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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 September
30, 2007
[ ] 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
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 643, THOMPSON FALLS, MONTANA 59873
-------------------------------------------
(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 [ ]
Indicate by check mark whether the registrant is a shell company as defined by
Rule 12b-2 of the Exchange Act.
YES [ ] No [X]
Transitional Small Business Disclosure Format
YES [ ] No [X]
At November 15, 2007 the registrant had outstanding 42,473,691 shares of par
value $0.01 common stock.
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UNITED STATES ANTIMONY CORPORATION
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD
ENDED SEPTEMBER 30, 2007
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements................................................1-7
Item 2: Management's Discussion and Analysis of Results
of Operations and Financial Condition..............................7-11
Item 3: Controls and Procedures..............................................12
PART II - OTHER INFORMATION
Item 1: Legal Proceedings....................................................13
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds..........13
Item 3: Defaults upon Senior Securities......................................13
Item 4: Submission of Matters to a Vote of Security Holders..................13
Item 5: Other Information....................................................13
Item 6: Exhibits and Reports on Form 8-K.....................................13
SIGNATURE....................................................................14
CERTIFICATIONS............................................................15-16
[The balance of this page has been intentionally left blank.]
PART I-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30,
2007
------------
ASSETS
Current assets:
Cash $ 64,926
Accounts receivable, less allowance
for doubtful accounts of $30,000 146,543
Inventories 312,018
------------
Total current assets 523,487
Properties, plants and equipment, net 2,686,226
Restricted cash for reclamation bonds 65,736
------------
Total assets $ 3,275,449
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Checks issued and payable $ 63,110
Accounts payable 690,473
Accrued payroll and payroll taxes 78,662
Other accrued liabilities 77,807
Deferred revenue 168,768
Accrued interest payable 60,846
Payable to related parties 225,575
Convertible note payable to a related party 100,000
Long-term debt, current 90,227
------------
Total current liabilities 1,555,468
Deferred revenue, noncurrent 400,000
Long-term debt, noncurrent 69,932
Accrued reclamation and remediation costs, noncurrent 107,500
------------
Total liabilities 2,132,900
------------
Commitments and contingencies (Note 3)
Stockholders' equity:
Preferred stock $0.01 par value, 10,000,000 shares authorized:
Series A: no shares issued and outstanding --
Series B: 750,000 shares issued and outstanding
(liquidation preference $847,500 at December 31, 2006) 7,500
Series C: 177,904 shares issued and outstanding
(liquidation preference $97,847 at December 31, 2006) 1,779
Series D: 1,751,005 shares issued and outstanding
(liquidation preference $4,508,690 at December 31, 2006) 17,510
Common stock, $0.01 par vaue, 50,000,000 shares authorized;
42,473,691 shares issued and outstanding 424,737
Additional paid-in capital 21,206,849
Accumulated deficit (20,515,826)
------------
Total stockholders' equity 1,142,549
------------
Total liabilities and stockholders' equity $ 3,275,449
============
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 For the nine months ended
---------------------------- ----------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Antimony Division
Revenues $ 980,196 $ 780,917 $ 3,172,863 $ 2,408,774
------------ ------------ ------------ ------------
Cost of sales:
Production costs 693,589 477,478 2,287,751 1,637,184
Depreciation 5,125 10,096 15,376 25,609
Freight and delivery 41,621 43,295 155,628 148,304
General and administrative 1,704 6,791 9,690 23,791
Direct sales expense 12,083 13,001 33,750 48,632
------------ ------------ ------------ ------------
Total cost of sales 754,122 550,661 2,502,195 1,883,520
------------ ------------ ------------ ------------
Gross profit - antimony 226,074 230,256 670,668 525,254
------------ ------------ ------------ ------------
Zeolite Division
Revenues 326,018 384,527 850,694 880,892
------------ ------------ ------------ ------------
Cost of sales:
Production costs 281,450 270,550 858,818 779,097
Depreciation 49,509 29,037 109,593 84,844
Freight and delivery 14,556 18,454 53,445 39,986
General and administrative 36,494 31,670 138,403 75,961
Royalties 39,441 35,539 101,049 100,922
Direct sales expense 13,492 19,419 37,759 55,824
------------ ------------ ------------ ------------
Total cost of sales 434,942 404,669 1,299,067 1,136,634
------------ ------------ ------------ ------------
Gross profit (loss) - zeolite (108,924) (20,142) (448,373) (255,742)
------------ ------------ ------------ ------------
Total revenues - combined 1,306,214 1,165,444 4,023,557 3,289,666
Total cost of sales - combined 1,189,064 955,330 3,801,262 3,020,154
------------ ------------ ------------ ------------
Gross profit - combined 117,150 210,114 222,295 269,512
------------ ------------ ------------ ------------
Other operating (income) expenses:
Corporate general and administrative 32,717 66,614 212,720 230,072
Exploration expense 85,434 125,655 201,730 335,631
Gain on sale of properties, plants and equipment (30,000) -- (127,541) --
------------ ------------ ------------ ------------
Other operating (income) expenses 88,151 192,269 286,909 565,703
------------ ------------ ------------ ------------
Income (loss) from operations 28,999 17,845 (64,614) (296,191)
------------ ------------ ------------ ------------
Other expenses:
Interest expense, net 14,197 24,592 34,884 75,074
Factoring expense 28,776 26,013 73,351 68,764
------------ ------------ ------------ ------------
Other expenses 42,973 50,605 108,235 143,838
------------ ------------ ------------ ------------
Net loss $ (13,974) $ (32,760) $ (172,849) $ (440,029)
============ ============ ============ ============
Net loss per share of common stock - basic and diluted Nil Nil Nil $ (0.01)
============ ============ ============ ============
Basic and diluted weighted average shares outstanding 41,825,068 37,283,985 41,021,940 35,736,439
============ ============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
2
United States Antimony Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
For the nine months ended
--------------------------
September 30, September 30,
2007 2006
---------- ----------
Cash Flows From Operating Activities:
Net loss $ (172,849) $ (440,029)
Adjustments to reconcile net loss to net cash
used by operating activities:
Common stock issued for directors services -- 49,500
Depreciation expense 124,969 117,327
Deferred financing costs as interest expense 3,750 --
Gain on sale of properties, plants and equipment (127,541) --
Change in:
Accounts receivable (52,947) 47,970
Inventories (26,206) (121,408)
Restricted cash for reclamation bonds 17,360 (3,927)
Accounts payable 10,969 56,264
Accrued payroll and payroll taxes 10,393 (30,656)
Other accrued liabilities (2,494) (6,191)
Deferred revenue (44,236) (48,265)
Accrued interest payable 1,655 (10,110)
Payable to related parties 1,126 (24,052)
---------- ----------
Net cash used by operating activities (256,051) (413,577)
---------- ----------
Cash Flows From Investing Activities:
Purchase of properties, plants and equipment (678,445) (438,371)
Proceeds from sale of properties, plants and equipment 127,541 --
---------- ----------
Net cash used by investing activities (550,904) (438,371)
---------- ----------
Cash Flows From Financing Activities:
Proceeds from sale of common stock and warrants, net of commissions 834,578 772,800
Principal payments of long-term debt (191,883) (111,912)
Change in checks issued and payable 10,821 4,546
---------- ----------
Net cash provided by financing activities 653,516 665,434
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (153,439) (186,514)
Cash and cash equivalents at beginning of period 218,365 287,841
---------- ----------
Cash and cash equivalents at end of period $ 64,926 $ 101,327
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Non-cash investing and financing activities:
Properties, plants & equipment acquired with accounts payable $ 24,256 $ 95,000
Properties, plants & equipment purchased with long-term debt 43,153 --
Common stock issued for conversion of preferred stock 66 --
Common stock issued for conversion of debt and related accrued interest -- 281,251
Common stock issued for acquisition of properties, plants, & equipment -- 43,500
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 nine month
period ended September 30, 2007 are not necessarily indicative of the results
that may be expected for the full year ending December 31, 2007. Certain
consolidated financial statement amounts for the nine month period ended
September 30, 2006 have been reclassified to conform to the 2007 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/A for the year ended December 31,
2006.
The financial statements have been prepared on a going concern basis, which
assumes realization of assets and liquidation of liabilities in the normal
course of business. At September 30, 2007, the Company had negative working
capital of approximately $1,030,000, an accumulated deficit of approximately
$20.5 million, and total stockholders' equity of approximately $1,143,000. These
factors, among others, indicate that there is substantial doubt that the Company
will be able to meet its obligations and continue in existence as a going
concern. The financial statements do not include any adjustments that may be
necessary should the Company be unable to continue as a going concern.
2. LOSS PER COMMON SHARE:
The Company accounts for its 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 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
(approximately 6,967,727 shares at September 30, 2007) and common stock issuable
upon the conversion of a convertible note payable (approximately 500,000 shares
at September 30, 2007) are excluded from the calculations when their effect is
antidilutive.
3. COMMITMENTS AND CONTINGENCIES:
The Company's management believes that USAC is currently in substantial
compliance with environmental regulatory requirements and that its accrued
environmental reclamation and remediation costs are representative of
management's estimate of costs required to fulfill its reclamation and
remediation 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 effect on the Company's operations. The range of
possible losses in excess of the amounts accrued cannot be reasonably estimated
at this time.
In March of 2007, the Company sustained an industrial accident at the BRZ mine.
Based upon preliminary discussions with federal safety regulators, the Company
has recorded an estimated penalty of $39,635 as of September 30, 2007; the
actual amount could differ from this estimate.
4
PART I - FINANCIAL INFORMATION, CONTINUED:
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED), CONTINUED:
4. BUSINESS SEGMENTS
The Company has two operating segments, antimony and zeolite. Management reviews
and evaluates the operating segments exclusive of interest and factoring
expenses. Therefore, interest expense is not allocated to the segments. Selected
information with respect to segments is as follows:
For the nine months
ended and as of
September 30, 2007
------------------
Capital expenditures:
Antimony
United States $ --
Mexico 126,700
------------------
Subtotal Antimony 126,700
Zeolite 619,154
------------------
$ 745,854
==================
Properties, plants and equipment, net:
Antimony
United States $ 122,338
Mexico 874,440
------------------
Subtotal Antimony 996,778
Zeolite 1,689,448
------------------
$ 2,686,226
==================
Inventory:
Antimony
United States $ 267,559
Mexico --
------------------
Subtotal Antimony 267,559
Zeolite 44,459
------------------
$ 312,018
==================
Total Assets:
Antimony
United States $ 540,014
Mexico 874,440
------------------
Subtotal Antimony 1,414,454
Zeolite 1,796,069
Corporate 64,926
------------------
$ 3,275,449
==================
5
PART I - FINANCIAL INFORMATION, CONTINUED:
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED), CONTINUED:
5. RELATED PARTY TRANSACTIONS
A director of the Company acts as legal counsel to the Company. During the
nine-month period ended September 30, 2007, the Company paid legal fees and
expenses to this director in the amount of $40,000. Of this amount, $7,500 has
been capitalized as properties, plant and equipment.
6. ADOPTION OF NEW ACCOUNTING PRINCIPLES
On January 1, 2007, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 155 "Accounting for Certain Hybrid Financial Instruments,"
which amends SFAS No. 133 "Accounting for Derivative Instruments and Hedging
Activities" and SFAS No. 140 "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." SFAS No. 155 resolves
issues addressed in Statement 133 Implementation Issue No. D1 "Application of
Statement 133 to Beneficial Interests in Securitized Financial Assets," and:
o Permits fair value remeasurement for any hybrid financial instrument
that contains an embedded derivative that otherwise would require
bifurcation;
o Clarifies which interest-only strips are not subject to the
requirements of SFAS No. 133;
o Establishes a requirement to evaluate interests in securitized
financial assets to identify interests that are freestanding
derivatives or that are hybrid financial instruments that contain an
embedded derivative requiring bifurcation;
o Clarifies that concentrations of credit risk in the form of
subordination are not embedded derivatives; and
o Amends SFAS No. 140 to eliminate the prohibition on a qualifying
special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial interest other than another derivative
financial instrument.
The Company adopted SFAS No. 155 using the modified prospective transition
method, which requires the application of the accounting standard as of January
1, 2007. There was no impact on the financial statements as of and for the nine
months ended September 30, 2007 as a result of the adoption of SFAS No 155. In
accordance with the modified prospective transition method, the financial
statements for prior periods have not been restated to reflect, and do not
include, the impact of SFAS No. 155.
On January 1, 2007, the Company adopted Financial Accounting Standards Board
Interpretation No. 48 ("FIN No. 48") "Accounting for Uncertainty in Income
Taxes," FIN No. 48 clarifies the accounting for uncertainly in income taxes
recognized in accordance with SFAS No. 109 "Accounting for Income Taxes,"
prescribing a recognition threshold and measurement attribute for the
recognition and measurement of a tax position taken or expected to be taken in a
tax return. In the course of our assessment, we have determined that we are
subject to examination of our income tax filings in the United States and state
jurisdictions for the 2004 through 2006 tax years. In the event that the Company
is assessed penalties and or interest; penalties will be charged to other
operating expense and interest will be charged to interest expense.
The Company adopted FIN No. 48 using the modified prospective transition method,
which requires the application of the accounting standard as of January 1, 2007.
There was no impact on the financial statements as of and for the nine months
ended September 30, 2007 as a result of the adoption of FIN No. 48. In
accordance with the modified prospective transition method, the financial
statements for prior periods have not been restated to reflect, and do not
include, the impact of FIN No. 48.
6
PART I - FINANCIAL INFORMATION, CONTINUED:
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED), CONTINUED:
7. NEW ACCOUNTING PRONOUNCEMENTS
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" (SFAS 159), which will permit
entities to choose to measure many financial assets and financial liabilities at
fair value. Unrealized gains on items for which the fair value option has been
elected are to be reported in earnings. SFAS 159 will become effective in our
2008 financial statements. We have not yet determined the effect that adoption
of SFAS 159 may have on our results of operations or financial position.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements,"
(SFAS 157), which will become effective in our 2008 financial statements. SFAS
157 establishes a framework for measuring fair value and expands disclosure
about fair value measurements, but does not require any new fair value
measurements. We have not yet determined the effect that adoption of SFAS 157
may have on our results of operations or financial position.
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
FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2007 COMPARED TO THE THREE MONTH
PERIOD ENDED SEPTEMBER 30, 2006.
The Company's operations resulted in a net loss of $13,974 for the three-month
period ended September 30, 2007, compared with a net loss of $32,760 for the
same period ended September 30, 2006. The decrease in the loss for the third
quarter of 2007 compared to the similar period of 2006 is primarily due to gain
on sale of mining interests.
ANTIMONY DIVISION:
Total revenues from antimony product sales for the third quarter of 2007 were
$980,196 compared with $780,917 for the comparable quarter of 2006, an increase
of $199,279. During the three-month period ended September 30, 2007, 56% of the
Company's revenues from antimony product sales were from sales to one customer.
Sales of antimony products during the third quarter of 2007 consisted of 384,548
pounds at an average sale price of $2.55 per pound. During the third quarter of
2006, sales of antimony products consisted of 307,321 pounds at an average sale
price of $2.54 per pound.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION, CONTINUED
The cost of antimony production was $693,589, or $1.80 per pound sold during the
third quarter of 2007 compared to $477,478 or $1.55 per pound sold during the
third quarter of 2006. The increase in price per pound was primarily due to
increased costs of raw materials.
Antimony depreciation for the third quarter of 2007 was $5,125 which was
comparable to $10,096 for the third quarter of 2006.
Antimony freight and delivery expense for the third quarter of 2007 was $41,621
compared to $43,295 during the third quarter of 2006. The decrease was due to
the decrease of freight costs.
General and administrative expenses in the antimony division were $1,704 during
the third quarter of 2007 compared to $6,791 during the same quarter in 2006.
The decrease is due to a decrease in finance charges on purchases.
Antimony sales expenses were $12,083 for the third quarter of 2007 compared to
$13,001 for the same quarter in 2006.
ZEOLITE DIVISION:
Total revenue from sales of zeolite products during the third quarter of 2007
were $326,018 at an average sales price of $120.93 per ton, compared with the
same quarter sales in 2006 of $384,527 at an average sales price of $148.35 per
ton. The decrease in revenue for the third quarter of 2007 compared to the same
quarter of 2006 was primarily due to the decrease in the average sales price of
$27.42 per ton sold during the third quarter of 2007.
The cost of zeolite production was $281,450, or $104.39 per ton sold, for the
third quarter of 2007 compared to $270,550, or $104.43 per ton sold, during the
third quarter of 2006. The increase was due to the sale of 104 more tons of
zeolite during the third quarter of 2007 than in the third quarter of 2006.
Zeolite depreciation for the third quarter of 2007 was $49,509 compared to
$29,307 for the third quarter of 2006. The increase in depreciation is due to
the continued purchase of capital assets associated with zeolite production.
Zeolite freight and delivery for the third quarter of 2007 was $14,556 compared
to $18,454 for the third quarter of 2006.
During the third quarter of 2007, the Company incurred costs totaling $36,494
associated with general and administrative expenses at Bear River Zeolite
Company, compared to $31,670 of such expenses in the comparable quarter of 2006.
The increase was primarily due to increases in fines and travel expenses.
Zeolite sales expenses were $13,492 during the third quarter of 2007 compared to
$19,419 during the third quarter of 2006. The decrease is caused by fewer
commissions paid to sales personnel.
Zeolite royalties expenses were $39,441 during the third quarter of 2007
compared to $35,539 during the third quarter of 2006.
8
ADMINISTRATIVE OPERATIONS
Interest expense of $14,197 was incurred during the third quarter of 2007
compared to $24,592 during the third quarter of 2006. The decrease in interest
resulted from additional principal payments on debt, using cash provided by
sales of mining claims.
Accounts receivable factoring expense was $28,776 during the third quarter of
2007 compared to $26,013 during the third quarter of 2006.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION, CONTINUED
General and administrative expenses for the corporation were $32,717 during the
third quarter of 2007 compared to $66,614 for the same quarter in 2006. The
decrease is primarily due to recovery of items previously expensed.
Exploration expense has decreased by $40,221 from the quarter ended September
30, 2006 because of greater focus on plant construction than on exploration.
The Company sold certain mining claims during the third quarter of 2007 that
resulted in a gain on sale of property $30,000 during the third quarter of 2007.
No such sales were transacted during the third quarter of 2006.
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2007 COMPARED TO THE NINE MONTH
PERIOD ENDED SEPTEMBER 30, 2006.
The Company's operations resulted in a net loss of $172,849 for the nine month
period ended September 30, 2007, compared with a net loss of $440,029 for the
same period ended September 30, 2006. The decrease in the loss for the first
nine months of 2007 compared to the similar period of 2006 is primarily due to
an increase in sales of antimony, a decrease in expenses related to the
exploration of the Mexican Project and the gain on sales of mining claims.
ANTIMONY DIVISION:
Total revenues from antimony product sales for the first nine months of 2007
were $3,172,863 compared with $2,408,774 for the first nine months of 2006, an
increase of $764,089. During the nine month period ended September 30, 2007, 49%
of the Company's revenues from antimony product sales were from sales to one
customer. Sales of antimony products during the first nine months of 2007
consisted of 1,256,520 pounds at an average sale price of $2.53 per pound.
During the first nine months of 2006, sales of antimony products consisted of
1,093,851 pounds at an average sale price of $2.20 per pound.
The cost of antimony production was $2,287,751, or $1.82 per pound sold during
the first nine months of 2007 compared to $1,637,184 or $1.50 per pound sold
during the first nine months of 2006. The increase in price per pound is
primarily due to increased raw materials cost.
Antimony depreciation for the first nine months of 2007 was $15,376 which was
comparable to $25,609 for the first nine months of 2006.
Antimony freight and delivery expense for the first nine months of 2007 was
$155,628 compared to $148,304 during the first nine months of 2006. The increase
is due to the increase in product shipped.
General and administrative expenses in the antimony division were $9,690 during
the first nine months of 2007 compared to $23,791 during the same quarter in
2006. The decrease is due to a decrease in finance charges on purchases.
9
Antimony sales expenses were $33,750 for the first nine months of 2007 compared
to $48,632 for the same quarter in 2006. The decrease is due to fewer
commissions paid to sales personnel.
ZEOLITE DIVISION:
Total revenue from sales of zeolite products during the first nine months of
2007 were $850,694 at an average sales price of $125.88 per ton compared with
the same period's sales in 2006 of $880,892 at an average sales price of $126.64
per ton. The decrease in revenue for the first nine months of 2007 compared to
the first nine months of 2006 was primarily due to a decrease of 198 tons sold
during the first nine months of 2007.
The cost of zeolite production was $858,818, or $127.08 per ton sold, for the
first nine months of 2007 compared to $779,097, or $112.00 per ton sold, during
the first nine months of 2006. The increase was principally due to the increased
prices for fuel, labor, and materials.
Zeolite depreciation for the first nine months of 2007 was $109,593 compared to
$84,844 for the first nine months of 2006. The increase in depreciation is due
to the continued purchase of capital assets associated with zeolite production.
Zeolite freight and delivery for the first nine months of 2007 was $53,445
compared to $39,986 for the first nine months of 2006. The increase is due to a
decrease in freight income, which is netted against freight and delivery costs,
for the first nine months of 2007.
During the first nine months of 2007, the Company incurred costs totaling
$138,403 associated with general and administrative expenses at Bear River
Zeolite Company, compared to $75,961 of such expenses in the comparable quarter
of 2006. The increase was due to increases in fines and travel expenses.
Zeolite royalties expenses were $101,049 during the first nine months of 2007
compared to $100,922 during the first nine months of 2006.
Zeolite sales expenses were $37,759 during the first nine months of 2007
compared to $55,824 during the first nine months of 2006. The decrease is
related to fewer commissions paid to sales personnel.
ADMINISTRATIVE OPERATIONS
Interest expense of $34,884 was incurred during the first nine months of 2007
compared to $75,074 during the first nine months of 2006. The decrease in
interest resulted from additional principal payments on debt, using cash
provided by sales of mining interests.
Accounts receivable factoring expense was $73,351 during the first nine months
of 2007 compared to $68,764 during the first nine months of 2006.
General and administrative expenses for the corporation were $212,720 during the
first nine months of 2007 compared to $230,072 for the first nine months of
2006. The decrease is primarily due to recovery of items previously expensed.
Exploration expense decreased by $133,901 from the nine months ended September
30, 2006 because of an increased focus on plant construction instead of
exploration.
The company sold certain mining claims during the first nine months of 2007 that
resulted in a gain on sale of property of $127,541 during the first nine months
of 2007. No such sales were transacted during the first nine months of 2006.
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FINANCIAL CONDITION AND LIQUIDITY
At September 30, 2007, Company assets totaled $3,275,449 and total stockholders'
equity was $1,142,549. Total stockholders' equity increased $661,751 from
December 31, 2006, primarily because of sales of common stock. At September 30,
2007, the Company's total current liabilities exceeded its total current assets
by $1,031,981. Because of the Company's operating losses and negative working
capital, the Company's independent accountants included a paragraph in the
Company's 2006 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 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. The Company's management is
confident, however, that it will be able to generate cash from operations and
financing sources that will enable it to meet its obligations over the next
twelve months.
Cash used by operating activities during the first nine months of 2007 was
$256,051, and resulted primarily from an increase in accounts receivable and the
non-cash affects of depreciation and amortization expenses and the gain on sale
of properties, plants and equipment.
Cash used in investing activities during the first nine months of 2007 was
$550,904 and primarily related to the BRZ Raymond Mill Project.
Net cash provided by financing activities was $653,516 during the first nine
months of 2007 and was primarily generated from proceeds from the sale of common
stock and exercise of warrants.
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ITEM 3. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and that such information
is accumulated and communicated to management, as appropriate, to allow timely
decisions regarding required disclosure. Our president, who serves as the chief
accounting officer, conducted an evaluation of the effectiveness of the
Company's disclosure controls and procedures (as defined in the Securities
Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of September 30, 2007.
Based upon this evaluation, it was determined that there were material
weaknesses affecting our internal control over financial reporting and, as a
result of those weaknesses, our disclosure controls and procedures were not
effective as of September 30, 2007. These material weaknesses are as follows:
o The Company lacks proper segregation of duties. As with any company
the size of ours, this lack of segregation of duties is due to limited
resources. The president authorizes the majority of the expenditures
and signs checks.
o The Company lacks accounting personnel with sufficient skills and
experience to ensure proper accounting for complex, non-routine
transactions.
o During its year end audit, our independent registered accountants
discovered material misstatements in our financial statements that
required audit adjustments.
MANAGEMENT'S REMEDIATION INITIATIVES
We are aware of these material weaknesses and plan to put procedures in place to
ensure that independent review of material transactions is performed. In
addition, we plan to consult with independent experts when complex transactions
are entered into.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes during the quarter ended September 30, 2007 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.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three month period ended September 30, 2007, the Company sold shares
of its restricted common stock and warrants as follows: 649,000 shares for $0.25
per share ($162,250), 200,000 shares for $0.54 ($108,000), and 200,000 for $0.50
($100,000). In addition, the Company issued 6,667 shares of restricted common
stock in conversion of 6,667 shares of preferred series D stock. Both the common
stock and the common stock underlying the warrants are restricted as defined
under Rule 144. In management's opinion, the offer and sale of the securities
were made in reliance on exemptions from registration provided by Section 4(2)
and Rule 506 of Regulation D of the Securities Act of 1933, as amended and other
applicable Federal and state securities laws.
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
None
Reports on Form 8-K None
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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: November 9, 2007
------------------------------
John C. Lawrence, Director and President
(Principal Executive, Financial and
Accounting Officer)
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