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EX-31.2 - CERTIFICATION - UNITED STATES ANTIMONY CORPuamy_ex312.htm
EX-32.3 - CERTIFICATION - UNITED STATES ANTIMONY CORPuamy_ex323.htm
EX-32.1 - CERTIFICATION - UNITED STATES ANTIMONY CORPuamy_ex321.htm
EX-32.2 - CERTIFICATION - UNITED STATES ANTIMONY CORPuamy_ex322.htm
EX-31.1 - CERTIFICATION - UNITED STATES ANTIMONY CORPuamy_ex311.htm
EX-95 - MINE SAFETY DISCLOSURES - UNITED STATES ANTIMONY CORPuamy_ex95.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(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, 2014

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 No
 
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
þ
 
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, the registrant had outstanding 66,027,453 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
Smaller reporting company
o
(Do not check if a smaller reporting company)
 


 
 
 
 
 
UNITED STATES ANTIMONY CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD
ENDED SEPTEMBER 30, 2014
(UNAUDITED)

TABLE OF CONTENTS
 
 
[The balance of this page has been intentionally left blank.]
 
 
2

 
 
PART I-FINANCIAL INFORMATION

Item 1. Financial Statements
 
   
(Unaudited)
       
   
September 30,
2014
   
December 31,
2013
 
ASSETS
       
Current assets:
           
Cash and cash equivalents
  $ 538,174     $ 20,343  
Certificates of deposit
    249,147       246,565  
Accounts receivable, net
    985,546       576,021  
Inventories
    1,132,915       1,034,770  
Other current assets
    50,012       32,865  
Total current assets
    2,955,794       1,910,564  
                 
Properties, plants and equipment, net
    13,198,165       12,395,645  
Restricted cash for reclamation bonds
    75,502       75,501  
Other assets
    574,420       509,281  
Total assets
  $ 16,803,881     $ 14,890,991  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
               
Accounts payable
  $ 1,875,028     $ 1,734,767  
Due to factor
    326,272       177,701  
Accrued payroll, taxes and interest
    110,060       124,937  
Other accrued liabilities
    35,990       50,745  
Payables to related parties
    28,608       15,549  
Deferred revenue
    41,515       110,138  
Notes payable to bank
    -       138,520  
Long-term debt, current
    169,903       126,984  
Total current liabilities
    2,587,376       2,479,341  
                 
Long-term debt, net of discount and current portion
    713,306       1,002,215  
Stock payable to directors for services
    -       150,000  
Asset retirement obligations and accrued reclamation costs
    253,980       257,580  
Total liabilities
    3,554,662       3,889,136  
Commitments and contingencies (Note 4, and 6)
               
                 
Stockholders' equity:
               
Preferred stock $0.01 par value, 10,000,000 shares authorized:
               
Series A:  -0- shares issued and outstanding
    -       -  
Series B: 750,000 shares issued and outstanding
               
(liquidation preference $892,500 at December 31, 2013)
    7,500       7,500  
Series C: 177,904 shares issued and outstanding
               
(liquidation preference $97,847 at December 31, 2013)
    1,779       1,779  
Series D: 1,751,005 shares issued and outstanding
               
(liquidation preference $4,796,731 at December 31, 2013)
    17,509       17,509  
Common stock, $0.01 par value, 90,000,000 shares authorized;
               
66,027,453 and 63,156,206 shares issued and outstanding, respectively
    660,274       631,562  
Additional paid-in capital
    35,740,672       32,030,249  
Notes receivable from stock sales
    (150,000 )     -  
Accumulated deficit
    (23,028,515 )     (21,686,744 )
Total stockholders' equity
    13,249,219       11,001,855  
Total liabilities and stockholders' equity
  $ 16,803,881     $ 14,890,991  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
3

 
 
    For the three months ended    
For the nine months ended
 
   
September 30,
2014
   
September 30,
2013
   
September 30,
2014
   
September 30,
2013
 
                         
REVENUES
  $ 2,951,457     $ 2,558,356     $ 8,173,914     $ 8,479,808  
                                 
COST OF REVENUES
    (3,221,717 )     (2,441,862 )     (8,635,571 )     (8,427,360 )
                                 
GROSS PROFIT (LOSS)
    (270,260 )     116,494       (461,657 )     52,448  
                                 
OPERATING EXPENSES:
                               
     General and administrative
    220,150       206,467       672,373       667,988  
     Professional fees
    51,595       58,827       169,918       187,880  
     Gain on sale of equpment
    -       -       (5,450 )     -  
TOTAL OPERATING EXPENSES
    271,745       265,294       836,841       855,868  
                                 
LOSS FROM OPERATIONS
    (542,005 )     (148,800 )     (1,298,498 )     (803,420 )
                                 
OTHER INCOME (EXPENSE):
                               
Interest income
    3,038       674       5,827       3,892  
Interest expense
    (348 )     (922 )     (1,110 )     (3,664 )
Factoring expense
    (20,014 )     (9,765 )     (47,990 )     (52,945 )
TOTAL OTHER EXPENSE
    (17,324 )     (10,013 )     (43,273 )     (52,717 )
                                 
LOSS BEFORE INCOME TAXES
    (559,329 )     (158,813 )     (1,341,771 )     (856,137 )
                                 
INCOME TAX EXPENSE
    -       -       -       (229,451 )
                                 
NET LOSS
  $ (559,329 )   $ (158,813 )   $ (1,341,771 )   $ (1,085,588 )
                                 
Net loss per share of
                               
common stock:
                               
Basic
 
$ Nil
   
$ Nil
    $ (0.02 )   $ (0.02 )
Diluted
 
$ Nil
   
$ Nil
    $ (0.02 )   $ (0.02 )
                                 
Weighted average shares outstanding:
                               
Basic
    65,689,496       62,621,726       64,125,977       62,146,360  
Diluted
    65,689,496       62,621,726       64,125,977       62,146,360  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
4

 
 
 
   
For the nine months ended
 
   
September 30,
2014
   
September 30,
2013
 
Cash Flows From Operating Activities:
           
Net loss
  $ (1,341,771 )   $ (1,085,588 )
Adjustments to reconcile net loss to net cash
               
provided by operating activities:
               
Depreciation and amortization expense
    562,130       503,016  
Gain on sale of asset
    (5,450 )     -  
Accretion of asset retirement obligation
    (3,600 )     6,030  
Common stock issued to directors for services
    -       2,628  
Common stock issued for services
    39,000       -  
Deferred income tax expense
    -       229,451  
Change in:
               
Accounts receivable, net
    (409,525 )     (207,261 )
Inventories
    (98,145 )     312,584  
Other current assets
    (19,729 )     (33,118 )
Other assets
    (55,139 )     (165,438 )
Accounts payable
    140,261       348,121  
Due to factor
    148,571       157,482  
Accrued payroll, taxes and interest
    (14,877 )     10,835  
Other accrued liabilities
    (14,755 )     44,695  
Deferred revenue
    (68,623 )     91,692  
Payables to related parties
    13,059       (8,988 )
Net cash provided by operating activities
    (1,128,593 )     206,141  
                 
Cash Flows From Investing Activities:
               
Purchase of properties, plants and equipment
    (1,315,846 )     (1,742,783 )
Net cash used by investing activities
    (1,315,846 )     (1,742,783 )
                 
Cash Flows From Financing Activities:
               
   Proceeds from issuance of long term debt
    130,000       200,000  
Net proceeds from sale of common stock and exercise of warrants
    3,070,134       653,604  
Principal payments on notes payable to bank
    (138,520 )     -  
Principal payments on long-term debt
    (99,344 )     (232,931 )
Net cash provided by financing activities
    2,962,270       620,673  
                 
NET INCREASE (DECREASE)  IN CASH AND CASH EQUIVALENTS
    517,831       (915,969 )
                 
Cash and cash equivalents at beginning of period
    20,343       1,000,811  
Cash and cash equivalents at end of period
  $ 538,174     $ 84,842  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
               
Noncash investing and financing activities:
               
Properties, plants and equipment acquired with long-term debt
  $ 19,040     $ -  
Properties, plants and equipment acquired with accounts payable
  $ -     $ 318,335  
Common stock issued for debt payment
  $ 330,000     $ -  
Fair value of derivative liability
  $ -     $ 108,750  
Equipment sold for note receivable
  $ 10,000     $ -  
Common stock issued for notes receivable
  $ 150,000     $ -  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
5

 
 
PART I - FINANCIAL INFORMATION, CONTINUED:


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, 2014, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2014.

Reclassifications
Certain consolidated financial statement amounts for the three and nine month periods ended September 30, 2013, have been reclassified to conform to the 2014 presentation.  These reclassifications had no effect on the net income (loss) or accumulated deficit as previously reported.

Management estimates the effective tax rate at 0% for the current year.

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, 2013.

During the nine months ended September 30, 2014 and 2013, the Company incurred interest expense of $68,986 and $53,326, respectively, of which $67,876, and $52,563, respectively, has been capitalized as part of the cost of construction projects in Mexico.

2.           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 ended September 30, 2014 and September 30, 2013, is not applicable since any additions to outstanding shares related to common stock equivalents would be anti-dilutive.

As of September 30, 2014 and 2013, 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 Nine Months Ended
 
   
September 30,
2014
   
September 30,
2013
 
Warrants
    831,657       2,297,167  
Convertible preferred stock
    1,751,005       1,751,005  
Total possible dilution
    2,582,662       4,048,172  

 
6

 
 
PART I - FINANCIAL INFORMATION, CONTINUED:

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

3.  
Inventories:

Inventories at September 30, 2014 and December 31, 2013, consisted primarily of finished antimony products, antimony metal, antimony ore, and finished zeolite products that are stated at the lower of first-in, first-out cost or estimated net realizable value. Finished antimony products, antimony metal and finished zeolite products costs include raw materials, direct labor and processing facility overhead costs and freight. Inventory at September 30, 2014 and December 31, 2013, is as follows:
 
   
September 30,
2014
   
December 31,
2013
 
Antimony Metal
  $ 145,571     $ 33,850  
Antimony Oxide - finished
    180,850       386,514  
Antimony Oxide - Crude
    223,095       148,737  
Antimony Concentrate
    53,475       93,190  
Antimony Ore
    369,234       106,519  
   Total antimony
    972,225       768,810  
Zeolite
    160,690       265,960  
    $ 1,132,915     $ 1,034,770  
 
4.  
Accounts Receivable and Due to Factor:

The Company factors designated trade receivables pursuant to a factoring agreement with LSQ 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 83% of the face value of the receivable by wire transfer. The Factor withholds 15% as retainage, and 2% as a servicing fee.  Upon payment by the customer, we receive the remainder of the amount due from the factor.  The 2% servicing fee is recorded on the consolidated statement of operations in the period of sale to the factor. John Lawrence, CEO, is a personal guarantor of the amount due to 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,
2014
   
December 31,
2013
 
Accounts receivable - non factored
  $ 663,305     $ 402,351  
Accounts receivable - factored with recourse
    326,272       177,701  
   less allowance for doubtful accounts
    (4,031 )     (4,031 )
      Accounts receivable - net
  $ 985,546     $ 576,021  
 
 
7

 

PART I - FINANCIAL INFORMATION, CONTINUED:

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

5.  
Other Assets:

Guadalupe

On March 7, 2012 and on April 4, 2012 the Company entered into a supply agreement and a loan agreement, respectively, (“the Agreements”) with several individuals collectively referred to as ‘Grupo Roga’ or ‘Guadalupe.’  The individuals are the holders of mining concessions located in Mexico in which the Company is interested.  The supply agreement specified that the Company would advance monies to Guadalupe for specific expenses, including repairs of road and payment of mining taxes.  In addition, the Company agreed to purchase antimony ore mined at Guadalupe and pay for mining and trucking costs incurred with the condition that the ore maintain a grade of 3% or more of recoverable antimony. The advances are to be repaid by deducting 10% from the value of each antimony ore shipment. During 2012 and 2013, the recoverable grade of antimony was less than 3% and the amounts due the Company from Guadalupe increased as a result of recoverable antimony shortfalls.

The Agreements with Guadalupe granted the Company an option to purchase the concessions outright for $2,000,000. The Agreements also provide that in event of a breach of the terms by Guadalupe that the Company has a right to enter the property and take possession of the mining concessions. The advances are collateralized by a mortgage on the concessions.  As of September 30, 2014 and December 31, 2013, the Company had cumulative loans and advances due from Guadalupe of $533,100, and $489,281, respectively, included in its other assets.

Soyatal

On August 5, 2013, the Company entered into a supply agreement with the owners of the Soyatal concessions similar to that of Guadalupe and notified the owners of Soyatal that it was exercising the option to purchase the Soyatal property. The option exercise agreement allowed the Company to apply all amounts previously due the Company (the “Purchase Price Credits”) from Soyatal of $420,411 to the purchase price consideration. At December 31, 2013, the Company had Purchase Price Credits of approximately $325,000 which can be used as payments on the note at the rate of $100,000 per year until gone.  The Company is obligated to make payments of $200,000 annually through 2020, and a final payment of $100,000 is due in 2021.  The debt payable for the Soyatal mine is non-interest bearing. The Company recorded the debt and the related Soyatal mine asset by determining the net present value of the contractual stream of payments due using a 6% discount rate. The resulting discount on the Soyatal debt is approximately $212,000 at December 31, 2013 and $178,000 at September 30, 2014.  The discount is netted against the debt payable resulting in a discounted amount of $762,541 at December 31, 2013 and $796,855 at September 30, 2014. The discount is amortized to interest expense using the effective interest method over the life of the debt.  During the nine months ended September 30, 2014, the Company recorded $33,314 of amortization on the Soyatal debt discount.  No payments were made on the debt during the first three quarters of 2014.  The first payment of $200,000 is due January 1, 2015. 

 
8

 

PART I - FINANCIAL INFORMATION, CONTINUED:

United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
 
6.  
Commitments and Contingencies:

In 2005, Antimonio de Mexico, S. A. (“AM”) signed an option agreement that gives AM the exclusive right to explore and develop the San Miguel I and San Miguel II concessions for annual payments.  Total payments will not exceed $1,430,344, reduced by taxes paid.  During the nine months ended September 30, 2014 and the year ended December 31, 2013, $100,000 and $130,434, respectively, was paid and capitalized as mineral rights in accordance with the Company’s accounting policies.  At September 30, 2014, the following payments are scheduled: $100,000 on December 15, 2014, $100,000 on June 15, 2015 and $192,000 on December 15, 2015.

In June of 2013, the Company entered into a lease to mine antimony ore from concessions located in the Wadley Mining district in Mexico.  The lease calls for a mandatory term of one year and requires payments of $34,800 per month.  The lease is renewable each year with a 15 day notice to the lessor, and agreement of terms.   The lease was renewed in June of 2014.
7.  
Notes Payable to Bank:

During 2012, the Company negotiated a new credit facility increasing the Company’s lines of credit to $202,000.  As part of this agreement, the Company has pledged two $101,000 certificates of deposit as collateral.  The increased loan facility allows us access to borrowings at an interest rate of 5.0% for the portion of the credit line used.  At September 30, 2014, all funds had been paid back and there was no notes payable to the bank.

At September 30, 2014 and December 31, 2013, the Company had the following notes payable to the bank:
 
    September 30,    
December 31,
 
    2014     2013  
Promissory note payable to First Security Bank of Missoula, bearing interest at 5.0%, maturing February 27, 2016, payable on demand, collateralized by a lien on Certificate of Deposit number 48614        $ -     $ 70,952  
                 
Promissory note payable to First Security Bank of Missoula, bearing interest at 5.0%, maturing February 27, 2016, payable on demand, collateralized by a lien on Certificate of Deposit number 48615                   67,568  
                 
Total notes payable to bank         $ -     $ 138,520  
 
These notes are personally guaranteed by John C. Lawrence the Company’s President and Chairman of the Board of Directors.

 
9

 
 
PART I - FINANCIAL INFORMATION, CONTINUED:

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

8.           Long – Term Debt:
 
Long-Term debt at September 30, 2014 and December 31, 2013, is as follows:
 
September 30,
   
December 31,
 
   
2014
   
2013
 
Note payable to BMT Leasing, bearing interest
           
at 13.38%; payable in monthly installments of $908; maturing
           
December 2015; collateralized by equipment.
  $ 11,588     $ -  
Note payable to Thermo Fisher Financial Co., bearing interest
               
at 8.54%; payable in monthly installments of $2,792; maturing
               
December 2013; collateralized by equipment.
    -       5,583  
Note payable to Stearns Bank, bearing interest
               
at 6.9%; payable in monthly installments of $3,555; maturing
               
December 2014; collateralized by equipment.
    10,546       41,117  
Note payable to Western States Equipment Co., bearing interest
               
at 6.15%; payable in monthly installments of $2,032; maturing
               
June 2015; collateralized by equipment.
    17,832       34,861  
Note payable to Catepillar Financial, bearing interest at 5.95%;
               
payable in monthly installments of $827; maturing September 2015;
               
collateralized by equipment.
    9,603       16,440  
Note payable toDe Lage Landen Financial Services,
               
 bearing interest at 5.30%; payable in monthly installments of $549;
               
 maturing  March 2016; collateralized by equipment.
    9,479       13,945  
Note payable to Phyllis Rice, bearing interest
               
at 1%; payable in monthly installments of $2,000; maturing
               
March 2015; collateralized by equipment.
    23,808       33,808  
Note payable to De Lage Landen Financial Services,
               
bearing interest at 5.12%; payable in monthly installments of $697;
               
maturing December 2014; collateralized by equipment.
    2,759       8,797  
Note payable to Catepillar Financial, bearing interest
               
at 6.15%; payable in monthly installments of $766; maturing
               
August 2014; collateralized by equipment.
    739       5,921  
Note payable to De Lage Landen Financial Services,
               
bearing interest at 5.28%; payable in monthly installments of $709;
               
maturing June 2014; collateralized by equipment.
    -       4,186  
Obligation payable for Soyatal Mine, non-interest bearing,
               
 annual payments of $200,000  through 2019, net of discount of $189,172
    796,855       762,541  
Note payable to Robert Detwiler, a shareholder, bearing interest at 10.0%,
               
due January 2, 2015; collateralized by equipment.
    -       82,000  
Note payable to Betsy Detwiler, a shareholder, bearing interest at 10.0%,
               
due January 2, 2015; monthly payments of $1,000;
               
collateralized by equipment.
    -       120,000  
      883,209       1,129,199  
Less current portion
    (169,903 )     (126,984 )
Long-term portion
  $ 713,306     $ 1,002,215  
 
 
10

 
 
PART I - FINANCIAL INFORMATION, CONTINUED:

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

8. Long – Term Debt, Continued:

At September 30, 2014, principal payments on debt are due as follows:
 
Due by September 30,
     
2015
  $ 169,903  
2016
    62,514  
2017
    60,952  
2018
    139,199  
2019
    172,962  
2020
    183,339  
2021
    94,340  
    $ 883,209  
 
9. Concentrations of Risk:
 
   
For the Three Months Ended
   
For the Nine Months Ended
 
Sales to Three
 
September 30,
   
September 30,
   
September 30,
   
September 30,
 
Largest Customers
 
2014
   
2013
   
2014
   
2013
 
Alpha Gary Corporation
  $ 636,918     $ 906,970     $ 2,440,019     $ 2,949,177  
General Electric
            195,300       382,788       585,900  
Kohler Corporation
    936,122       592,567       2,091,565       2,164,997  
East Penn Corporation
    366,520                          
    $ 1,939,560     $ 1,694,837     $ 4,914,372     $ 5,700,074  
% of Total Revenues
    65.71 %     66.20 %     60.12 %     67.20 %
 
Three Largest
  September 30,     December 31,              
Accounts Receivable
 
2014
   
2013
             
Kohler Corporation
  $ 374,346     $ 202,019                  
Alpha Gary Corporation
            42,778                  
Teck American, Inc.
            88,329                  
East Penn Corporation
    183,260                          
General Electric
    191,394                          
    $ 749,000     $ 333,126                  
% of Total Receivables
    76.02 %     57.80 %                
 
10.           Related Party Transactions:

During the first three and nine months ended September 30, 2014 and 2013, the Chairman of the audit committee and compensation committee received $9,000 and $27,000, respectively, for services performed.

 
11

 

PART I - FINANCIAL INFORMATION, CONTINUED:

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

10.           Related Party Transactions, Continued:

During the three and nine months ended September 30, 2014 and 2013, the Company paid $3,547 and $6,843 in 2014, respectively, and $14,793 and $52,739 in 2013, respectively, to John Lawrence, President and Chief financial Officer, as reimbursement for equipment used by th Company. Additionally during the quarter ended June 30, 2014, Mr. Lawrence loaned the Company $63,500 for operating expenses and was paid back $13,500 at June 30, 2014. The loan was non-inteest bearing and unsecured and the remainder was paid in full during July of 2014.

During the three and nine months ended September 30, 2014 and 2013, the Company paid royalty expenses, based on sales of zeolite, of $10,611 and $31,655, in 2014, respectively, and $11,885 and $34,494, in 2013, respectively, to a company controlled by the estate of Al Dugan, formerly a significant stockholder and the father of a former director.

11.           Income Taxes:

The Company had recognized a deferred tax asset of $229,451 as of December 31, 2012. During the year ended December 31, 2013, the Company recognized a valuation allowance equal to 100% of the net deferred tax asset as management of the Company cannot determine that it is more likely than not the Company will realize the benefit of the net deferred tax asset. The net effect is that the deferred tax asset as of December 31, 2013, and any deferred tax assets that may have been incurred since then, are fully reserved for at September 30, 2014.

12.           Stockholder’s Equity:

Issuance of Common Stock for Cash

During the nine months ended September 30, 2014, the Company sold an aggregate of 2,217,571 shares of its common stock pursuant to a Form S-3 registration statement for $1.40 per share. The sales resulted in $2,831,134 of net proceeds to the Company.

Issuance of Common Stock for Notes Payable

In the fourth quarter of 2013, the Company borrowed $150,000 from Mr. and Mrs. Robert Detwiler, stockholders of the Company. Prior to the end of 2013, the Detwiler’s converted their notes into 120,000 shares common stock and 60,000 stock purchase warrants. The terms of the conversion were identical to those offered other investors that purchased common stock and warrants near the time of the conversion and no gain or loss on the conversion resulted. During the three months ended June 30, 2014, the Company issued 235,717 shares of its commons stock to Mr. and Mrs. Robert Detwiler and two other shareholders in satisfaction of $330,000 of additional debt that the Detwilers and two other shareholders had loaned the Company. Again, the terms of the share payment were identical to those offered other investors that purchased common stock during the second quarter offering.

 
12

 

PART I - FINANCIAL INFORMATION, CONTINUED:

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

12.      Stockholder’s Equity, Continued:

Warrant Exercise

During the quarter ended June 30, 2014, the Company issued an aggregate of 310,625 shares of its common stock to existing shareholders of the Company for their exercise of common stock purchase warrants. Of the shares issued, 182,500 generated cash proceeds of $239,000; 3,125 shares were issued in connection with a cashless exercise of warrants; and 125,000 shares were issued in connection with the receipt of notes receivable promising to pay $150,000 to the Company.

Issuance of Common Stock for Services

Directors

On December 27, 2013, the Company declared, but did not issue, shares of unregistered common stock to be paid to its directors for services during 2013, having a fair value of $150,000, based on the current stock price at the date declared.  During the nine months ended September 30, 2014, the Company issued 83,334 shares in satisfaction of the obligation.

Consultants

During the nine months ended September 30, 2014, the Company issued 24,000 shares to Herbert Denton for investor relations services provided. The shares estimated fair value at the time of issue was approximately $39,000.

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 Warrants
   
Exercise Prices
 
Balance, December 31, 2011
    600,000     $ .30 - $.60  
Warrants issued
    1,734,667     $ 2.50 - $4.50  
   Warrants exercised
    (250,000 )   $ .30 - $2.50  
   Warrants expired
    (150,000 )   $ .30 - $.40  
Balance, December 31, 2012
    1,934,667     $ .25 - $4.50  
Warrants issued
    629,740     $ 1.20-$1.60  
   Warrants exercised
    (25,000 )   $ 1.20  
   Warrants expired
    (50,000 )   $ 4.50  
Balance, December 31, 2013
    2,489,407     $ 0.25 - $4.50  
Warrants exercised
    (320,000 )   $ 1.20-$1.60  
   Warrants expired
    (1,337,750 )        
Balance, September 30, 2014
    831,657     $ 0.25 - $4.50  
                 
The above common stock warrants expire as follows:
         
Year ended December 31:
               
2014
    179,740          
2015
    401,917          
Thereafter
    250,000          
      831,657          
 
 
13

 

PART I - FINANCIAL INFORMATION, CONTINUED:

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

13.           Business Segments:

The Company is currently organized and managed by three segments, which represent our operating units: United States antimony operations, Mexican antimony operations and United States zeolite operations.  The Company’s Other operating costs include general and administrative expenses, freight and delivery, and other non-production related costs. Other income and expense consists primarily of interest income and expense and factoring expense.

The Madero smelter and Puerto Blanco mill at the Company’s Mexico operation brings antimony to an intermediate stage, which is then shipped to the United States operation for finishing and sales at the Thompson Falls, Montana plant. The Zeolite operation produces Zeolite near Preston, Idaho. Almost all of the sales of products from the United States antimony and Zeolite operations are to customers in the United States.

Segment disclosure regarding sales to major customers is located in Notes 9.
 
   
As of
September 30,
2014
   
As of
December 31,
2013
 
Properties, plants and equipment, net:
           
Antimony
           
United States
  $ 1,951,393     $ 1,928,442  
Mexico
    9,653,683       8,792,410  
Subtotal Antimony
    11,605,076       10,720,852  
Zeolite
    1,593,089       1,674,793  
    $ 13,198,165     $ 12,395,645  
                 
Total Assets:
               
Antimony
               
United States
  $ 3,885,788     $ 3,017,768  
Mexico
    10,870,955       9,668,997  
Subtotal Antimony
    14,756,743       12,686,765  
Zeolite
    2,047,138       2,204,226  
    $ 16,803,881     $ 14,890,991  
 
   
For the three months ended
   
For the nine months ended
 
   
September 30,
2014
   
September 30,
2013
   
September 30,
2014
   
September 30,
2013
 
Capital expenditures:
                       
Antimony
                       
United States
  $ 3,166     $ 4,883     $ 77,059     $ 79,630  
Mexico
    647,222       411,089       1,174,225       1,834,194  
Subtotal Antimony
    650,388       415,972       1,251,284       1,913,824  
Zeolite
    33,180       50,551       83,602       156,563  
   Total
  $ 683,568     $ 466,523     $ 1,334,886     $ 2,070,387  

 
14

 

PART I - FINANCIAL INFORMATION, CONTINUED:

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

13.       Business Segments, Continued:

Segment Operations for the
 
Antimony
   
Antimony
   
Bear River
       
Three Months ended September 30, 2014
 
USAC
   
Mexico
   
Zeolite
   
Totals
 
Total revenues
  $ 2,495,338           $ 456,119     $ 2,951,457  
                               
  Production costs
    1,692,970       766,122       275,440       2,734,532  
  Depreciation and amortization
    15,868       118,341       55,102       189,311  
  Other operating costs
    150,653       44,773       102,449       297,875  
      Total operating expenses
    1,859,491       929,236       432,991       3,221,718  
                                 
Gross profit (loss)
    635,847       (929,236 )     23,128       (270,261 )
                                 
Other income (expense):
    (251,077 )     (21,054 )     (16,937 )     (289,068 )
                                 
Income (loss) before income taxes
    384,770       (950,290 )     6,191       (559,329 )
                                 
NET INCOME (LOSS)
  $ 384,770     $ (950,290 )   $ 6,191     $ (559,329 )
 
Segment Operations for the
 
Antimony
   
Antimony
   
Bear River
       
Three Months ended September 30, 2013
 
USAC
   
Mexico
   
Zeolite
   
Totals
 
Total revenues
  $ 2,030,852     $ 26,000     $ 501,504     $ 2,558,356  
                                 
  Production costs
    1,083,957       778,545       262,798       2,125,300  
  Depreciation and amortization
    15,365       55,082       67,246       137,693  
  Other operating costs
    124,712       47,412       6,745       178,869  
      Total operating expenses
    1,224,034       881,039       336,789       2,441,862  
                                 
Gross profit (loss)
    806,818       (855,039 )     164,715       116,494  
                                 
Other income (expense):
    (255,350 )     (11,029 )     (8,928 )     (275,307 )
                                 
Income (loss) before income taxes
    551,468       (866,068 )     155,787       (158,813 )
                                 
NET INCOME (LOSS)
  $ 551,468     $ (866,068 )   $ 155,787     $ (158,813 )
 
 
15

 

PART I - FINANCIAL INFORMATION, CONTINUED:

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

13.           Business Segments, Continued:
 
Segment Operations for the
 
Antimony
   
Antimony
   
Bear River
       
Nine Months ended September 30, 2014
 
USAC
   
Mexico
   
Zeolite
   
Totals
 
Total revenues
  $ 6,563,452           $ 1,610,462     $ 8,173,914  
                               
  Production costs
    4,148,964       2,401,700       1,162,646       7,713,310  
  Depreciation and amortization
    47,618       349,206       165,305       562,129  
  Other operating costs
    208,878       95,602       55,654       360,134  
      Total operating expenses
    4,405,460       2,846,508       1,383,605       8,635,573  
                                 
Gross profit (loss)
    2,157,992       (2,846,508 )     226,857       (461,659 )
                                 
Other income (expense):
    (779,090 )     (52,324 )     (48,701 )     (880,112 )
                                 
Income (loss) before income taxes
    1,378,902       (2,898,832 )     178,156       (1,341,771 )
                                 
Income tax provision
    -       -       -       -  
                                 
NET INCOME (LOSS)
  $ 1,378,902     $ (2,898,832 )   $ 178,156     $ (1,341,771 )
 
Segment Operations for the
 
Antimony
   
Antimony
   
Bear River
       
Nine Months ended September 30, 2013
 
USAC
   
Mexico
   
Zeolite
   
Totals
 
Total revenues
  $ 6,853,912     $ 32,000     $ 1,593,896     $ 8,479,808  
                                 
  Production costs
    3,636,369       2,581,293       1,085,648       7,303,310.00  
  Depreciation and amortization
    45,965       163,767       299,314       509,046.00  
  Other operating costs
    423,355       36,397       155,252       615,004.00  
      Total operating expenses
    4,105,689       2,781,457       1,540,214       8,427,360.00  
                                 
Gross profit (loss)
    2,748,223       (2,749,457 )     53,682       52,448  
                                 
Other income (expense):
    (768,800 )     (107,847 )     (31,936 )     (908,583 )
                                 
Income (loss) before income taxes
    1,979,423       (2,857,304 )     21,746       (856,135 )
                                 
Income tax provision
    (229,451 )     -       -       (229,451 )
                                 
NET INCOME (LOSS)
  $ 1,749,972     $ (2,857,304 )   $ 21,746     $ (1,085,586 )
 
 
16

 

PART I - FINANCIAL INFORMATION, CONTINUED:

 
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.      
 
Precious Metals Sales
                         
Nine Months
 
Silver/Gold
 
2010
   
2011
   
2012
   
2013
   
2014
 
Montana
                             
Ounces Gold Shipped (Au)
    101.13       161.71       102.32       59.74       40.07  
Ounces Silver Shipped (Ag)
    31,545.22       17,472.99       20,237.70       22,042.46       18,430.22  
                                         
Revenues
  $ 483,307     $ 667,813     $ 647,554     $ 347,016     $ 288,346  
Mexico
                                       
Ounces Gold Shipped (Au)
                            1.780          
Ounces Silver Shipped (Ag)
                            1,053.240          
Revenues
                          $ 22,690          
                                         
 Total Revenues
  $ 483,307     $ 667,813     $ 647,554     $ 369,706     $ 288,346  
 
The precious metals production was held during the third quarter of 2014 due to furnace time.  All of the precious metals production for the third and fourth quarters will be shipped during the fourth quarter of 2014.

 
17

 

PART I - FINANCIAL INFORMATION, CONTINUED:

ITEM 2. Management’s Discussion and Analysis of Results of Operations and FinancialCondition, continued:

Results of Operations by Division:

For the three and nine month periods ended September 30, 2014 and 2013
 
Antimony - Combined USA
 
3rd Qtr
   
3rd Qtr
   
Nine Months
   
Nine Months
 
   and Mexico
 
2014
   
2013
   
2014
   
2013
 
Lbs of Antimony Metal USA
    372,781       248,268       897,455       740,495  
Lbs of Antimony Metal Mexico:
    156,348       133,586       404,998       482,980  
   Total Lbs of Antimony Metal Sold
    529,129       381,854       1,302,453       1,223,475  
Sales Price/Lb Metal
  $ 4.72     $ 5.17     $ 4.82     $ 5.38  
Net income (loss)/Lb Metal
  $ (1.07 )   $ (0.86 )   $ (1.17 )   $ (1.11 )
                                 
Gross antimony revenue - net of discount
  $ 2,495,338     $ 1,973,620     $ 6,275,106     $ 6,581,861  
Precious metals revenue
            83,232       288,346       304,052  
Production costs - USA
    (1,692,970 )     (1,083,957 )     (3,940,342 )     (3,636,369 )
Product cost - Mexico
    (695,749 )     (602,473 )     (1,802,241 )     (2,178,240 )
Direct sales and freight
    (71,536 )     (67,517 )     (208,620 )     (214,957 )
General and administrative - operating
    (123,889 )     (104,108 )     (304,480 )     (363,650 )
Mexico non-production costs
    (70,373 )     (178,082 )     (599,459 )     (409,083 )
General and administrative - non-operating
    (274,942 )     (266,809 )     (841,269 )     (876,643 )
 Net interest & gain on sale of asset
    2,810       (70 )     9,857       (5 )
   EBITDA
    (431,311 )     (246,164 )     (1,123,102 )     (793,034 )
Depreciation & amortization
    (134,209 )     (80,600 )     (396,825 )     (339,250 )
Provision for income taxes
                            (229,451 )
Net income (Loss) - antimony
  $ (565,520 )   $ (326,764 )   $ (1,519,927 )   $ (1,361,735 )
                                 
Zeolite
                               
Tons sold
    2,251       2,516       8,016       7,808  
Sales Price/Ton
  $ 202.63     $ 199.33     $ 200.91     $ 204.14  
Net income (Loss)/Ton
  $ 2.75     $ 66.75     $ 22.23     $ 35.37  
                                 
Gross zeolite revenue
  $ 456,119     $ 501,504     $ 1,610,462     $ 1,593,896  
Production costs
    (290,814 )     (183,960 )     (921,939 )     (846,649 )
Direct sales and freight
    (45,069 )     (40,102 )     (129,725 )     (123,798 )
Royalties
    (42,005 )     (45,481 )     (166,636 )     (151,597 )
General and administrative
    (16,818 )     (8,250 )     (49,011 )     (32,168 )
 Net interest
    (120 )     (678 )     310       232  
   EBITDA
    61,293       223,033       343,461       439,916  
Depreciation
    (55,102 )     (55,082 )     (165,305 )     (163,767 )
Net income  (Loss) - zeolite
  $ 6,191     $ 167,951     $ 178,156     $ 276,149  
                                 
Company-wide
                               
Gross revenue
  $ 2,951,457     $ 2,558,356     $ 8,173,914     $ 8,479,809  
Production costs
    (2,679,533 )     (1,870,390 )     (6,664,522 )     (6,661,258 )
Other operating costs
    (352,872 )     (435,290 )     (1,408,920 )     (1,263,085 )
General and administrative - non-operating
    (291,760 )     (275,059 )     (890,280 )     (908,811 )
Net interest
    2,690       (748 )     10,167       227  
   EBITDA
    (370,018 )     (23,131 )     (779,641 )     (353,118 )
Income tax benefit (expense)
                            (229,451 )
Depreciation & amortization
    (189,311 )     (135,682 )     (562,130 )     (503,017 )
Net income  (Loss)
  $ (559,329 )   $ (158,813 )   $ (1,341,771 )   $ (1,085,586 )

 
18

 

PART I - FINANCIAL INFORMATION, CONTINUED:

ITEM 2. Management’s Discussion and Analysis of Results of Operations and FinancialCondition, continued:
 
      Antimony
 
USAC antimony production is in a strong growth mode. Due to permitting delays for furnaces, the mine production for the first nine months of 2014 has exceeded the smelter capacity in Mexico, and USAMSA (our Mexican wholly owned subsidiary) has a large inventory of unprocessed mineral. During the third quarter of 2014, furnace number nine went on line, and in November of 2014, three more furnaces have started.  At a cost of approximately $504,000, this has increased our furnace capacity in Mexico by 50%.  Although USAMSA draws from five properties for smelter feed as well as various smaller properties, several of the properties have been in start-up mode and are currently on care and maintenance.  This has resulted in a large non-production holding cost that is now declining.  These holding costs included in the determination of the company’s profit or loss were $70,373 during Qtr 3 of 2014 compared to $178,082 for Qtr 3 of 2013.  For the nine months of 2014 these holding costs were $599,459 compared to $409,083 for the same period of 2013.  The over head costs directly related to production was $139,264 for Qtr 3 of 2014, and $360,134 for the first nine months of 2014.  For the third quarter of 2014, we incurred a loss of $559,329 compared to a loss of $158,813 during the same quarter of 2013. The price of antimony metal declined from $5.17 during the third quarter of 2013 to $4.72 in the third quarter of 2014, a decrease of $.45 per lb (9%).  Antimony oxide prices have now fallen from a high of $8.11 per lb in 2011, to $3.65 per lb in September of 2014.  The 2014 losses include excess production costs incurred in Mexico of $70,373 for the quarter, and $599,459 for the nine months, ended September 30, 2014.  The excess production costs are the result of the Los Juarez property not being in production, metallurgical work on Los Juarez concentrates, the Soyatal mine being shut down, the Puerto Blanco mill only running at 20% capacity, and the Wadley mill not yet in production.  Without the Mexican excess production costs, our production cost is $4.51 per pound of antimony contained, and our average sales price for the second quarter of 2014 was $4.72, leaving us a margin of $.21 per pound. The amount of antimony available for sale from Mexico declined due to shipping problems where we could not get trucks to transport our raw material to Montana. We now have a dedicated truck to solve this problem. Also, during the months of April and July, we received limited raw material from our North American supplier.  Combined production during the third quarter of 2014 was 492,606 pounds compared to 397,432 lbs during the third quarter of 2013, an increase of 24%.  The increase was primarily due to an overall increase in raw material received from our North American supplier. The production from Mexico for the quarter and nine months would have been greater except that we were processing test batches of ore from Los Juarez to determine the precious metals recovery.  The cost of production in the USA was up by approximately $609,000 from the same quarter in the prior year, primarily due to the increase in the amount of product produced and sold.  We have approximately 182,000 pounds of antimony at or in transit to the U.S. from the Mexican smelter. We have an estimated 228,000 pounds of antimony at our Wadley mine. Mineral from the Los Juarez property has not been milled this year due to metallurgical testing and the processing backlog at the Madero smelter, limited mining and development has increased the inventory at Los Juarez by approximately 2,000 tons during the third quarter, and by approximately 6,500 tons during the first nine months.  The operator of the Guadalupe mine has required our financial help for development and equipment during the year.  During Qtr1, we provided $45,582, during Qtr 2 $16,067, and during Qtr 3 $3,299.  The ore from Guadalupe is being milled at our Puerto Blanco mill and produces a concentrate containing 60% to 68% antimony.  Additional equipment shipped during November of 2014 is expected to increase production substantially.  The Soyatal and Guadalupana properties are on care and maintenance for the time being.  Our efforts in Mexico are resulting in increased product that will be shipped to our Montana plant.  We expect to have increased revenue from precious metals from our Mexico division.

 
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PART I - FINANCIAL INFORMATION, CONTINUED:

ITEM 2. Management’s Discussion and Analysis of Results of Operations and FinancialCondition, continued:

We contracted in July, 2012, to install a natural gas pipeline for our Mexico smelter operation, and that is now complete as the middle of September 2014.  Our fuel costs in Mexico are our largest expense after raw materials, and we are expecting the switch from propane to natural gas to decrease our Mexico fuel costs by 65% when fully in use.

In prior quarters, the Mexico production was primarily crude oxide.  As of the end of July, 2014, all crude oxide in Mexico is being further reduced to antimony metal.  This cut the Mexican production by approximately 12%, but increased badly needed capacity for the Montana smelter.

     Zeolite

Zeolite sales for the quarter ending September 30, 2014, decreased by approximately $45,000 compared to the same period in 2013.  The third quarter of 2014 realized a net profit of approximately $6,000 compared to a net profit of approximately $168,000 for the third quarter of 2013.  The sales price increased by approximately $3 per ton from the same period of the prior year, but there was a decrease in the tons of zeolite sold of approximately 265 tons for the quarter ended September 30, 2014, over the comparable period for 2013, a decrease of  approximately10%.  The BRZ profit for the nine months ended September 30, 2014, was approximately $178,000 compared to approximately $276,000 for the same period in the prior year.  The depreciation for the quarter and nine months ended September 30, 2014, was approximately $55,000 and $165,000, respectively.  BRZ is providing approximately $450,000 cash flow annually to the consolidated company.  We have installed new equipment at BRZ to produce a water filtration product that could represent a major market, and we have made improvements to increase our production capacity when needed.  We continue to have interest from customers in our Bear River Zeolite products.
 
     Company-wide
 
For the third quarter of 2014, we incurred a loss of $559,329 compared to a loss of $158,813 during the same quarter of 2013. For the nine months ended September 30, 2014, we incurred a loss of $1,341,771 compared to a loss of $1,085,586 during the same period of 2013. The depreciation and amortization for the quarter and nine months ended September 30, 2014, was $189,311 and $562,130, respectively.  The losses in 2014 were primarily due to a decrease in the market price for antimony and excess production costs in Mexico.

 Our general and administrative costs were little changed for the three months and nine months ended September 30, 2014, compared to the same periods for the prior year.  Management is seeking ways to bring these costs down.
 
Financial Condition and Liquidity
           
   
September 30,
2014
   
December 31,
2013
 
Current Assets
  $ 2,955,794     $ 1,910,564  
Current liabilities
    (2,587,376 )     (2,479,341 )
   Net Working Capital
  $ 368,418     $ (568,777 )
                 
Cash provided (used) by operations
  $ (1,128,593 )   $ 234,820  
Cash used for capital outlay and investment
    (1,315,846 )     (2,733,762 )
Cash provided (used) by financing:
               
   Proceeds (payments) notes payable to bank
    (138,520 )     138,520  
Proceeds from related party
               
   Principal paid on long-term debt
    (99,344 )     (273,405 )
   Proceeds from long-term debt
    130,000       352,000  
   Sale of Stock
    3,070,134       1,147,194  
   Other
            154,165  
      Net change in cash
  $ 517,831     $ (980,468 )
 
 
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PART I - FINANCIAL INFORMATION, CONTINUED:

ITEM 2. Management’s Discussion and Analysis of Results of Operations and FinancialCondition, continued:

Our net working capital increased by approximately $937,000 from December 31, 2013.  Our cash increased by approximately $520,000 during the same period.  The increase in our net working capital was primarily due to approximately $3,070,000 cash from the sale of stock, $130,000 borrowing, and approximately $330,000 of current debt paid with stock.  Decreases to working capital were from approximately $1,300,000 of capital expenditures, a $780,000 EBITDA loss, and $237,000 cash paid on debt. We have estimated commitments for construction and improvements, primarily for furnaces and installation of the 500 ton per day mill, of approximately $250,000 over the next twelve months. We believe that with our current cash balance, along with the future cash flow from operations, we have adequate liquid assets to meet these commitments and service our debt for the next twelve months.  We have lines of credit of $202,000 which have not been drawn down at September 30, 2014.
 

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 ended September 30, 2014, 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, 2014, a $2 per pound decrease in our sales price would have likely caused our gross profit to decrease $1 per pound.
 
 
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PART I - FINANCIAL INFORMATION, CONTINUED:


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, 2014.  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, 2014. 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 our 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 have procedures to ensure that independent review of material transactions is performed.  We have internal control measures to mitigate the lack of segregation of duties as follows:
 
  
The CFO reviews all bank reconciliations
  
The CFO reviews all material transactions for capital expenditures
  
The CFO reviews all period ending entries for preparation of financial statements, including the calculation of inventory, depreciation, and amortization
  
The CFO review all material entries for compliance with generally accepted accounting principles prior to the annual audit and 10Q filings
  
The Company has a formal capitalization policy
  
In addition, we consult with independent experts when complex transactions are entered into.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no significant changes made to internal controls for the quarter ended September 30, 2014.

 
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PART II - OTHER INFORMATION


None

PART II - OTHER INFORMATION, CONTINUED:


Issuance of Common Stock for Cash

During the nine months ended September 30, 2014, shareholders exercised their rights to convert warrants into 447,625 shares common stock for $562,800.  An adjustment to accrued offering costs for $5,716 was made for the nine months ended September 30, 2014.
 

The registrant has no outstanding senior securities.


The information concerning mine safety violations or other regulatory matters required by Section 1503 (a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Annual Report.


None


Certifications

Certifications Pursuant to the Sarbanes-Oxley Act
 
Reports on Form 8-K   None

 
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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: November 10, 2014
By:
/s/ John C. Lawrence   
    John C. Lawrence, Director and President  
    (Principal Executive)  
       
       
Date: November 10, 2014
By:
/s/ Daniel L. Parks      
    Daniel L. Parks, Chief Financial Officer  
       
       
Date: November 10, 2014
By:
/s/ Alicia Hill   
    Alicia Hill, Controller  


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