UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period ______to________
Commission file number 33-00215
UNITED STATES ANTIMONY CORPORATION
(Name of small business issuer in its charter)
MONTANA 81-0305822
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
P.O. BOX 643, THOMPSON FALLS, MONTANA 59873
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(Address of principal executive offices) (Zip code)
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 May 6, 2002, the registrant had outstanding 26,956,956 shares of par value
$0.01 common stock.
UNITED STATES ANTIMONY CORPORATION
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 2002
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements 1
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II - OTHER INFORMATION
Item 1: Legal Proceedings 7
Item 2: Changes in Securities 7
Item 3: Defaults among Senior Securities 7
Item 4: Submission of Matters to a Vote of Security Holders 7
Item 5: Other Information 7
Item 6: Exhibits and Reports on Form 8-K 7
SIGNATURES
[The balance of this page has been intentionally left blank.]
PART I-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
MARCH 31, DECEMBER 31,
2002 2001
ASSETS
Current assets:
Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,659 $ 3,803
Accounts receivable, less allowance
for doubtful accounts of $30,000 . . . . . . . . . . . . . . . . . 40,598 105,084
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,943 126,075
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Total current assets . . . . . . . . . . . . . . . . . . . . 177,200 234,962
Investment in USAMSA, net. . . . . . . . . . . . . . . . . . . . . . . 89,303 95,734
Properties, plants and equipment, net. . . . . . . . . . . . . . . . . 392,894 307,373
Restricted cash for reclamation bonds. . . . . . . . . . . . . . . . . 87,550 87,550
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Total assets . . . . . . . . . . . . . . . . . . . . . . . . $ 746,947 $ 725,619
============= ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Checks issued and payable. . . . . . . . . . . . . . . . . . . . . . $ 56,885 $ 61,121
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . 691,859 624,588
Accrued payroll and property taxes . . . . . . . . . . . . . . . . . 271,229 256,320
Accrued payroll. . . . . . . . . . . . . . . . . . . . . . . . . . . 26,198 26,150
Other current liabilities. . . . . . . . . . . . . . . . . . . . . . 56,467 56,640
Judgment payable . . . . . . . . . . . . . . . . . . . . . . . . . . 47,374 46,523
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . 14,640 14,640
Payable to related parties . . . . . . . . . . . . . . . . . . . . . 94,702 121,082
Notes payable to bank, current . . . . . . . . . . . . . . . . . . . 216,183 119,431
Accrued reclamation costs, current . . . . . . . . . . . . . . . . . 137,639 137,639
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Total current liabilities. . . . . . . . . . . . . . . . . . 1,613,176 1,464,134
Notes payable to bank, noncurrent. . . . . . . . . . . . . . . . . . . 248,467 341,845
Accrued reclamations costs, noncurrent . . . . . . . . . . . . . . . . 87,524 87,524
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Total liabilities. . . . . . . . . . . . . . . . . . . . . . 1,949,167 1,893,503
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Commitments and contingencies (Note 3)
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
Series C: 177,904 shares issued and outstanding. . . . . . . . . 1,779 1,779
Common stock, $.01 par value, 30,000,000 shares
authorized; 26,956,959 issued and outstanding at March 31, 2002
and 26,156,959 shares issued and outstanding at December 31, 2001. 269,569 261,569
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . 16,943,610 16,791,610
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . (18,424,723) (18,230,387)
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Total stockholders' deficit. . . . . . . . . . . . . . . . . (1,202,220) (1,167,884)
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Total liabilities and stockholders' deficit. . . . . . . . . $ 746,947 $ 725,619
============= ==============
The accompanying notes are an integral part of the financial statements.
1
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31, MARCH 31,
2002 2001
Revenues:
Sales of antimony products and other . . $ 651,089 $ 961,131
Sales of zeolite products. . . . . . . . 61,314
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712,403 961,131
Cost of zeolite production . . . . . . . 39,311
Cost of antimony production. . . . . . . 564,548 802,368
Freight and delivery-antimony. . . . . . 79,809 103,614
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683,668 905,982
Gross profit . . . . . . . . . . . . . . . 28,735 55,149
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Other operating expenses:
Bear River Zeolite-sales and development 68,481 46,243
General and administrative . . . . . . . 97,896 174,047
Sales expenses . . . . . . . . . . . . . 26,865 38,496
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193,242 258,786
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Other (income) expense:
Interest expense . . . . . . . . . . . . 17,453 39,886
Factoring expense. . . . . . . . . . . . 19,326 23,264
Interest income and other. . . . . . . . (6,950) (1,481)
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29,829 61,669
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Net loss . . . . . . . . . . . . . . . . . $ 194,336 $ 265,306
=========== ===========
Basic net loss per share of common stock:. $ 0.01 $ 0.01
=========== ===========
Basic weighted average shares outstanding. 26,588,070 18,467,762
=========== ===========
The accompanying notes are an integral part of the financial statements.
2
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31, MARCH 31,
2002 2001
Cash flows from operating activities:
Net loss. . . . . . . . . . . . . . . . . . . . . . $ (194,336) $ (265,306)
Adjustments to reconcile net loss to
net cash used by operations:
Depreciation. . . . . . . . . . . . . . . . . . 26,931 24,000
Amortization of deferred financing charges. . . 10,313
Amortization of debenture discount. . . . . . . 3,161
Change in:
Restricted cash . . . . . . . . . . . . . . . 144 (472)
Accounts receivable . . . . . . . . . . . . . 64,486 53,932
Inventories . . . . . . . . . . . . . . . . . (6,868) 50,079
Accounts payable. . . . . . . . . . . . . . . 67,271 31,068
Accrued payroll and property taxes. . . . . . 14,909 (66,683)
Accrued payroll and other . . . . . . . . . . (125) 69,033
Judgments payable . . . . . . . . . . . . . . 851 761
Accrued debenture interest payable. . . . . . 25,575
Payable to related parties. . . . . . . . . . (26,380) (5,784)
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Net cash used by operating activities . . . (53,117) (70,323)
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Cash flows from investing activities:
Purchase of properties, plants and equipment. . . . (106,021) (38,810)
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Net cash used in investing activities . . . (106,021) (38,810)
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Cash flows from financing activities:
Proceeds from issuance of common stock and warrants 160,000 42,000
Payments on notes payable to bank . . . . . . . . . (96,117)
Proceeds from related party advances. . . . . . . . 50,000
Proceeds from notes payable to bank . . . . . . . . 99,491 40,934
Change in checks issued and payable . . . . . . . . (4,236) (23,801)
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Net cash provided by financing activities . 159,138 109,133
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Net change in cash. . . . . . . . . . . . . . . . . . 0 0
Cash, beginning of period . . . . . . . . . . . . . . 0 0
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Cash, end of period . . . . . . . . . . . . . . . . . $ 0 $ 0
========== ===========
Supplemental disclosures:
Cash paid during the period for interest. . . . . . $ 13,343 $ 12,495
========== ===========
The accompanying notes are an integral part of the financial statements.
3
PART I - FINANCIAL INFORMATION, CONTINUED:
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION:
The unaudited consolidated financial statements have been prepared by the
Company in accordance with accounting principles generally accepted in the
United States of America for interim financial information, as well as the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of the Company's management, all adjustments (consisting of only normal
recurring accruals) considered necessary for a fair presentation of the interim
financial statements have been included. Operating results for the three-month
period ended March 31, 2002 are not necessarily indicative of the results that
may be expected for the full year ending December 31, 2002. Certain
consolidated financial statement amounts for the three-month period ended March
31, 2001 have been reclassified to conform to the 2002 presentation. These
reclassifications had no effect on the net loss or accumulated deficit as
previously reported.
For further information refer to the financial statements and footnotes thereto
in the Company's Annual Report on Form 10-KSB for the year ended December 31,
2001.
2. LOSS PER COMMON SHARE
The Company accounts for its income (loss) per common share according to the
Statement of Financial Accounting Standards No. 128 "Earnings Per Share" ("SFAS
No. 128"). Under the provisions of SFAS No. 128, primary and fully diluted
earnings per share are replaced with basic and diluted earnings per share.
Basic earnings per share is arrived at by dividing net income (loss) available
to common stockholders by the weighted average number of common shares
outstanding, and does not include the impact of any potentially dilutive common
stock equivalents. Common stock equivalents, including warrants to purchase the
Company's common stock and common stock issuable upon the conversion of
debentures are excluded from the calculations when their effect is antidilutive.
3. COMMITMENTS AND CONTINGENCIES:
Until 1989, the Company mined, milled and leached gold and silver in the Yankee
Fork Mining District in Custer County, Idaho. 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 December 31, 2001, the cyanide solution cleanup was
complete, the mill removed, and a majority of the cyanide leach residue disposed
of. In 1996, the Idaho Department of Environmental Quality requested that the
Company sign a consent decree related to completing the reclamation and
remediation at the Preachers Cove mill, which the Company signed in December
1996.
In November of 2001, the Environmental Protection Agency ("EPA") listed two
by-products of the Company's antimony oxide manufacturing process as hazardous
wastes. Antimony slag and antimony bag house filters are now subject to
comprehensive management and treatment standards under subtitle C of the
Resource Conservation and Recovery Act ("RCRA"), and emergency notification
requirements for releases to the environment under CERCLA. During 2001, the
Company adjusted its reclamation accrual at its antimony processing site based
on an estimate of costs associated with disposing the Company's current antimony
slag inventory according to EPA universal treatment standards. While it is
probable that future costs will result from the EPA's listings, the additional
costs are not estimable at December 31, 2001.
4
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED:
3. COMMITMENTS AND CONTINGENCIES, CONTINUED:
The Company's management believes that USAC is currently in substantial
compliance with environmental regulatory requirements and that its accrued
environmental reclamation costs are representative of management's estimate of
costs required to fulfill its reclamation obligations. Such costs are accrued
at the time the expenditure becomes probable and the costs can reasonably be
estimated. The Company recognizes, however, that in some cases future
environmental expenditures cannot be reliably determined due to the uncertainty
of specific remediation methods, conflicts between regulating agencies relating
to remediation methods and environmental law interpretations, and changes in
environmental laws and regulations. Any changes to the Company's reclamation
plans as a result of these factors could have an adverse affect on the Company's
operations. The range of possible losses in excess of the amounts accrued
cannot be reasonably estimated at this time.
During 2001, the Company issued a number of shares in transactions that may not
qualify for exemption from the Securities Act registration requirements and may
be in violation of Section 5 of the Securities Act of 1933. As a result the
Company may be subject to liabilities associated with the rescission rights of
the purchasers of these shares and fines and penalties from securities
regulators. At March 31, 2002 and December 31, 2001, the Company had not
recorded any liability associated with the issuance of these shares, as
management believes the likelihood of a claim, and the ultimate outcome if a
claim is asserted, cannot be ascertained at this time.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
General
This report contains both historical and prospective statements concerning the
Company and its operations. Prospective statements (known as "forward-looking
statements") may or may not prove true with the passage of time because of
future risks and uncertainties. The Company cannot predict what factors might
cause actual results to differ materially from those indicated by prospective
statements.
Results of Operations
The Company's operations resulted in a net loss of $194,336 for the three-month
period ended March 31, 2002, compared with a net loss of $265,306 for the
three-month period ended March 31, 2001. The decrease in the loss for the first
quarter of 2002 compared to the similar quarter of 2001 is primarily due to
decreased general and administrative expenses during the first quarter of 2002.
During the first quarter of 2001, the Company incurred penalties and legal and
accounting expenses associated with the preparation of a registration statement
that were not incurred during the first quarter of 2002.
Total revenues from antimony product sales for the first quarter of 2002 were
$651,089 compared with $961,131 for the comparable quarter of 2001, a decrease
of $310,042. During the three-month period ended March 31, 2002, 40.36%, of the
Company's revenues from antimony product sales were from sales to one customer
and 10.7% were from sales to a second individual customer. Sales of antimony
products during the first quarter of 2002 consisted of 752,049 pounds at an
average sale price of $0.87 per pound. During the first quarter of 2001 sales
of antimony products consisted of 945,324 pounds at an average sale price of
$1.02 per pound. Management believes that the decrease in the sales of antimony
products is the result of a general economic slow down during the first quarter
of 2002. The decrease in sale prices of antimony products from the first quarter
of 2001 to the first quarter of 2002 is the result of a corresponding decrease
in antimony metal prices.
5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Sales of zeolite products during the first quarter of 2002 were $61,314, no
corresponding sales were made during the first period of 2001. Gross profit
from antimony and zeolite sales during the first three-month period of 2002 was
$28,735 compared with gross profit of $55,149 during the first three-month
period of 2001.
During the first quarter of 2002, the Company incurred expenses totaling $68,481
associated with production and development costs of its 75% owned subsidiary,
Bear River Zeolite Company, ("Bear River Zeolite or BRZ") compared to $46,243 of
expenses in the comparable quarter of 2001. The increase in BRZ expenses was
principally due to the costs associated with zeolite marketing efforts and
expenses relating to the development of the zeolite plant and equipment during
2002.
General and administrative expenses were $97,896 during the first quarter of
2002, compared to $174,047 during the first quarter of 2001. The decrease in
general and administrative expenses during the first quarter of 2002 compared to
the same quarter of 2001 was partially due to the absence of penalties and legal
and accounting expenses associated with the preparation of a registration
statement during the first quarter of 2001 that were incurred during the first
quarter of 2001.
Sales expenses were $26,865 during the first quarter of 2002 compared with
$38,496 in the first quarter of 2001, the decrease was due to the allocation of
a portion of the Company's sales and labor costs to BRZ.
Interest expense was $17,453 during the first quarter of 2002, compared to
interest expense of $39,886 incurred during the first quarter of 2001; the
decrease in interest expense was due to the conversion of outstanding debentures
during the fourth quarter of 2001.
Accounts receivable factoring expense was $19,326 during the first quarter of
2002 compared to $23,264 of factoring expense incurred during the first quarter
of 2002. The decrease was primarily due to fewer accounts receivable factored
during the first quarter of 2002 compared to 2001.
Interest and other income increased from $1,481 during the first quarter of 2001
to $6,950 during the first quarter of 2002. The increase was the result of
plant and equipment rental income recognized from BRZ.
Financial Condition and Liquidity
At March 31, 2002, Company assets totaled $746,947, and there was a
stockholders' deficit of $1,202,220. The stockholders' deficit increased $34,336
from December 31, 2001, primarily due to the net loss incurred during the first
quarter of 2002. At March 31, 2002 the Company's total current liabilities
exceeded its total current assets by $1,435,976. Due to the Company's operating
losses, negative working capital, and stockholders' deficit, the Company's
independent accountants included a paragraph in the Company's 2001 financial
statements relating to a going concern uncertainty. To continue as a going
concern the Company must generate profits from its antimony and zeolite sales
and to acquire additional capital resources through the sale of its securities
or from short and long-term debt financing. Without financing and profitable
operations, the Company may not be able to meet its obligations, fund operations
and continue in existence. While management is optimistic that the Company will
be able to sustain profitable operations and meet its financial obligations,
there can be no assurance of such.
Cash used by operating activities during the first three months of 2002 was
$53,117, and resulted from the first quarter net loss of $194,336 as adjusted
principally by decreasing accounts receivable, increasing accounts payable and
the non-cash affects of depreciation and amortization expenses.
Cash used in investing activities during the first three months of 2002 was
$106,021 and primarily related to the construction of capital assets at the Bear
River Zeolite facility.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Cash provided by financing activities was $159,138 during the first three months
of 2002, and was principally generated by sales of 800,000 shares of
unregistered common stock for $160,000 or $0.20 per share.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
Neither the constituent instruments defining the rights of the registrant's
securities filers nor the rights evidenced by the registrant's outstanding
common stock have been modified, limited or qualified. The Company sold 800,000
shares of its common stock for $0.20 per share, during the first quarter of
2002 pursuant to exemptions from registration under Section 4(2) of the
Securities Act of 1933 as amended.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The registrant has no outstanding senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits None
Reports on Form 8-K None
7
SIGNATURE
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 14, 2002
---------------------------------------
John C. Lawrence, Director and President
(Principal Executive, Financial and Accounting
Officer)
8