SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2000 Commission File No. 001-10156
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0735390
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporated or organization
Post Office Box 909, Alleghany, CA 95910
(Address of principal executive offices)
(530) 287-3223
(Registrant's telephone number)
(including area code)
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 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
requirement for the past 90 days.
Yes: X No:
As of March 31, 2000, 4,154,340 shares of Common Stock, par value $.10 per
share, were issued and outstanding.
PART I
1. FINANCIAL INFORMATION
Original Sixteen to One Mine, Inc.
Balance Sheet
March 31, 2000 and December 31, 1999
March 31, 2000 December 31, 1999
ASSETS
Current Assets
Cash $ 74 $ 680
Accounts receivable 21,343 30,130
Inventory 440,990 308,420
Other current assets 10,729 11,181
---------- ----------
Total current assets 473,136 350,411
---------- ----------
Mining Property
Real estate and property rights
net of depletion of $524,145 182,091 182,091
Mineral property 472,403 473,323
Development costs, net of amortization
of $98,841 at March 31, 2000 and
December 31, 2000 799,144 799,144
---------- ----------
1,453,638 1,454,558
---------- ----------
Fixed Assets at Cost
Equipment 853,800 810,806
Buildings 170,721 170,721
Vehicles 184,805 184,805
---------- ----------
1,209,326 1,166,332
Less accumulated depreciation (1,023,082) (973,282)
---------- ----------
Net fixed assets 186,244 193,050
---------- ----------
Other Assets
Net of accumulated amortization 14,900 15,865
---------- ----------
Total Assets $2,127,918 $2,013,844
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable & accrued compensation $ 301,078 $ 184,060
Due to related party 3,750 54,458
Notes payable 218,307 176,801
---------- ----------
Total Current Liabilities 523,135 415,319
---------- ----------
Total Liabilities 523,135 415,319
---------- ----------
Stockholers' Equity
Capital stock, par value $.10 -
10,000,000 shares authorized:
4,154,340 shares issued and
outstanding as of March 31, 2000
and December 31, 1999, respectively 415,434 415,434
Additional paid-in capital 1,758,978 1,758,978
Retained earnings (569,629) (575,847)
---------- ----------
Total Stockholders' Equity 1,604,783 1,598,565
---------- ----------
Total Liabilities and
Stockholders' Equity $2,127,918 $2,013,884
========== ==========
See Accompanying Notes
<PAGE>
Original Sixteen to One Mine, Inc.
Statement of Operations and Retained Earnings
For the Three Months Ended March 31, 2000 and 1999
Three Months Ended March 31,
2000 1999
Revenues:
Gold & jewelry sales $ 304,163 $ 420,209
Timber sales 8,138
----------- -----------
Total revenues 312,301 420,209
----------- -----------
Operating expenses:
Salaries and wages 140,489 211,457
Contract labor 1,087 35,332
Telephone & utilities 15,574 26,931
Taxes - property & payroll 14,249 36,349
Insurance 10,891 34,568
Supplies 21,948 18,929
Drayage 5,003 6,351
Promotion 501 514
Office expenses 7,498 6,462
Legal and accounting 27,120 10,446
Depreciation & amortization 50,765 28,448
Other expenses 6,221 21,460
---------- -----------
Total operating expenses 301,346 437,247
---------- -----------
Income (loss)
from operations 10,955 (17,238)
Other Income & (Expense):
Other income (expense) (4,737) (14,721)
---------- -----------
Profit (loss) before taxes 6,218 (30,959)
============ ============
Basic and diluted profit
(loss) per share - ($0.01)
====== ======
See Accompanying Notes
<PAGE>
Original Sixteen To One Mine, Inc.
Statement of Cash Flows
Three Months Ended March 31, 2000 and March 31, 1999
Three Months Ended March 31,
2000 1999
-------------- --------------
Cash Flows From Operating Activities:
Net profit (loss) $ 6,220 $ (31,759)
Adjustments to reconcile net profit
(loss) to net cash provided by
operating activities:
Depreciation and amortization 50,765 27,000
Decrease in accounts receivable 8,787 11,777
(Increase)Decrease in inventory (132,570) (53,595)
Decrease in other current assets 452 2,123
Increase in accounts payable
and accrued compensation 117,018 33,091
Increase is accrued expenses - 17,084
Decrease in corporate income
Taxes payable - -
------------ ----------
Net cash (used) by operating activities 50,672 5,721
------------ -----------
Cash Flows From Investing Activities:
Proceeds from sale of fixed assets - -
Purchase of fixed assets (42,994) -
Proceeds from sale of land 920 -
------------- -----------
Net cash provided by investing
activities (42,074) -
------------- -----------
Cash Flows From Financing Activities
Payments made on notes payable - (4,747)
Payments made to employees for advances
made to the Company (50,710) -
Proceeds from additional borrowings 41,506 -
Proceeds from sale of common stock - -
------------ ------------
Net cash provided (used) by
financing activities (9,204) (4,747)
------------ ------------
(Decrease) increase in Cash (606) 974
Cash, beginning of year 680 25,338
------------ ------------
Cash, end of period $ 74 $ 26,312
============ ============
Supplemental schedule of other cash flows:
Cash paid during the period for:
Interest expense $ 7,048
============ ============
Income taxes $ 800 $ -
============ ============
See Accompanying Notes
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
1. In the opinion of management, the financial statements contain all
adjustment (consisting only of normal recurring accruals) necessary to present
fairly the Company's financial position at March 31, 2000 and December 31,
1999, the results of operations and cash flows for the three month periods
ended March 31, 2000 and 1999.
2. Certain information and footnote disclosures normally presented in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. These interim financial statements should be
read in conjunction with the financial statements and notes thereto included
in the Company's 1999 Form 10-KSB. The results of operations for the three
month period ended March 31, 2000 may not necessarily be indicative of the
operating results for the full year.
3. In preparing financial statements, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities as of
the date of the balance sheet and revenues and expenses for the period.
Actual results could differ significantly from those estimates. Material
estimates that are particularly susceptible to significant changes in the near
term related to the ability of the Company to recover capitalized development
costs. In the event the capitalized 2283 winze area is abandoned, recovering
the capitalized development cost may not be possible.
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
BALANCE SHEET COMPARISONS
The Company's increase in assets of $114,074 or 5.7% was attributed primarily
to gold mined during the three month period ending March 31, 2000 and
processed into inventory. Additionally, the increase of $42,994 in fixed
assets directly reflects the purchase of a compressor and related equipment.
The Company's total liabilities increase of $107,816 reflects the loan for the
purchase of equipment, additional unpaid interest and increases in accounts
payable. The increase was offset by the payment of compensation due to the
President.
STATEMENT OF INCOME AND RETAINED EARNINGS
It is difficult to evaluate line-by-line changes in the financial statements
due to the significant changes in operations during the comparative reporting
periods. On February 12, 1999, the Company significantly altered its mining
operation. Forty employees were terminated. Fourteen returned as independent
contractors. Compensation was based upon a percentage of the gold mined and
sold. Effective October 2, 1999, a crew of 13 was re-hired and on the
Company's payroll. Seventeen employees are on the Company's payroll at March
31, 2000.
Due to the significant changes in operations, expenses for the period ending
March 31, 2000 were reduced by $135,901 for the same period ending March 31,
1999. Revenues also decreased the first quarter of 2000 compared to the same
period in 1999 directly related to the change in operations.
For the period ended March 31, 2000, the Company recorded a profit of $6,220
(before taxes) compared to a loss of $30,959 for the same period in 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity (i.e., its ability to generate adequate amounts of
cash to meet its needs for cash) is substantially dependent upon the results
of its operations. While the Company does maintain a gold inventory which it
can liquidate from time to time to satisfy its working capital needs, there
can be no assurance that such inventory will be adequate to sustain operations
if the Company's gold mining activities are not successful. Because of the
unpredictable nature of the gold mining business, the Company cannot provide
any assurance with respect to long-term liquidity. In addition, if the
Company's mining operation does not produce meaningful additions to inventory,
the Company may determine it is necessary to satisfy its working capital needs
by selling gold in bullion form.
The Company is dependent on continued recovery of gold mined and sales of gold
from inventory to meets its cash needs. Although the Company has historically
located at least $1.2 million of gold in each of the last five years, there
can be no assurance that the Company's efforts in any particular period will
provide sufficient funding for the Company to continue operations. The
Company has a fully extended line of credit with a bank. If the Company's
cash resources are inadequate and its gold inventory is depleted, the Company
may seek debt of equity financing on the most reasonable terms available or
may terminate its operation.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
From time to time the Original Sixteen to One Mine, Inc. (the Company), will
make written and oral forward-looking statements about matters that involve
risks and uncertainties that could cause actual results to differ materially
from projected results. Important factors that could cause actual results to
differ materially include, among others:
- Fluctuations in the market prices of gold
- General domestic and international economic and political
conditions
- Unexpected geological conditions or rock stability conditions
resulting in cave-ins, flooding, rock-bursts or rock slides
- Difficulties associated with managing complex operations in remote
areas
- Unanticipated milling and other processing problems
- The speculative nature of mineral exploration
- Environmental risks
- Changes in laws and government regulations, including those
relating to taxes and the environment
- The availability and timing of receipt of necessary governmental
permits and approval relating to operations, expansion of
operations, and financing of operations
- Fluctuations in interest rates and other adverse financial market
conditions
- Other unanticipated difficulties in obtaining necessary financing
- The failure of equipment of processes to operate in accordance
with specifications or expectations
- Labor relations
- Accidents
- Unusual weather or operating conditions
- Force majeure events
- Other risk factors described from time to time in the Original
Sixteen to One Mine, Inc., filings with the Securities and
Exchange Commission
Many of these factors are beyond the Company's ability to control or predict.
Investors are cautioned not to place undue reliance on forward-looking
statements. The Company disclaims any intent or obligation to update its
forward-looking statements, whether as a result of receiving new information,
the occurrence of future events or otherwise.
SIGNATURE
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.
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Registrant)
/s/Michael M. Miller
President and Director
Dated: May 12, 2000
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