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, 2021
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, 2021, 14,390,631 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, 2021 & December 31, 2020
ASSETS
2021 2020
Current Assets
Cash $ 20,028 $ 21,822
Accounts receivable 58,012 55,775
Inventory (see Note 1) 279,650 309,425
Other current assets - -
------- -------
Total current assets 357,690 387,022
------- -------
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 (938,434) (937,727)
----------- -----------
Net fixed assets 37,580 38,287
----------- -----------
Other Assets
Bonds and misc. deposits 14,869 14,869
--------- -------
Total Assets $ 688,516 $ 718,555
========== ==========
?
Original sixteen to One Mine, Inc.
Condensed Balance Sheet Continued
LIABILITIES & STOCKHOLDERS' EQUITY
2021 2020
Current Liabilities
Accounts payable & accrued expenses (see Note 3)$
1,343,753 1,323,897
Due to related party (see Note 4) 303,753 286,248
Notes payable Short-term (see Note 6) 538,558 538,558
-------- -------
Total Current Liabilities 2,186,064 2,148,703
-------- -------
Long Term Liabilities
Notes payable due after one year (see Note 7) 97,236 97,236
-------- -------
Total Liabilities 2,283,300 2,245,939
---------- ---------
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 June 30, 2019
(see Note 8) 474,891 474,891
Additional paid-in capital 2,222,892 2,222,892
(Accumulated deficit)
Retained earnings (4,292,567) (4,225,167)
------------ -----------
Total Stockholders' Equity (1,594,784) (1,527,384)
------------ -----------
Total Liabilities and Stockholders' Equity $ 688,516 $ 718,555
============ ============
See Accompanying Notes
?
Original Sixteen to One Mine, Inc.
Statement of Operations and Retained Earnings
Three Months Ending March 31,
2021 2020
------ ------
Revenues:
Gold & Jewelry Sales (24,174) 50,130
Other Revenue
--------- ---------
Total revenues $ (24,174) $ 50,130
--------- ---------
Operating expenses:
Salaries and wages 15,000 15,000
Contract Labor 4,133 34,517
Utilities 19,750 18,661
Taxes - property & payroll 412 4,762
Supplies 47 448
Insurance 381 1,127
Small equipment & repairs 1,284 2,600
Drayage 1,005 3,967
Corporate expenses - 1,221
Legal and Compliance - 4,201
Mine Maintenance - 1,271
Depreciation & amortization 707 2,442
Other expenses 329 846
- ------- -------
Total operating expenses 43,048 91,063
-------- --------
Profit (Loss) from operations (67,222) (40,933)
Other Income: 1,200 1,200
Other Expense: - -
--------- --------
Total Other income(expense) 1,200 1,200
-------- --------
Profit (Loss) before taxes (66,022) (39,733)
---------- ---------
Income tax benefit (expense) - -
---------- ---------
Net profit (loss) $ (66,022) $ (39,733)
=========== ==========
Basic and diluted (loss)
earnings per share $ (.005) $ (.003)
=========== =========
Shares used in the
calculation of net
(loss) income per share 14,390,631 14,342,097
=========== ==========
See Accompanying Notes
Original Sixteen to One Mine, Inc.
Statement of Cash Flows
Three Months Ended March 31, 2021 and March 31, 2019
Three Months Ended March 31,
2021 2020
-------------- ------------
Net profit (loss) $ (66,022) $ (39,733)
Cash Flows From Operating Activities:
Depreciation and amortization 707 2,442
(Increase)Decrease in
accounts receivable (2,237) (250)
Decrease(Increase) in inventory 29,775 35,496
(Increase)Decrease in other
current assets - -
(Decrease) increase in accounts payable
and accrued expenses 18,477 (52,064)
(Decrease) increase in related party loans 17,506 12,464
(Decrease) increase in short term notes - -
------------ ----------
Net cash (used) provided by
operating activities (1,794) (41,645)
------------ ----------
Cash Flows From Investing Activities:
Fixed Asset Purchases _ -
Proceed from sale real estate - -
Other assets bonds misc. deposits - -
----------- - ----------
Net cash (used) provided by
investing activities - -
----------- -----------
Cash Flows From Financing Activities
Increase (decrease) notes payable - (50,864)
Proceeds from sale of common stock - -
Additional paid-in capital - -
----------- -----------
Net cash provided (used) by
financing activities - 112,906
------------ ------------
(Decrease) increase in cash (1,794) 20,397
Cash, beginning of period 21,822 4,433
------------ ----------
Cash, end of period $ 20,028 $ 24,830
============ ============
Supplemental schedule of other cash flows:
Cash paid during the period for:
Interest expense $ - $ -
============ ===========
Income taxes $ - $ -
============ ===========
NOTES TO THE FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business: Original Sixteen to One Mine, Inc. (the Company)
incorporated in 1911, 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. Inventory is
adjusted by gold at the spot price for the quarter.
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, 2021 and December 31, 2020. The
results of operations and cash flows for the first quarter of 2021 and
2020 and showing the three-month year-to-date ending March 31, 2021
and 2020. 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. becoming the oldest gold mining
corporation in the United States. Experts estimate that sixty percent
or more of the gold deposit remains. 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 31,2021, there were no
significant changes to the balance sheet.
STATEMENT OF OPERATIONS
Revenues
Gold revenues for the three-month period ending March 31, 2021,
decreased by $74,304 (148%) compared with the same period in 2020 due
to supporting COVID-19 California and federal restrictions, decrease
in the spot price of gold, and the emphasis on maintenance instead of
producing gold.
Expenses
For the three-month period ended March 31, 2021, compared to the same
period in 2020 total operating expenses decreased by $48,015 (53%) to
support COVID-19 California and federal restrictions to support COVID-
19 California and federal restrictions. Operations complied with COVID
19 restrictions. Planned maintenance is less costly than mining.
For the three-month period ended March 31, 2021, compared to the same
period in 2020, the company showed a loss of $66,022 compared to a
loss of $39,733. The $26,289 (66%) difference was due to intentional
changes in the operation from mining for gold to maintenance.
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
Company is defending criminal allegations initiated by the California
District Attorney?s Association.
Item 1a RISK FACTORS
(a) Price of Gold
The daily spot price of gold has no financial effect on gross revenue
if it's between $1,700 and $1,800 an ounce. A significant drop below
$1,700 may have an adverse effect on the Company's revenue. Closing
spot price on December 31, 2020, was $1,803.28 and on March 31, 2021,
it was $1691.05 an ounce. The Company's realized gold inventory
usually exceeds the bullion price.
(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 has faced
reoccurring unreasonable and illegal demands from the Central Valley
Regional Water Quality Control Board (CVRWCB. The Company expends
working capital and time defending excessive and punitive behavior.
There is 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, 2021, was $279,650 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-month ended March 31, 2021, 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, 2021.
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: May 26, 2021
