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UNITED STATES ANTIMONY CORP - Quarter Report: 2023 September (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 September 30, 2023

 

☐    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 registrant 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

(Registrant’s telephone number)

 

Securities registered pursuant to Section 12(b) of the Act: 

 

 

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

 

Indicate by checkmark whether the registrant has submitted electronically 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 November 10, 2023, there were 107,647,317 shares outstanding of the registrant’s $0.01 par value common stock.

 

 

 

 

Contents

 

PART I - FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

ITEM 1.

FINANCIAL STATEMENTS

 

 

3

 

 

 

 

 

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.

 

 

14

 

 

 

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

 

23

 

 

 

 

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES

 

 

23

 

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS.

 

 

24

 

 

 

 

 

 

 

ITEM 1A.

RISK FACTORS.

 

 

24

 

 

 

 

 

 

 

ITEM 2.

RECENT SALES OF UNREGISTERED SECURITIES.

 

 

24

 

 

 

 

 

 

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

 

 

24

 

 

 

 

 

 

 

ITEM 4.

MINE SAFETY DISCOSURES.

 

 

24

 

 

 

 

 

 

 

ITEM 5.

OTHER INFORMATION.

 

 

24

 

 

 

 

 

 

 

ITEM 6.

EXHIBITS.

 

 

25

 

 

 
2

Table of Contents

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS  

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

September 30,  

 

 

December 31,  

 

 

 

2023 

 

 

2022 

 

ASSETS 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents 

 

$12,864,992

 

 

$19,060,378

 

Certificates of deposit 

 

 

259,856

 

 

 

259,857

 

Accounts receivable, net 

 

 

1,390,437

 

 

 

784,457

 

Inventories  

 

 

1,876,555

 

 

 

1,375,068

 

Prepaid expenses and other current assets 

 

 

236,966

 

 

 

137,599

 

Total current assets 

 

$16,628,806

 

 

$21,617,359

 

Properties, plants and equipment, net 

 

 

12,933,542

 

 

 

12,128,124

 

Restricted cash for reclamation bonds 

 

 

57,288

 

 

 

57,288

 

IVA receivable and other assets 

 

 

1,307,094

 

 

 

897,679

 

Total assets 

 

$30,926,730

 

 

$34,700,450

 

LIABILITIES AND STOCKHOLDERS’ EQUITY 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES: 

 

 

 

 

 

 

 

 

Accounts payable 

 

$606,300

 

 

$628,803

 

Accrued liabilities 

 

 

224,151

 

 

 

212,654

 

Accrued liabilities – directors 

 

 

279,244

 

 

 

61,458

 

Royalties payable 

 

 

107,937

 

 

 

435,075

 

Dividends payable 

 

 

-

 

 

 

787,730

 

Long-term debt, current portion 

 

 

62,064

 

 

 

94,150

 

Total current liabilities  

 

$1,279,696

 

 

$2,219,870

 

NON-CURRENT LIABILITIES: 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion 

 

 

179,892

 

 

 

217,855

 

Stock payable to directors for services 

 

 

43,750

 

 

 

61,459

 

Asset retirement obligations and accrued reclamation costs 

 

 

342,114

 

 

 

332,011

 

Total liabilities 

 

$1,845,452

 

 

$2,831,195

 

COMMITMENTS AND CONTINGENCIES (NOTE 8) 

 

 

 

 

 

 

 

 

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 $965,625 and $960,000, 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: 0 and 1,692,672 shares issued and outstanding (liquidation preference $0 and $5,019,410, respectively) 

 

 

-

 

 

 

16,926

 

Common stock, $0.01 par value; 150,000,000 shares authorized; 107,647,317 shares issued and outstanding at September 30, 2023 and 106,373,341 shares issued and outstanding at December 31, 2022 

 

 

1,076,472

 

 

 

1,063,732

 

Additional paid-in capital 

 

 

63,853,836

 

 

 

64,052,630

 

Shares to be returned to treasury 

 

 

-

 

 

 

(202,980)

Accumulated deficit 

 

 

(35,858,309)

 

 

(33,070,332)

Total stockholders’ equity 

 

 

29,081,278

 

 

 

31,869,255

 

Total liabilities and stockholders’ equity 

 

$30,926,730

 

 

$34,700,450

 

 

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

 

 
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Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

Three months ended

September 30,

 

 

Nine months ended

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUE

 

$2,313,491

 

 

$2,463,984

 

 

$7,027,908

 

 

$9,624,611

 

COST OF REVENUE

 

 

3,374,563

 

 

 

2,033,066

 

 

 

8,328,503

 

 

 

7,339,499

 

GROSS PROFIT (LOSS)

 

$(1,061,072)

 

$430,918

 

 

$(1,300,595)

 

$2,285,112

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$301,077

 

 

$108,538

 

 

$821,036

 

 

$489,810

 

Salaries and benefits

 

 

228,967

 

 

 

76,811

 

 

 

502,071

 

 

 

222,858

 

Other operating expenses

 

 

66,637

 

 

 

91,405

 

 

 

217,985

 

 

 

109,365

 

Professional fees

 

 

166,808

 

 

 

93,678

 

 

 

504,819

 

 

 

263,682

 

TOTAL OPERATING EXPENSES

 

$763,489

 

 

$370,432

 

 

$2,045,911

 

 

$1,085,715

 

INCOME (LOSS) FROM OPERATIONS

 

$(1,824,561)

 

$60,486

 

 

$(3,346,506)

 

$1,199,397

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and investment income

 

$176,656

 

 

$15,064

 

 

$466,809

 

 

$54,770

 

Change in fair value of investments

 

 

-

 

 

 

(25,840)

 

 

-

 

 

 

(119,298)

Trademark and licensing income

 

 

6,117

 

 

 

4,899

 

 

 

25,023

 

 

 

65,674

 

Other miscellaneous income (expense)

 

 

(2,740)

 

 

(4,207)

 

 

66,697

 

 

 

(10,270)

TOTAL OTHER INCOME (EXPENSE)

 

$180,033

 

 

$(10,084)

 

$558,529

 

 

$(9,124)

NET INCOME (LOSS)

 

$(1,644,528)

 

$50,402

 

 

$(2,787,977)

 

$1,190,273

 

Preferred dividends

 

 

(1,875)

 

 

(11,819)

 

 

(5,625)

 

 

(35,458)

Net income (loss) available to common stockholders

 

$(1,646,403)

 

$38,583

 

 

$(2,793,602)

 

$1,154,815

 

Net income (loss) per share of common stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$(0.02)

 

 $                   Nil

 

 

$(0.03)

 

$0.01

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

107,647,317

 

 

 

106,293,842

 

 

 

107,519,786

 

 

 

106,258,384

 

Diluted

 

 

107,647,317

 

 

 

106,293,842

 

 

 

107,519,786

 

 

 

106,258,384

 

 

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

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

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

For the three and nine months ended September 30, 2023 and 2022

 

 

 

 

 

 

 

 

Additional

 

 

Shares to be

 

 

 

 

 

Total

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid in

 

 

Returned to

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Treasury

 

 

Deficit

 

 

Equity

 

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

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

353,619

 

 

 

353,619

 

BALANCE, June 30, 2022

 

 

2,620,576

 

 

 

26,205

 

 

 

106,240,361

 

 

 

1,062,402

 

 

 

63,991,459

 

 

 

-

 

 

 

(31,571,392)

 

 

33,508,674

 

Issuance of common stock for director fees

 

 

-

 

 

 

-

 

 

 

132,980

 

 

 

133

 

 

 

62,368

 

 

 

-

 

 

 

-

 

 

 

62,501

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

50,402

 

 

 

50,402

 

BALANCE, September 30, 2022

 

 

2,620,576

 

 

$26,205

 

 

 

106,373,341

 

 

$1,062,535

 

 

$64,053,827

 

 

$-

 

 

$(31,520,990)

 

$33,621,577

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, December 31, 2022

 

 

2,620,576

 

 

$26,205

 

 

 

106,373,341

 

 

$1,063,732

 

 

$64,052,630

 

 

$(202,980)

 

$(33,070,332)

 

$31,869,255

 

Common stock buyback and retirement

 

 

-

 

 

 

-

 

 

 

(418,696)

 

 

(4,187)

 

 

(198,793)

 

 

202,980

 

 

 

-

 

 

 

-

 

Conversion of Preferred Series D to Common Stock

 

 

(1,692,672)

 

 

(16,926)

 

 

1,692,672

 

 

 

16,927

 

 

 

(1)

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(806,984)

 

 

(806,984)

BALANCE, March 31, 2023

 

 

927,904

 

 

 

9,279

 

 

 

107,647,317

 

 

 

1,076,472

 

 

 

63,853,836

 

 

 

-

 

 

 

(33,877,316)

 

 

31,062,271

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(336,465)

 

 

(336,465)

BALANCE, June 30, 2023

 

 

927,904

 

 

 

9,279

 

 

 

107,647,317

 

 

 

1,076,472

 

 

 

63,853,836

 

 

 

-

 

 

 

(34,213,781)

 

 

30,725,806

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,644,528)

 

 

(1,644,528)

BALANCE, September 30, 2023

 

 

927,904

 

 

$9,279

 

 

 

107,647,317

 

 

$1,076,472

 

 

$63,853,836

 

 

$-

 

 

$(35,858,309)

 

$29,081,278

 

 

 

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

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

Nine months ended

September 30,

 

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income (loss)

 

$(2,787,977)

 

$1,190,273

 

Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

714,302

 

 

 

693,990

 

Accretion of asset retirement obligation

 

 

10,103

 

 

 

14,589

 

Write down of inventory to net realizable value

 

 

883,390

 

 

 

409,919

 

Provision for losses on receivables

 

 

43,560

 

 

 

-

 

Change in fair value of investments

 

 

-

 

 

 

119,298

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(649,540)

 

 

(559,000)

Inventories

 

 

(1,384,877)

 

 

(182,457)

Prepaid expenses and other current assets

 

 

(99,367)

 

 

(187,937)

IVA receivable and other assets

 

 

(409,414)

 

 

(605,047)

Accounts payable

 

 

(22,503)

 

 

(923,490)

Accrued liabilities

 

 

11,497

 

 

 

530

 

Accrued liabilities – directors

 

 

200,077

 

 

 

52,248

 

Royalties payable

 

 

(327,138)

 

 

-

 

Net cash provided (used) by operating activities

 

$(3,817,887)

 

$22,916

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of investments

 

$-

 

 

$(13,500,000)

Proceeds from sales of investments

 

 

-

 

 

 

407,149

 

Purchase of properties, plants and equipment

 

 

(1,519,720)

 

 

(592,221)

Net cash used by investing activities

 

$(1,519,720)

 

$(13,685,072)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Principal payments of long-term debt

 

$(70,049)

 

$(42,080)

Dividends paid

 

 

(787,730)

 

 

-

 

Net cash used by financing activities

 

$(857,779)

 

$(42,080)

NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

$(6,195,386)

 

$(13,704,236)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

 

$19,117,666

 

 

$21,420,329

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

 

$12,922,280

 

 

$7,716,093

 

 

 

 

 

 

 

 

 

 

NON-CASH FINANCING AND INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Common stock retirement

 

$202,980

 

 

$-

 

Conversion of Preferred Series D to Common Stock

 

$16,927

 

 

$-

 

Equipment purchased with note payable

 

$-

 

 

$161,600

 

Issuance of common stock for directors fees

 

$-

 

 

$62,501

 

 

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

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2023

 

NOTE 1 - NATURE OF OPERATIONS

 

United States Antimony Corporation and its subsidiaries in the U.S. and Mexico (“USAC”, the “Company”, “Our”, or “we”) sell processed antimony, zeolite, and precious metals products in the U.S. and abroad. The Company processes antimony ore in the U.S. and Mexico primarily into antimony oxide and antimony metal at its facilities in Montana and Mexico. Our antimony oxide is used to form a flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings and paper, as a color fastener in paint, and as a phosphorescent agent in fluorescent light bulbs. Our antimony metal is used in bearings, storage batteries, and ordnance. In its operations in Idaho, the Company mines and processes zeolite, a group of industrial minerals used in soil amendment and fertilizer, water filtration, sewage treatment, nuclear waste and other environmental cleanup, odor control, gas separation, animal nutrition, and other miscellaneous applications.

 

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

In the opinion of the management, 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 September 30, 2023, and its results of operations and cash flows for the three and nine months ended September 30, 2023 and 2022. The condensed consolidated balance sheet as of December 31, 2022, 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 nine-month periods ended September 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023.

 

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, 2022 filed with the Securities and Exchange Commission on July 18, 2023.

 

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. These accounting policies conform to U.S. GAAP and have been consistently applied in the preparation of the financial statements.

 

Reclassifications

 

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

 

Recent Accounting Pronouncements

 

Management does not believe that any recently issued but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

 

Recently Adopted Accounting Pronouncements:

 

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The FASB has subsequently issued updates to the standard to provide additional clarification on specific topics. The Company adopted the ASU on January 1, 2023 and determined that it had no material impact on the Company’s unaudited condensed consolidated financial statements and disclosures.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2023

 

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 convertible preferred stock, stock options, and warrants.

 

At September 30, 2023 and 2022, the potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive were as follows:

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

Warrants

 

 

12,346,215

 

 

 

12,346,215

 

Convertible preferred stock

 

 

-

 

 

 

1,692,672

 

TOTAL POSSIBLE DILUTIVE SHARES

 

 

12,346,215

 

 

 

14,038,887

 

 

 

 NOTE 4 – REVENUE RECOGNITION

 

Products consist of the following:

 

 

·

Antimony: includes antimony oxide, 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 September 30, 2023 and 2022 were as follows:

 

 

 

For the three months ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

Antimony

 

$1,641,666

 

 

$1,671,301

 

Zeolite

 

 

671,825

 

 

 

792,683

 

Precious metals

 

 

-

 

 

 

-

 

TOTAL REVENUE

 

$2,313,491

 

 

$2,463,984

 

 

Sales of products for the nine months ended September 30, 2023 and 2022 were as follows:

 

 

 

For the nine months ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

Antimony

 

$4,844,466

 

 

$6,972,312

 

Zeolite

 

 

1,941,009

 

 

 

2,487,116

 

Precious metals

 

 

242,433

 

 

 

165,183

 

TOTAL REVENUE

 

$7,027,908

 

 

$9,624,611

 

 

The Company’s trade accounts receivable balance related to contracts with customers was $1,390,437 at September 30, 2023 and $784,457 at December 31, 2022. The Company’s allowance for doubtful accounts related to trade accounts receivables was $75,000 at September 30, 2023 and $31,440 at December 31, 2022. The Company’s products do not involve any warranty agreements and product returns are not typical.

 

 
8

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2023

 

NOTE 5 – INVENTORIES

 

Inventories at September 30, 2023 and December 31, 2022 consisted primarily of finished antimony metal and oxide products, antimony ore and concentrates, and finished zeolite products. Inventories are stated at the lower of first-in, first-out cost or estimated net realizable value. Finished antimony metal and oxide products and finished zeolite products costs include raw materials, direct labor, processing facility overhead costs and freight. Inventories at September 30, 2023 and December 31, 2022 were as follows:

 

 

 

September 30,

 2023

 

 

December 31,

2022

 

Antimony Metal

 

$503,873

 

 

$142,230

 

Antimony Oxide

 

 

128,945

 

 

 

509,643

 

Antimony Ore and Concentrates

 

 

867,049

 

 

 

545,373

 

Total antimony

 

$1,499,867

 

 

$1,197,246

 

Zeolite

 

 

376,688

 

 

 

177,822

 

 TOTAL INVENTORIES

 

$1,876,555

 

 

$1,375,068

 

 

 

 

At September 30, 2023 and December 31, 2022, inventories were valued at cost, except for inventory related to Mexican operations, which was 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 antimony contained in inventory. The adjustment to inventory for net realizable value was $883,390 and $409,919 for the nine months ended September 30, 2023 and 2022, respectively. The adjustment to inventory for net realizable value was $427,152 and $273,083 for the three months ended September 30, 2023 and 2022, respectively.

 

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

 

NOTE 6 – PROPERTIES, PLANTS AND EQUIPMENT

 

The major components of the Company’s properties, plants and equipment by segment at September 30, 2023 and December 31, 2022 were as follows:

 

 

 

Antimony Segment

 

 

Zeolite Segment

 

 

Precious Metals

 

 

 

 

September 30, 2023

 

USAC

 

 

USAMSA

 

 

BRZ

 

 

Segment

 

 

TOTAL

 

Plant and equipment

 

$1,822,775

 

 

$9,459,098

 

 

$5,464,280

 

 

$1,347,912

 

 

$18,094,065

 

Buildings

 

 

243,248

 

 

 

875,024

 

 

 

2,025,043

 

 

 

-

 

 

 

3,143,315

 

Land and other

 

 

2,431,387

 

 

 

2,886,037

 

 

 

16,753

 

 

 

-

 

 

 

5,334,177

 

Total

 

$4,497,410

 

 

$13,220,159

 

 

$7,506,076

 

 

$1,347,912

 

 

$26,571,557

 

Accumulated depreciation

 

 

(2,796,806)

 

 

(6,625,450)

 

 

(3,582,124)

 

 

(633,635)

 

 

(13,638,015)

Properties, Plants, and Equipment, Net

 

$1,700,604

 

 

$6,594,709

 

 

$3,923,952

 

 

$714,277

 

 

$12,933,542

 

 

 

 

Antimony Segment

 

 

Zeolite Segment

 

 

Precious Metals

 

 

 

 

December 31, 2022

 

USAC

 

 

USAMSA

 

 

BRZ

 

 

Segment

 

 

TOTAL

 

Plant and equipment

 

$1,760,926

 

 

$9,090,860

 

 

$4,996,216

 

 

$1,347,912

 

 

$17,195,914

 

Buildings

 

 

243,248

 

 

 

870,534

 

 

 

1,047,023

 

 

 

-

 

 

 

2,160,805

 

Land and other

 

 

2,431,387

 

 

 

2,796,037

 

 

 

16,753

 

 

 

-

 

 

 

5,244,177

 

Construction in progress

 

 

-

 

 

 

280,406

 

 

 

170,535

 

 

 

-

 

 

 

450,941

 

Total 

 

$4,435,561

 

 

$13,037,837

 

 

$6,230,527

 

 

$1,347,912

 

 

$25,051,837

 

Accumulated depreciation

 

 

(2,767,803)

 

 

(6,212,433)

 

 

(3,392,861)

 

 

(550,616)

 

 

(12,923,713)

Properties, Plants, and Equipment, Net 

 

$1,667,758

 

 

$6,825,404

 

 

$2,837,666

 

 

$797,296

 

 

$12,128,124

 

 

 
9

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2023

 

At September 30, 2023 and December 31, 2022, the Company had $280,406 and $1,117,041, respectively, of assets that were not yet placed in service and were not yet depreciated.

 

NOTE 7 – DEBT

 

Long term debt at September 30, 2023 and December 31, 2022 was as follows:

 

 

 

September 30,

2023

 

 

December 31,

2022

 

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

 

$192,589

 

 

$201,908

 

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

 

 

49,367

 

 

 

110,097

 

Total debt

 

$241,956

 

 

$312,005

 

Less current portion of debt

 

 

(62,064)

 

 

(94,150)

Long term portion of debt

 

$179,892

 

 

$217,855

 

 

At September 30, 2023, principal payments on debt were due as follows:

 

Twelve months ending September 30,

 

Principal payment

 

2024

 

$62,064

 

2025

 

$12,998

 

2026

 

$13,293

 

2027

 

$153,601

 

 

 

$241,956

 

 

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

The Company follows U.S. GAAP guidance in determining its accruals and disclosures with respect to loss contingencies and evaluates 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 loss 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.

 

Historically, 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 September 30, 2023 and December 31, 2022, the Company had no accrued liabilities relating to such assessments. Bear River Zeolite Company (“BRZ”), a wholly owned subsidiary of the Company, received twelve significant and substantial citations from MSHA in September and October of 2023. BRZ rectified the matters noted in eight of the twelve citations and received termination dates for these eight citations from MSHA. The Company is working to rectify the four remaining citations; however, the outcome of these citations as well as the impact on the Company’s results of operations or financial position is unknown.

 

The Company pays various royalties that, on a combined basis, generally vary around 8% to 13% of zeolite products sold. At September 30, 2023 and December 31, 2022, the Company had accrued royalties payable of $107,937 and $435,075, respectively. The decrease in royalties payable in 2023 was primarily due to the Company finalizing its estimates and paying a royalty obligation in 2023 that had been accumulating since 2016.

 

 
10

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2023

 

On August 8, 2022, the Company executed a preliminary 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 agreed to pay Wadley eight monthly installments of $10,000 plus VAT for the right to mine and conduct geological and resource studies as due diligence and exploration on the Wadley Property. At the end of such eight-month period, should the Company choose to exercise its option to acquire following due diligence and assessment of geological and resource studies, the Company agreed to pay Wadley $2,230,000 and seven annual payments of $1,160,000. The due diligence period under the Agreement was extended to October 15, 2023. After evaluation in October 2023 of Wadley Property information and the Agreement, the Company officially notified Wadley on October 12, 2023 that it did not intend to acquire the Wadley Property and terminated this Agreement. During the fourth quarter of 2023, the Company expects to incur a loss on disposal of assets of approximately $130,000 related to the termination of this Agreement.

 

Mexican Tax Assessment

 

In 2015, the Mexican tax authority (“SAT”) initiated an audit of the USAMSA’s 2013 income tax return. In October 2016, as a result of its audit, SAT assessed the Company $13.8 million pesos, which was approximately $666,400 in U.S. Dollars (“USD”) as of December 31, 2016. SAT’s assessment was based on the disallowance of specific costs that the Company deducted on the 2013 USAMSA income tax return. The assessment was settled in 2018 with no assessment due from the Company.

 

In early 2019, the Company was notified that SAT re-opened its assessment of USAMSA’s 2013 income tax return and, in November 2019, SAT assessed the Company $16.3 million pesos, which was approximately $795,000 USD as of December 31, 2021.

 

Management reviewed the 2019 assessment notice from SAT and, similar to the earlier assessment, believes the findings have no merit. An appeal was filed by the Company in November 2019 suspending SAT from taking immediate action regarding the assessment. The Company posted a guarantee of the amount in March 2020 as is required under the appeal process. In August 2020, the Company filed a lawsuit against SAT for resolution of the process and, in December 2020, filed closing arguments.  In 2022, the Mexican court ruled against the Company in the above matter. The Company subsequently appealed the ruling, which is still pending.

 

As of September 30, 2023, the updated SAT assessment was approximately $22 million pesos, which was approximately $1,262,000 USD, comprising $343,000 of unpaid income taxes and $919,000 of interest and penalties. Management, along with its legal counsel, assessed the possible outcomes for this tax audit and believes, based on discussions with its tax attorneys located 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, 2023 or December 31, 2022 relating to this potential tax liability. However, 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 the SAT audit is resolved in a manner inconsistent with management expectations, the Company will record changes to tax liabilities and tax expense associated with the assessment. Also, the Company will recognize penalties associated with the assessment in general and administrative expense and interest associated with the assessment will be recorded as interest expense.

 

NOTE 9 – STOCKHOLDERS’ EQUITY

 

On January 25, 2023, the holders of 1,692,672 shares of Series D Preferred stock converted their respective preferred shares and the Company issued 1,692,672 shares of common stock.  The Company also paid the holders $787,730 for dividends payable as declared on November 28, 2022. 1,590,672 shares of the 1,692,672 shares of Series D Preferred stock that were converted and $740,261 of the $787,730 of dividends paid related to the estate of John Lawrence, who was a prior President and Chairman of the Company.

 

On January 26, 2023, in conjunction with its share repurchase plan, the Company returned to treasury and cancelled 418,696 of its common shares which were repurchased prior to December 31, 2022 for $202,980.

 

 
11

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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2023

 

Common stock warrants

 

No warrants were issued, expired, or exercised during the nine months ended September 30, 2023 and 2022.

 

The composition of the Company’s warrants outstanding at September 30, 2023 and December 31, 2022 were as follows:

 

Number of warrants

 

 

Exercise Price

 

 

Expiration Date

 

Remaining life in years

 

 

2,285,715

 

 

 

0.46

 

 

7/31/25

 

 

1.84

 

 

804,000

 

 

 

0.46

 

 

1/27/26

 

 

2.33

 

 

7,650,000

 

 

 

0.85

 

 

8/3/26

 

 

2.84

 

 

1,606,500

 

 

 

0.85

 

 

2/1/26

 

 

2.34

 

 

12,346,215

 

 

 

 

 

 

 

 

 

 

 

 

NOTE 10 – BUSINESS SEGMENTS

 

The Company is organized and managed with four business 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 to customers in the United States or shipped to the United States operation for finishing at the Company’s plant near Thompson Falls, Montana. The Puerto Blanco mill in Mexico is the site of our crushing and flotation plant, and a cyanide leach plant which recovers 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 is produced. The zeolite operation produces zeolite near Preston, Idaho. Almost all sales of products from the United States antimony and zeolite operations are to customers in the United States. Sales to foreign customers are primarily to customers in Canada.

 

Total Assets:

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Antimony

 

 

 

 

 

 

United States

 

$16,253,362

 

 

$21,636,386

 

Mexico

 

 

9,100,457

 

 

 

8,484,131

 

Subtotal antimony

 

$25,353,819

 

 

$30,120,517

 

Precious metals

 

 

 

 

 

 

 

 

United States

 

 

201,338

 

 

 

172,004

 

Mexico

 

 

553,981

 

 

 

625,292

 

Subtotal precious metals

 

$755,319

 

 

$797,296

 

Zeolite

 

$4,817,592

 

 

$3,782,637

 

TOTAL ASSETS

 

$30,926,730

 

 

$34,700,450

 

 

 
12

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2023

 

Capital expenditures:

 

For the three months ended

September 30,

 

 

For the nine months ended

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Antimony

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$-

 

 

$1,655

 

 

$61,849

 

 

$81,931

 

Mexico

 

 

30,000

 

 

 

151,559

 

 

 

182,322

 

 

 

163,125

 

Subtotal antimony

 

$30,000

 

 

$153,214

 

 

$244,171

 

 

$245,056

 

Precious metals

 

 

-

 

 

 

-

 

 

 

-

 

 

 

17,518

 

Zeolite

 

 

141,864

 

 

 

56,008

 

 

 

1,275,549

 

 

 

491,247

 

Total capital expenditures

 

$171,864

 

 

$209,222

 

 

$1,519,720

 

 

$753,821

 

 

Segment operations for the three months ended September 30, 2023

 

Antimony - USA

 

 

Antimony -Mexico

 

 

Total Antimony

 

 

Precious Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$1,391,733

 

 

$249,933

 

 

$1,641,666

 

 

$-

 

 

$671,825

 

 

$2,313,491

 

Depreciation and amortization

 

$10,360

 

 

$137,735

 

 

$148,095

 

 

$27,673

 

 

$73,193

 

 

$248,961

 

Income (loss) from operations

 

$47,534

 

 

$(1,465,000)

 

$(1,417,466)

 

$(27,673)

 

$(379,422)

 

$(1,824,561)

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$180,033

 

NET LOSS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(1,644,528)

 

Segment operations for the three months ended September 30, 2022

 

Antimony - USA

 

 

Antimony -Mexico

 

 

Total Antimony

 

 

Precious Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$1,671,301

 

 

$-

 

 

$1,671,301

 

 

$-

 

 

$792,683

 

 

$2,463,984

 

Depreciation and amortization

 

$10,262

 

 

$154,238

 

 

$164,500

 

 

$27,673

 

 

$50,610

 

 

$242,783

 

Income (loss) from operations

 

$802,817

 

 

$(817,746)

 

$(14,929)

 

$(27,763)

 

$103,088

 

 

$60,486

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(10,084)

NET INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$50,402

 

 

Segment operations for the nine months ended September 30, 2023

 

Antimony - USA

 

 

Antimony -Mexico

 

 

Total Antimony

 

 

Precious Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$4,356,077

 

 

$488,389

 

 

$4,844,466

 

 

$242,433

 

 

$1,941,009

 

 

$7,027,908

 

Depreciation and amortization

 

$29,002

 

 

$413,019

 

 

$442,021

 

 

$83,019

 

 

$189,262

 

 

$714,302

 

Income (loss) from operations

 

$(207,907)

 

$(2,877,838)

 

$(3,085,745)

 

$159,414

 

 

$(420,175)

 

$(3,346,506)

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$558,529

 

NET LOSS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(2,787,977)

 

Segment operations for the nine months ended September 30, 2022

 

Antimony - USA

 

 

Antimony -Mexico

 

 

Total Antimony

 

 

Precious Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$6,144,490

 

 

$827,822

 

 

$6,972,312

 

 

$165,183

 

 

$2,487,116

 

 

$9,624,611

 

Depreciation and amortization

 

$30,832

 

 

$436,431

 

 

$467,263

 

 

$82,867

 

 

$143,860

 

 

$693,990

 

Income (loss) from operations

 

$2,314,965

 

 

$(1,477,387)

 

$837,578

 

 

$82,316

 

 

$279,503

 

 

$1,199,397

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(9,124)

NET INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$1,190,273

 

 

 
13

Table of Contents

 

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;

 

·

The mineral operations being subject to government regulation;

 

·

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

 

·

Mineral exploration and development activities;

 

·

Mineral estimates;

 

·

The Company’s insurance coverage for operating risks;

 

·

The fluctuation of prices for precious and base metals, such as gold and silver;

 

·

The competitive industry of mineral exploration;

 

·

The title and rights in the Company’s mineral properties;

 

·

Environmental hazards;

 

·

The possible dilution of the Company’s common stock from additional financing activities;

 

·

Metallurgical and other processing problems;

 

·

Unexpected geological formations;

 

·

Global economic and political conditions;

 

·

Staffing in remote locations;

 

·

Changes in product costing;

 

·

Inflation on operational costs and profitability;

 

·

Competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, flooding, landslides, power outages, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities);

 

·

Global pandemics or civil unrest;

 

·

Mexican labor and cartel issues regarding safety and organized control over our properties;

 

·

The positions and associated outcomes of Mexican and other taxing authorities;

 

·

The possible dilution of the Company’s common stock from additional financing activities;

 

·

Potential conflicts of interest with the Company’s management; and

 

·

The Company’s common stock.

 

 
14

Table of Contents

 

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. If 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.

 

 As used in this Quarterly Report, the terms “we,” “us,” “our,” “United State Antimony Corporation,”, “US Antimony,” “USAC,” 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.

 

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 ending December 31, 2022. The following statements may be forward-looking in nature and actual results may differ materially.

 

DESCRIPTION OF BUSINESS

 

History

 

United States Antimony Corporation was incorporated in Montana in January 1970 to mine and produce antimony products. In December 1983, the Company suspended antimony ore mining operations in the U.S. but continued to produce antimony products using foreign sources of antimony ore. In April 1998, the Company formed United States Antimony Mexico SA de CV (“USAMSA”) to smelt antimony in Mexico, and, in August 2005, the Company formed Antimonio de Mexico, S. A. de C. V. (“ADM”) to explore and develop antimony and silver deposits in Mexico. The Company formed Bear River Zeolite Company (“BRZ”) in 2000 for the purpose of mining and producing zeolite in southeastern Idaho. Our principal business is the production and sale of antimony, silver, gold, and zeolite products. In May 2012, our shares of common stock started trading on the NYSE MKT (now NYSE AMERICAN) under the symbol UAMY.

 

Although we extract minerals from the Los Juarez, Mexico antimony property and the Bear River, Idaho zeolite property that we later process and sell, each of our properties is classified under Regulation S-K Item 1300 as an exploration stage property and the Company is classified as an exploration stage issuer because we have not prepared a technical report summary for any of our properties making a determination that the property contains proven mineral reserves or probable mineral reserves.

 

 
15

Table of Contents

 

Antimony Segment

 

The Burns Mining District of Sanders County, MT, which is approximately 15 miles west of Thompson Falls, MT, is the location of one of our antimony smelters and precious metals plants. We hold 2 patented claims, where the plant is located. Mining was suspended at this site in December 1983, because antimony ore could be purchased more economically from foreign sources; currently, the environmental permitting process precludes any mining at this site.

 

Since 1983, we have relied on foreign sources for antimony ore, 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 also depend on foreign companies for antimony ore. We anticipate continuing to receive antimony from our owned and leased properties in Mexico and from foreign suppliers in Canada, Mexico, and Central America, assuming economics are profitable. 

 

In Montana, we primarily produce antimony oxide, antimony metal, antimony trisulfide, and precious metals. Our antimony oxide is used in conjunction with a halogen to form a synergistic flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings, and paper. Our antimony oxide is also used as a color fastener in paint and as a phosphorescent agent in fluorescent light bulbs. Our antimony metal is used in bearings, storage batteries and ordnance. Our antimony trisulfide is used as a primer in ammunition.

 

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 approximately 92% of the world antimony demand. We believe we are competitive both domestically and worldwide due to the following factors:

 

 

·

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 U.S. producer of antimony products.

 

 

 

 

·

We can ship on short notice to domestic customers.

 

 

 

 

·

Our smelter in Coahuila is the largest operating antimony smelter in Mexico or the United States with a current maximum processing capacity of approximately 32,600 pounds of antimony ore per day.

 

Zeolite Segment

 

We own 100% of BRZ. BRZ has a lease with Zeolite LLC (f/k/a 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. The annual royalty payment is the greater of: (1) the minimum annual royalty of $60,000, adjusted annually for the Consumer Price Index for all Urban Consumers, or (2) $11.00 per ton for the first ten thousand tons, $9.90 per ton for tons in excess of ten thousand up to twenty thousand, and $8.80 per ton for tons in excess of twenty thousand. This Zeolite LLC lease also requires BRZ to pay $10,000 to the lessor on March 1 of each year during the term of the lease which ends March 1, 2025. BRZ also pays other royalties on the sale of zeolite products. In total, royalties vary from 8% to 13% of sales. In addition, BRZ can surface mine and process zeolite on property owned by the U.S. Bureau of Land Management that is adjacent to the Company’s Preston, Idaho property after obtaining certain permits. Also, given the mining difficulties in the winter season, BRZ constructed warehouses to store mined zeolite prior to the winter season allow production to continue during the winter season.

 

“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 cation exchange capacity (CEC) of approximately 180-220 meq/100 gr. (which predicts plant nutrient availability and retention in soil), its hardness and high clinoptilolite content (which is an effective barrier to prevent problematic radionuclide movement), its absence of clay minerals, and its low sodium content. Our zeolite is used in:

 

 

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.

 

 
16

Table of Contents

 

 

 

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 solutions. 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.

 

 

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 fishponds 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 certain third-party research, feeding up to 2% zeolite increases growth rates, decreases conversion rates, and prevents scours. A large number of cattle are currently being fed zeolite in feed lots located in the United States.

 

 

 

 

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

 

SELECTED FINANCIAL DATA.

 

Results of Operations :

 

For the three months ended

September 30,

 

 

For the nine months ended

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

$2,313,491

 

 

$2,463,984

 

 

$7,027,908

 

 

$9,624,611

 

Costs of revenues

 

 

3,374,563

 

 

 

2,033,066

 

 

 

8,328,503

 

 

 

7,339,499

 

Gross profit (loss)

 

$(1,061,072)

 

$430,918

 

 

$(1,300,595)

 

$2,285,112

 

Total operating expenses

 

 

763,489

 

 

 

370,432

 

 

 

2,045,911

 

 

 

1,085,715

 

Income (loss) from operations

 

$(1,824,561)

 

$60,486

 

 

$(3,346,506)

 

$1,199,397

 

Other income (expense)

 

 

180,033

 

 

 

(10,084)

 

 

558,529

 

 

 

(9,124)

Net income (loss)

 

$(1,644,528)

 

$50,402

 

 

$(2,787,977)

 

$1,190,273

 

Weighted average shares of common stock (basic)

 

 

107,647,317

 

 

 

106,293,842

 

 

 

107,519,786

 

 

 

106,258,384

 

Weighted average shares of common stock (diluted)

 

 

107,647,317

 

 

 

106,293,842

 

 

 

107,519,786

 

 

 

106,258,384

 

 

Balance Sheet Information:

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Working capital

 

$15,349,110

 

 

$19,397,489

 

Total assets

 

$30,926,730

 

 

$34,700,450

 

Accumulated deficit

 

$(35,858,309)

 

$(33,070,332)

Stockholders’ equity

 

$29,081,278

 

 

$31,869,255

 

 

 
17

Table of Contents

 

Operational and financial performance by Segment:

 

Antimony Segment

 

Financial and operational performance of antimony for the three months ended September 30, 2023 and 2022 was as follows:

 

Antimony - Combined USA and Mexico

 

2023

 

 

2022

 

 

$ Change

 

 

(Decrease)

 

Revenue

 

$1,641,666

 

 

$1,671,301

 

 

$(29,635)

 

(1.8

%) 

Gross profit

 

$(683,029)

 

$329,233

 

 

$(1,012,262)

 

(307.5

%) 

Pounds of antimony sold

 

 

332,565

 

 

 

250,244

 

 

 

82,321

 

 

 

32.9%

Average sales price per pound

 

$4.94

 

 

$6.68

 

 

$(1.74)

 

(26.1

%) 

Average cost per pound

 

$6.99

 

 

$5.36

 

 

$1.63

 

 

 

30.4%

Average gross profit per pound

 

$(2.05)

 

$1.32

 

 

$(3.37)

 

(255.7

%) 

 

Financial and operational performance of antimony for the nine months ended September 30, 2023 and 2022 was as follows:

 

 

 

Nine months ended

September 30,

 

 

 

 

 

Percent Increase/

 

Antimony - Combined USA and Mexico

 

2023

 

 

2022

 

 

$ Change

 

 

(Decrease)

 

Revenue

 

$4,844,466

 

 

$6,972,312

 

 

$(2,127,846)

 

(30.5

%)

Gross profit (loss)

 

$(1,264,545)

 

$1,875,569

 

 

$(3,140,114)

 

(167.4

%)

Pounds of antimony sold

 

 

998,573

 

 

 

1,046,722

 

 

 

(48,149)

 

(4.6

%)

Average sales price per pound

 

$4.85

 

 

$6.66

 

 

$(1.81)

 

(27.2

%)

Average cost per pound

 

$6.12

 

 

$4.87

 

 

$1.25

 

 

 

25.7%

Average gross profit per pound

 

$(1.27)

 

$1.79

 

 

$(3.06)

 

(170.8

%)

 

During the three and nine months ended September 30, 2023, antimony revenue decreased $29,635 and $2,127,846, respectively, or 2% and 31%, respectively, compared to the three and nine months ended September 30, 2022. The decrease was primarily due to the lower sales price per pound, which was consistent with the decline in market rates for antimony.

 

Gross profit for the three and nine months ended September 30, 2023 was lower by $1,012,262 and $3,140,114, respectively, compared to the three and nine months ended September 30, 2022, primarily due to the lower sales price per pound, which was consistent with the decline in market rates for antimony, and processing of antimony ore with less antimony percentage concentrate.

 

Zeolite Segment

 

Financial and operational performance of zeolite for the three months ended September 30, 2023 and 2022 was as follows:

 

 

 

Three months ended

September 30,

 

 

 

 

 

Percent Increase/

 

Zeolite

 

2023

 

 

2022

 

 

$ Change

 

 

(Decrease)

 

Revenue

 

$671,825

 

 

$792,683

 

 

$(120,858)

 

(15.2

%) 

Gross profit

 

$(350,370)

 

$129,358

 

 

$(479,728)

 

(370.9

%) 

Tons of zeolite sold

 

 

2,254

 

 

 

3,264

 

 

 

(1,010)

 

(30.9

%) 

Average sales price per ton

 

$298.06

 

 

$242.86

 

 

$55.20

 

 

 

22.7%

Average cost per ton

 

$453.50

 

 

$203.22

 

 

$250.28

 

 

 

123.2%

Average gross profit per ton

 

$(155.44)

 

$39.63

 

 

$(195.08)

 

(492.2

%) 

 

 
18

Table of Contents

 

Financial and operational performance of zeolite for the nine months ended September 30, 2023 and 2022 was as follows:

 

 

 

Nine months ended

September 30,

 

 

 

 

 

Percent Increase/

 

Zeolite

 

2023

 

 

2022

 

 

$ Change

 

 

(Decrease)

 

Revenue

 

$1,941,009

 

 

$2,487,116

 

 

$(546,107)

 

(22.0

%) 

Gross profit

 

$(195,464)

 

$327,227

 

 

$(522,691)

 

(159.7

%) 

Tons of zeolite sold

 

 

8,007

 

 

 

10,336

 

 

$(2,329)

 

(22.5

%) 

Average sales price per ton

 

$242.41

 

 

$240.63

 

 

$1.79

 

 

 

0.7%

Average cost per ton

 

$266.83

 

 

$208.97

 

 

$57.86

 

 

 

27.7%

Average gross profit per ton

 

$(24.41)

 

$31.66

 

 

$(56.07)

 

(177.1

%) 

 

During the three and nine months ended September 30, 2023, zeolite revenue decreased $120,858 and $546,107, respectively, or 15% and 22%, respectively, compared to the three and nine months ended September 30, 2022. The decrease was primarily due to the decrease in tons sold, which was primarily due to a significant equipment failure for approximately 14 weeks during the nine months ended September 30, 2023. The cone of BRZ’s main cone crusher failed and production was curtailed until a new cone could be sourced, delivered, and installed. The new cone is equipped with performance monitoring features that are expected to eventually enhance our preventive maintenance program, contribute to longer and more reliable run times, and enable a material increase in production. The failure of the original cone curtailed production for approximately two months in the first quarter of 2023 until completion of the new cone acquisition and installation. The curtailment of production resulted in lower revenue for the nine months ended September 30, 2023.

 

During the three and nine months ended September 30, 2023, zeolite gross profit decreased $479,728 and $522,691, respectively, compared to the three and nine months ended September 30, 2022. The decrease was primarily due to increased maintenance costs and equipment and facility-related labor costs during production downtime during the nine months ended September 30, 2023.

 

Precious Metals Segment

 

Financial and operational performance of precious metals for the three months ended September 30, 2023 and 2022 was as follows: 

 

 

 

Three months ended

September 30,

 

 

 

 

Percent Increase/

 

Precious metals

 

2023

 

 

2022

 

 

$ Change

 

 

(Decrease)

 

Revenue

 

$-

 

 

$-

 

 

$-

 

 

 

-

 

Gross profit

 

$(27,673)

 

$(27,673)

 

$-

 

 

 

-

 

Ounces sold - gold

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Ounces sold - silver

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

Financial and operational performance of precious metals for the nine months ended September 30, 2023 and 2022 was as follows:

 

 

 

 

Nine months ended

September 30,

 

 

 

 

Percent Increase/

 

Precious metals

 

2023

 

 

2022

 

 

$ Change

 

 

(Decrease)

 

Revenue

 

$242,433

 

 

$165,183

 

 

$77,250

 

 

 

46.8%

Gross profit

 

$159,414

 

 

$82,316

 

 

$77,098

 

 

 

93.7%

Ounces sold-gold

 

 

24.30

 

 

 

21.35

 

 

 

2.95

 

 

 

13.8%

Ounces sold-silver

 

 

15,074

 

 

 

8,175

 

 

 

6,899

 

 

 

84.4%

  

Earnings before Interest, Tax, Depreciation and Amortization (“EBITDA”)

 

We present EBTIDA, a non-GAAP financial measurement, to supplement other measures of our financial performance. We believe that EBITDA is a useful measure of our operating performance because it eliminates non-cash expenses that do not reflect our underlying business performance. We use this measure to facilitate a comparison of our operating performance on a consistent basis from period to period, to analyze the factors and trends affecting our business and to evaluate our performance.

 

 
19

Table of Contents

 

We had an EBITDA loss of ($2,065,050) for the nine months ended September 30, 2023, compared to positive EBITDA of $1,894,533 for the nine months ended September 30, 2022.

 

EBIDTA by segment for the three months ended September 30, 2023 and 2022 was as follows:

 

Antimony - Combined USA and Mexico

 

Three months ended

 

 

Three months ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Revenue

 

$1,641,666

 

 

 

100.0%

 

$1,671,301

 

 

 

100.0%

Cost of sales

 

$(2,324,695)

 

(141.6

%) 

 

$(1,342,068)

 

(80.3

%) 

Gross profit (loss)

 

$(683,029)

 

(41.6

%) 

 

$329,233

 

 

 

19.7%

Operating expenses

 

$(734,437)

 

(44.7

%) 

 

$(344,162)

 

(20.6

%) 

Income (loss) from operations

 

$(1,417,466)

 

(86.3

%) 

 

$(14,929)

 

(0.9

%) 

Non-operating income (expense)

 

$182,734

 

 

 

11.1%

 

$(7,058)

 

(0.4

%) 

Net income (loss)

 

$(1,234,731)

 

(75.2

%) 

 

$(21,987)

 

(1.3

%) 

Interest expense

 

$1,126

 

 

 

0.1%

 

$1,181

 

 

 

0.1%

Depreciation and amortization

 

$148,095

 

 

 

9.0%

 

$164,500

 

 

 

9.8%

EBITDA

 

$(1,085,510)

 

(66.1%)

 

 

$143,694

 

 

 

8.6%

 

Zeolite

 

Three months ended

 

 

Three months ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Revenue

 

$671,825

 

 

 

100.0%

 

$792,683

 

 

 

100.0%

Cost of sales

 

$(1,022,195)

 

(152.2

%) 

 

$(663,325)

 

(83.7

%) 

Gross profit (loss)

 

$(350,370)

 

(52.2

%) 

 

$129,358

 

 

 

16.3%

Operating expenses

 

$(29,052)

 

(4.3

%) 

 

$(26,270)

 

(3.3

%) 

Income (loss) from operations

 

$(379,422)

 

(56.5

%) 

 

$103,088

 

 

 

13.0%

Non-operating income (expense)

 

$(2,701)

 

(0.4

%) 

 

$(3,026)

 

(0.4

%) 

Net income (loss)

 

$(382,123)

 

(56.9

%) 

 

$100,062

 

 

 

12.6%

Interest expense

 

$1,049

 

 

 

0.2%

 

$3,026

 

 

 

0.4%

Depreciation and amortization

 

$73,193

 

 

 

10.9%

 

$50,610

 

 

 

6.4%

EBITDA

 

$(307,881)

 

(45.8%)

 

 

$153,698

 

 

 

19.4%

 

Precious Metals

 

Three months ended

September 30,

 

 

 

2023

 

 

2022

 

Revenue

 

$-

 

 

$-

 

Cost of sales

 

$(27,673)

 

$(27,673)

Gross profit (loss)

 

$(27,673)

 

$(27,673)

Operating expenses

 

$-

 

 

$-

 

Income (loss) from operations

 

$(27,673)

 

$(27,673)

Non-operating income (expense)

 

$-

 

 

$-

 

Net income (loss)

 

$(27,673)

 

$(27,673)

Interest expense

 

$-

 

 

$-

 

Depreciation and amortization

 

$27,673

 

 

$27,673

 

EBITDA

 

$-

 

 

$-

 

 

 
20

Table of Contents

 

 

Company-wide

 

Three months ended

 

 

Three months ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Revenue

 

$2,313,491

 

 

 

100.0%

 

$2,463,984

 

 

 

100.0%

Cost of sales

 

$(3,374,563)

 

(145.9

%) 

 

$(2,033,066)

 

(82.5

%) 

Gross profit (loss)

 

$(1,061,072)

 

(45.9

%) 

 

$430,918

 

 

 

17.5%

Operating expenses

 

$(763,489)

 

(33.0

%) 

 

$(370,432)

 

(15.0

%) 

Income (loss) from operations

 

$(1,824,561)

 

(78.9

%) 

 

$60,486

 

 

 

2.5%

Non-operating income (expense)

 

$180,033

 

 

 

7.8%

 

$(10,084)

 

(0.4

%) 

Net income (loss)

 

$(1,644,528)

 

(71.1

%) 

 

$50,402

 

 

 

2.0%

Interest expense

 

$2,175

 

 

 

0.1%

 

$4,207

 

 

 

0.2%

Depreciation and amortization

 

$248,961

 

 

 

10.8%

 

$242,783

 

 

 

9.9%

EBITDA

 

$(1,393,392)

 

(60.2

%) 

 

$297,392

 

 

 

12.1%

  

EBIDTA by segment for the nine months ended September 30, 2023 and 2022 was as follows:

 

Antimony - Combined USA and Mexico

 

Nine months ended

 

 

Nine months ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Revenue

 

$4,844,466

 

 

 

100.0%

 

$6,972,312

 

 

 

100.0%

Cost of sales

 

$(6,109,011)

 

(126.1

%) 

 

$(5,096,743)

 

(73.1

%) 

Gross profit (loss)

 

$(1,264,545)

 

(26.1

%) 

 

$1,875,569

 

 

 

26.9%

Operating expenses

 

$(1,821,200)

 

(37.6

%) 

 

$(1,037,991)

 

(14.9

%) 

Income (loss) from operations

 

$(3,085,745)

 

(63.7

%) 

 

$837,578

 

 

 

12.0%

Non-operating income (expense)

 

$564,852

 

 

 

11.7%

 

$(3,723)

 

(0.1

%) 

Net income (loss)

 

$(2,520,892)

 

(52.0

%) 

 

$833,855

 

 

 

12.0%

Interest expense

 

$3,843

 

 

 

0.1%

 

$4,869

 

 

 

0.1%

Depreciation and amortization

 

$442,021

 

 

 

9.1%

 

$467,263

 

 

 

6.7%

EBITDA

 

$(2,075,028)

 

(42.8

%) 

 

$1,305,987

 

 

 

18.7%

 

 
21

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Zeolite

 

Nine months ended

 

 

Nine months ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Revenue

 

$1,941,009

 

 

 

100.0%

 

$2,487,116

 

 

 

100.0%

Cost of sales

 

$(2,136,473)

 

(110.1

%) 

 

$(2,159,889)

 

(86.8

%) 

Gross profit (loss)

 

$(195,464)

 

(10.1

%) 

 

$327,227

 

 

 

13.2%

Operating expenses

 

$(224,711)

 

(11.6

%) 

 

$(47,724)

 

(1.9

%) 

Income (loss) from operations

 

$(420,175)

 

(21.6

%) 

 

$279,503

 

 

 

11.2%

Non-operating income (expense)

 

$(6,323)

 

(0.3

%) 

 

$(5,401)

 

(0.2

%) 

Net income (loss)

 

$(426,498)

 

(22.0

%) 

 

$274,102

 

 

 

11.0%

Interest expense

 

$4,782

 

 

 

0.2%

 

$5,401

 

 

 

0.2%

Depreciation and amortization

 

$189,262

 

 

 

9.8%

 

$143,860

 

 

 

5.8%

EBITDA

 

$(232,454)

 

(12.0

%) 

 

$423,363

 

 

 

17.0%

 

Precious Metals

 

Nine months ended

 

 

Nine months ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Revenue

 

$242,433

 

 

 

100.0%

 

$165,183

 

 

 

100.0%

Cost of sales

 

$(83,019)

 

(34.2

%) 

 

$(82,867)

 

(50.2

%) 

Gross profit (loss)

 

$159,414

 

 

 

65.8%

 

$82,316

 

 

 

49.8%

Operating expenses

 

$-

 

 

 

0.0%

 

$-

 

 

 

0.0%

Income (loss) from operations

 

$159,414

 

 

 

65.8%

 

$82,316

 

 

 

49.8%

Non-operating income (expense)

 

$-

 

 

 

0.0%

 

$-

 

 

 

0.0%

Net income (loss)

 

$159,414

 

 

 

65.8%

 

$82,316

 

 

 

49.8%

Interest expense

 

$-

 

 

 

0.0%

 

$-

 

 

 

0.0%

Depreciation and amortization

 

$83,019

 

 

 

34.2%

 

$82,867

 

 

 

50.2%

EBITDA

 

$242,433

 

 

 

100.0%

 

$165,183

 

 

 

100.0%

 

Company-wide

 

Nine months ended

 

 

Nine months ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Revenue

 

$7,027,908

 

 

 

100.0%

 

$9,624,611

 

 

 

100.0%

Cost of sales

 

$(8,328,503)

 

(118.5

%) 

 

$(7,339,499)

 

(76.3

%) 

Gross profit (loss)

 

$(1,300,595)

 

(18.5

%) 

 

$2,285,112

 

 

 

23.7%

Operating expenses

 

$(2,045,911)

 

(29.1

%) 

 

$(1,085,715)

 

(11.3

%) 

Income (loss) from operations

 

$(3,346,506)

 

(47.6

%) 

 

$1,199,397

 

 

 

12.5%

Non-operating income (expense)

 

$558,529

 

 

 

7.9%

 

$(9,124)

 

(0.1

%) 

Net income (loss)

 

$(2,787,977)

 

(39.7

%) 

 

$1,190,273

 

 

 

12.4%

Interest expense

 

$8,625

 

 

 

0.1%

 

$10,270

 

 

 

0.1%

Depreciation and amortization

 

$714,302

 

 

 

10.2%

 

$693,990

 

 

 

7.2%

EBITDA

 

$(2,065,050)

 

(29.4

%) 

 

$1,894,533

 

 

 

19.7%

 

 
22

Table of Contents

 

Capital Resources and Liquidity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Working Capital:

 

September 30,

2023

 

 

December 31,

2022

 

Current assets

 

$16,628,806

 

 

$21,617,359

 

Current liabilities

 

 

(1,279,696)

 

 

(2,219,870)

Working capital

 

$15,349,110

 

 

$19,397,489

 

 

Cash Flows:

 

For the nine months ended

 

 

 

September 30,

2023

 

 

September 30,

2022

 

Cash flow provided (used) by operating activities

 

$(3,817,887)

 

$22,916

 

Cash flow used by investing activities

 

 

(1,519,720)

 

 

(13,685,072)

Cash flow used by financing activities

 

 

(857,779)

 

 

(42,080)

Net decrease in cash and cash equivalents during the period

 

$(6,195,386)

 

$(13,704,236)

 

As of September 30, 2023, the Company had cash and cash equivalents of $12,864,992.

 

Cash flow used by operating activities was $3,817,887 for the nine months ended September 30, 2023, compared to cash flow provided by operating activities of $22,916 for the nine months ended September 30, 2022. The $3,840,803 decrease in cash flow from operating activities was attributable primarily to the differential between the net loss generated during 2023 compared to the net income generated during 2022, an increase in the use of cash in inventories in 2023, and an increase in the payment of royalties in 2023. The increase in the use of cash in inventories was primarily due to an increase in antimony ore inventory in Mexico in 2023, which can be used in future processing. The increase in the payment of royalties was primarily due to the Company finalizing its estimates and paying a royalty obligation in 2023 that had been accumulating since 2016.

 

Cash flow used by investing activities was $1,519,720 for the nine months ended September 30, 2023, compared to $13,685,072 for the nine months ended September 30, 2022. The use of cash in 2023 related to purchases of fixed assets primarily at BRZ, which included the purchase of a new cone for the cone crusher. The use of cash in 2022 related primarily to investing cash in U.S. treasury bonds and other fixed income funds to improve return on cash.

 

Cash flow used by financing activities increased by $815,699 to $857,779 for the nine months ended September 30, 2023, compared to $42,080 for the nine months ended September 30, 2022. This increase in the use of cash was primarily due to the payment of dividends of $787,730 on January 25, 2023 to the holders of 1,692,672 shares of Series D Preferred Stock related to the conversion of these shares into common stock.

 

We are planning to continue using our funds to make improvements to our operations with the goal of increasing production and decreasing costs and for revenue growth. Also, we plan to continue to review the operations and financial results of each segment in order to make informed decisions that benefit the Company overall.

 

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

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

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 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 related to segregation of accounting duties. 

 

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 accounting and legal 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 September 30, 2023 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.

 

 
23

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.

 

Historically, 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 September 30, 2023 and December 31, 2022, the Company had no accrued liabilities relating to such assessments. Bear River Zeolite Company (“BRZ”), a wholly owned subsidiary of the Company, received twelve significant and substantial citations from MSHA in September and October of 2023. BRZ rectified the matters noted in eight of the twelve citations and received termination dates for these eight citations from MSHA. The Company is working to rectify the four remaining citations; however, the outcome of these citations as well as the impact on the Company’s results of operations or financial position is unknown.

 

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, 2022 which was filed with the SEC on July 18, 2023.

 

ITEM 2. RECENT SALES OF UNREGISTERED SECURITIES.

 

For the three months ended September 30, 2023, the Company sold no common stock.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCOSURES.

 

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 report.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

 

24

Table of Contents

 

ITEM 6. EXHIBITS.

 

Exhibit No.

 

Description

3.1

 

Second Amended and Restated Articles of Incorporation (incorporated by reference as Exhibit 3.1 to the Company’s current Report on Form 8-K filed with the SEC on January 15, 2021)

3.2

 

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.02 to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2012)

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).

 

 

25

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: November 10, 2023

By:

/s/ John C. Gustavsen

 

 

John C. Gustavsen

 

 

(Principal Executive Officer and Chief Executive Officer)

 

 

 

Date: November 10, 2023

By:

/s/ Richard R. Isaak

 

 

Richard R. Isaak

 

 

(Principal Accounting Officer and Chief Financial Officer)

 

 

 

26