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, 2003
[ ] 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.
incorporation or organization) Employer 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
--
At September 10, 2003, the registrant had outstanding 27,027,959 shares of par
value $0.01 common stock.
UNITED STATES ANTIMONY CORPORATION
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTERLY PERIOD
ENDED SEPTEMBER 30, 2003
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
Item 3: Controls and Procedures . . . . . . . . . . . . . . . . . . . . 8
PART II - OTHER INFORMATION
Item 1: Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2: Changes in Securities . . . . . . . . . . . . . . . . . . . . . 9
Item 3: Defaults among Senior Securities. . . . . . . . . . . . . . . . 9
Item 4: Submission of Matters to a Vote of Security Holders . . . . . . 9
Item 5: Other Information . . . . . . . . . . . . . . . . . . . . . . . 9
Item 6: Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . 9
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
CERTIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
[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)
SEPTEMBER 30, DECEMBER 31,
2003 2002
ASSETS
Current assets:
Accounts receivable, less allowance
for doubtful accounts of $30,000 . . . . . . . . . . . . . . . $ 55,825 $ 106,971
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . 68,189 123,307
--------------- --------------
Total current assets . . . . . . . . . . . . . . . . . . 124,014 230,278
Investment in USAMSA, net. . . . . . . . . . . . . . . . . . . . . 12,125 18,625
Properties, plants and equipment, net. . . . . . . . . . . . . . . 561,256 529,416
Restricted cash for bank note payable. . . . . . . . . . . . . . . 102,022 102,022
Restricted cash for reclamation bonds. . . . . . . . . . . . . . . 88,670 91,186
Restricted cash for payroll taxes. . . . . . . . . . . . . . . . . 14,000
---------------
Total assets . . . . . . . . . . . . . . . . . . . . . . $ 902,087 $ 971,527
=============== ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Checks issued and payable. . . . . . . . . . . . . . . . . . . . $ 112,442 $ 53,641
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 908,730 783,799
Accrued payroll and property taxes . . . . . . . . . . . . . . . 240,803 280,247
Accrued payroll and other. . . . . . . . . . . . . . . . . . . . 86,855 85,838
Judgment payable . . . . . . . . . . . . . . . . . . . . . . . . 52,330 49,780
Accrued interest payable . . . . . . . . . . . . . . . . . . . . 14,640 18,663
Payable to related parties . . . . . . . . . . . . . . . . . . . 277,652 202,625
Stock subscription payable . . . . . . . . . . . . . . . . . . . 310,000 35,000
Notes payable to bank, current . . . . . . . . . . . . . . . . . 229,142 266,284
Accrued reclamation costs, current . . . . . . . . . . . . . . . 19,483 44,565
--------------- --------------
Total current liabilities. . . . . . . . . . . . . . . . 2,252,077 1,820,442
Notes payable to bank, noncurrent. . . . . . . . . . . . . . . . . 415,010 345,638
Accrued reclamations costs, noncurrent . . . . . . . . . . . . . . 152,052 152,050
--------------- --------------
Total liabilities. . . . . . . . . . . . . . . . . . . . 2,819,139 2,318,130
--------------- --------------
Commitments and contingencies (Note 3)
Stockholders' deficit:
Preferred stock, $0.01 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
Series D: 475,000 shares issued and outstanding. . . . . . . 4,750 960
Common stock, $0.01 par value, 30,000,000 shares
authorized; 27,027,959 issued and outstanding. . . . . . . . . 270,279 270,279
Additional paid-in capital . . . . . . . . . . . . . . . . . . . 17,002,720 16,963,610
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . (19,204,125) (18,590,776)
--------------- --------------
Total stockholders' deficit. . . . . . . . . . . . . . . (1,917,052) (1,346,603)
--------------- --------------
Total liabilities and stockholders' deficit. . . . . . . $ 902,087 $ 971,527
=============== ==============
The accompanying notes are an integral part of the financial statements.
1
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED, FOR THE NINE MONTHS ENDED,
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
Revenues:
Sales of antimony products and other. . . . . $ 678,060 $ 863,625 $ 2,239,915 $ 2,489,997
Sales of zeolite products . . . . . . . . . . 85,291 44,740 349,049 150,647
---------------- --------------- --------------- ---------------
763,351 908,365 2,588,964 2,640,644
Cost of sales:
Cost of antimony production . . . . . . . . . 511,991 656,656 1,757,911 1,929,370
Cost of zeolite production. . . . . . . . . . 98,303 45,349 350,840 142,777
Antimony depreciation . . . . . . . . . . . . 9,475 10,250 28,428 30,750
Zeolite depreciation. . . . . . . . . . . . . 13,686 6,500 41,058 18,900
Antimony freight and delivery . . . . . . . . 67,042 84,546 207,355 278,688
Zeolite freight and delivery. . . . . . . . . 22,318 4,358 60,969 7,232
---------------- --------------- --------------- ---------------
722,815 807,659 2,446,561 2,407,717
Gross profit. . . . . . . . . . . . . . . . . . 40,536 100,706 142,403 232,927
---------------- --------------- --------------- ---------------
Other operating expenses:
Bear River Zeolite general and administrative 47,872 33,320 191,046 126,478
Antimony general and administrative . . . . . 101,272 89,248 331,151 254,666
Bear River Zeolite sales expenses . . . . . . 20,652 4,882 49,917 24,405
Antimony sales expenses . . . . . . . . . . . 17,028 17,801 51,994 62,199
---------------- --------------- --------------- ---------------
186,824 145,251 624,108 467,748
---------------- --------------- --------------- ---------------
Other (income) expense:
Interest expense. . . . . . . . . . . . . . . 21,266 20,234 54,293 57,607
Factoring expense . . . . . . . . . . . . . . 22,320 27,217 83,544 72,544
Interest income and other . . . . . . . . . . (544) (1,663) (6,193) (3,113)
Sale of Bear River Zeolite royalty. . . . . . (50,000) (200,000)
---------------- --------------- -------------- --------------
43,042 (4,212) 131,644 (72,962)
---------------- --------------- --------------- ---------------
Net loss. . . . . . . . . . . . . . . . . . . . $ (189,330) $ (40,333) $ (613,349) $ (161,859)
================ =============== =============== ===============
Basic net loss per share of common stock. . . . $ (0.01) $ Nil $ (0.02) $ (0.01)
================ =============== =============== ===============
Basic weighted average shares outstanding . . . 27,027,959 27,027,959 27,027,959 26,865,026
================ =============== =============== ===============
The accompanying notes are an integral part of the financial statements.
3
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2003 2002
Cash flows from operating activities:
Net loss. . . . . . . . . . . . . . . . . . . . . . $ (613,349) $ (161,859)
Adjustments to reconcile net loss to
net cash used by operations:
Depreciation and amortization . . . . . . . . . . 75,986 67,322
Series D stock issued to directors. . . . . . . . 15,000
Series D stock issued for legal services. . . . . 7,800
Change in:. . . . . . . . . . . . . . . . . . . . 20,100 8,000
Restricted cash
Accounts receivable . . . . . . . . . . . . . . (11,484) (93,684)
Inventories . . . . . . . . . . . . . . . . . . 51,146 (30,705)
Accounts payable. . . . . . . . . . . . . . . . 55,118 26,125
Accrued payroll and property taxes. . . . . . . 124,933 101,854
Accrued payroll and other . . . . . . . . . . . (39,444) 7,302
Judgment payable. . . . . . . . . . . . . . . . 1,017 (1,684)
Accrued interest payable. . . . . . . . . . . . 2,550 2,550
Payable to related parties. . . . . . . . . . . (4,023)
Accrued reclamation costs . . . . . . . . . . . (25,082) (43,656)
--------------- ---------------
Net cash used by operating activities. . . . (339,732) (118,435)
--------------- ---------------
Cash flows from investing activities:
Purchase of properties, plants and equipment. . . . (101,326) (260,895)
--------------- ---------------
Net cash used in investing activities. . . . (101,326) (260,895)
--------------- ---------------
Cash flows from financing activities:
Proceeds from issuance of common stock and warrants 172,070
Proceed from stock subscriptions payable. . . . . . 275,000 10,000
Payments on notes payable to bank, net. . . . . . . (117,770) (274,017)
Proceeds from related party advances, net . . . . . 75,027 56,879
Proceeds from notes payable to bank . . . . . . . . 150,000 395,000
Change in checks issued and payable . . . . . . . . 58,801 19,398
--------------- ---------------
Net cash provided by financing activities. . 441,058 379,330
--------------- ---------------
Net change in cash. . . . . . . . . . . . . . . . . . 0 0
Cash, beginning of period . . . . . . . . . . . . . . 0 0
--------------- ---------------
Cash, end of period . . . . . . . . . . . . . . . . . $ 0 $ 0
=============== ===============
The accompanying notes are an integral part of the financial statements.
4
PART I - FINANCIAL INFORMATION, CONTINUED:
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
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 and
three-month periods ended September 30, 2003 are not necessarily indicative of
the results that may be expected for the full year ending December 31, 2003.
Certain consolidated financial statement amounts for the nine and three-month
periods ended September 30, 2002 have been reclassified to conform to the 2003
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,
2002.
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.
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. The Company has been diligently
reclaiming the property and anticipates it will have the reclamation complete in
the near term.
In November of 2001, the Environmental Protection Agency ("EPA") listed two
by-products of the Company's antimony oxide manufacturing process as hazardous
wastes under subtitle C of the Resource Conservation and Recovery Act ("RCRA"),
and emergency notification requirements for releases to the environment under
CERCLA. On November 26, 2002, the Company received a notice of violation
related to a hazardous waste discharge that was discovered during a hazardous
waste compliance evaluation inspection conducted at the Company's Thompson Falls
antimony facility. In response to the notice, the Company removed certain
antimony materials from its production area and agreed to ensure that future
releases of hazardous waste would not occur. At September 30, 2003, management
believes that no additional liability will result from the violation.
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED:
3. COMMITMENTS AND CONTINGENCIES, CONTINUED:
During the first nine months of 2003, the Company paid $11,651 in reclamation
and water monitoring costs relating to its Preachers Cove property that were
charged to its accrued reclamation liability.
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.
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, 2003 compared to the three-month
period ended September 30, 2002
On May 29, 2002, the Company, was assigned all rights, title and interest in any
and all common stock of Bear River Zeolite Company ("Bear River Zeolite" or
"BRZ") owned by George Desborough and Nick Raymond, holders of 25% of BRZ's
outstanding shares of common stock. The assignment brought the Company's
ownership in Bear River Zeolite to 100%. In connection with the assignment, the
Company agreed to pay Mr. Desborough and Mr. Raymond a royalty on zeolite sales
ranging from 1-3% based on per-ton zeolite sale prices. As additional
consideration for the assignment, USAC also agreed to issue Mr. Desborough and
Mr. Raymond a total of 50,000 restricted common stock purchase warrants
exercisable at $0.40 for a period of 3 years within 30 days of the signing of
the agreement, providing common stock is authorized. At September 30, 2003, the
warrants had not yet been issued.
On June 1, 2002, BRZ sold a production royalty to Delaware Royalty Corporation
("Delaware"), a company controlled by Al Dugan, a major shareholder that may be
regarded as an affiliate. The sale granted Delaware a 2% royalty on all zeolite
ore extracted and sold from BRZ's Webster Farm zeolite property. As
consideration for the royalty the Company received $150,000. The royalty is due
at the end of each quarter and is calculated on the gross sales proceeds from
zeolite shipped and sold during the preceding quarter.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION, CONTINUED:
The Company's operations resulted in a net loss of $189,330 for the three-month
period ended September 30, 2003, compared with a net loss of $40,333 for the
three-month period ended September 30, 2002. Net loss during the third quarter
of 2003 compared to the net loss during the similar quarter of 2002 is primarily
due to the decrease in antimony sales due to the economy, increased fuel
expenses, payroll taxes, general and administrative expenses and worker's
compensation insurance increases in Montana in 2003. The Company expects that in
the fourth quarter of 2003 the worker's compensation insurance expense for the
Company will decrease dramatically.
Total revenues from antimony product sales for the third quarter of 2003 were
$678,060 compared with $863,625 during the comparable quarter of 2002, a
decrease of $185,565. The decrease in sales revenues during the 3rd quarter of
2003 compared to the same quarter in 2002 is due to the poor economy, an
increase in the cost of antimony metal and the corresponding price increase in
the oxide products (resulting in decreased consumer purchasing) and competitive
pressures from Chinese antimony distributors. During the three-month period
ended September 30, 2003, 38.34%, of the Company's revenues from antimony
product sales were from sales to one customer and 11.6% were from sales to a
second individual customer. Sales of antimony products during the third quarter
of 2003 consisted of 529,457 pounds at an average sale price of $1.28 per pound.
During the third quarter of 2002 sales of antimony products consisted of
1,062,413 pounds at an average sale price of $0.81 per pound. The increase in
sale prices of antimony products from the third quarter of 2002 to the third
quarter of 2003 is the result of a corresponding increase in antimony metal
prices.
Sales of zeolite products during the third quarter of 2003 were $85,291 compared
to sales of $44,740 during the third quarter of 2002. Sales of zeolite products
during the third quarter of 2003 consisted of 882 tons at an average sale price
of $99.60 per ton. During the third quarter of 2002 sales of zeolite products
consisted of 484 tons at an average sale price of $85.78 per ton.
Gross profit from antimony sales during the third three-month period of 2003 was
$89,552 compared with gross profit of $112,173 during the third three-month
period of 2002 and gross loss from zeolite sales during the third three-month
period of 2003 was $49,016 compared with gross loss of $11,467 during the third
three-month period of 2002.
During the third quarter of 2003, the Company incurred expenses totaling $68,524
associated with sales development and general and administrative expenses of its
wholly owned subsidiary, Bear River Zeolite, compared to $38,202 of expenses in
the comparable quarter of 2002. The increase in BRZ expenses was principally
due to increased sales expenses.
Antimony general and administrative expenses were $101,272 during the third
quarter of 2003, compared to $89,248 during the second quarter of 2002. The
increase in general and administrative expenses during the third quarter of 2003
compared to the same quarter of 2002 was due to increased accounting and legal
expenses.
Antimony sales expenses were $17,028 during the third quarter of 2003 compared
with $17,801 in the third quarter of 2002.
Interest expenses were $21,266 during the third quarter of 2003, compared to
interest expense of $20,234 incurred during the third quarter of 2002.
Accounts receivable factoring expense was $22,320 during the third quarter of
2003 compared to $27,217 of factoring expense incurred during the third quarter
of 2002. The decrease was primarily due to a decrease in finance charges on a
smaller amount of accounts receivable factored.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION, CONTINUED:
Interest and other income decreased from $1,663 during the third quarter of 2002
to $544 during the third quarter of 2003. The decrease was due to a
corresponding decrease in other income.
For the nine-month period ended September 30, 2003 compared to the nine-month
period ended September 30, 2002
The Company's operations resulted in a net loss of $613,349 for the nine-month
period ended September 30, 2003, compared with a net loss of $161,859 for the
nine-month period ended September 30, 2002. The increase in net loss from the
first nine months of 2002 compared to the first nine months of 2003 is primarily
due to the sale of a royalty in the Company's zeolite operations in 2002 and
increase in general administrative expenses in 2003.
Total revenues from antimony product sales for the first nine months of 2003
were $2,239,915 compared with $2,489,997 for the comparable period of 2002, a
decrease of $250,082. During the nine-month period ended September 30, 2003,
45.27% of the Company's revenues from antimony products sales were from sales to
one customer and 5.08% were from sales to a second individual customer. Sales
of antimony products during the first nine months of 2003 consisted of 1,716,534
pounds at an average sale price of $1.30 per pound. During the first nine
months of 2002 sales of antimony products consisted of 2,992,407 pounds at an
average sale price of $0.83 per pound. The decrease in pounds of antimony sales
is attributed to higher product price and a poor economy. The increase in sale
prices of antimony products from the first nine months of 2002 to the first nine
months of 2003 is the result of a corresponding increase in antimony metal
prices.
Sales of zeolite products during the first nine months of 2003 were $349,049
compared to sales of $150,647 during the comparable period of 2002. Sales of
zeolite products during the first nine months of 2003 consisted of 3,295 tons at
an average sale price of $105.93 per ton. During the first nine months of 2002
sales of zeolite products consisted of 1,609 tons at an average sale price of
$93.63 per ton.
Gross profit from antimony sales during the first nine-month period of 2003 was
$246,221 compared with gross profit of $263,039 during the same nine-month
period of 2002 and gross loss for zeolite sales during the first nine-month
period of 2003 was $103,818 compared with gross loss of $18,262 during the same
nine-month period of 2002.
During the first nine months of 2003, the Company incurred expenses totaling
$240,963 associated with sales development and general and administrative
expenses of its wholly owned subsidiary, Bear River Zeolite, compared to
$150,883 of expenses during the comparable period of 2002. The increase in BRZ
expenses was principally due to expanded sales efforts.
Antimony general and administrative expenses were $331,151 during the first nine
months of 2003, compared to $254,666 during the first nine months of 2002. The
increase in general and administrative expenses during the first nine months of
2003 compared to the same period of 2002 was due to increased consulting and
management costs.
Antimony sales expenses were $51,994 during the first nine months of 2003
compared with $62,199 in the first nine months of 2002, the decrease was
principally due to the allocation of a portion of the Company's sales costs to
BRZ during 2003.
Interest expense was $54,293 during the first nine months of 2003, compared to
interest expense of $57,607 incurred during the first nine months of 2002.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION, CONTINUED:
Accounts receivable factoring expense was $83,544 during the first nine months
of 2003 compared to $72,544 of factoring expense incurred during the first nine
months of 2002. The increase was primarily due to increased finance charges.
Interest and other income increased from $3,113 during the first nine months of
2002 to $6,193 during the first nine months of 2003. The increase was due to a
corresponding increase in other income.
Financial Condition and Liquidity
At September 30, 2003, Company assets totaled $902,087, and there was a
stockholders' deficit of $1,917,052. The stockholders' deficit increased
$570,449 from December 31, 2002. The increase is principally due to operating
losses incurred during the nine-month period ended September 30, 2003. At
September 30, 2003, the Company's total current liabilities exceeded its total
current assets by $2,128,063. Included in the Company's current liabilities are
significant delinquent balances due raw materials suppliers, attorneys, and
payroll taxing agencies. 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 2002 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 from alternative financing resources. Without
financing and profitable operations, the Company may not be able to meet its
obligations, fund operations and continue in existence for another twelve
months. While management is optimistic that the Company will be able to sustain
its operations and meet its financial obligations, there can be no assurance of
such.
Cash used by operating activities during the first nine months of 2003 was
$339,732, and resulted primarily from the nine-month net loss of $613,349.
Cash used in investing activities during the first nine months of 2003 was
$101,326 and was almost entirely related to the construction of capital assets
at the Bear River Zeolite facility.
Cash provided by financing activities was $441,058 during the first nine months
of 2003, and was principally generated by subscriptions to purchase 1,375,000
shares of unregistered common stock for $275,000 and increased bank borrowings.
At September 30, 2003, the Company substantially had no unencumbered authorized
common stock available for sale or issue.
ITEM 3. CONTROLS AND PROCEDURES
Based on their most recent evaluation, which was completed within 90 days of the
filing of this Form 10-QSB, the Company's president believes the Company's
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) are effective to ensure that information required to be disclosed by the
Company in this report is accumulated and communicated to the Company's
management, including its principal executive officer and principal financial
officer, as appropriate, to allow timely decisions regarding required
disclosure. There were no significant changes in the Company's internal
controls or other factors that could significantly affect these controls
subsequent to the date of their evaluation and there were no corrective actions
with regard to significant deficiencies and material weaknesses.
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.
During the second quarter of 2003, the Company sold stock subscriptions to
purchase 1,375,000 shares of its restricted common stock and warrants for
$275,000. The sales were to accredited investors and exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The registrant has no outstanding senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of shareholders held on September 30, 2003, the following
proposals were put forth and voted on by the shareholders with results as
follows:
Proposal One: To elect John C. Lawrence, Robert A. Rice and Leo Jackson to our
board of directors to serve for the ensuing year or until their successor are
duly elected and qualified.
Results:
Yes No Abstain
---
Board Member:
--------------
Robert Rice 13,725,899 12,160 33,715
----------- ---------- ------ ------
Leo Jackson 13,079,026 12,560 33,715
----------- ---------- ------ ------
John C. Lawrence 13,606,356 6,860 33,515
---------------- ---------- ----- ------
Proposal Two: To amend the Company's Articles of Incorporation to increase the
authorized number of shares of Common Stock from 30,000,000 shares to
50,000,000.
Results:
Yes No Abstain
--- -- -------
Proposal Two 12,011,046 180,470 1,323,086
------------ ---------- ------- ---------
Proposal Three: To ratify the appointment of DeCoria, Maichel & Teague P.S. as
the Company's independent auditors to examine the financial statement of the
Company for the fiscal year ending December 31, 2003.
Results:
Yes No Abstain
--- -- -------
Proposal Three: 13,472,877 7,660 34,065
--------------- ---------- ----- ------
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Form 8-K dated October 10, 2003, Item 5-Other Events
[The balance of this page has been intentionally left blank.]
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 14, 2003
John C. Lawrence, Director and President
(Principal Executive, Financial and Accounting Officer)
CERTIFICATION
I, John C. Lawrence, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of United States
Antimony Corporation
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of and for the periods presented in this quarterly report.
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
Registrant and I have:
a. designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of disclosure controls and procedures based on our evaluation as
of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the Registrant's
auditors and the audit committee of the Registrant's board of directors (or
persons performing the equivalent functions);
a. all significant deficiencies in the design or operations of internal
controls which could adversely affect the Registrant's ability to record,
process, summarize and report financial data and have identified for the
Registrant's auditors any material weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal controls; and
6. I have indicated in this quarterly report whether there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of my most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 14, 2003
/s/ John C. Lawrence
John C. Lawrence
President, Director and Principal Financial Officer
CERTIFICATION PURSUANT TO THE SARBANES-OXLEY ACT
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, John C. Lawrence, President, Director and Principal Financial Officer of
United States Antimony Corporation ("the "Registrant") do hereby certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. This Quarterly Report on Form 10-QSB of the Registrant for the period
ended September 30, 2003, as filed with the Securities and Exchange Commission
(the "Report"), fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.
Date: November 14, 2003
/s/ John C. Lawrence
John C. Lawrence
President, Director and Principal Financial Officer