(573,916)

Other income (expense)

 

 

(5,712)

 

 

569,331

 

 

 

960

 

 

575,569

 

NET INCOME

 

$361,223

 

 

$337,141

 

 

$1,147,475

 

 

$1,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock (basic)

 

 

106,240,361

 

 

 

106,315,419

 

 

 

106,240,361

 

 

 

99,513,378

 

Weighted average shares of common stock (diluted)

 

 

106,240,361

 

 

 

108,696,704

 

 

 

106,240,361

 

 

 

99,513,378

 

 

Balance Sheet Information:

 

 

 

June 30,

2022

 

 

December 31,

2021

 

Working capital

 

$22,665,906

 

 

$21,548,137

 

Total assets

 

 

35,756,017

 

 

 

35,002,727

 

Accumulated deficit

 

 

(31,563,788)

 

 

(32,711,263)

Stockholders’ equity

 

 

33,516,278

 

 

 

32,368,803

 

 

 
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Operational and financial performance

 

Antimony

 

Financial and operational metrics of antimony for the three months ended June 30, 2022 and 2021 are as follows:

 

 

 

Three months ended June 30,

 

 

 

 

Pct. Increase

 

Antimony - Combined USA and Mexico

 

2022

 

 

2021

 

 

$ Change

 

 

(Decrease)

 

Total revenue -antimony

 

$2,472,081

 

 

$1,428,939

 

 

$1,043,142

 

 

 

73.0%

Gross profit - antimony

 

 

490,559

 

 

 

(62,222 )

 

 

552,781

 

 

 

(888.4)%

Total lbs of antimony metal sold

 

 

363,128

 

 

 

339,117

 

 

 

24,011

 

 

 

7.1%

Average sales price/lb metal

 

 

6.81

 

 

 

4.21

 

 

 

2.59

 

 

 

61.6%

Average cost/lb metal

 

 

5.46

 

 

 

4.40

 

 

 

1.06

 

 

 

24.1%

Average gross profit/lb metal

 

 

1.35

 

 

 

(0.18 )

 

 

1.53

 

 

 

(836.3)%

 

Financial and operational metrics of antimony for the six months ended June 30, 2022 and 2021 was as follows:

 

 

 

Six months ended June 30,

 

 

 

 

Pct Increase

 

Antimony - Combined USA and Mexico

 

2022

 

 

2021

 

 

$ Change

 

 

(Decrease)

 

Total revenue -antimony

 

$5,301,011

 

 

$2,086,046

 

 

$3,214,965

 

 

 

154.1%

Gross profit - antimony

 

 

1,546,336

 

 

 

25,245

 

 

 

1,521,091

 

 

 

6,025.3%

Total lbs of antimony metal sold

 

 

796,478

 

 

 

521,086

 

 

 

275,392

 

 

 

52.8%

Average sales price/lb metal

 

 

6.66

 

 

 

4.00

 

 

 

2.65

 

 

 

66.3%

Average cost/lb metal

 

 

4.71

 

 

 

3.95

 

 

 

0.76

 

 

 

19.2%

Average gross profit/lb metal

 

 

1.94

 

 

 

0.05

 

 

 

1.89

 

 

 

3,907.4%

 

During the three months ended June 30, 2022, the average sales price for antimony increased $2.60 per pound compared to the three months ended June 30, 2021. Gross profit per pound increased $1.53 per pound over the three months ended June 30, 2021.

 

During the six months ended June 30, 2022, the average sales price for antimony increased $2.66 per pound compared to the six months ended June 30, 2021. Gross profit per pound increased $1.89 per pound over the three months ended June 30, 2021.

 

 
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Zeolite

 

Financial and operational performance of zeolite for the three months ended June 30, 2022 and 2021 was as follows:

 

 

 

Three months ended June 30,

 

 

 

 

Pct Increase

 

Zeolite

 

2022

 

 

2021

 

 

$ Change

 

 

(Decrease)

 

Total revenue - zeolite

 

$1,020,391

 

 

$716,428

 

 

 

303,963

 

 

 

42.4%

Gross profit - zeolite

 

 

164,072

 

 

 

156,651

 

 

 

7,421

 

 

 

4.7%

Tons of zeolite sold

 

 

4,046

 

 

 

3,035

 

 

 

1,011

 

 

 

33.3%

Average sales price/ton

 

 

252.20

 

 

 

236.06

 

 

 

16.14

 

 

 

6.8%

Average cost/ton

 

 

211.65

 

 

 

184.44

 

 

 

27.21

 

 

 

14.8%

Average gross profit/ton

 

 

40.55

 

 

 

51.61

 

 

 

(11.06 )

 

(21.4

%)

 

Financial and operational performance of zeolite for the six months ended June 30, 2022 and 2021 was as follows:

 

 

 

Six months ended June 30,

 

 

 

 

Pct. Increase

 

Zeolite

 

2022

 

 

2021

 

 

$ Change

 

 

(Decrease)

 

Total revenue - zeolite

 

$1,694,433

 

 

$1,236,375

 

 

 

458,058

 

 

 

37.0%

Gross profit - zeolite

 

 

197,869

 

 

 

232,712

 

 

 

(34,843 )

 

(15.0

%)

Tons of zeolite sold

 

 

7,072

 

 

 

5,778

 

 

 

1,294

 

 

 

22.4%

Average sales price/ton

 

 

239.60

 

 

 

213.98

 

 

 

25.62

 

 

 

12.0%

Average cost/ton

 

 

211.62

 

 

 

173.70

 

 

 

37.92

 

 

 

21.8%

Average gross profit/ton

 

 

27.98

 

 

 

40.28

 

 

 

(12.30 )

 

(30.5

%)

 

Sales volume of zeolite for the three months ended June 30, 2022 increased 1,011 tons over the three months ended June 30, 2021. Average sales price per ton increased $16.14 for the same comparable period. Sales volume of zeolite for the six months ended June 30, 2022 increased 1,294 tons over the six months ended June 30, 2021. Average sales price per ton increased $25.62 for the six months ended June 30, 2022 over the comparable six month period ending June 30, 2021.

 

Construction of the new 50’x100’ warehouse (for additional storage of product) and the 40’x60’ shop (for servicing equipment) continued. The structures are substantially complete as of the date of this report and will be put into service in the third quarter of 2022.

 

During the three and six months ended June 30, 2022, the Company purchased a Cat 740 haul truck to replace aging equipment. The Company also took delivery on a Cat 992 during the same period.

 

 
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Precious Metals

 

Financial and operational performance of precious metals for the three months ended June 30, 2022 and 2021 was as follows:

  

 

 

Three months ended June 30,

 

 

 

 

 

Precious metals

 

2022

 

 

2021

 

 

$ Change

 

 

Pct Change

 

Total revenue - precious metals

 

$95,453

 

 

$130,195

 

 

$(34,742 )

 

 

(26.7)%

Gross profit precious metals

 

 

67,779

 

 

 

101,969

 

 

 

(34,190 )

 

 

(33.5)%

Ounces sold - gold

 

 

11.06

 

 

 

14.74

 

 

 

(3.68 )

 

 

(24.9)%

Ounces sold - silver

 

 

3,319

 

 

 

6,254

 

 

 

(2,935

)

 

 

(46.9)%

   

Financial and operational performance of precious metals for the three months ended June 30, 2022 and 2021 was as follows:

  

 

 

Six months ended June 30,

 

 

 

 

 

Precious metals

 

2022

 

 

2021

 

 

$ Change

 

 

Pct Change

 

Total revenue - precious metals

 

 

172,787

 

 

 

206,428

 

 

 

(33,641 )

 

 

(16.3)%

Gross profit precious metals

 

 

117,593

 

 

 

150,598

 

 

 

(33,005 )

 

 

(21.9)%

Ounces sold-gold

 

 

21.35

 

 

 

22.00

 

 

 

(0.65 )

 

 

(3.0)%

Ounces sold-silver

 

 

8,175

 

 

 

9,608

 

 

 

(1,433 )

 

 

(14.9)%

  

 
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EARNINGS BEFORE INTEREST TAX DEPRECIATION AND AMORTIZATION

 

The Company utilizes Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”), a non-GAAP financial measurement which approximates free cash flow.

 

Our company-wide Earnings Before Interest Taxes Depreciation Amortization (“EBITDA”) was $595,360 for the three months ended June 30, 2022, compared to EBITDA of $557,965 for the three months ended June 30, 2021. The primary driver of the June 30, 2021 EBITDA was a one-time non-recurring gain on forgiveness of CARES Act funds on a loan received in 2020 during the global pandemic and subsequent federal government economic stimulus program.

 

Income from operations improved from a company-wide loss of $232,190 for the three months ended June 30, 2021 to income from operations of $366,935 for the three months ended June 30, 2022. As a percentage of sales, income from operations improve from a negative 10.2% in 2021 to 11.7% in 2022 for the three-month period. Primary drivers include continued strong market prices for antimony and zeolite combined with relatively stable prices for cost of goods sold during the period.

 

EBIDTA schedules by business segment for the three months ended June 30, 2022 and June 30, 2021 is presented as follows.

  

Antimony - Combined USA and Mexico

 

Three months ended June 30, 2022

 

 

Three months ended June 30, 2021

 

 

$ Change

 

 

Change as a %

of Revenue

 

Gross antimony revenue

 

$2,472,081

 

 

 

100.0%

 

$1,428,939

 

 

 

100.0%

 

$1,043,142

 

 

 

0.0%

Cost of sales

 

 

(1,981,522)

 

 

(80.2 )%

 

 

(1,491,161 )

 

 

(104.4 )%

 

 

(490,361 )

 

 

24.2%

Gross profit

 

 

490,559

 

 

 

19.8%

 

 

(62,222 )

 

 

(4.4 )%

 

 

552,781

 

 

 

24.2%

Operating expenses

 

 

(345,527 )

 

 

(14.0 )%

 

 

(413,499 )

 

 

(28.9 )%

 

 

67,972

 

 

 

15.0%

Income (loss) from operations

 

 

145,032

 

 

 

5.9%

 

 

(475,721 )

 

 

(33.3 )%

 

 

620,753

 

 

 

39.2%

Non-operating income (expense)

 

 

(3,975)

 

 

(2.6 )%

 

 

570,147

 

 

 

39.9%

 

 

(574,122 )

 

 

(40.1 )%

Net income - antimony

 

 

141,057

 

 

 

5.7%

 

 

94,426

 

 

 

6.6%

 

 

46,631

 

 

 

(0.9 )%

Interest expense

 

 

1,343

 

 

 

0.1%

 

 

38

 

 

 

0.0%

 

 

1,305

 

 

 

0.1%

Depreciation and amortization

 

 

154,837

 

 

 

6.3%

 

 

152,892

 

 

 

10.7%

 

 

1,945

 

 

 

(4.4 )%

EBITDA - antimony

 

$297,237

 

 

 

12.0%

 

$247,356

 

 

 

17.3%

 

$49,881

 

 

 

(5.3 )%

 

Zeolite

 

Three months ended June 30, 2022

 

 

Three months ended June 30, 2021

 

 

$ Change

 

 

Change as a %

of Revenue

 

Gross zeolite revenue

 

$1,020,391

 

 

 

100.0%

 

$716,428

 

 

 

100.0%

 

$303,963

 

 

 

0.0%

Cost of sales

 

 

(856,319 )

 

 

(83.9 )%

 

 

(559,777 )

 

 

(78.1 )%

 

 

(296,542 )

 

 

(5.8 )%

Gross profit - zeolite

 

 

164,072

 

 

 

16.1%

 

 

156,651

 

 

 

21.9%

 

 

7,421

 

 

 

(5.8 )%

Operating expenses

 

 

(9,948 )

 

 

(1.0)%

 

 

(15,089 )

 

 

(2.1 )%

 

 

5,141

 

 

 

1.1%

Income (loss) from operations

 

 

154,124

 

 

 

15.1%

 

 

141,562

 

 

 

19.8%

 

 

12,562

 

 

 

(4.7)%

Non-operating expenses

 

 

(1,737 )

 

 

(0.2 )%

 

 

(816 )

 

 

(0.1 )%

 

 

(921 )

 

 

(0.1 )%

Net income - zeolite

 

 

152,387

 

 

 

14.9%

 

 

140,746

 

 

 

19.6%

 

 

11,641

 

 

 

(4.7 )%

Interest expense

 

 

1,738

 

 

 

0.2%

 

 

842

 

 

 

0.1%

 

 

896

 

 

 

0.1%

Depreciation and amortization

 

 

48,546

 

 

 

4.8%

 

 

38,826

 

 

 

5.4%

 

 

9,720

 

 

 

(0.7 )%

EBITDA - zeolite

 

$202,671

 

 

 

19.9%

 

$180,414

 

 

 

25.2%

 

$22,257

 

 

 

(5.3 )%

 

 
Page 24 of 32

Table of Contents

 

Precious Metals

 

Three months ended June 30, 2022

 

 

Three months ended June 30, 2021

 

 

$ Change

 

 

Change as a %

of Revenue

 

Gross precious metals revenue

 

 

95,453

 

 

 

100.0%

 

 

130,195

 

 

 

100.0%

 

 

(34,742 )

 

 

0.0%

Production costs

 

 

(27,674 )

 

 

(29.0)%

 

 

(28,226 )

 

 

(21.7)%

 

 

552

 

 

 

(7.3)%

Gross profit

 

 

67,779

 

 

 

71.0%

 

 

101,969

 

 

 

78.3%

 

 

(34,190 )

 

 

(7.3)%

Operating expenses

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

Income from operations

 

 

67,779

 

 

 

71.0%

 

 

101,969

 

 

 

78.3%

 

 

(34,190 )

 

 

(7.3)%

Non-operating income

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

Net income - antimony

 

 

67,779

 

 

 

71.0%

 

 

101,969

 

 

 

78.3%

 

 

(34,190 )

 

 

(7.3)%

Interest expense

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

Depreciation and amortization

 

 

27,674

 

 

 

29.0%

 

 

28,226

 

 

 

21.7%

 

 

(552 )

 

 

7.3%

EBITDA - precious metals

 

 

95,453

 

 

 

100.0%

 

 

130,195

 

 

 

100.0%

 

 

(34,742 )

 

 

0.0%

 

Company-wide

 

Three months ended June 30, 2022

 

 

Three months ended June 30, 2021

 

 

Change

 

 

Change as a % of Revenue

 

Gross revenue

 

 

3,587,925

 

 

 

100.0%

 

 

2,275,562

 

 

 

100.0%

 

 

1,312,363

 

 

 

0.0%

Cost of sales

 

 

(2,865,515 )

 

 

(79.9 )%

 

 

(2,079,164 )

 

 

(91.4 )%

 

 

(786,351 )

 

 

11.5%

Gross profit

 

 

722,410

 

 

 

20.1%

 

 

196,398

 

 

 

8.6%

 

 

526,012

 

 

 

11.5%

Operating expenses

 

 

(355,475 )

 

 

(9.7 )%

 

 

(428,588 )

 

 

(18.8 )%

 

 

73,113

 

 

 

8.9%

Income (loss) from operations

 

 

366,935

 

 

 

10.2%

 

 

(232,190 )

 

 

(10.2 )%

 

 

599,125

 

 

 

18.6

 

Non-operating income (expense)

 

 

(5,712 )

 

 

(0.2 )%

 

 

569,331

 

 

 

25.0%

 

 

(575,043

 

 

 

(25.2 )%

Net income (loss)

 

 

361,223

 

 

 

10.1%

 

 

337,141

 

 

 

14.8%

 

 

24,082

 

 

 

(4.7 )%

Interest expense

 

 

3,081

 

 

 

0.1%

 

 

880

 

 

 

0.0%

 

 

2,201

 

 

 

0.0%

Depreciation and amortization

 

 

231,057

 

 

 

6.4%

 

 

219,944

 

 

 

9.7%

 

 

11,113

 

 

 

(3.2 )%

EBITDA

 

 

595,360

 

 

 

16.6%

 

 

557,965

 

 

 

24.5%

 

 

37,395

 

 

 

(7.9 )%

 

 
Page 25 of 32

Table of Contents

 

EBIDTA schedules by business segment for the six months ended June 30, 2022 and June 30, 2021 is presented as follows.

 

Antimony - Combined USA and Mexico

 

Six months ended June 30, 2022

 

 

Six months ended June 30, 2021

 

 

$ Change

 

 

Change as a %

of Revenue

 

Gross antimony revenue

 

$5,301,011

 

 

 

100.0%

 

$2,086,046

 

 

 

100.0%

 

$3,214,965

 

 

 

0.0%

Cost of sales

 

 

(3,754,675 )

 

 

(70.8 )%

 

 

(2,060,801 )

 

 

(98.8 )%

 

 

(1,693,874 )

 

 

28.0%

Gross profit

 

 

1,546,336

 

 

 

29.2%

 

 

25,245

 

 

 

1.2%

 

 

1,521,091

 

 

 

28.0%

Operating expenses

 

 

(693,829 )

 

 

(13.1 )%

 

 

(958,203 )

 

 

(45.9 )%

 

 

264,374

 

 

 

32.8%

Income (loss) from operations

 

 

852,507

 

 

 

16.1%

 

 

(932,958 )

 

 

(44.7 )%

 

 

1,785,465

 

 

 

60.8%

Non-operating income (expense)

 

 

3,335 )

 

 

(0.1 )%

 

 

576,782

 

 

 

27.6%

 

 

(573,447 )

 

 

(27.6 )%

Net income (loss) - antimony

 

 

855,843

 

 

 

16.1%

 

 

(356,176 )

 

 

(17.1 )%

 

 

1,212,018

 

 

 

33.2%

Interest expense

 

 

3,688

 

 

 

0.1%

 

 

1,565

 

 

 

0.1%

 

 

2,123

 

 

 

(0.0 )%

Depreciation and amortization

 

 

302,763

 

 

 

5.7%

 

 

305,735

 

 

 

14.7%

 

 

(2,972 )

 

 

(8.9 )%

EBITDA - antimony

 

$1,162,294

 

 

 

21.9%

 

$(48,876 )

 

 

(2.3 )%

 

$1,211,169

 

 

 

24.3%

 

Zeolite

 

Six months ended June 30, 2022

 

 

Six months ended June 30, 2021

 

 

$ Change

 

 

Change as a %

of Revenue

 

Gross zeolite revenue

 

$1,694,433

 

 

 

100.0%

 

$1,236,375

 

 

 

100.0%

 

$458,058

 

 

 

0.0%

Cost of sales

 

 

(1,496,564 )

 

 

(88.3 )%

 

 

(1,003,663 )

 

 

(81.2 )%

 

 

(492,901 )

 

 

(7.1 )%

Gross profit - zeolite

 

 

197,869

 

 

 

11.7%

 

 

232,712

 

 

 

18.8%

 

 

(34,843 )

 

 

(7.1 )%

Operating expenses

 

 

(21,454 )

 

 

(1.3 )%

 

 

(24,268 )

 

 

(2.0 )%

 

 

2,814

 

 

 

0.7%

Income from operations

 

 

176,415

 

 

 

10.4%

 

 

208,444

 

 

 

16.9%

 

 

(32,029 )

 

 

(6.4 )%

Non-operating expenses

 

 

(2,375 )

 

 

(0.1 )%

 

 

(1,213 )

 

 

(0.1 )%

 

 

(1,162 )

 

 

(0.0 )%

Net income - zeolite

 

 

174,040

 

 

 

10.3%

 

 

207,231

 

 

 

16.8%

 

 

(33,191 )

 

 

(6.5 )%

Interest expense

 

 

2,375

 

 

 

0.1%

 

 

1,570

 

 

 

0.1%

 

 

805

 

 

 

0.0%

Depreciation and amortization

 

 

93,250

 

 

 

5.5%

 

 

80,843

 

 

 

6.5%

 

 

12,407

 

 

 

(1.0 )%

EBITDA - zeolite

 

$269,665

 

 

 

15.9%

 

$289,644

 

 

 

23.4%

 

$(19,979 )

 

 

(7.5 )%

 

 
Page 26 of 32

Table of Contents

 

Precious Metals

 

Six months ended June 30, 2022

 

 

Six months ended June 30, 2021

 

 

$ Change

 

 

Change as a %

of Revenue

 

Gross precious metals revenue

 

$172,787

 

 

 

100.0%

 

$206,428

 

 

 

100.0%

 

$(33,641 )

 

 

0.0%

Cost of sales

 

 

(55,194 )

 

 

(31.9 )%

 

 

(55,830 )

 

 

(27.0 )%

 

 

636

 

 

 

(4.9 )%

Gross profit - precious metals

 

 

117,593

 

 

 

68.1%

 

 

150,598

 

 

 

73.0%

 

 

(33,005 )

 

 

(4.9 )%

Operating expenses

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

Income from operations

 

 

117,593

 

 

 

68.1%

 

 

150,598

 

 

 

73.0%

 

 

(33,005 )

 

 

(4.9 )%

Non-operating expenses

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

Net income - precious metals

 

 

117,593

 

 

 

68.1%

 

 

150,598

 

 

 

73.0%

 

 

(33,005 )

 

 

(4.9 )%

Interest expense

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

Depreciation and amortization

 

 

55,194

 

 

 

31.9%

 

 

55,830

 

 

 

27.0%

 

 

(636 )

 

 

4.9%

EBITDA - precious metals

 

$172,787

 

 

 

100.0%

 

$206,428

 

 

 

100.0%

 

$(33,641 )

 

 

0.0%

 

Company-wide

 

Six months ended June 30, 2022

 

 

Six months ended June 30, 2021

 

 

Change

 

 

Change as a %

of Revenue

 

Gross revenue

 

$7,168,231

 

 

 

100.0%

 

$3,528,849

 

 

 

100.0%

 

$3,639,382

 

 

 

0.0%

Cost of sales

 

 

(5,306,433)

 

 

(74.0)%

 

 

(3,120,294)

 

 

(88.4)%

 

 

(2,186,139

 

 

 

14.4%

Gross profit

 

 

1,861,798

 

 

 

26.0%

 

 

408,555

 

 

 

11.6%

 

 

1,453,243

 

 

 

14.4%

Operating expenses

 

 

(715,283)

 

 

(10.0)%

 

 

(982,471)

 

 

(27.8)%

 

 

267,188

 

 

 

17.9%

Income (loss) from operations

 

 

1,146,515

 

 

 

16.0%

 

 

(573,916)

 

 

(16.3)%

 

 

1,720,431

 

 

 

32.3%

Non-operating income (expense)

 

 

960

 

 

 

(0.0)%

 

 

575,569

 

 

 

16.3%

 

 

(574,609)

 

 

(16.3)%

Net income

 

 

1,147,475

 

 

 

16.0%

 

 

1,653

 

 

 

0.0%

 

 

1,145,822

 

 

 

16.0%

Interest expense

 

 

6,063

 

 

 

0.1%

 

 

3,135

 

 

 

0.1%

 

 

2,928

 

 

 

(0.0)%

Depreciation and amortization

 

 

451,207

 

 

 

6.3%

 

 

442,408

 

 

 

12.5%

 

 

8,799

 

 

 

(6.2)%

EBITDA

 

$1,604,745

 

 

 

22.4%

 

$447,196

 

 

 

12.7%

 

$1,157,549

 

 

 

9.7%

 

 
Page 27 of 32

Table of Contents

 

LIQUIDITY AND FINANCIAL CONDITION

 

WORKING CAPITAL

 

June 30,

2022

 

 

December 31,

2021

 

Current assets

 

$24,126,852

 

 

$23,568,992

 

Current liabilities

 

 

(1,460,946)

 

 

(2,020,855)

Working capital

 

$22,665,906

 

 

$21,548,137

 

 

 

 

For the six months ended

 

CASH FLOWS

 

June 30,

2022

 

 

June 30,

2021

 

Cash flow provided (used) by operating activities

 

$745,038

 

 

$(2,236,609)

Cash flow used by investing activities

 

 

(13,775,850)

 

 

95,057

 

Cash flow provided (used) by financing activities

 

 

(19,767)

 

 

23,841,057

 

Net change in cash during period

 

$

(13,050,579

)

 

$21,699,505

 

 

As of June 30, 2022, the Company had cash and cash equivalents of hand of $8,369,750 which consisted of $8,312,469 in money market funds and deposit accounts along with $57,281 of restricted cash.

 

Net cash provided by operating activities was $745,038 for the six-month period ending June 30, 2022, compared with cash used by operating activities of $2,236,609 during the six-month period ended June 20, 2021. The $2,981,647 change in cash from operating activities is attributable to a decrease in existing inventories coupled with continuing strong revenue from antinomy sales which have more than doubled in the current year.

 

Net cash used by investing activities of $13,775,850 included the purchase of a caterpillar for the Bear River Zeolite operation and ongoing construction of a new warehouse in Preston, ID. The Company also invested $13,500,000 in a managed investment account, seeking to improve its return on investment versus maintaining deposits in a low-interest bearing money market account. The managed investment account  invests in primarily US Treasury Bonds and other fixed income funds.

 

Cash flow used by financing activities for the six months ended June 30, 2022 was $19,767 compared to a cash flow provided by financing activities of $23,841,057 for the six months ended June 30, 2021. In 2021, the Company raised $25,132,883 from the issuance of common stock and warrants and the exercise of warrants by existing shareholders. This capital raise was not recurring during the six months ended June 30, 2022.

 

For the year ending December 31, 2022, we are planning to use funds acquired from the two stock offerings raised in 2021 to make significant improvements to our operations at Madero, Puerto Blanco, Bear River Zeolite, and Thompson Falls facilities with the goal of increasing production and decreasing costs.

 

In the past, the Company has been successful in raising required capital from sale of common stock.  As a result of planned operations and potential equity sales and potential debt borrowings, management believes cash flows from operations and existing cash and investments are sufficient to conduct planned operations and meet contractual obligations for the next 12 months.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

The Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to its stockholders.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

The Company does not hold any derivative instruments and does not engage in any hedging activities.

 

 
Page 28 of 32

Table of Contents

 

ITEM 4. CONTROLS AND PROCEDURES

 

Conclusions of Management Regarding Effectiveness of Disclosure Controls and Procedures

 

At the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the President and Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), of the effectiveness of the design and operations of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based on that evaluation, the PEO and the PFO have concluded that as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective as it was determined that there were material weaknesses affecting our disclosure controls and procedures. 

 

Management of the Company believes that these material weaknesses are due to the small size of the Company’s accounting staff. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As the Company grows, management expects to increase the number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes during the quarter ended June 30, 2022 in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

 

 
Page 29 of 32

Table of Contents

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

United States Antimony Corporation is not a party to any material legal proceedings, and, to Management’s knowledge, no such proceedings are threatened or contemplated. No director, officer or affiliate of United States Antimony Corporation and no owner of record or beneficial owner of more than 5% of the Company’s securities or any associate of any such director, officer or security holder is a party adverse to United States Antimony Corporation or has a material interest adverse to United States Antimony Corporation in reference to pending litigation.

 

ITEM 1A. RISK FACTORS.

 

There have been no material changes from the risk factors as previously disclosed in the Company’s Form 10-K for the year ended December 31, 2021 which was filed with the SEC on March 31, 2022.

 

ITEM 2. RECENT SALES OF UNREGISTERED SECURITIES.

 

For the three months ended June 30, 2022, the Company sold no common stock.

 

During the three months ended June 30, 2022, neither the Company nor any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) purchased any shares of our Common Stock, the only class of the Company’s equity securities registered pursuant to section 12 of the Exchange Act at the date of this filing.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None

 

ITEM 4. MINE SAFETY DISCOSURES.

 

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. 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

 

 
Page 30 of 32

Table of Contents

 

ITEM 6. EXHIBITS.

 

Exhibit No.

 

Description

31.1

 

Rule 15d-14(a) Certification by Principal Executive Officer

31.2

 

Rule 15d-14(a) Certification by Principal Financial Officer

32.1

 

Section 1350 Certification of Principal Executive Officer

32.2

 

Section 1350 Certification of Principal Financial Officer

95

 

Mine Safety Disclosure

101.INS

 

Inline XBRL Instance Document.

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

 

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

 

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

In accordance with Rule 402 of Regulation S-T, the XBRL information included in Exhibit 101 to this Form 10-Q shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

 
Page 31 of 32

Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

UNITED STATES ANTIMONY CORPORATION

 

 

Date: August 16, 2022

By:

/s/ Russell Lawrence

 

 

 

Russell Lawrence

 

 

 

(Principal Executive Officer, President and Director)

 

 

 

 

 

Date: August 16, 2022

By:

/s/ Kelly J. Stopher

 

 

 

Kelly J. Stopher

 

 

 

(Principal Accounting Officer)

 

 

 
Page 32 of 33