SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 2020 Commission File No. 001-10156 ORIGINAL SIXTEEN TO ONE MINE, INC. (Exact name of registrant as specified in its charter) CALIFORNIA 94-0735390 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporated or organization) Post Office Box 909, Alleghany, CA 95910 (Address of principal executive offices) (530) 287-3223 (Registrant's telephone number) (including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 requirement for the past 90 days. N/A Voluntary Filer 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 [ ] Accelerated filer [ ] Non-accelerated filer [ ] (do not check if smaller reporting company) Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-d of the Exchange Act). Yes [ ] N0 [X] As of March 31, 2020, 14,342,097 shares of Common Stock, par value $.033 per share, were issued and outstanding. Item 1. PART I Original Sixteen to One Mine, Inc. Condensed Balance Sheet March 31, 2020 & December 31, 2019 ASSETS 2020 2019 Current Assets Cash $ 24,830 $ 4,433 Accounts receivable 56,775 56,525 Inventory (see Note 1) 270,194 305,691 Other current assets - - ------- ------- Total current assets 351,799 366,649 ------- ------- Mining Property Real estate and property rights net of depletion of $524,145 230,401 230,401 Mineral property 47,976 47,976 ------- ------- Total Mining Property (see Note 2) 278,377 278,377 ------- ------- Fixed Assets at Cost Equipment 597,602 597,602 Buildings 209,487 209,487 Vehicles 168,925 168,925 --------- --------- Total fixed assets at cost 976,014 976,014 --------- --------- Less accumulated depreciation (930,402) (927,961) ----------- - ---------- Net fixed assets 45,612 48,053 ----------- - ---------- Other Assets Bonds and misc. deposits 14,869 14,869 --------- ------- Total Assets $ 690,657 $ 707,948 ========== ========== ? Original sixteen to One Mine, Inc. Condensed Balance Sheet Continued LIABILITIES & STOCKHOLDERS' EQUITY 2020 2019 Current Liabilities Accounts payable & accrued expenses (see Note 3)$ 1,237,392 1,342,718 Due to related party (see Note 4) 209,511 247,911 Notes payable Short-term (see Note 6) 538,558 538,558 -------- ------- Total Current Liabilities 1,985,461 2,129,187 -------- ------- Long Term Liabilities Notes payable due after one year (see Note 7) 98,736 101,092 -------- ------- Total Liabilities 2,084,197 2,230,279 ---------- --------- Stockholders' Equity Capital stock, par value $.033: 30,000,000 shares authorized: 14,342,097 issued and outstanding as of Dec. 31, 2018 and as of March 31, 2019 (see Note 8) 474,891 474,891 Additional paid-in capital 2,222,892 2,221,290 (Accumulated deficit) Retained earnings (4,091,323) (4,218,512) ------------ - ---------- Total Stockholders' Equity (1,393,540) (1,522,331) ------------ - ---------- Total Liabilities and Stockholders' Equity $ 690,657 $ 707,948 ============ ============ See Accompanying Notes ? Original Sixteen to One Mine, Inc. Statement of Operations and Retained Earnings Three Months Ended March 31, 2020 and March 31, 2019 Three Months Ending March 31, 2020 2019 ------ ------ Revenues: Gold & jewelry sales $ 50,130 $ 116,451 Other Revenue - -- ----------- ----------- Total revenues 50,130 116,451 ----------- ----------- Operating expenses: Salaries and wages 15,000 15,000 Contract Labor 34,517 55,287 Telephone & utilities 18,661 19,316 Taxes - property & payroll 4,762 4,379 Supplies 448 3,727 Insurance 1,127 1,875 Small equipment & repairs 2,600 2,511 Drayage 3,967 2,512 Corporate expenses 1,221 365 Legal fees and penalties 4,201 880 Mine Maintenance & Compliance 1,271 3,411 Depreciation & amortization 2,442 4,520 Other operating expenses 846 1,468 ---------- ---------- Total operating expenses 91,063 115,251 ---------- ---------- Profit (Loss) from operations (40,933) 1,200 Other Income & Expenses: Other Income 1,200 1,519 Other Expenses - 5,284 ------- -------- Total Other Income (Expense) 1,200 (3,765) ---------- ----------- Profit (Loss) before taxes (39,733) (2,565) ---------- ----------- Income Tax Benefit - - Net Profit (Loss) $ (39,733) $ (2,565) ============ =========== Basic and diluted Gain (Loss) per share $ (0.0002) $ (0.0002) ============ ========== Shares used in the calculation of net loss income per share 14,342,097 14,342,097 ============ ========== See Accompanying Notes Original Sixteen to One Mine, Inc. Statement of Cash Flows Three Months Ended March 31, 2020 and March 31, 2019 Three Months Ended March 31, 2020 2019 -------------- -------------- Cash Flows From Operating Activities: Net profit (loss) $ (39,733) $ (2,564) operating activities: Depreciation 2,442 4,520 (Increase)Decrease in accounts receivable (250) (750) Decrease(Increase) in inventory 35,496 5,453 (Increase)Decrease in other current assets - - (Decrease) increase in accounts payable and accrued expenses (52,064) (4,857) (Decrease) increase related-party loans 12,464 6,397 (Decrease) increase in short term notes _ - ------------ ---------- Net cash (used) provided by operating activities (41,645) 8,199 ------------ ----------- Cash Flows From Investing Activities: (Increase) Decrease Fixed Assets - (3,450) ------------- ---------- Net cash (used) provided by investing activities - (3,450) ------------ ----------- Cash Flows From Financing Activities Increase (decrease) notes payable (50,864) (1,523) (Increase) decrease in notes receivable - - Proceeds from sale of common stock - - Additional paid-in capital - - ------------ ------------ Net cash provided (used) by financing activities 112,906 (1,523) ------------ ------------ (Decrease) increase in cash 20,397 3,226 Cash, beginning of period 4,433 3,296 ------------ ---------- Cash, end of period $ 24,830 $ 6,522 ============ ============ Supplemental schedule of other cash flows: Cash paid during the period for: Interest expense $ - $ 4,611 Income Taxes $ - $ - ============ ============ See Accompanying Notes NOTES TO THE FINANCIAL STATEMENTS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business: Original Sixteen to One Mine, Inc. (the Company) incorporated in 1911, and actively operates the Sixteen to One mine in Alleghany, California. Inventory: Inventory consists of gold bullion, specimens and jewelry. Gold bullion is quoted at the market price. Jewelry and specimens are quoted at the market price for gold content plus labor cost. Inventory is accounted for using the average cost method. Fixed Assets: Fixed assets are stated at historical cost. Depreciation is calculated using straight-line and accelerated methods over the following useful lives: Vehicles 3 to 5 years, Equipment 5 to 7 years, Buildings 18 to 31.5 years. Company does not capitalize underground expenses or exploration. Depletion Policy: Because of the geological formation in the Alleghany Mining District, estimates of ore reserves cannot be calculated, and accordingly, a cost per unit depletion factor cannot be determined. No depletion deduction is recorded. Revenue Recognition: Revenue is recognized using quoted market prices for gold when mined. For income tax purposes revenues are not recognized until the gold is sold. Use of Estimates: Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. Estimates and assumptions affect reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. GENERAL NOTES 1. In accordance with directive from the Securities and Exchange Commission (SEC)and Industry Guide 7, reference for all intent and purposes to the Company's employees as miners, its properties as mines or its operation as mining does not diminish the fact that the Company has no proven reserves for the period. The "exploration state" as defined in Guide 7(a)(4)(iii) may apply. 2. Financial statements contain adjustments (consisting only of normal recurring accruals) necessary to present fairly the Company's financial position at March 31, 2020 and December 31, 2019, the results of operations and cash flows for the three-month periods ended March 31, 2020 and 2019. Unaudited financial statements are prepared in accordance with Generally Accepted Accounting Principles for interim financial information and with instructions to Form 10-Q and Item 310(b) of Regulation S-B. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION The Sixteen to One mine in the Alleghany Mining District is a unique gold deposit and requires an unfamiliar operation, which is recognized by its owners, its miners, geologists, engineers, and some public agencies for 125 years. It is a rare California high-grade, hard rock, underground gold mine. The Company celebrated its 100th year anniversary on Oct. 9, 2011. It became the oldest gold mining corporation in the United States. Experts estimate that sixty percent of the of the deposit remain. Production is approximately 1,500,000 ounces of gold. Over thirty miles of horizontal workings and millions of cubic feet of vertical excavations called stopes exist. The entire grounds are not maintained for mining. Once an area is targeted for mining, travel ways and escape routes are brought into safety compliance. Production miners set up a heading (face) and begin a drill-blast-muck sequence into the quartz. Gold is hosted in the quartz vein as exceedingly rich concentrations called "pockets". Metal detectors are regularly used underground as a tool for guiding the direction of the work. Metal detectors are also used as a tool to classify the ore underground. A positive effect reduces the volume of rock taken from the mine, thereby reducing costs. In 1992, the company initiated a gold marketing plan of selling gold in quartz as a gemstone. This produces revenue significantly greater than selling gold into the spot market. Demand for the Sixteen to One gold-in-quartz gemstone exceeds supply. Production has been termed a "feast or famine" situation for over 100 years. Reserves in this high-grade gold mine cannot be termed as "proven". At the Sixteen to One the search for gold embraces: (1) historical maps; (2) geophysical prospecting; (3) underground headings, drifts or tunnels. When operations detect the presence of gold, the Company evaluates the environment and changes from exploration to development to production rapidly. The company hoards gold and sells it according to short-term cash needs. These facts create headaches for the Company managing cash flow between pockets. Balance Sheet notes: Gold inventory is recorded at spot price despite proven additional value for specimen and gem-stone material which is substantially greater than spot price. Jewelry inventory is recorded at labor plus gold cost. No value is recorded on the balance sheet for timber reserves. The company owns 470 acres of prime forested timberland. No value is recorded on the balance sheet for the Company owned water-rights. Reduced value is recorded on the balance sheet for buildings, equipment and land. No value is recorded on the balance sheet for marketable aggregate and decorative stone currently stockpiled. No value is recorded on the balance sheet for goodwill. Fixed assets are recorded at historic cost less depreciation which cloud the true value of Company assets. BALANCE SHEET COMPARISONS For the three-month period ended March 31, 2020 there were no significant changes to the balance sheet. STATEMENT OF OPERATIONS Revenues Gold revenues for the three-month period ending March 31, 2020, decreased by $116,607 (58%) compared with the same period in 2019 due to management?s decision to dewater the mine. Expenses For the three-month period ended March 31, 2020 compared to the same period in 2019 total operating expenses decreased by $31,813 (26%) primarily due to a smaller crew in 2020 compared to 2019. For the three-month period ended March 31, 2020 compared to the same period in 2019 the company showed a loss of $39,733 compared to a loss of $5,225. The $34,508 (87%) difference is due to lower gold production. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK From time to time the Company makes written and oral forward- looking statements about matters that involve risks and uncertainties that could cause actual results to differ materially from projected results. Important factors that could cause actual results to differ materially include, among others: - Fluctuations in the market prices of gold - General domestic and international economic, political and governmental conditions - Unexpected geological conditions or rock stability conditions resulting in cave-ins, flooding, rock-bursts or rock slides - The speculative nature of mineral exploration - Environmental risks - Changes in laws and government regulations, including those relating to taxes and the environment - Fluctuations in interest rates and other adverse financial market conditions - Labor relations - Accidents - Unusual weather or operating conditions - Force majeure events These factors are beyond the Company's ability to control or predict. Investors are cautioned not to place undue reliance on forward-looking statements. The Company will update its forward-looking statements, whether as a result of receiving new information, the occurrence of future events or otherwise if significant. ITEM 4: CONTROLS AND PROCEDURES Security procedures include multiple levels of gold custody, from the mine to sales. Inventory control procedures were set up by an SEC certified auditing firm and continue to be followed. PART II Item 1 LEGAL PROCEEDINGS None Item 1a RISK FACTORS (a) Price of Gold The daily spot price of gold has a modest effect on gross revenue if it's between $1,000 and $1,300 an ounce. A significant drop below $1,000 may have an adverse effect on the Company's operation. The Company's realized gold values usually exceed the bullion price due to the jewelry and specimen markets which are not affected by the spot price of gold. ? (b) Lack of Proven Reserves Because proven reserves are not utilized as a component for evaluating future earnings or ore values, a sense of uncertainty of existence is perceived by some. Caution is always recommended in using the doctrines of reserves as an economic tool for valuing a mining company. While (i) the Company has recovered over one million ounces of gold and (ii) management knows that substantial additional virgin veins exist in the Sixteen to One mine, the Company has no ability to measure potential gold production using the mathematical tools generally recognized in the mining industry; however, the company can prove that approximately seventy percent (70%) of its vein systems have not been developed. (c) Governmental Regulation The attached financial statements have not been audited by a Securities Exchange Commission (SEC) accounting firm. Therefore, the Company is not in full compliance with this SEC regulation for companies listed on an exchange. State and federal statutes regulate environmental quality, safety, exploration procedures, reclamation, employee?s health and safety, use of explosives, air quality standards, pollution of stream and fresh water sources, noxious odors, noise, dust, and other environmental protection controls as well as the rights of adjoining property owners. Laws may change preventing or delaying the commencement or continuance of given operations. The Company is substantially in compliance with all known safety and environmental standards and regulations, however; it faces reoccurring unreasonable and illegal demands from the Central Valley Regional Water Quality Control Board (CVRWCB) or its staff. The Company is forced to expend working capital and time defending this excessive and punitive behavior. There can be no assurance that future changes in the laws, regulations or reckless interpretations thereof will not have a material adverse effect. CVRWCB staff accepted invitations to visit the mine property. A definitive plan is under mutual development to re-write the mine's discharge permit. (d) Liquidity Gold inventory at March 31, 2020, was $270,194 primarily as specimens or gold held as jewelry. While history of actual cash sales supports an inventory value exceeding the spot price, no such increases are used to compute the inventory. All inventory of raw material is recorded at spot price per troy ounce. In addition, contract manufacturing costs of jewelry are included in the finished jewelry inventory. Periodic shortfalls in liquidity occur which are not likely to be bridged by institutional debt financing. Management addresses these issues as they arise. (e) Price of Stock Bids and offers are publicly recorded on the stock page of the Company's web site and a gray market. Exposure is limited. The price of stock may not accurately reflect its fair market value because of the limited marketplace and the existence of a wild and free gray market. The company deferred programs to support or promote its stock. There are conflicting bids, offers and trades between the Company's website and the unregulated Pink Sheet Gray Market, ticker symbol OSTO. Because of these discrepancies the market price is unreliable. Item 2 UNREGISTERED SALES OF EQUITY None Item 3. DEFAULTS ON SECURITIES None Item 4. MINE SAFETY DISCLOSURES For the three-months ended March 31, 2020, the Mine Safety and Health Administration (MSHA) issued no citations or orders. Item 5. OTHER INFORMATION The unaudited interim consolidated financial statements of the Company are prepared by management in accordance with generally accepted accounting practices. Such rules allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted audited accounting principles as long as the statements are not misleading. In the opinion of management, verified by signature below, all adjustments necessary for a fair presentation of these interim statements have been included. These adjustments are of a normal recurring nature. The preparation of the Company's financial statements in conformity with accounting principles accepted in the United States requires management to make estimates and assumptions. These estimates and assumptions affect reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements, as well as reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts may differ. No accounting principle upon which the Company's financial status depends, requires estimates of proven and probable reserves and/or assumptions of future gold prices. Commodity prices may significantly affect the company's profitability and cash flow. No independent accounting firm or auditors have any responsibility for the accounting and written statements of the Form 10-Q. The Company and its president assume responsibility for the accuracy of this filing and certify the financial statements present fairly in all material respects, the financial position of Original Sixteen to One Mine, Inc at March 31, 2020. SIGNATURE Pursuant to the requirements 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. ORIGINAL SIXTEEN TO ONE MINE, INC. (Registrant) Michael M. Miller President and Director Dated: April 15, 2020 2