UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (fee required)
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (no fee required)
For the transition period to
----- -----
Commission file number 33-00215
UNITED STATES ANTIMONY CORPORATION
----------------------------------
(Name of small business issuer in its charter)
Montana
---------------------------------
(State or other jurisdiction
of incorporation or organization)
81-0305822
---------------------------------
P.O. Box 643, Thompson Falls,
Montana 59873
---------------------------------
(Address of principal
executive offices)
Registrant s telephone number, including area code:
(406) 827-3523
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
At March 31, 1997, the registrant had outstanding 13,043,434
shares of par value $.01 common stock.
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements and Supplementary Data
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
------------ -------------
(Unaudited)
ASSETS
Current assets:
Restricted cash $ 103,000
Stock subscription receivable 20,000
Accounts receivable $ 33,837
Inventories 541,997 556,249
Prepaid expenses 1,164 21,085
------------ ------------
Total current assets 666,161 611,171
Properties, plants and equipment, net 654,464 670,081
Restricted cash, reclamation bonds 170,046 170,046
------------ ------------
Total assets $ 1,490,671 $ 1,451,298
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Checks issued and payable $ 59,765 $ 29,491
Accounts payable 237,303 306,636
Accrued payroll and property taxes 82,199 93,454
Accrued payroll and other 39,445 39,823
Judgments payable 133,771 131,764
Accrued interest payable 822,633 792,240
Payable to related parties 631,015 644,752
Notes payable to bank 139,382 125,397
Note payable to Bobby C. Hamilton,
current 20,879 20,494
Debentures payable 650,000 650,000
Accrued reclamation costs, current 100,000 100,000
------------ ------------
Total current liabilities 2,916,392 2,934,051
Note payable to bank, noncurrent 167,533 185,607
Note payable to Bobby C. Hamilton,
noncurrent 1,695,212 1,706,257
Accrued reclamation costs, noncurrent 314,238 315,212
------------ ------------
Total liabilities 5,093,375 5,141,127
------------ ------------
Commitments and contingencies
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, CONTINUED
March 31, December 31,
1997 1996
------------ -------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' DEFICIT,
CONTINUED
Stockholders' deficit:
Preferred stock, $.01 par value,
10,000,000 shares authorized:
Series A: 4,500 shares issued and
outstanding $ 45 $ 45
Series B: 750,000 shares issued
and outstanding 7,500 7,500
Common stock, $.01 par value,
20,000,000 shares authorized;
13,043,434 and 12,627,434 shares
issued and outstanding 130,434 126,274
Additional paid-in capital 13,530,304 13,326,464
Accumulated deficit (17,270,987) (17,150,112)
------------ ------------
Total stockholders' deficit (3,602,704) (3,689,829)
------------ ------------
Total liabilities and stock-
holders' deficit $ 1,490,671 $ 1,451,298
============ ============
See Notes to Consolidated Financial Statements.
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three-month periods ended March 31, 1997 and 1996
(Unaudited)
March 31, December 31,
1997 1996
------------ -------------
(Unaudited)
Revenues:
Sales of antimony products and
other $ 1,113,410 $ 1,348,530
Sales of gold and silver 177,450
------------ ------------
1,113,410 1,525,980
------------ ------------
Cost of production:
Cost of antimony production and other 980,787 1,142,936
Cost of gold and silver production 282,727
------------ ------------
980,787 1,425,663
------------ ------------
Gross profit 132,623 100,317
------------ ------------
Other operating expenses:
Care and maintenance - Yellow Jacket 76,492
Exploration and evaluation 36,249
General and administrative 74,703 104,209
------------ ------------
187,444 104,209
------------ ------------
Other (income) expense:
Interest expense 71,866 80,781
Interest income and other (5,812) (2,515)
Gain on disposal of property (45,000)
------------ ------------
66,054 33,266
------------ ------------
Net loss $ (120,875) $ (37,158)
============ ============
Net loss per common share $ (.01) NIL
============ ============
Weighted average number of common
shares outstanding 12,729,523 12,113,434
============ ============
See Notes to Consolidated Financial Statements.
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three-month periods ended March 31, 1997 and 1996
(Unaudited)
1997 1996
--------- ---------
Cash flows from operating activities:
Net loss $(120,875) $ (37,158)
Adjustments to reconcile net loss to
net cash provided by operations:
Depreciation 40,732 49,200
Gain on disposal of equipment (45,000)
Change in:
Restricted cash (103,000) 4,598
Stock subscription receivable (20,000)
Accounts receivable 33,837 50,893
Inventories 14,252 (55,833)
Prepaid expenses 19,921
Accounts payable (69,333) 48,478
Accrued payroll and property taxes (11,255) 33,290
Accrued payroll and other (378) (2,014)
Judgments payable 2,007 (3,703)
Accrued interest payable 30,393 32,074
Payable to related parties (13,737) (4,240)
Accrued reclamation costs (974) (1,081)
--------- ---------
Net cash provided (used) by
operating activities (198,410) 69,504
--------- ---------
Cash flows from investing activities:
Purchase of properties, plant and
equipment (25,115) (85,297)
Sale of property 45,000
--------- ---------
Net cash used in investing
activities: (25,115) (40,297)
--------- ---------
Cash flows from financing activities:
Payments on notes payable to bank (4,089) (35,973)
Payments to Bobby C. Hamilton (10,660) (24,126)
Sale of common stock 208,000
--------- ---------
Net cash provided (used) by
financing activities 193,251 (60,099)
--------- ---------
Net decrease in cash (30,274) (30,892)
Checks issued & payable, beginning of period (29,491) 5,800
--------- ---------
Checks issued & payable, end of period $ (59,765) $ (25,092)
========= =========
Supplemental disclosures:
Cash paid for interest $ 41,473 $ 39,916
========= =========
See Notes to Consolidated Financial Statements
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
UNITED STATES ANTIMONY CORPORATION and SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. NOTES TO DECEMBER 31, 1996 CONSOLIDATED FINANCIAL STATEMENTS:
The notes to the consolidated financial statements as of
December 31, 1996, as set forth in the Company s 1996 Annual
Report on Form 10-KSB, substantially apply to these interim
consolidated financial statements and are not repeated here.
2. ADJUSTMENTS TO FINANCIAL STATEMENTS:
The financial statements reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the
results for the interim periods reported. All such adjustments
are of a normal recurring nature. All financial statements
presented herein are unaudited. However, the balance sheet as of
December 31, 1996, was derived from the audited consolidated
balance sheet referred to in Note 1 above.
4. COMMITMENTS AND CONTINGENCIES:
Until 1989, the Company mined, milled and leached gold and silver
in the Yankee Fork Mining District in Custer County, Idaho. The
metals were recovered by a 150-ton per day gravity and flotation
mill, and the concentrates were leached with cyanide to produce a
bullion product at the Preachers Cove mill, which is located six
miles north of Sunbeam, Idaho on the Yankee Fork of the Salmon
River. In 1994, the U.S. Forest Service, under the provisions of
the Comprehensive Environmental Response Liability Act of 1980
(CERCLA), designated the cyanide leach plant as a contaminated
site requiring cleanup of the cyanide solution. The Company has
been reclaiming the property and as of March 31, 1997 the cleanup
of cyanide solution is complete. The Company anticipates having
the remaining cyanide residue contained and the existing mill
entirely removed by 1998. In 1996, the Idaho Department of
Environmental Quality requested the Company sign a consent decree
related to completing the reclamation and remediation at the
Preachers Cove mill.
In December of 1996 the Company entered into the consent decree.
<PAGE>
ITEM 2. Management s Discussion and Analysis of Results of Operations
and Financial Condition
GENERAL
The Company's operations resulted in a net loss of $120,875 for the
three-month period ending March 31, 1997 compared to a net loss of
$37,158 for the comparable period in 1996. The increase in the loss
is primarily due to decreased gross profit in the antimony division
and the absence of any gain from sale of property during the first
quarter of 1997 compared with the first quarter of 1996.
Total revenues for the first quarter of 1997 were $1,113,410 compared
with $1,525,980 for the comparable quarter in 1996, an decrease of
$465,556 or 31%. The decrease is attributable to the absence of gold
and silver sales in the first quarter of 1997 compared to 1996, due to
the Yellow Jacket Mine being placed on a care and maintenance basis
during the third quarter of 1996. Sales of antimony products during
the first quarter of 1997 were $1,113,410 consisting of 761,657 pounds
at an average sale price of $1.46 per pound. Sales of antimony
products during the first quarter of 1996 were $1,348,530 consisting
of 641,094 pounds at an average sale price of $2.10 per pound. Gross
profit from antimony product sales was $132,623 or 11.9% of sales
during the first quarter of 1997 compared with a gross profit of
$205,594 or 15% of sales during the comparable quarter of 1996. The
decrease in gross profit is primarily due to the decrease in sale
price per pound during the first quarter of 1997 compared to the first
quarter of 1996.
The Company reports 50% of total antimony sales made by HoltraChem and
the Company. Accordingly, total sales of antimony products by both
companies was $2,226,820 or 1,523,314 pounds during the first quarter
of 1997 and $2,697,060 or 1,282,187 pounds during the first quarter of
1996. In both quarters all of the antimony products sold were
produced at the Company s plant in Thompson Falls, Montana.
The Company had no sales of gold and silver during the first quarter
of 1996 versus sales of $177,450 during the comparable period in
1996. The decrease is due to the suspension of operations at the
Yellow Jacket mine during the third quarter of 1996. Care and
maintenance expenses related to the Yellow Jacket Mine were $76,492
during the first three months of 1997.
During the first quarter of 1997 the Company pursued underground
exploration of the Yellow Jacket pit. Expenses associated with this
exploration were $36,249, there were no exploration expenses during
the first quarter of 1996.
General and administrative expenses decreased from $104,209 during the
first quarter of 1996 to $74,703 in the comparable quarter of 1997,
The decrease was principally due to legal fees relating to the
Company's USAMSA negotiations and increased office labor and
accounting fees related to the Company s efforts to regain compliance
with Securities and Exchange Commission ( SEC ) reporting regulations
that were incurred during the first quarter of 1996.
<PAGE>
Interest expense decreased from $80,781 during the first quarter of
1996 to $71,866 during the comparable quarter of 1997. The decrease
is principally due to less interest expense charged the Company for
its unfunded share of antimony inventory. Interest income increased
from $2,515 during the first quarter of 1996 to $5,812 during the
comparable quarter in 1996. The increase was due to interest income
recognized from the overfunding of antimony inventory during the first
quarter of 1997 compared to the first quarter of 1996.
FINANCIAL CONDITION AND LIQUIDITY
At March 31, 1997, Company assets totaled $1,490,671 and there was a
stockholders' deficit of $3,602,704. The stockholders' deficit
increased $87,125 from December 31, 1996 primarily due to a net loss
recognized from the Company's operations during the first quarter of
1997. In order to continue as a going concern, the Company is
dependent upon (1) the planned conversion of certain debt and accrued
interest to equity (2) profitable operations from the antimony
division, (3) additional equity financing, and (4) continued
availability of bank financing.
Without such debt conversions and additional financing, the Company
may not be able to meet its obligations, fund operations and continue
in existence. There can be no assurance that management will be
successful in its plans to improve the financial condition of the
Company.
Cash used by operating activities during the first quarter of 1997 was
$198,410 and resulted primarily from the first quarter net loss. Cash
used by investing activities during the first quarter of 1997 was
$25,115 and related to the construction of antimony processing
equipment.
Cash used in financing activities totaled $14,749 during the first
quarter of 1997 and consisted of principal payments on notes to bank
and to Bobby C. Hamilton.
Cash provided by financing activities was $208,000 and consisted of
proceeds from the sale of the Company s restricted common stock.
During the first quarter of 1997 the Company was fully vested in its
share of antimony products inventory. Correspondingly, it has been
receiving a greater percentage of cash flow from antimony sales with
HoltraChem.
Significant financial commitments for future periods will include:
- Providing $5,000 per month for a "sinking fund" to pay defaulted
debentures, related accrued interest and accrued interest payable
to related parties, which are not ultimately converted (see Note 9
to the 1996 consolidated financial statements).
- Servicing borrowings from the bank (see Note 8 to the 1996
consolidated financial statements).
<PAGE>
- Servicing the Hamilton note payable at a minimum of $150,000
annually (see Note 10 to the 1996 consolidated financial
statements).
- Keeping current on payroll tax liabilities and accounts payable.
- Fulfilling reclamation responsibilities with regulatory agencies.
- Annual care and maintenance costs at the Yellow Jacket mine.
- Minimum annual royalty payments of $52,500 to Geosearch and Yellow
Jacket.
- Providing antimony profits to fund the Company's antimony inventory
when the Company's share of antimony inventory amounts to $750,000
or more or when its share of inventory is less than 50% of total
inventory.
The Company plans to address these and other financial requirements by
enhancing the value of its gold properties through an exploration
program started in 1996, and continuing in 1997. The Company hopes to
develop additional reserves from exploration and generate funds from
the sale, joint venture or eventual production from the property.
Exploration activities are expected to culminate during the second or
third quarter, of 1997 at which time the Company will be in a position
to realize an economic benefit from either, 1) the development of the
property for production in the event of positive exploration results
or, 2) savings associated with terminating the care and maintenance
status and beginning final closure activities.
During 1995 and 1996, the Company began assembling and later filed
reports required by SEC regulations. It is the Company's intention
that as these reports are available and as the Company continues to
maintain it s timely filings it will regain compliance with SEC
regulations and seek additional financing to expand its business
operations and satisfy its obligations.
During the first quarter of 1997, the Company sought and obtained
sponsorship on the NASD over-the-counter electronic bulletin board.
The Company intends to continue to pursue listings on larger trading
exchanges as it s financial condition allows.
In 1997, 416,000 shares of unregistered common and common stock
purchase warrants were sold to a director and an existing shareholder
for $203,000. Of this amount, $103,000, was restricted for expenditure
in the development of USAMSA.
The Company plans to issue additional shares to investors to help
finance the finalization of its investment in USAMSA and fund
production from the Mexican properties.
<PAGE>
PART II - OTHER INFORMATION
Items 1, 2, 3, 4, and 5 are omitted from this report as inapplicable.
ITEM 6. Exhibits and Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(b) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
UNITED STATES ANTIMONY CORPORATION
(Registrant)
By: /s/ John C. Lawrence Date: May 15, 1997
------------------------------------
John C. Lawrence, Director and
President (Principal Executive,
Financial and Accounting Officer)
<PAGE>
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