10-Q/A 1 uamy_10qa.htm AMENDMENT uamy_10qa.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A
 
(Mark One)

þ
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2012

o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period_________to_________
 
Commission file number 001-08675

UNITED STATES ANTIMONY CORPORATION
(Exact name of registrant as specified in its charter)

Montana
 
81-0305822
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. 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

Indicate by check mark 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 þ No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES o No o
 
Indicate by check mark whether the registrant is a shell company as defined by Rule 12b-2 of the Exchange Act. YES o No þ
 
At November 10, 2012, the registrant had outstanding 61,786,822 shares of par value $0.01 common stock.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o
 
Accelerated filer  þ
 
Non-accelerated filer  o
(Do not check if a smaller reporting company)
 
Smaller reporting company  o
 


 
 

 
UNITED STATES ANTIMONY CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD
ENDED SEPTEMBER 30, 2012
 
TABLE OF CONTENTS
 
      Page  
PART I – FINANCIAL INFORMATION      
         
Item 1:
Financial Statements (unaudited) 
    1-11  
           
Item 2:
Management’s Discussion and Analysis of Results of Operations and Financial Condition 
    12  
           
Item 3:
Quantitative and Qualitative Disclosure about Market Risk 
    13  
           
Item 4:
Controls and Procedures 
    13  
           
PART II – OTHER INFORMATION        
           
Item 1:
Legal Proceedings
   
14
 
           
Item 2:
Unregistered Sales of Equity Securities and Use of Proceeds 
    14  
           
Item 3:
Defaults upon Senior Securities 
    14  
           
Item 4:
Mine Safety Disclosures
    14  
           
Item 5:
Other Information 
    15  
           
Item 6:
Exhibits and Reports on Form 8-K 
    15  
           
SIGNATURE      16  
           
CERTIFICATIONS         
 
[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 Sheets
 
   
(Unaudited)
       
   
September 30, 2012
   
December 31, 2011
 
ASSETS
Current assets:
           
Cash and cash equivalents
  $ 2,376,701     $ 5,427  
Certificates of deposit (Note 4)
    242,800       -  
Accounts receivable, less allowance for
               
doubtful accounts of $4,031 and $7,600, respectively
    491,735       1,438,564  
Inventories
    1,454,633       1,066,813  
Other current assets
    57,659       56,208  
Deferred tax asset
    470,869       396,558  
Total current assets
    5,094,397       2,963,570  
                 
Properties, plants and equipment, net
    8,342,025       6,047,004  
Restricted cash for reclamation bonds
    74,782       74,777  
Other assets
    155,036       54,766  
Total assets
  $ 13,666,240     $ 9,140,117  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
               
Checks issued and payable
  $ -     $ 113,908  
Deferred revenue
    31,668       43,760  
Accounts payable
    970,845       994,940  
Due to factor
    240,446       146,589  
Accrued payroll, taxes and interest
    93,105       141,928  
Other accrued liabilities
    32,434       119,292  
Payables to related parties
    13,382       331,978  
Long-term debt, current
    305,911       79,631  
Total current liabilities
    1,687,791       1,972,026  
                 
Long-term debt, noncurrent
    136,993       158,218  
Asset retirement and accrued reclamation costs
    247,530       241,500  
Total liabilities
    2,072,314       2,371,744  
                 
Commitments and contingencies (Note 5)
               
                 
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 $877,500)
    7,500       7,500  
Series C: 177,904 shares issued and outstanding
               
(liquidation preference $97,847)
    1,779       1,779  
Series D: 1,751,005 shares issued and outstanding
               
(liquidation preference and cumulative dividends of $4,714,433)
    17,509       17,509  
Common stock, $0.01 par vaue, 90,000,000 shares authorized;
               
61,786,822 and 59,349,300 shares issued and outstanding, respectively
    617,868       593,492  
Additional paid-in capital
    30,723,895       25,635,129  
Accumulated deficit
    (19,774,625 )     (19,487,036 )
Total stockholders' equity
    11,593,926       6,768,373  
Total liabilities and stockholders' equity
  $ 13,666,240     $ 9,140,117  
 
The accompanying notes are an integral part of the consolidated financial statements.

 
1

 
 
United States Antimony Corporation and Subsidiaries
Consolidated Statements of Operations (Unaudited)
 
    For the three months ended    
For the nine months ended
 
   
September 30, 2012
   
September 30, 2011
   
September 30, 2012
   
September 30, 2011
 
                         
REVENUES
  $ 2,655,123     $ 3,332,008     $ 9,206,978     $ 9,262,039  
                                 
COST OF REVENUES
    (2,517,497 )     (2,505,682 )     (8,659,703 )     (7,913,079 )
                                 
GROSS PROFIT
    137,626       826,326       547,275       1,348,960  
                                 
OPERATING EXPENSES:
                               
     General and administrative
    239,093       28,582       655,077       198,186  
     Professional fees
    54,722       34,764       187,366       160,604  
TOTAL OPERATING EXPENSES
    293,815       63,346       842,443       358,790  
                                 
INCOME (LOSS) FROM OPERATIONS
    (156,189 )     762,980       (295,168 )     990,170  
                                 
OTHER INCOME (EXPENSE):
                               
Interest income
    2,789       248       6,337       4,326  
Interest expense
    (2,162 )     (2,569 )     (2,162 )     (4,204 )
Factoring expense
    (19,563 )     (52,586 )     (70,907 )     (126,000 )
TOTAL OTHER INCOME (EXPENSE)
    (18,936 )     (54,907 )     (66,732 )     (125,878 )
                                 
INCOME (LOSS) BEFORE INCOME TAXES
    (175,125 )     708,073       (361,900 )     864,292  
                                 
INCOME TAX (EXPENSE) BENEFIT
    -       -       74,311       (24,426 )
                                 
NET INCOME (LOSS)
  $ (175,125 )   $ 708,073     $ (287,589 )   $ 839,866  
                                 
Net income (loss) per share of
                               
common stock:
                               
Basic
 
 Nil
    $ 0.01    
$ Nil
    $ 0.01  
Diluted
 
 Nil
    $ 0.01    
$ Nil
    $ 0.01  
                                 
Weighted average shares outstanding:
                               
Basic
    61,786,822       59,150,784       61,051,943       58,157,638  
Diluted
    61,786,822       59,692,102       61,051,943       58,662,586  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
2

 
 
United States Antimony Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
 
   
For the nine months ended
 
   
September 30, 2012
   
September 30, 2011
 
Cash Flows From Operating Activities:
           
Net income (loss)
  $ (287,589 )   $ 839,866  
Adjustments to reconcile net income (loss) to net cash
               
provided by operating activities:
               
Depreciation and amortization expense
    349,375       297,866  
Accretion of asset retirement obligation
    6,030       -  
Common stock issued to directors for services
    176,191       -  
Deferred income tax expense (benefit)
    (74,311 )     21,926  
Change in:
               
Accounts receivable, net
    946,829       (123,002 )
Inventories
    (387,820 )     (1,099,035 )
Other current assets
    250,737       (279,193 )
Other assets
    (100,275 )     (88,196 )
Accounts payable
    (24,095 )     627,752  
Accrued payroll, taxes and interest
    (48,823 )     (12,302 )
Other accrued liabilities
    (86,858 )     (36,324 )
Deferred revenue
    (12,092 )     -  
Payables to related parties
    (318,596 )     28,158  
Net cash provided by operating activities
    388,703       177,516  
                 
Cash Flows From Investing Activities:
               
   Purchase of certificates of deposit
    (242,800 )     (9 )
Purchase of properties, plants and equipment
    (2,292,246 )     (1,744,892 )
Net cash used by investing activities
    (2,535,046 )     (1,744,901 )
                 
Cash Flows From Financing Activities:
               
   Net proceeds from (payments to) factor
    93,857       497,300  
Proceeds from sale of common stock, net of offering costs
    4,624,763       1,160,218  
Issuance of common stock pursuant to exercise of warrants
    60,000       -  
Principal payments on long-term debt
    (147,095 )     (110,487 )
Payments received on stock subscription agreements
    -       82,563  
Change in checks issued and payable
    (113,908 )     -  
Net cash provided by financing activities
    4,517,617       1,629,594  
                 
NET INCREASE IN CASH AND CASH EQUIVALENTS
    2,371,274       62,209  
                 
Cash and cash equivalents at beginning of period
    5,427       448,861  
Cash and cash equivalents at end of period
  $ 2,376,701     $ 511,070  
                 
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
               
Noncash investing and financing activities:
               
Properties, plants and equipment acquired with long-term debt
  $ 352,150     $ 239,900  
Properties, plants and equipment acquired with accounts payable
    -       89,654  
Common stock issued for prepaid directors fees
  $ 426,819       -  
Common stock issued pursuant to cashless exercise of warrants
  $ 253       -  
 
The accompanying notes are an integral part of the consolidated 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-Q.  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 and nine month periods ended September 30, 2012, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012.

Certain consolidated financial statement amounts for the three and nine month periods ended September 30, 2011 have been reclassified to conform to the 2012 presentation.  These reclassifications had no effect on the net income 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-K for the year ended December 31, 2011.

During the nine months ended September 30, 2012 and 2011, the Company incurred interest expense of $29,667 and $0, respectively, all of which has been capitalized as part of the cost of constructing the Puerto Blanco Mill in Mexico.

2.  Income (Loss) Per Common Share:

Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including warrants to purchase the Company's common stock and convertible preferred stock.  Management has determined that the calculation of diluted earnings per share for the three and nine month periods ending September 30, 2012, is not applicable since any additions to outstanding shares related to common stock purchase warrants would be anti-dilutive.

As of September 30, 2012 and 2011, the potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive are as follows:

   
For the Three Months Ended
   
For the NineMonths Ended
 
   
September 30, 2012
   
September 30, 2011
   
September 30, 2012
   
September 30, 2011
 
                             
Warrants
    1,776,917             1,776,917        
Convertible preferred stock
    1,751,005       1,751,005       1,751,005       1,751,005  
Total possible dilution
    3,527,922       1,751,005       3,527,922       1,751,005  
                                 
Basic weighted shares
                               
   outstanding
    61,786,822       59,150,784       61,051,943       58,157,638  
Warrants
    -       541,318       -       504,948  
 Basic and diluted weighted shares outstanding
    61,786,822       59,692,102       61,051,943       58,662,586  
 
 
4

 
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
 
3.  Inventories
 
   
September 30, 2012
   
December 31, 2011
 
Antimony Metal
  $ 176,139     $ 152,026  
Antimony Oxide
    175,982       180,404  
Antimony Ore
    878,467       644,113  
     Total antimony
    1,230,588       976,543  
Zeolite
    224,045       90,270  
    $ 1,454,633     $ 1,066,813  
 
4.  Accounts Receivable and Due to Factor

The Company factors designated trade receivables pursuant to a factoring agreement with LSC Funding Group L.C., an unrelated factor (the “Factor”).  The agreement specifies that eligible trade receivables are factored with recourse. We submit selected trade receivables to the factor, and receive 85% of the face value of the receivable by wire transfer. Upon payment by the customer, we receive the remainder of the amount due from the factor, less a one-time servicing fee of 2% for the receivables factored.  This servicing fee is recorded on the consolidated statement of operations in the period of sale to the factor.  
 
Trade receivables assigned to the Factor are carried at the original invoice amount less an estimate made for doubtful accounts.  Under the terms of the recourse provision, the Company is required to reimburse the Factor, upon demand, for factored receivables that are not paid on time.  Accordingly, these receivables are accounted for as a secured financing arrangement and not as a sale of financial assets.  The allowance for doubtful accounts is based on management’s regular evaluation of individual customer’s receivables and consideration of a customer’s financial condition and credit history.  Trade receivables are written off when deemed uncollectible.  Recoveries of trade receivables previously written off are recorded when received.  Interest is not charged on past due accounts.

We present the receivables, net of allowances, as current assets and we present the amount potentially due to the Factor as a secured financing in current liabilities.
 
Accounts Receivable
 
September 30, 2012
   
December 31, 2011
 
Accounts receivable - non factored
  $ 255,320     $ 1,299,575  
Accounts receivable - factored with recourse
    240,446       146,589  
   Less allowance for doubtful accounts
    (4,031 )     (7,600 )
      Accounts receivable - net
  $ 491,735     $ 1,438,564  
 
 5.  Commitments and Contingencies:

In 2005, a subsidiary of the Company signed an option agreement that gives it the exclusive right to explore and develop the San Miguel I and San Miguel II concessions for an annual payment of $50,000, and an option to purchase payment of $100,000 annually.  Total payments will not exceed $1,430,344, reduced by taxes paid.  During the nine months ended September 30, 2012 and the year ended December 31, 2011, $0 and $186,956 respectively, was paid and capitalized as mineral rights in accordance with the Company’s accounting policies.
 
 
5

 

United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:

From time to time, the Company is assessed fines and penalties by the Mine Safety and Health Administration (“MSHA”). Using appropriate regulatory channels, management may contest these proposed assessments. The Company has accrued $7,360 and $73,225 in other accrued liabilities as of September 30, 2012, and at December 31, 2011, respectively, related to such assessments.

During the nine months ended September 30, 2012, the Company negotiated a new credit facility increasing the Company’s lines of credit by $202,000.  As part of this agreement, two $101,000 certificates of deposit were pledged as collateral.  The increased loan facility allows us access to borrowings at an interest rate of 3.15% for the portion of the credit line used.  At September 30, 2012, we did not have any outstanding line of credit debt.
 
6.   Long – Term Debt
 
Long-term debt at September 30, 2012 and December 31, 2011 is as follows:
 
   
2012
   
2011
 
             
Note payable toThermoFisher financial Services, bearing interest at 5.67%; payable in monthly installments of $3522; maturing September 2013; collateralized by equipment.
  $ 41,000     $ -  
                 
Note payable to De Lage Landen financial Services, bearing interest at 5.3%; payable in monthly installments of $549; maturing March 2016; collateralized by equipment.
    21,004       -  
                 
Note payable to Catepillar Finance, bearing interest at 6.15%; payable in monthly installments of $2,032; maturing June 2015; collateralized by equipment.
    59,851       77,040  
                 
Note payable to CNH Capital America, LLC, bearing interest at 4.5%; payable in monthly installments of $505; maturing June 2013; collateralized by equipment.
    4,454       8,648  
                 
Note payable to GE Capital, bearing interest at 2.25%; payable in monthly installments of $359; maturing July 2013; collateralized by equipment.
    3,552       6,531  
                 
Note payable to Robert and Phyllis Rice, bearing interest at 1%; payable in monthly installments of $2,000; maturing March 2015; collateralized by equipment.
    63,206       80,882  
                 
Note payable to De Lage Landen Financial Services at 5.2%; payable in monthly installments of $709; maturing July 2014; collateralized by equipment.
    14,183       19,229  
                 
Note payable to Catepillar Finance, bearing interest at 6.15%; payable in monthly installments of $766; maturing August 2014; collateralized by equipment.
    16,590       21,990  
                 
Note payable to De Lage Landen Financial Services at 5.2%; payable in monthly installments of $697; maturing January 2015; collateralized by equipment.
    18,360       23,529  
                 
Note payable to Catepillar Finance, bearing interest at 5.95%; payable in monthly installments of $827; maturing September 2015; collateralized by equipment.
    27,210       -  
                 
Note payable for Corral Blanco land, bearing interest at 6%; payable in three installments; maturing May 1, 2013; collateralized by land.
    173,494       -  
                 
Total debt
    442,904       237,849  
Less current portion
    (305,911 )     (79,631 )
Noncurrent portion
  $ 136,993     $ 158,218  
 
Debt outstanding will mature as follows:
           
Twelve months ending
 
September 30,
       
2013
  $ 305,911          
2014
    83,928          
2015
    49,821          
2016
    3,244          
    $ 442,904          
 
 
6

 
 
 PART I - FINANCIAL INFORMATION, CONTINUED:

United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:

7.   Concentrations of Risk

During the nine months ended September 30, 2012 and 2011, approximately 56% and 53% of the Company's revenues were generated by sales to three customers. Loss of any of the Company’s key customers could adversely affect its business.
 
   
For the Nine Months Ended
 
Largest Customers
 
September 30, 2012
   
September 30, 2011
 
   Customer A
  $ 2,038,378     $ 1,074,963  
   Customer B
    2,033,470       1,932,345  
   Customer C
    1,091,079       1,856,991  
    $ 5,162,927     $ 4,864,299  
% of total revenues
    56.10 %     52.50 %
 
8.  Related Party Transactions

During the first three and nine months of 2012 and 2011, the Company paid $1,858 and $23,884 in 2012, and $43,387 and $120,259 in 2011, respectively, to directors of the Company for services provided in permitting and other construction related activities at Mexican mill sites.

During the first three and nine months of 2012 and 2011, the Company paid $15,625 and $54,340 in 2012, and $21,330 and $65,912 in 2011, respectively, to John Lawrence, our President and Chief Executive Officer, as reimbursement for personally owned equipment used by the Company.
 
9.  Stockholder’s Equity

Issuance of Common Stock for Cash

During the nine months ending September 30, 2012, the Company sold an aggregate of 2,056,334 shares of unregistered common stock to existing stockholders and other parties for $5,066,502. In connection with the sales of the Company’s common stock, 1,207,750 warrants to purchase shares of the Company’s common stock at $2.50 per share, and 476,917 warrants at $4.50 per share, were issued.  Expenses of $441,739 connected to the issuance of the unregistered shares were deducted from additional paid in capital.  200,000 shares were issued as an exercise of warrants at $.30 per share for a total of $60,000.  Also in the first nine months of 2012, 25,265 shares were issued in a cashless exercise of 50,000 warrants, which resulted in an addition of $263 to capital stock, and a corresponding reduction to additional paid in capital.  No share or warrants to purchase shares of the Company’s common stock were issued in the first nine months of 2011.

 
7

 
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:

Issuance of Common Stock for Services
 
At December 31, 2011, the Company declared, but did not issue, 95,835 shares of unregistered common stock to be paid to its directors for services, having a fair value of $230,004, based on the current stock price at the date declared.  During the first nine months of 2012, the company issued 149,500 shares of unregistered common stock with a fair market value of $401,819 to the Directors as compensation for past and future services. During the first nine months of 2012, the Company awarded 39,406 of the remaining 53,665 shares of unregistered common stock to its directors for services.  6,423 new shares with a fair value of $25,000 were issued to new Directors during 2012.  This expense is classified with general and administrative expense in the consolidated statement of operations.

Common Stock Warrants
 
The Company's Board of Directors has the authority to issue stock warrants for the purchase of preferred or unregistered common stock to directors and employees of the Company.

Transactions in common stock warrants are as follows:
 
   
Number of
   
Exercise
 
   
Warrants
   
Prices
 
Balance, December 31, 2010
    725,000     $ 0.20-$0.75  
Warrants exercised
    (125,000 )   $ 0.30-$0.40  
Balance, December 31, 2011
    600,000     $ 0.30-$0.60  
Warrants granted
    1,684,667     $ 2.50-$4.50  
Warrants exercised
    (250,000 )   $ 0.30-$2.50  
Warrants expired
    (150,000 )   $ 0.40  
Balance, September 30, 2012
    1,884,667     $ 0.25-$4.50  
                 
The above common stock warrants expire as follows:
               
                 
Year Ended December 31:
               
2014
    1,157,750          
2015
    476,917          
Thereafter
    250,000          
      1,884,667          

 
8

 
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:

10.   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 and factoring is not allocated to the segments.  Selected information with respect to segments is as follows:

   
September 30,
2012
   
As of 
December 31,
2011
 
Properties, plants and equipment, net:
           
Antimony
           
United States
  $ 1,774,326     $ 1,657,473  
Mexico
    4,861,559       2,791,233  
Subtotal Antimony
    6,635,885       4,448,706  
Zeolite
    1,706,140       1,598,298  
   Total
  $ 8,342,025     $ 6,047,004  
                 
Total Assets:
               
Antimony
               
United States
  $ 5,432,421     $ 2,387,425  
Mexico
    5,960,744       4,291,187  
Subtotal Antimony
    11,393,165       6,678,612  
Zeolite
    2,273,075       2,461,505  
   Total
  $ 13,666,240     $ 9,140,117  

 
9

 
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:

   
For the three months ended
   
For the nine months ended
 
   
September 30, 2012
   
September 30, 2011
   
September 30, 2012
   
September 30, 2011
 
Capital expenditures:
                       
Antimony
                       
United States
  $ 96,206     $ 16,501     $ 158,644     $ 95,790  
Mexico
    786,086       579,525       2,220,913       1,668,761  
Subtotal Antimony
    882,292       596,026       2,379,557       1,764,551  
Zeolite
    107,467       121,756       264,839       309,896  
   Total
  $ 989,759     $ 717,782     $ 2,644,396     $ 2,074,447  
 
   
For the three months ended
   
For the nine months ended
 
   
September 30, 2012
   
September 30, 2011
   
September 30, 2012
   
September 30, 2011
 
Revenues:
                       
Antimony
  $ 1,974,535     $ 2,649,889     $ 6,678,725     $ 7,337,484  
Precious metals
    144,082       142,421       525,707       480,003  
Zeolite
    536,506       539,698       2,002,546       1,444,552  
Total
  $ 2,655,123     $ 3,332,008     $ 9,206,978     $ 9,262,039  
                                 
                                 
   
For the three months ended
   
For the nine months ended
 
   
September 30, 2012
   
September 30, 2011
   
September 30, 2012
   
September 30,, 2011
 
Gross profit:
                               
Antimony
  $ 156,059     $ 732,748     $ 421,037     $ 1,260,228  
Zeolite
    (18,433 )     93,578       126,238       88,732  
Total
  $ 137,626     $ 826,326     $ 547,275     $ 1,348,960  
                                 
                                 
   
For the three months ended
   
For the nine months ended
 
   
September 30, 2012
   
September 30, 2011
   
September 30, 2012
   
September 30, 2011
 
Depreciation and amortization:
                               
Antimony
  $ 76,914     $ 51,746     $ 192,020     $ 148,612  
Zeolite
    55,077       53,617       157,355       149,254  
Total
  $ 131,991     $ 105,363     $ 349,375     $ 297,866  
 

 
 
10

 
 
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.

United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:

For the three and nine month periods ended September 30, 2012 compared to the three and nine month periods ended September 30, 2011
 
 
Results of Operations by Division
                       
                         
Antimony - Combined USA
 
3rd Qtr
   
3rd Qtr
   
Nine Months
   
Nine Months
 
   and Mexico
 
2012
   
2011
   
2012
   
2011
 
Lbs of Antimony Metal USA
    314,053       385,279       1,020,085       1,037,237  
Lbs of Antimony Metal Mexico:
    57,545       45,918       233,163       166,789  
   Total Lbs of Antimony Metal Sold
    371,598       431,197       1,253,248       1,204,026  
Sales Price/Lb Metal
  $ 5.31     $ 6.15     $ 5.33     $ 6.09  
Net income (loss)/Lb Metal
  $ (0.42 )   $ 1.43     $ (0.39 )   $ 0.64  
                                 
Gross antimony revenue - net of discount
  $ 1,974,535     $ 2,649,889     $ 6,678,725     $ 7,337,484  
Precious metals revenue
    144,082       142,421       525,707       480,003  
Production costs - USA
    (1,173,827 )     (1,639,741 )     (4,200,298 )     (5,128,984 )
Product cost - Mexico
    (268,735 )     (214,437 )     (1,088,871 )     (778,905 )
Direct sales and freight
    (63,225 )     (87,500 )     (277,204 )     (200,612 )
General and administrative - operating
    (246,148 )     (56,487 )     (702,626 )     (171,702 )
Mexico non-production costs
    (135,049 )     (9,651 )     (316,346 )     (128,444 )
General and administrative - non-operating
    (313,378 )     (115,932 )     (913,350 )     (484,790 )
 Net interest
    627       (2,321 )     4,175       122  
   EBITDA
    (81,118 )     666,241       (290,088 )     924,172  
Depreciation & amortization
    (75,574 )     (51,746 )     (198,050 )     (148,612 )
Net income (Loss) - antimony
  $ (156,692 )   $ 614,495     $ (488,138 )   $ 775,560  
                                 
Zeolite
                               
Tons sold
    2,260       2,819       8,960       8,662  
Sales Price/Ton
  $ 237.39     $ 191.45     $ 223.50     $ 166.77  
Net income (Loss)/Ton
  $ (8.16 )   $ 33.20     $ 14.09     $ 10.24  
                                 
Gross zeolite revenue
  $ 536,506     $ 539,698     $ 2,002,546     $ 1,444,552  
Production costs
    (402,165 )     (262,645 )     (1,380,675 )     (835,758 )
Direct sales and freight
    (39,659 )     (42,610 )     (129,378 )     (129,691 )
Royalties
    (47,945 )     (24,266 )     (176,992 )     (121,317 )
General and administrative
    (10,093 )     (62,982 )     (31,908 )     (119,800 )
   EBITDA
    36,644       147,195       283,593       237,986  
Depreciation
    (55,077 )     (53,617 )     (157,355 )     (149,254 )
Net income  (Loss) - zeolite
  $ (18,433 )   $ 93,578     $ 126,238     $ 88,732  
                                 
Company-wide
                               
Gross revenue
  $ 2,655,123     $ 3,332,008     $ 9,206,978     $ 9,262,039  
Production costs
    (1,844,727 )     (2,116,823 )     (6,669,844 )     (6,743,647 )
Other operating costs
    (542,119 )     (283,496 )     (1,634,454 )     (871,566 )
General and administrative - non-operating
    (313,378 )     (115,932 )     (913,350 )     (484,790 )
Net interest
    627       (2,321 )     4,175       122  
   EBITDA
    (44,474 )     813,436       (6,495 )     1,162,158  
Income tax benefit (expense)
                    74,311       (24,426 )
Depreciation & amortization
    (130,651 )     (105,363 )     (355,405 )     (297,866 )
Net income  (Loss)
  $ (175,125 )   $ 708,073     $ (287,589 )   $ 839,866  
                                 
 
 
11

 
 
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION, CONTINUED:
 
Revenues from antimony sales decreased by $676,000 and $659,000 for the third quarter and nine month periods of 2012, as compared to the same periods of 2011.  The pounds of antimony produced and sold was down 59,600 lbs ($366,000) from the third quarter of 2011, while the sales were up 49,200 lbs ($300,000) from the nine month period one year ago.  The sales price per pound was down $0.84 per lb ($312,000) from the same quarter one year ago, and down $0.76 per lb ($952,000) from the nine month period for the prior year.  The pounds of product (raw material) from Mexico increased 11,627 lbs over the same quarter and 66,374 lbs over the nine months from one year ago.  The flotation plant at Puerto Blanco is on line since early October of 2012, and we should see increased product from Mexico in the upcoming quarters.  Non-production costs incurred in getting the Mexico plants in operation increased by $125,000 and $188,000 for the quarter and nine months ended September 30, 2102, as compared to the same periods for 2011.  We expect the non-production costs for Mexico to be substantial for the remainder of 2012 as production is being ramped up.  Conversely, we will have more antimony products from Mexico to sell, and the cost of raw material per pound of antimony produced will decrease as we are able to work more raw materials from Mexico into our production.  In addition, we expect to have increased revenue from precious metals as we process more of the raw materials supplied by our Mexico division.  We contracted in July 2012 to install a natural gas pipeline for our Mexico smelter operation.  Our fuel costs are our second largest expense after raw material in Mexico, and we are expecting the switch from propane to natural gas to decrease our Mexico fuel costs by 75%.  We have spent $132,000 on the pipeline project as of September 30, 2012, and our projections are that the total cost will be approximately $1 million. We expect the pipeline to be completed in nine months.
We had sales of precious metals since 2009 as follows:

Silver/Gold
 
2009
   
2010
   
2011
   
2012 YTD
 
Ounces Gold Shipped
    31.797       101.127       161.711       72.609  
Ounces Silver Shipped
    6,870.10       31,545.22       17,472.99       16,370.15  
 
Zeolite sales decreased by approximately $3,000 and increased by approximately $558,000 for the quarter and nine month periods ended September 30, 2012, respectively, when compared to the same quarters from 2011.  Zeolite sold in the third quarter of 2012 decreased by 559 tons ($132,000) from the tons sold the third quarter of 2011, but was up by 298 tons ($70,000) for the nine months ended September 30, 2012.  The price per ton increased by $46 per ton ($129,000) and $56 per ton ($485,000) for the quarter and nine months periods ending September 30, 2012, when compared to the same quarters from 2011.  The sales price per ton was better than the prior year’s sales price for both periods due to the cost of an additive for a customer.  The cost of the additive was also was the primary reason that production costs were up $144,000 and $545,000 for the quarter and nine months ended September 30, 2012, when compared to the same quarters for 2011.  We expect that the increase in the price per ton for both sales and production costs to continue through the remainder of the year.
 
Our general and administrative costs are significantly higher than the prior year, and management is aggressively seeking ways to bring this cost down.  During the three months and nine months ended September 30, 2012, we incurred approximately $88,000 in one time charges related to our listing on the NYSE MKT stock exchange.  Expenses for Directors’ fees were $81,753 and $0, for the nine months ended September 30, 2012 and 2011, respectively.

Financial Condition and Liquidity
           
             
   
September 30, 2012
   
December 31, 2011
 
Current Assets
  $ 5,094,397     $ 2,963,570  
Current liabilities
    (1,687,791 )     (1,972,026 )
   Net Working Capital
  $ 3,406,606     $ 991,544  
                 
Cash provided (used) by operations
  $ 482,560     $ 564,041  
Cash (used) by investing
    (2,535,046 )     (2,239,441 )
Cash provided (used) by financing:
               
   Principal paid on long-term debt
    (147,095 )     (124,722 )
   Sale of Stock
    4,684,763       1,242,780  
   Other
    (113,908 )     113,908  
      Net change in cash
  $ 2,371,274     $ (443,434 )
 

 
12

 
 
Our net working capital increased by approximately $2,415,000 million from December 31, 2011.  This was primarily due to an increase of $482,000 in cash from operations, and $4,685,000 cash from the sale of restricted stock, versus $1,160,000 for the same period in 2011. The increase in cash from operating activities was largely due to a decrease in accounts receivable of $946,000, versus an increase of $123,000 for the same period in 2011.  We spent $2,292,000 and $1,745,000 cash to purchase property, plant and equipment, primarily in Mexico.  Other decreases to cash were for payments of accounts payable, checks issued but not cleared at end of year, and payments of long-term debt.  During the nine months ended September 30, 2012, we issued $358,800 of stock to Directors for payment of the obligations to related parties accrued at December 31, 2011.We have estimated commitments for construction and improvements, including $750,000 for the natural gas pipeline, of approximately $1,500,000 over the next twelve months. We believe that with $2,376,000 of cash, along with future cash flow from operations, we have adequate liquid assets to meet our commitments and service our debt.  We have lines of credit of $202,000 which have not been drawn on at September 30, 2012.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 
We sell our antimony products based on a world market price, and we buy a majority of our raw material based on the same market prices.  Analysis of our costs indicate that, for the quarter and nine months ended September 30, 2012, raw materials were approximately 50% of our cost of goods sold.  Most of our production costs are fixed in nature, and could not be decreased readily without decreasing our production.  During the quarter and nine months ending September 30, 2012, a $2 per pound decrease in our sales price would have likely caused our gross profit to decrease $1 per pound

ITEM 4.  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 chief financial 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, 2012.

It was determined that there were material weaknesses affecting our disclosure controls and procedures and, as a result of those weaknesses, our disclosure controls and procedures were not effective as of September 30, 2012. These material weaknesses are as follows:

  
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.
  
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 will develop procedures to ensure that independent review of material transactions is performed.  We will develop internal control measures to mitigate the lack of segregation of duties as follows:
 
  
The CFO will review all bank reconciliations
  
The CFO will review all material transactions for capital expenditures
  
The CFO will review all period ending entries for preparation of financial statements, including the calculation of inventory, depreciation, and amortization
  
The CFO will review all material entries for compliance with generally accepted accounting principles prior to the annual audit and 10Q filings
  
The CFO will develop a formal capitalization policy
 
In addition, we plan to consult with independent experts when complex transactions are contemplated.
 
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

Since December 31, 2011, the Company has appointed three independent Director’s to an Audit Committee which has been actively involved in the Company's internal controls over financial reporting through communications with the Company’s management and outside auditors.  The CFO has reviewed bank reconciliations, capital expenditures, calculation of depreciation and amortization, and has prepared a formal capitalization document since December 31, 2011.
 
 
13

 

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 March 31, 2012, the Company sold shares of its restricted common stock directly and through the exercise of outstanding stock purchase warrants as follows: 1,102,500 shares for $2.00 per share ($2,205,000), and 200,000 shares for $.30 per share ($60,000).

During the three month period ended June 30, 2012, the Company sold shares of its restricted common stock directly and through the exercise of outstanding stock purchase warrants as follows: 953,834 shares for $3.00 per share ($2,851,964), and 25,265 shares were issued as a cashless exercise of warrants.

$441,739 was paid for cost and fees in connection with the issuance of the above shares, and was recorded as a reduction of additional paid in capital.

Common stock sold is 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.  Proceeds received on sales of common stock were used for general corporate purposes.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

The registrant has no outstanding senior securities.

ITEM 4.  

None.
 
 
 
14

 
 
 
 
 
Mine
 
Mine Act §104 Violations (1)
   
Mine Act §104(b) Orders (2)
   
Mine Act §104(d) Citations and Orders (3)
   
Mine Act §(b)(2) Violations (4)
   
Mine Act §107(a) Orders (5)
   
Proposed Assessments from MSHA (In dollars$)
   
Mining Related Fatalities
 
Mine Act §104(e) Notice (yes/no) (6)
 
Pending Legal Action before Federal Mine Saftey and Health Review Commission (yes/no)
                                                               
Bear River Zeolite
    0       0       0       0       0     $ 2,282.00       0  
No
 
No

ITEM 5.  OTHER INFORMATION

None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit 95  MINE SAFETY DISCLOSURES

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the six month period ended June 30, 2012, the Company had no material specified health and safety violations, orders or citations, related assessments or legal actions, mining-related fatalities, or similar events in relation to the Company’s United States operations requiring disclosure pursuant to Section 1503(a) of the Dodd-Frank Act.
 
Mine
 
Mine Act §104 Violations (1)
   
Mine Act §104(b) Orders (2)
   
Mine Act §104(d) Citations and Orders (3)
   
Mine Act §(b)(2) Violations (4)
   
Mine Act §107(a) Orders (5)
   
Proposed Assessments from MSHA (In dollars$)
   
Mining Related Fatalities
 
Mine Act §104(e) Notice (yes/no) (6)
 
Pending Legal Action before Federal Mine Saftey and Health Review Commission (yes/no)
                                                               
Bear River Zeolite
    0       0       0       0       0     $ 2,282.00       0  
No
 
No

Certifications
Certifications Pursuant to the Sarbanes-Oxley Act
Reports on Form 8-KNone

 
15

 

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)  
       
Date: June 20, 2012  
By:
/s/ John C. Lawrence  
    John C. Lawrence, Director and President  
    (Principal Executive)  
 
 
Date:  June 20, 2012  
By:
/s/ Daniel L. Parks  
    Daniel L. Parks, Chief Financial Officer  
 
 
Date:  June 20, 2012  
By:
/s/ Alicia Hill  
   
Alicia Hill, Controller
 




                                                                                              
     
16