10QSB 1 doc1.txt USAC 10-QSB 1ST QUARTER 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 ------- ---------- (State or other jurisdiction (I.R.S. Employer of 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 --- --- 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 ------------- -------------- 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 ------------- -------------- 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 ------------- -------------- 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 ------------- -------------- Total liabilities. . . . . . . . . . . . . . . . . . . . . . 1,949,167 1,893,503 ------------- -------------- 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) ------------- -------------- Total stockholders' deficit. . . . . . . . . . . . . . . . . (1,202,220) (1,167,884) ------------- -------------- 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 ------------- ----------- 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 ------------- ----------- 683,668 905,982 Gross profit . . . . . . . . . . . . . . . 28,735 55,149 ------------- ----------- 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 ------------ ----------- 193,242 258,786 ------------ ----------- Other (income) expense: Interest expense . . . . . . . . . . . . 17,453 39,886 Factoring expense. . . . . . . . . . . . 19,326 23,264 Interest income and other. . . . . . . . (6,950) (1,481) ----------- ----------- 29,829 61,669 ----------- ----------- 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) ------------ ---------- Net cash used by operating activities . . . (53,117) (70,323) ------------ ----------- Cash flows from investing activities: Purchase of properties, plants and equipment. . . . (106,021) (38,810) ----------- ----------- Net cash used in investing activities . . . (106,021) (38,810) ----------- ----------- 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) ---------- ----------- Net cash provided by financing activities . 159,138 109,133 ---------- ----------- Net change in cash. . . . . . . . . . . . . . . . . . 0 0 Cash, beginning of period . . . . . . . . . . . . . . 0 0 --------- ----------- 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