UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2023
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_______________ to______________
Commission file number: 001-08675
UNITED STATES ANTIMONY CORPORATION
(Exact name of registrant as specified in its charter)
Montana
(State or other jurisdiction of
incorporation or organization)
P.O. Box 643, Thompson Falls, Montana
(Address of principal executive offices)
81-0305822
(I.R.S. Employer
Identification No.)
59873
(Zip Code)
Registrant’s telephone number, including area code: (406) 827-3523
Securities registered under Section 12(b) of the Exchange Act:
Title of each class
Common stock, $0.01 par value
Trading Symbol(s)
UAMY
Name of each exchange on which registered
NYSE American
Securities registered under Section 12(g) of the Exchange Act:
Title of class
None
Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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
preceding 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 ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐
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. (Check one):
Large accelerated filer
Non-accelerated Filer
Emerging Growth Company
☐
☒
☐
Accelerated filer
Smaller reporting company
☐
☒
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements requiring a recovery analysis of incentive-based compensation received by any of the
registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of June 30, 2023, which was the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s
common stock held by non-affiliates was $30,438,620, determined using the per share closing price of $0.31 on the NYSE American exchange on June 30, 2023.
Common stock held by each executive officer and director has been excluded from this aggregate market value.
The number of shares outstanding of the registrant’s common stock as of April 9, 2024 was 107,647,317.
UNITED STATES ANTIMONY CORPORATION
INDEX TO THE FORM 10-K
FOR THE FISCAL YAER ENDED DECEMBER 31, 2023
PART I
ITEM 1.
BUSINESS
ITEM 1A.
RISK FACTORS
ITEM 1B.
UNRESOLVED STAFF COMMENTS
ITEM 1C.
CYBERSECURITY
ITEM 2.
PROPERTIES
ITEM 3.
LEGAL PROCEEDINGS
ITEM 4.
MINE SAFETY DISCLOSURES
PART II
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
ITEM 6.
[RESERVED]
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS AND PROCEDURES
ITEM 9B.
OTHER INFORMATION
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE COMPENSATION
PART III
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
ITEM 15.
EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
ITEM 16.
FORM 10-K SUMMARY
SIGNATURES
PART IV
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Readers should note that, in addition to the historical information contained herein, this Annual Report and the exhibits attached hereto contain “forward-looking
statements” within the meaning of, and intended to be covered by, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-
looking statements are based upon current expectations and beliefs concerning future developments and their potential effects on the Company including matters
related to the Company's operations, pending contracts and future revenues, financial performance, and profitability, ability to execute on its increased production
and installation schedules for planned capital expenditures, and the size of forecasted deposits. Although the Company believes that the expectations reflected in the
forward-looking statements and the assumptions upon which they are based are reasonable, it can give no assurance that such expectations and assumptions will
prove to have been correct. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous
factors and uncertainties. In addition, other factors that could cause actual results to differ materially are discussed in the Company's most recent filings, including
Form 10-K, Form 10-Q, and Form 8-K with the Securities and Exchange Commission.
Any statement that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or
performance (often, but not always using words or phrases such as “believes”, “expects” or “does not expect”, “is expected”, “outlook”, “anticipates” or “does not
anticipate”, “plans”, “estimates”, “forecast”, “project”, “pro forma”, or “intends”, or stating that certain actions, events or results “may” or “could”, “would”,
“might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject
to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and are subject to
assumptions and uncertainties. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause
actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation, risks related to:
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The Company’s properties being in the exploration stage;
Macroeconomic factors;
Continued operational losses;
The mineral operations being subject to government regulation;
The Company’s ability to obtain additional capital to develop the Company’s resources, if any;
Concentration of customers;
Increase in energy costs;
Mineral exploration and development activities;
Mineral estimates;
The Company’s insurance coverage for operating risks;
The fluctuation of prices for antimony and precious metals, such as gold and silver;
The competitive industry of mineral exploration;
The title and rights in the Company’s mineral properties;
Environmental hazards;
The possible dilution of the Company’s common stock from additional financing activities;
Metallurgical and other processing problems;
Unexpected geological formations;
Global economic and political conditions;
Staffing in remote locations;
Changes in product costing;
Inflation on operational costs and profitability;
Competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, flooding, landslides, power
outages, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities);
Global pandemics or civil unrest;
Mexican labor and cartel issues regarding safety and organized control over our properties;
The positions and associated outcomes of Mexican and other taxing authorities;
The possible dilution of the Company’s common stock from additional financing activities;
Cybersecurity and business disruptions;
Potential conflicts of interest with the Company’s management;
Not realizing the value of its USAMSA assets in Mexico upon sale or disposal; and
The Company’s common stock.
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This list is not an exhaustive list of the factors that may affect the Company’s forward-looking statements. Some of the important risks and uncertainties that could
affect forward-looking statements are described further under the sections titled “Risk Factors”, “Description of Business” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” of this Annual Report. If one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. The Company cautions readers not to place
undue reliance on any such forward-looking statements, which speak only as of the date made. United States Antimony Corporation disclaims any obligation
subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated
or unanticipated events, except as required by law. The Company advises readers to carefully review the reports and documents filed with the Securities and
Exchange Commission (the “SEC”), particularly the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
You should read this report with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially
different from what we expect and from our historical results.
This report contains estimates, projections and other information concerning our industry, our business and the markets for our products. We obtained the industry,
market and similar data set forth in this report from our own internal estimates and research and from industry research, publications, surveys and studies conducted
by third parties, including governmental agencies. Information that is based on estimates, forecasts, projections, market research or similar methodologies is
inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information.
While we believe that the data we use from third parties is reliable, we have not separately verified this data. You are cautioned not to give undue weight to any such
information, projections and estimates.
As a result of a number of known and unknown risks and uncertainties, including without limitation, the important factors described in Part I. Item 1A “Risk Factors”
in this Annual Report, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements.
As used in this Annual Report, the terms “we,” “us,” “our,” “United States Antimony Corporation,”, “US Antimony,” “USAC,” and the “Company”, mean United
States Antimony Corporation and its subsidiaries, unless otherwise indicated. All dollar amounts in this Annual Report are expressed in U.S. dollars, unless
otherwise indicated.
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Item 1. Business.
History
PART I
United States Antimony Corporation was incorporated in Montana in January 1970 to mine and produce antimony products. In December 1983, the Company
suspended its antimony mining operations in the U.S. but continued to produce antimony products using foreign sources of antimony ore. In April 1998, the
Company formed US Antimony de Mexico, S.A. de C.V. (“USAMSA”) to smelt antimony in Mexico, and, in August 2005, the Company formed Antimonio de Mexico,
S.A. de C.V. (“ADM”) to explore and develop antimony and precious metal deposits in Mexico. The Company formed Bear River Zeolite Company (“BRZ”) in 2000 for
the purpose of mining and producing zeolite in Idaho. Our principal business is the production and sale of antimony, precious metals, primarily gold and silver, and
zeolite products. In May 2012, our shares of common stock started trading on the NYSE MKT (now NYSE AMERICAN) under the symbol UAMY.
Although we extract minerals from the Bear River Zeolite property in Idaho that we later process and sell, we have not prepared a technical report summary for the
Bear River Zeolite property making a determination on the property’s mineral resources or mineral reserves.
Recent Developments
The Company has two subsidiaries in Mexico, US Antimony de Mexico, S.A. de C.V. (“USAMSA”) and Antimonio de Mexico, S.A. de C.V. (“ADM”). On March 11,
2024, the Company shut down the operations of USAMSA, terminated a majority of USAMSA employees, the cost of which related to this employee termination was
approximately $40,000, and announced its plans to sell, lease, or dispose of its USAMSA subsidiary, operations, or assets. The USAMSA subsidiary primarily
includes the Company’s Madero antimony and precious metals plant in Parras de la Fuente Coahuila, Mexico and its Puerto Blanco antimony and precious metals
plant in San Luis de la Paz Guanajuato, Mexico. The Company intends to sell or lease its USAMSA subsidiary, operations, or assets over the next year and has
initiated an active search for buyers or leasing opportunities of its operations and/or existing assets. The Company will maintain its existing Los Juarez mining claims
and concessions in Cadereyta de Montes Queretaro, Mexico, which are included in our ADM subsidiary. There are presently no active operations at Los Juarez. See
Note 14 of the Notes to Consolidated Financial Statements in this Annual Report for further information.
In March 2024, the Company received a favorable ruling with no assessment due related to the audit of USAMSA’s 2013 income tax return by the Mexican tax
authority (“SAT”) that began in 2015 and that had been under appeal since 2022. See Note 9 and Note 14 of the Notes to Consolidated Financial Statements in this
Annual Report for further information.
Products, Markets, and Segments
Our products consist primarily of the following:
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Antimony: includes antimony oxide, antimony metal, and antimony trisulfide;
Zeolite: includes coarse and fine zeolite crushed in various sizes; and
Precious metals: includes unrefined and refined gold and silver.
All sales of antimony, zeolite, and precious metals products are to customers in the United States and Canada.
The Company is organized and managed by the following four segments, which represent our operating units: United States antimony segment, Mexico antimony
segment, zeolite segment, and precious metals segment.
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United States Antimony Segment
Our United States antimony segment consists of an antimony plant in the Burns Mining District of Sanders County in Montana, which primarily produces antimony
oxide, antimony metal, antimony trisulfide, and precious metals. Antimony oxide is a fine, white powder. Our antimony oxide is used in conjunction with a halogen to
form a synergistic flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings, and paper. Our antimony oxide is also used as a color fastener
in paint and as a phosphorescent agent in fluorescent light bulbs. Our antimony metal is used in bearings, storage batteries and ordnance. Our antimony trisulfide is
used as a primer in ammunition. The precious metals processed at this plant in Montana are included in our Precious Metals Segment.
We closed our antimony mine and mill in Montana in December 1983 because antimony ore could be purchased more economically from foreign sources. Our mine
and mill are approximately 1 mile from our current antimony smelter plant in Montana. We hold one patented claim at the mine. The environmental permitting process
currently precludes mining at our mine in Montana.
As a result of the mine and mill closure, we have relied on sources outside the U.S. for antimony ore since 1983, and there are risks of interruption in procurement from
these sources and volatile changes in world market prices for these materials that are not controllable by us. We anticipate continuing to receive antimony ore
primarily from a supplier in Canada but will continue to explore Mexico and Central America for suppliers of antimony ore, assuming economics are profitable. The
acquisition of antimony ore is technically complex and a function of the country’s laws and regulations. Our purchasing consequently requires flexibility regarding
supply agreements and is tailored accordingly to specific suppliers.
We estimate (but have not independently confirmed) that our present share of the domestic and international markets for antimony oxide products is approximately
4% and less than 1%, respectively. We are the only significant U.S. producer of antimony products. We believe we are competitive both domestically and world-wide
due to the following:
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We are the only U.S. domestic producer of antimony products.
We can ship on short notice to domestic customers.
We have a reputation for quality products delivered on a timely basis.
We have the only operating, permitted antimony smelter in the U.S.
Mexico Antimony Segment
The Company has two subsidiaries in Mexico, USAMSA and ADM. As described in the “ Recent Developments” section in this Annual Report, we shut down the
operational activities of USAMSA on March 11, 2024, which primarily includes the following two antimony and precious metals processing plants in Mexico: (1) the
Madero smelter in Coahuila, and (2) the Puerto Blanco flotation mill, oxide circuit, and cyanide leach circuit in Guanajuato. Our Madero smelter processes antimony
ore primarily into antimony metal and an intermediate stage of antimony. Our Puerto Blanco plant includes crushing equipment, a flotation mill, and an oxide circuit to
process and produce an intermediate stage of antimony and a cyanide leach circuit and settling pond that recovers precious metals after the ore goes through the
crushing and flotation cycles. The intermediate stage of antimony produced at Madero and Puerto Blanco is shipped to our plant in Montana for further processing
to produce antimony oxide and metal. The precious metals processed at Madero and Puerto Blanco, which were shut down as well, are included in our Precious
Metals Segment. The Company intends to sell or lease its USAMSA subsidiary, operations, or assets over the next year and has initiated an active search for buyers
or leasing opportunities of its operations and/or existing assets.
We will maintain our existing Los Juarez mining claims and concessions in Cadereyta de Montes Queretaro, Mexico, which are included in our ADM subsidiary.
There are presently no active operations at Los Juarez.
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Combined United States and Mexico Antimony Segments
Combined Antimony Sales: Following is a schedule of our antimony sales for the years ended December 31, 2023 and 2022:
Year
2023
2022
Antimony Sales
($)
5,904,480
7,631,670
$
$
Antimony
Pounds Sold
Average Sales
Price/Pound
Sold
1,269,131 $
1,394,036 $
4.65
5.47
Antimony Price Fluctuations: We report our average antimony sales price per pound using the total antimony sales from all our antimony products, which primarily
include metal, oxide, and trisulfide. However, our operating results from all our antimony products have been, and will continue to be, related to the Rotterdam
antimony metal market price, which has fluctuated widely over the past several years. The Rotterdam average antimony metal market price per pound, as reported by
Argus Metals, was $5.50 in 2023 and $5.99 in 2022.
The market price of antimony metal is determined by several variables out of our control. These variables include the availability and price of imported antimony
metal, the quantity of new antimony metal supply, and industrial demand for antimony metal. If antimony metal prices decline and remain depressed, our revenues and
profitability may be adversely affected.
Zeolite Segment
Our zeolite segment consists of a mine and mill in Preston, Idaho, Bear River Zeolite, Inc. (“BRZ”), which produces zeolite. Our zeolite is used for various purposes
including soil amendment and fertilizer, water filtration, sewage treatment, nuclear waste and other environmental cleanup, odor control, gas separation, animal
nutrition, and other miscellaneous applications.
BRZ has a lease with Zeolite, LLC that entitles BRZ to surface mine and process zeolite on property in Preston, Idaho, in exchange for a royalty payment. The annual
royalty payment is the greater of: (1) the minimum annual royalty of $60,000, adjusted annually for the Consumer Price Index for all Urban Consumers, or (2) $11.00 per
ton for the first ten thousand tons, $9.90 per ton for tons in excess of ten thousand up to twenty thousand, and $8.80 per ton for tons in excess of twenty thousand.
This Zeolite LLC lease also requires BRZ to pay $10,000 to the lessor on March 1 of each year during the term of the lease, which ends March 1, 2025. BRZ also pays
two other royalties on the sale of zeolite products. On a combined basis, BRZ pays royalties ranging from 8% to 13% on the sale of zeolite products. In addition, BRZ
can surface mine and process zeolite on property owned by the U.S. Bureau of Land Management that is adjacent to the Company’s Preston, Idaho property after
obtaining required permits.
“Zeolite” refers to a group of industrial minerals that consist of hydrated aluminosilicates that hold cations such as calcium, sodium, ammonium, various heavy
metals, and potassium in their crystal lattice. Water is loosely held in cavities in the lattice. BRZ zeolite is regarded as one of the best zeolites in the world due to its
high cation exchange capacity (CEC) of approximately 180-220 meq/100 gr. (which predicts plant nutrient availability and retention in soil), its hardness and high
clinoptilolite content (which is an effective barrier to prevent problematic radionuclide movement), its absence of clay minerals, and its low sodium content. Our
zeolite is used in:
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Soil Amendment and Fertilizer: Zeolite has been successfully used to fertilize golf courses, sports fields, parks and common areas, and high value
agricultural crops.
Water Filtration: Zeolite is used for particulate, heavy metal and ammonium removal in swimming pools, municipal water systems, fisheries, fish farms,
and aquariums.
Sewage Treatment: Zeolite is used in sewage treatment plants to remove nitrogen and as a carrier for microorganisms.
Nuclear Waste and Other Environmental Cleanup: Zeolite has shown a strong ability to selectively remove strontium, cesium, radium, uranium, and
various other radioactive isotopes from solutions. Zeolite can also be used for the cleanup of soluble metals such as mercury, chromium, copper, lead,
zinc, arsenic, molybdenum, nickel, cobalt, antimony, calcium, silver and uranium.
Odor Control: A major cause of odor around cattle, hog, and poultry feed lots is the generation of the ammonium in urea and manure. The ability of
zeolite to absorb ammonium prevents the formation of ammonia gas, which disperses the odor.
Gas Separation: Zeolite has been used for some time to separate gases, to re-oxygenate downstream water from sewage plants, smelters, pulp and paper
plants, and fishponds and tanks, and to remove carbon dioxide, sulfur dioxide and hydrogen sulfide from methane generators as organic waste, sanitary
landfills, municipal sewage systems, animal waste treatment facilities, and is excellent in pressure swing apparatuses.
Animal Nutrition: According to certain third-party research, feeding up to 2% zeolite increases growth rates, decreases conversion rates, and prevents
scours. Many cattle are currently being fed zeolite in feed lots located in the United States.
Miscellaneous Uses: Other uses include catalysts, petroleum refining, concrete, solar energy and heat exchange, desiccants, pellet binding, horse and
kitty litter, floor cleaner, traction control, ammonia removal from mining waste, and carriers for insecticides, pesticides and herbicides.
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Precious Metals Segment
Our precious metals segment consists of three precious metals recovery plants, one that is operated in conjunction with the antimony processing plant in Montana
and two that were shut down on March 11, 2024 that were operated in conjunction with the antimony processing plants at our Madero and Puerto Blanco operations
in Mexico. Precious metals are recovered in the leach circuit and settling pond after the ore goes through the crushing and flotation cycles. When precious metals are
contained in antimony source, the metallurgical techniques employed for the recovery of antimony are altered to also recover the precious metals. In 2023, the
principal source of antimony concentrates bearing precious metals came from our Canadian supplier, who also purchases precious metals from the Company.
Concentration of Sales
During the years ended December 31, 2023 and 2022, the Company sold 10% or more of its product to the following customers:
For the year ended
December 31,
2023
2022
Customer A revenue
Customer B revenue
Customer C revenue
Total customer revenue
Customer revenue as a % of total revenues
Regulatory Matters
$
$
$
1,548,283
1,451,950
1,037,307
4,037,540
$
46%
1,882,667
1,863,958
n/a
3,746,625
34%
We are subject to the requirements of the Federal Mining Safety and Health Act of 1977, the Occupational Safety and Health Administration’s regulations, the states
of Montana and Idaho, federal and state health and safety statutes and Sanders County, Montana and Franklin County, Idaho health ordinances. We also must
obtain and maintain various licenses and permits from various governmental agencies to operate our mines and plants and to conduct exploration. The following is a
summary of governmental regulation compliance areas which we believe are significant to our business and may have a material effect on our consolidated financial
statements, earnings and/or competitive position, although other regulations could be issued and/or become more material to our business and have a material effect
on our consolidated financial statements, earnings and/or competitive position.
Health and Safety
We are subject to the regulations of the Mine Safety and Health Administration (“MSHA”) in the United States and the Mexico Ministry of Economy and Mining in
Mexico, and work with these agencies to address issues outlined in any investigations and inspections and continue to evaluate our safety practices. We strive to
achieve excellent mine safety and health performance, and attempt to implement reasonable best practices with respect to mine safety and emergency preparedness.
Achieving and maintaining compliance with regulations will be challenging and may increase our operating costs.
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Licenses, Permits and Claims/Concessions
We are required to obtain various licenses and permits to operate our mines and conduct exploration and reclamation activities. Targets at our Los Juarez exploration
project in Mexico can only be developed if we are successful in obtaining the necessary permits. In addition, our operations and exploration activities in Mexico are
conducted pursuant to claims or concessions granted by the host government, and otherwise are subject to claims renewal and minimum work commitment
requirements, which are subject to certain political risks associated with foreign operations.
Environmental
Our operations are subject to various environmental laws and regulations at the federal and state level. Compliance with environmental regulations, and litigation
based on environmental laws and regulations, involves significant costs and can threaten existing operations or constrain expansion opportunities. Mine closure and
reclamation regulations impose substantial costs on our operations and include requirements that we provide financial assurance supporting those obligations. We
have about $55,000 of financial assurances, primarily in the form of surety bonds, for reclamation company-wide.
Our exploration, development and production programs conducted in the United States are subject to local, state and federal regulations regarding environmental
protection. Some of our production and mining activities are conducted on public lands. We believe that our current discharge of waste materials from our processing
facilities is in material compliance with environmental regulations and health and safety standards. The U.S. Forest Service extensively regulates mining operations
conducted in National Forests. Department of Interior regulations cover mining operations carried out on most other public lands. All operations by us involving the
exploration for or the production of minerals are subject to existing laws and regulations relating to exploration procedures, safety precautions, employee health and
safety, air quality standards, pollution of water sources, waste materials, odor, noise, dust and other environmental protection requirements adopted by federal, state
and local governmental authorities. We may be required to prepare and present data to these regulatory authorities pertaining to the effect or impact that any
proposed exploration for, or production of, minerals may have upon the environment. Any changes to our reclamation and remediation plans, which may be required
due to changes in state or federal regulations, could have an adverse effect on our operations. The range of reasonably possible loss in excess of the amounts
accrued, by site, cannot be reasonably estimated at this time.
We accrue environmental liabilities when the occurrence of such liabilities is probable, and the costs are reasonably estimable. The initial accruals for all our sites are
based on comprehensive remediation plans approved by the various regulatory agencies in connection with permitting or bonding requirements. Our accruals are
further based on presently enacted regulatory requirements and adjusted only when changes in requirements occur or when we revise our estimate of costs to
comply with existing requirements. When remediation activity physically commences, we can refine and revise our estimates of costs required to fulfill future
environmental tasks based on contemporaneous cost information, operating experience, and changes in regulatory requirements. In instances where the costs
required to complete our remaining environmental obligations are clearly determined to be in excess of the existing accrual, we have adjusted the accrual accordingly.
When regulatory agencies require additional tasks to be performed in connection with our environmental responsibilities, we evaluate the costs required to perform
those tasks and adjust our accrual accordingly, as the information becomes available. In all cases, however, our accrual at year-end is based on the best information
available at that time to develop estimates of environmental liabilities.
Retirement and Reclamation Obligations related to our US and Mexico Antimony and Precious Metals Segments
We have retirement and reclamation obligations at our closed antimony mine and mill (“the Stibnite Hill Mine Site”) and at our active smelter and precious metals
plant, all of which are in the Burns Mining District of Sanders County, Montana, and have accrued $395,811 at December 31, 2023 related to these obligations. We are
under the regulatory jurisdiction of the U.S. Forest Service and subject to the operating permit requirements of the Montana Department of Environmental Quality.
Some reclamation activities have been performed under the supervision of the U.S. Forest Service and Montana Department of Environmental Quality.
We have retirement and reclamation obligations in Mexico and have accrued $571,330 at December 31, 2023 related to these obligations. These obligations are under
The Secretary of Environment and Natural Resources (“SEMARNAT”) and The Federal Attorney for Environmental Protection (“PROFEPA”) based on the Program
for Environmental Vigilance (“PVA”).
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Retirement and Reclamation Obligation related to our Zeolite Segment
We have a retirement and reclamation obligation accrual for BRZ of $670,886 at December 31, 2023 based on the retirement and reclamation requirements of BRZ’s
lease with Zeolite LLC and the regulatory authorities.
General Environmental Remediation
We believe we have accrued adequate reserves to fulfill our environmental remediation responsibilities as of December 31, 2023. We have posted cash performance
bonds with a bank and the U.S. Forest Service in connection with our reclamation activities. We have made significant reclamation and remediation progress on all
our properties over thirty years and have complied with regulatory requirements in our environmental remediation efforts.
Competition
We compete with other mineral resource exploration and development companies for financing and for the acquisition of new mineral properties and for equipment
and labor related to exploration and development of mineral properties. Many of the mineral resource exploration and development companies with whom we compete
have greater financial and technical resources. Accordingly, competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on
exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the
targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective
investors who may finance additional exploration and development. This competition could adversely impact our ability to finance further exploration and to achieve
the financing necessary to develop its mineral properties.
We provide no assurance we will be able to effectively compete in any of our business areas with current or future competitors or that the competitive pressures
faced by us will not have a material adverse effect on the business, financial condition and operating results.
Employees
As of December 31, 2023, we employed 83 full-time employees, 16 in Montana, 23 in Idaho, 3 in Missouri, and 41 in Mexico. The number of full-time employees may
vary seasonally. None of our employees are covered by any collective bargaining agreement.
Intellectual Property
We hold no material patents, licenses, franchises or concessions. However, we consider our antimony processing plants proprietary in nature.
Available Information
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the
SEC’s website at http://www.sec.gov. Our SEC filings are also available free of charge on the Investors portion of our website at https://www.usantimony.com as
soon as reasonably practicable after they are filed with or furnished to the SEC. Our website and the information contained on or through that site are not
incorporated into this report. All website addresses in this report are intended to be inactive textual references only.
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Item 1A. Risk Factors.
The following risks and uncertainties, together with the other information set forth in this report, should be carefully considered by those who invest in our
securities. Any of the following material risk factors could adversely affect our business, financial condition or operating results and could decrease the value of our
common or preferred stock or other outstanding securities. These are not all of the risks we face, and other factors not presently known to us or that we currently
believe are immaterial may also affect our business materially if they occur.
Financial Risks
We have experienced losses in recent years and may continue to incur losses.
We have experienced a loss from operations and a net loss in each of the fiscal years ended December 31, 2019 to December 31, 2023 other than the fiscal year ended
December 31, 2022. We may continue to experience losses in the future. Many of the factors affecting our operating results are beyond our control, including, but not
limited to, the volatility of metals prices; smelter terms; rock and soil conditions; seismic events; availability of hydroelectric power; diesel fuel prices; interest rates;
foreign exchange rates; global or regional political or economic policies; inflation; availability and cost of labor; economic developments and crises; governmental
regulations; continuity of orebodies; ore grades; recoveries; performance of equipment; pandemics; global conflicts; price speculation by certain investors; and
purchases and sales by central banks and other holders and producers of gold and silver in response to these factors. We cannot assure you that we will not
experience net losses in the future. Continued losses may have an adverse effect on our cash balances, require us to curtail certain activities and investments, or may
require us to raise additional capital or sell assets.
Macroeconomic factors, including inflation, high interest rates, recession risks, unemployment rates, rising labor costs, fiscal policy, geopolitical events, and the
lagging effects of the COVID-19 pandemic, have caused downturns in key markets and created other commercial disruptions, which have and could further
adversely impact our businesses.
Many macroeconomic factors affect our business and the industries and companies that purchase our products. As a result, these macroeconomic factors have and
could cause further changes to demand for our products. These factors include: (i) inflation; (ii) high interest rates; (iii) recession risks; (iv) rising labor costs; (v)
disruptions to supply chains; (vi) fiscal policy, (vii) geopolitical events, (viii) interruptions of international and regional commerce; and (ix) the lagging effects of the
COVID-19 pandemic. Price erosion may occur as competitors become more aggressive in pricing practices. To the extent that these factors increase our costs and/or
reduce demand for our products and/or increase competition due to their effects on our customers and vendors, our business, financial position, results of operations
and cash flows could be adversely impacted.
We may seek or require additional financing, which may not be available on acceptable terms, if at all.
We may seek to source additional financing by way of private or public offerings of equity or debt or the sale of project or property interests in order to have
sufficient capital to engage in acquisitions, investments and for general working capital. We can give no assurance that financing will be available to it or, if it is
available, that it will be offered on acceptable terms. If additional financing is raised by the issuance of our equity securities, control of our company may change,
security holders will suffer additional dilution and the price of the common stock may decrease. If additional financing is raised through the issuance of indebtedness,
we will require additional financing in order to repay such indebtedness. Failure to obtain such additional financing could result in the delay or indefinite
postponement of further acquisitions, investments, exploration and development, curtailment of business activities or even a loss of property interests.
Metal prices are volatile. A substantial or extended decline in metals prices would have a material adverse effect on us.
Our revenue is derived primarily from the sale of antimony and zeolite products, and to a lesser extent silver and gold products, and, as a result, our earnings are
directly related to the prices of these metals and products. Antimony, zeolite, silver and gold prices fluctuate widely and are affected by numerous factors, including:
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speculative activities;
relative exchange rates of the U.S. dollar;
global and regional demand and production;
political instability;
inflation, recession or increased or reduced economic activity; and
other political, regulatory and economic conditions.
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These factors are largely beyond our control and are difficult to predict. If the market prices for these metals and products fall below our production, exploration or
development costs for a sustained period of time, we will experience losses and may have to discontinue exploration, development or operations, or incur asset write-
downs at one or more of our properties.
An extended decline in metals prices, an increase in operating or capital costs, mine accidents or closures, increasing regulatory obligations, or our inability to
convert resources or exploration targets to reserves may cause us to record write-downs, which could negatively impact our results of operations.
When events or changes in circumstances indicate the carrying value of our long-lived assets may not be recoverable, we review the recoverability of the carrying
value by estimating the future undiscounted cash flows expected to result from the use and eventual salvage values related to the disposition of the assets.
Impairment must be recognized when the carrying value of the asset exceeds these cash flows. Recognizing impairment write-downs could negatively impact our
results of operations. Metals price estimates are a key component used in the evaluation of the carrying values of our assets, as the evaluation involves comparing
carrying values to the average estimated undiscounted cash flows resulting from operating plans using various metals price scenarios. Our estimates of
undiscounted cash flows for our long-lived assets also include an estimate of the market value of the resources and exploration targets beyond the current operating
plans.
If the prices of antimony or zeolite decline for an extended period of time, if we fail to control production or capital costs, if regulatory issues increase costs or
decrease production, if the commercial value of fixed assets declines, or if we do not realize the mineable ore reserves, resources or exploration targets at our mining
properties, we may be required to recognize asset write-downs in the future. In addition, the perceived market value of the resources and exploration targets of our
properties is dependent upon prevailing metals prices as well as our ability to discover economic ore. A decline in metals prices for an extended period of time or our
inability to convert resources or exploration targets to reserves could significantly reduce our estimates of the value of the resources or exploration targets at our
properties and result in asset write-downs.
Our profitability could be affected by the prices of other commodities.
Our profitability is sensitive to the costs of commodities such as fuel, steel, and cement. While the recent prices for such commodities have been stable or in decline,
prices have been historically volatile, and material increases in commodity costs could have a significant effect on our results of operations.
We are subject to the risk of fluctuations in the relative values of the U.S. and Canadian Dollar and Mexican Peso.
We may be adversely affected by foreign currency fluctuations. Certain of our assets are located in Mexico. Our expenses relative to our Mexico assets, and in
certain cases those assets themselves, may be denominated in Mexican Pesos. Fluctuations in the exchange rates between the U.S. Dollar and the Mexican Peso may
therefore have a material adverse effect on the Company’s financial results. Mexico has experienced periods of significant inflation. If Mexico experiences
substantial inflation in the future, the Company’s costs in peso terms will increase significantly, subject to movements in applicable exchange rates. Also, we sell
zeolite to customers in Canada in Canadian dollars. Significant fluctuations in the exchange rates between the U.S. Dollar and the Canadian Dollar may therefore have
a material adverse effect on the Company’s financial results.
Our liabilities for environmental reclamation and retirement and safety may exceed the amounts accrued on our financial statements.
Our research, development, manufacturing and production processes involve the controlled use of hazardous materials, and we are subject to various environmental
and occupational safety laws and regulations governing the use, manufacture, storage, handling, and disposal of hazardous materials and some waste products. The
risk of accidental contamination or injury from hazardous materials cannot be completely eliminated. In the event of an accident, we could be held liable for any
damages that result and any liability could exceed our financial resources. We also have ongoing reclamation and retirement projects at our facilities. Adequate
financial resources may not be available to ultimately finish the reclamation and retirement activities if changes in environmental laws and regulations occur, and
these changes could adversely affect our cash flow and profitability. We do not have environmental liability insurance now, and we do not expect to be able to obtain
insurance at a reasonable cost. If we incur liability for environmental damages while we are uninsured, it could have a harmful effect on our financial condition and
results of operations. The range of reasonably possible losses from our exposure to environmental liabilities in excess of amounts accrued to date cannot be
reasonably estimated at this time.
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Our accounting and other estimates may be imprecise.
Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts and related disclosure of
assets, liabilities, revenue and expenses at the date of the consolidated financial statements and reporting periods. The more significant areas requiring the use of
management assumptions and estimates relate to:
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mineral reserves, resources, and exploration targets that are the basis for future income and cash flow estimates and units-of-production depreciation,
depletion and amortization calculations;
environmental reclamation and retirement obligations;
permitting and other regulatory considerations;
asset impairments;
valuation of business combinations;
asset valuations;
future foreign exchange rates, inflation rates and applicable tax rates;
reserves for contingencies and litigation; and
deferred tax asset and liability valuation allowance.
Future estimates and actual results may differ materially from these estimates as a result of using different assumptions or conditions. For additional information, see
Critical Accounting Estimates in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 of the Notes to
Consolidated Financial Statements in this Annual Report.
Operational and Mining Industry Risks
Mining is an inherently speculative business. The properties on which we have the right to mine are not known to have any proven and probable reserves. We
extracted zeolite without completing the technical work required to declare a mineral reserve. If we are unable to extract zeolite at a profit, our business could
fail.
Mining is a business that by its nature is speculative. We have not completed an S-K 1300 technical report summary, nor have we declared proven and probable
mineral reserves at our BRZ plant where we are extracting zeolite. Unusual or unexpected geological formations, geological formation pressures, fires, power outages,
labor disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are just some of the many
risks involved in mineral exploration programs. If we are unable to extract zeolite at a profit, our zeolite business could fail.
We are substantially dependent on a few significant customers and the ordering levels for our products may vary based on customer needs. Further, we face
significant risks associated with changes in our relationship with these significant customers.
Historically, most of our revenues are concentrated with a limited number of customers. Some of the markets we serve have a limited number of customers. In 2023,
three customers accounted for more than 10% of our consolidated revenues, and our three largest customers accounted for 46% of our consolidated revenues.
Additionally, not all our customers make purchases every year. Because of this variability, we believe that comparisons of our operating results in any quarterly
period may not be a reliable indicator of future performance.
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Additionally, if our relationships with our significant customers should change materially, it could be difficult for us to immediately and profitably replace lost sales in
a market with such concentration, which could have a material adverse effect on our operating and financial results. We could be adversely impacted by decreased
customer demand for our products due to (i) the impact of current or future economic conditions on our customers, (ii) our customers’ loss of market share to their
competitors that do not use our products, and (iii) our loss of market share with our customers. We could lose market share with our customers to our competitors or
to our customers themselves, should they decide to become more vertically integrated and produce the products that we currently provide.
In addition, even if our customers continue to do business with us, we could be adversely affected by a number of other potential developments with our customers.
For example:
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The inability or failure of our customers to meet their contractual obligations could have a material adverse effect on our business, financial position and
results of operations.
If we are unable to deliver products to our customers in accordance within the timeframe outlined in the order, the revenue associated with that order as
well as future orders from that customer may not occur, which could have an adverse affect on the results of our operations and financial condition.
A material change in payment terms with a significant customer could have a material adverse effect on our short-term cash flows.
The concentration of our customer base may enable our customers to demand certain pricing and other terms unfavorable to us and make us more
vulnerable to changes in demand by or issues with a given customer.
Natural disasters, public health crises, political crises, and other catastrophic events or other events outside of our control may materially and adversely affect
our business or financial results.
If any of our facilities or the facilities of our suppliers, third-party service providers, or customers is affected by natural disasters, such as earthquakes, floods, fires,
power shortages or outages, public health crises (such as pandemics and epidemics), political crises (such as terrorism, war, political instability or other conflict), or
other events outside of our control, our operations or financial results could suffer. Any of these events could materially and adversely impact us in a number of
ways, including through decreased production, increased costs, decreased demand for our products due to reduced economic activity or other factors, or the failure
by counterparties to perform under contracts or similar arrangements.
Our business could be materially and adversely affected by the risks, or the public perception of the risks, related to a pandemic or other health crisis, such as the
recent outbreak of novel coronavirus. A significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could
adversely affect our planned operations. Such events could result in the complete or partial closure of our operations, as well as the domestic and global economies
and financial markets, resulting in an economic downturn that could impact our ability to raise capital.
Increases in energy costs may adversely affect our business, financial position, results of operations and liquidity.
Energy costs, including electrical power costs, represent one of the larger components of our cost of goods sold. As a result, the availability of electricity and other
energy costs at competitive prices is critical to the profitability of our operations.
In the U.S., our facilities receive all their electricity requirements under market-based electricity contracts. These market-based contracts expose us to price volatility
and fluctuations due to factors beyond our control and without any direct relationship to the price of our products. For example, extreme weather events throughout
2022 across the United States resulted in increases to power prices More recently, market disruptions in global energy markets related to the war in Ukraine caused
significant increases in market-based power prices. Market-based electricity contracts expose us to market price volatility and fluctuations driven by, among other
things, coal and natural gas prices, renewable energy production, regulatory changes and weather events, in each case, without any direct relationship to the price of
our products. There can be no assurance that our market-based power supply arrangements will result in favorable electricity costs. Any increase in our electricity
and other energy prices not tied to corresponding increases in the prices for the commodities we sell could have a material adverse effect on our business, financial
position, results of operations and liquidity.
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Mining accidents or other adverse events at an operation could decrease our anticipated production or otherwise adversely affect our operations.
Production may be reduced below our historical or estimated levels for many reasons, including, but not limited to, mining accidents; unfavorable ground or shaft
conditions; work stoppages or slow-downs; lower than expected ore grades; unexpected regulatory actions; if the metallurgical characteristics of ore are less
economic than anticipated; or because our equipment or facilities fail to operate properly or as expected. Our operations are subject to risks relating to ground
instability, including, but not limited to, pit wall failure, crown pillar collapse, seismic events, backfill and stope failure or the breach or failure of a tailings
impoundment. The occurrence of an event such as those described above could result in loss of life or temporary or permanent cessation of operations, any of which
could have a material adverse effect on our financial condition and results of operations. Other closures or impacts on operations or production may occur at any of
our mines at any time, whether related to accidents, changes in conditions, changes to regulatory policy, or as precautionary measures.
In addition, our operations are typically in remote locations, where conditions can be inhospitable, including with respect to weather, surface conditions, interactions
with wildlife or otherwise in or near dangerous conditions. In the past we have had employees, contractors, or employees of contractors get injured, sometimes
fatally, while working in such challenging locations. An accident or injury to a person at or near one of our operations could have a material adverse effect on our
financial condition and results of operations.
We may not be able to maintain the infrastructure necessary to conduct mining activities.
Our mining activities depend upon adequate infrastructure. Reliable roads, bridges, power sources and water supply are important factors which affect capital and
operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could
adversely affect our mining activities and financial condition.
Our mining activities may be adversely affected by the local climate.
The local climate sometimes affects our mining activities on our properties. Earthquakes, heavy rains, snowstorms, and floods could result in serious damage to or the
destruction of facilities, equipment or means of access to our property, or could occasionally prevent us temporarily from conducting mining activities on our
property. Because of their rural location and the lack of developed infrastructure in the area, our mineral properties in Montana and Idaho are occasionally impassable
during the winter season. During this time, it may be difficult for us to access our property, maintain production rates, make repairs, or otherwise conduct mining
activities on them.
Certain operations are in Mexico and may be subject to geo-political risk.
Certain operations are in Mexico. Any political or social disruptions unique to Mexico would have a material impact on our operations, financial performance and
stability. Additionally, our properties and projects are subject to the laws of Mexico, and we may be negatively impacted by the existing laws and regulations of that
country, as they apply to mineral exploration, land ownership, royalty interests and taxation, and by any potential changes of such laws and regulations.
Any changes in regulations or shifts in political conditions are beyond our control or influence and may adversely affect our business, or if significant enough, may
result in the impairment or loss of mineral concessions or other mineral rights.
Our operations are subject to hazards and risks normally associated with the exploration and development of mineral properties.
Our operations are subject to hazards and risks normally associated with the exploration and development of mineral properties, any of which could cause delays in
the progress of our exploration and development plans, damage or destruction of property, loss of life and/or environmental damage. Some of these risks include, but
are not limited to, unexpected or unusual geological formations, rock bursts, cave-ins, flooding, fires, earthquakes; unanticipated changes in metallurgical
characteristics and mineral recovery; unanticipated ground or water conditions; changes in the regulatory environment; industrial or labor disputes; hazardous
weather conditions; cost overruns; land claims; and other unforeseen events. A combination of experience, knowledge and careful evaluation may not be able to
overcome these risks.
The nature of these risks is such that liabilities may exceed any insurance policy coverages; the liabilities and hazards might not be insurable, or the Company might
not elect to insure itself against such liabilities due to excess premium costs or other factors. Such liabilities may have a material adverse effect on our financial
condition and operations and could reduce or eliminate any future profitability and result in increased costs and a decline in the value of our securities.
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Our non-extractive properties may not be brought into the state of commercial production.
Development of mineral properties involves a high degree of risk and few properties that are explored are ultimately developed into producing mines. The commercial
viability of a mineral deposit depends on factors beyond our control, including the deposit's attributes, commodity prices, government policies and regulation and
environmental protection. Fluctuations in the market prices of minerals may render reserves and deposits containing relatively lower grades of mineralization
uneconomic. The development of our non-extractive properties will require obtaining land use consents, permits and the construction and operation of mines,
processing plants and related infrastructure. We are subject to all the risks associated with establishing new mining operations, including:
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the timing and cost, which can be considerable, of the construction of mining and processing facilities and related infrastructure;
the availability and cost of skilled labor and mining equipment;
the availability and cost of appropriate smelting and/or refining arrangements;
the need to obtain and maintain necessary environmental and other governmental approvals and permits, and the timing of those approvals and permits;
in the event that the required permits are not obtained in a timely manner, mine construction and ramp-up will be delayed and the risks of government
environmental authorities issuing directives or commencing enforcement proceedings to cease operations or administrative, civil and criminal sanctions
being imposed on our company, directors and employees;
delays in obtaining, or a failure to obtain, access to surface rights required for current or future operations;
the availability of funds to finance construction and development activities;
potential opposition from non-governmental organizations, environmental groups or local community groups which may delay or prevent development
activities; and
potential increases in construction and operating costs due to changes in the cost of fuel, power, materials and supplies and foreign exchange rates.
It is common in new mining operations to experience unexpected costs, problems and delays during development, construction and mine ramp-up. Accordingly, there
are no assurances that our non-extractive properties will be brought into a state of commercial production.
Actual capital costs, operating costs, production and economic returns may differ significantly from those we have anticipated and there are no assurances that
any future development activities will result in profitable mining operations.
The capital costs to take projects into commercial production may be significantly higher than anticipated. Capital costs, operating costs, production and economic
returns and other estimates may prove to differ significantly from those used by us to decide to commence extraction, and there can be no assurance that our actual
capital and operating costs will not be higher than currently anticipated. Due to higher capital and operating costs, production and economic returns may differ
significantly from those we anticipated.
We may face equipment shortages, access restrictions and lack of infrastructure.
Natural resource exploration, development and mining activities are dependent on the availability of mining, drilling and related equipment in the areas where such
activities are conducted. A limited supply of such equipment or access restrictions may affect the availability of such equipment to us and may delay exploration,
development or extraction activities. Certain equipment may not be immediately available or may require long lead-time orders. A delay in obtaining necessary
equipment for mineral exploration, including drill rigs, could have a material adverse effect on our operations and financial results.
Mining, processing, development and exploration activities also depend, to one degree or another, on the availability of adequate infrastructure. Reliable roads,
bridges, power sources, fuel and water supply and the availability of skilled labor and other infrastructure are important determinants that affect capital and operating
costs. The establishment and maintenance of infrastructure, and services are subject to several risks, including risks related to the availability of equipment and
materials, inflation, cost overruns and delays, political or community opposition and reliance upon third parties, many of which are outside our control. The lack of
availability of acceptable terms or the delay in the availability of any one or more of these items could prevent or delay the development or ongoing operation of our
projects.
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Exploration of mineral properties is less intrusive and requires fewer surface and access rights than properties developed for mining. No assurances can be provided
that we will be able to secure required surface rights on favorable terms, or at all. Any failure by us to secure surface rights could prevent or delay the development of
our projects.
Insurance may not be available to us.
Mineral exploration and processing is subject to risks of human injury, environmental and legal liability and loss of assets. We may elect not to have insurance for
certain risks because of the high premiums associated with insuring those risks or, in some cases, insurance may not be available for certain risks. The occurrence of
events for which we are not insured could have a material adverse effect on our financial position or results of operations.
Our business depends on the availability of skilled personnel and good relations with employees.
We are dependent upon the ability and experience of our executive officers, managers, employees, contractors and their employees, and other personnel, and we
cannot assure you that we will be able to attract or retain such employees or contractors. We may at times have insufficient executive or operational personnel, or
personnel whose skills require improvement. We compete with other companies both in and outside the mining industry in recruiting and retaining qualified
employees and contractors knowledgeable about the mining business. From time to time, we have encountered, and may in the future encounter, difficulty recruiting
skilled mining personnel at acceptable wage and benefit levels in a competitive labor market, and may be required to utilize contractors, which can be more costly.
Temporary or extended lay-offs due to mine closures may exacerbate such issues and result in vacancies or the need to hire less skilled or efficient employees or
contractors. The loss of skilled employees or contractors or our inability to attract and retain additional highly skilled employees and contractors could have an
adverse effect on our business and future operations.
A significant disruption to our information technology could adversely affect our business, operating result and financial position.
We rely on a variety of information technology and automated systems to manage and support our operations. For example, we depend on our information
technology systems for financial reporting, database management, operational and investment management and internal communications. These systems contain our
proprietary business information and personally identifiable information of our employees. The proper functioning of these systems and the security of this data is
critical to the efficient operation and management of our business. In addition, these systems could require upgrades as a result of technological changes or growth
in our business. These changes could be costly and disruptive to our operations and could impose substantial demands on management time. Our systems and those
of third-party providers, could be vulnerable to damage or disruption caused by catastrophic events, power outages, natural disasters, computer system or network
failures, viruses, ransomware or malware, physical or electronic break-ins, unauthorized access, or cyber-attacks.
We have experienced cybersecurity incidents, primarily related to phishing emails, and may in the future experience, whether directly or indirectly, cybersecurity
incidents. While prior incidents have not materially affected our business strategy, results of operations, or financial condition, there is no guarantee that a future
cyber incident would not materially affect our business strategy, results of operations, or financial condition.
Any security breach could compromise our networks, and the information contained therein could be improperly accessed, disclosed, lost or stolen. Because
techniques used to sabotage, obtain unauthorized access to systems or prohibit authorized access to systems change frequently and generally are not detected until
successfully launched against a target, we may not be able to anticipate these attacks nor prevent them from harming our business or network. Any unauthorized
activities could disrupt our operations, damage our reputation, be costly to fix or result in legal claims or proceedings, any of which could adversely affect our
business, reputation or operating results.
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Competition from other mining companies may harm our business.
We compete with other mining companies, some of which have greater financial resources than we do or other advantages, in various areas which include:
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attracting and retaining key executives, skilled labor, and other employees;
for the services of other skilled personnel and contractors and their specialized equipment, components and supplies, such as drill rigs, necessary for
exploration and development;
for contractors that perform mining and other activities and milling facilities which we lease or toll mill through; and
for rights to mine properties.
Organizational and Common Stock Risks
Our Articles of Incorporation allow for our board to create new series of preferred stock without further approval by our stockholders, which could adversely
affect the rights of the holders of our common stock.
Our board of directors (the “Board”) has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board also has the authority to
issue preferred stock without further stockholder approval. As a result, our Board could authorize the issuance of a series of preferred stock that would grant to
holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and
the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock. In addition, our Board could authorize the issuance
of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative
voting power of our common stock or result in dilution to our existing stockholders.
If we lose any of our key personnel, we may encounter difficulty replacing their expertise, which could impair our ability to implement our business plan
successfully.
We believe that our ability to implement our business strategy and our future success depends on the continued employment of our management team. The loss of
the technical knowledge and mining industry expertise of these key employees could make it difficult for us to execute our business plan effectively and could cause
a diversion of resources while we seek replacements.
In addition, our operations require employees, consultants, advisors and contractors with a high degree of specialized technical, management and professional skills,
such as engineers, trades people, geologists and equipment operators. We compete both locally and internationally for such professionals. We may be unsuccessful
in attracting and maintaining key employees. If we are unable to acquire the talents we seek, we could experience higher operating costs, poorer results, and an
overall lack of success in implementing our business plans.
The price of our common stock has a history of volatility and could decline in the future.
Shares of our common stock are listed on NYSE American. The market price for our common stock has been volatile, often based on:
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changes in metals prices, particularly antimony;
our results of operations and financial condition as reflected in our public news releases or periodic filings with the SEC;
factors unrelated to our financial performance or prospects, such as global economic developments, market perceptions of the attractiveness of
industries, or the reliability of metals markets;
political and regulatory risk;
the success of our exploration, pre-development, and capital programs;
ability to meet production estimates;
environmental, safety and legal risk;
the extent and nature of analytical coverage concerning our business;
the trading volume and general market interest in our securities; and
delayed financial filings with the Securities Exchange Commission.
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The market price of our stock at any given point in time may not accurately reflect our value, and may prevent stockholders from realizing a profit on, or recovering,
their investment.
If we were liquidated, our common stockholders could lose part, or all, of their investment.
In the event of our dissolution, the proceeds, if any, realized from the liquidation of our assets will be distributed to our stockholders only after the satisfaction of the
claims of our creditors and preferred stockholders. The ability of a purchaser of shares to recover all, or any portion, of the purchase price for the shares, in that
event, will depend on the amount of funds realized and the claims to be satisfied by those funds.
Our Series B preferred stock has a liquidation preference of $1.00 per share or $750,000 plus accumulated dividends.
If we were liquidated, holders of our preferred stock would be entitled to receive approximately $750,000 plus any accumulated and unpaid dividends from any
liquidation proceeds before holders of our common stock would be entitled to receive any proceeds.
Our Series C preferred stock has a liquidation preference of $0.55 per share or $97,847.
If we were liquidated, holders of our preferred stock would be entitled to receive approximately $97,847 from any liquidation proceeds before holders of our common
stock would be entitled to receive any proceeds.
We do not expect to pay dividends to our stockholders in the foreseeable future.
We have no plans to pay dividends in the foreseeable future. Our directors will determine if and when dividends should be declared and paid in the future based on
our financial position at the relevant time.
The issuance of additional equity securities in the future could adversely affect holders of our common stock.
The market price of our common stock may be influenced by any preferred or common stock or options, warrants, convertible debt or other rights to acquire any
preferred or common stock we may issue. Our Board is authorized to issue additional classes or series of preferred stock without any action on the part of our
stockholders. This includes the power to set the terms of any such classes or series of preferred stock that may be issued, including voting rights, dividend rights
and preferences over common stock with respect to dividends or upon the liquidation, dissolution or winding up of the business and other terms. If we issue
preferred stock in the future that has preference over our common stock with respect to the payment of dividends or upon liquidation, dissolution or winding up, or if
we issue preferred stock with voting rights that dilute the voting power of our common stock, the rights of holders of the common stock or the market price of the
common stock could be adversely affected. Our Board is also authorized to issue additional shares of common stock and rights to acquire common stock.
We cannot predict the number of additional equity securities that will be issued or the effect, if any, that future issuances and sales of the securities will have on the
market price of the common stock. Any transaction involving the issuance of previously authorized but unissued equity securities would result in dilution, possibly
substantial, to stockholders. Based on the need for additional capital to fund expected expenditures and growth, it is likely that we will issue securities to provide
such capital. Such additional issuances may involve the issuance of a significant number of equity securities at prices less than the current market price. Sales of
substantial amounts of securities, or the availability of the securities for sale, could adversely affect the prevailing market prices for the securities and dilute
investors’ earnings per share. A decline in the market prices of the securities could impair our ability to raise additional capital through the sale of additional
securities should we desire to do so.
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The provisions in our certificate of incorporation, our by-laws and Montana law could delay or deter tender offers or takeover attempts.
Certain provisions in our restated certificate of incorporation, our by-laws and Montana law could make it more difficult for a third party to acquire control of us, even
if that transaction could be beneficial to stockholders. These impediments include:
·
·
·
·
·
·
·
·
·
the classification of our Board into three classes serving staggered three-year terms, which makes it more difficult to quickly replace board members;
the ability of our Board to issue shares of preferred stock with rights as it deems appropriate without stockholder approval;
a provision that special meetings of our board of directors may be called only by our chief executive officer or a majority of our Board;
a provision that special meetings of stockholders may only be called pursuant to a resolution approved by a majority of our Board;
a prohibition against action by written consent of our stockholders;
a provision that our directors may only be removed for cause and by an affirmative vote of at least 80% of the outstanding voting stock;
a provision that our stockholders comply with advance-notice provisions to bring director nominations or other matters before meetings of our
stockholders;
a prohibition against certain business combinations with an acquirer of 15% or more of our common stock for three years after such acquisition unless
the stock acquisition or the business combination is approved by our Board prior to the acquisition of the 15% interest, or after such acquisition our
Board and the holders of two-thirds of the other common stock approve the business combination; and
a prohibition against our entering into certain business combinations with interested stockholders without the affirmative vote of the holders of at least
80% of the voting power of the then outstanding shares of voting stock.
In addition, amendment of most of the provisions described above requires approval of at least 80% of the outstanding voting stock.
Legal, Regulatory, and Compliance Risks
As a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting. If we fail to develop and maintain
an effective system of internal control over financial reporting, our ability to produce timely and accurate financial statements and other required disclosures
and to comply with applicable laws and regulations could be impaired. Also, if deficiencies in our internal control over financial reporting are not properly
remediated, it could adversely affect our business and results of operations.
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act
of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of NYSE American, and other
applicable securities rules and regulations. Compliance with these rules and regulations may be difficult, time-consuming, or costly, and compliance may increase
demand on processes, systems, and resources. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our
business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting.
Management reviews the Company’s internal control over financial reporting to determine if it is effective. A control deficiency exists when the design, operation, or
lack of a control does not allow management or employees to prevent, or detect, and correct, misstatements on a timely basis. A material weakness is a deficiency, or
a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim
financial statements will not be prevented or detected on a timely basis. As described in “Item 9A. Controls and Procedures” of this Annual Report, we have
concluded that our internal control over financial reporting was ineffective as of December 31, 2023 due to material weaknesses in our internal control over financial
reporting. The identified material weaknesses related primarily to lack of segregation of duties. We intend to take the necessary steps to remediate these material
weaknesses. However, we cannot assure you that we will be successful in implementing effective internal control over financial reporting during 2024 or that, once
implemented, such controls will remain effective.
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It may require significant resources and management oversight to effectively comply with our regulatory obligations and to avoid future violations. In addition,
significant resources and management oversight may also be required to maintain and, if necessary, improve our disclosure controls and procedures and internal
control over financial reporting. As a result of our efforts to comply with the above rules and regulations, management’s attention may be diverted from other
business concerns, which could adversely affect our business and operating results. To comply with these requirements, we may need to hire more employees in the
future or engage outside consultants, which would increase our costs and expenses. We may be unable to comply despite such efforts. Any failure to comply with
applicable regulations could adversely affect our stock price and our ability to make accurate and timely financial and other disclosures to investors, attract and
maintain key personnel and investors, and use our funds for intended purposes. It may also subject us to the risk of litigation or regulatory enforcement actions
against us.
We may be unable to comply with NYSE American continued listing standards and our common stock may be delisted from the NYSE American market, which
would likely cause the liquidity and market price of the common stock to decline.
Our common stock is currently listed on the NYSE American. We are subject to the continued listing standards of the NYSE American and such exchange will
consider suspending dealings in, or delisting, securities of an issuer that does not meet its continued listing standards. We may not be able to satisfy these
requirements. In the past, NYSE American has notified us of certain alleged violations by our company of the NYSE American continued listing requirements. In
addition, in early fiscal year 2023, we determined that one of the members of our Board’s Audit Committee, Joseph Bardswich, did not satisfy the SEC and NYSE
American independence requirements applicable to an Audit Committee member, because he was concurrently receiving compensation for serving as our geologic
and investor relations consultant. We believe that we have regained compliance with the Audit Committee independence requirements by replacing Mr. Bardswich
with Dr. Aguirre on the Audit Committee . However, we cannot assure you that our past deficiencies will not affect the continued listing of our common stock on the
NYSE American.
To maintain our NYSE American listing, we must maintain certain standards, such as various corporate governance standards as well as minimum levels or values
related to share price, shareholders’ equity balance, market capitalization value, and various share distribution levels. In addition to objective standards, the NYSE
American may delist the securities of any issuer, among other reasons, if the issuer sells or disposes of principal operating assets, ceases to be an operating company
or has discontinued a substantial portion of its operations or business for any reason or the NYSE American otherwise determines that the securities are unsuitable
for continued trading. We may not be able to satisfy these standards and remain listed on the NYSE American.
A delisting of our common stock could also adversely affect our reputation, ability to raise funds through the sale of equity or securities convertible into equity and
the terms of any such fundraising, the liquidity and market price our common stock and the ability of broker-dealers to purchase the common stock.
We face substantial governmental regulations, including the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining
Law.
Our business is subject to extensive U.S. and foreign federal, state, and local laws and regulations governing environmental protection, natural resources,
prospecting, development, production, post-closure reclamation, taxes, labor standards and occupational health and safety laws and regulations, including mine
safety, toxic substances and other matters. The costs associated with compliance with such laws and regulations are substantial. Possible future laws and
regulations, or more restrictive interpretations of current laws and regulations by governmental authorities, could cause additional expense, capital expenditures,
restrictions on or suspensions of operations and delays in the development of new properties.
U.S. surface and underground mines like those at our Preston Operations are inspected periodically by MSHA, which inspections often lead to notices of violation
under the Mine Safety and Health Act. Our facilities or mines at Preston Idaho could be subject to a temporary or extended shutdown due to a violation alleged by
MSHA. For more information on the status of inspections by MSHA, see Note 10 of the Notes to Consolidated Financial Statements in this Annual Report for the
status of MSHA inspections.
Some mining laws prevent mining companies that have been found to (i) have engaged in environmentally harmful conduct or (ii) be responsible for environmentally
harmful conduct engaged in by affiliates or other third parties, including in other jurisdictions, from maintaining current or obtaining future permits until remediation
or restitution has occurred. If we are found to be responsible for any such conduct, our ability to operate existing projects or develop new projects might be impaired
until we satisfy costly conditions.
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We cannot assure you that we will always be in compliance with applicable laws, regulations and permitting requirements. Failure to comply with applicable laws,
regulations and permitting requirements may result in lawsuits or regulatory actions, including orders issued by regulatory or judicial authorities causing operations
to cease or be curtailed, which may require corrective measures including capital expenditures, installation of additional equipment or remedial actions. Any one or
more of these liabilities could have a material adverse impact on our financial condition.
In addition to existing regulatory requirements, legislation and regulations may be adopted, regulatory procedures modified, or permit limits reduced at any time, any
of which could result in additional exposure to liability, operating expense, capital expenditures or restrictions and delays in the mining, production or development of
our properties. Mining accidents and fatalities or toxic waste releases, whether at our mines or related to metals mining, may increase the likelihood of additional
regulation or changes in law or enhanced regulatory scrutiny. In addition, enforcement or regulatory tools and methods available to regulatory bodies such as MSHA
or the U.S. Environmental Protection Agency (“EPA”), which have not been or have infrequently been used against us or the mining industry, in the future could be
used against us or the industry in general.
From time to time, the U.S. Congress considers proposed amendments to the 1872 Mining Law, which governs mining claims and related activities on federal lands.
The extent of any future changes is not known and the potential impact on us because of U.S. Congressional action is difficult to predict. Changes to the 1872 Mining
Law, if adopted, could adversely affect our ability to economically develop mineral reserves on federal lands. For example, in 2021 the U.S. Congress debated
imposing royalties on minerals extracted from federal lands. Although legislation was not passed as of the date of this report, it is possible that in the future royalties
or taxes will be imposed on mining operations conducted on federal land, which could adversely impact our financial results.
Our operations are subject to complex, evolving and increasingly stringent environmental laws and regulations. Compliance with environmental regulations,
and litigation based on such regulations, involves significant costs and can threaten existing operations or constrain expansion opportunities.
Our operations, both in the United States and internationally, are subject to extensive environmental laws and regulations governing wastewater discharges;
remediation, restoration and reclamation of environmental contamination; the generation, storage, treatment, transportation and disposal of hazardous substances;
solid waste disposal; air emissions; protection of endangered and protected species and designation of critical habitats; mine closures and reclamation; and other
related matters. In addition, we must obtain regulatory permits and approvals to start, continue and expand operations. New or revised environmental regulatory
requirements are frequently proposed, many of which result in substantially increased costs for our business.
Our U.S. operations are subject to the Clean Water Act, which requires permits for certain discharges into waters of the United States. Such permitting has been a
frequent subject of litigation and enforcement activity by environmental advocacy groups and the EPA, respectively, which has resulted in declines in such permits
or extensive delays in receiving them, as well as the imposition of penalties for permit violations. In 2015, the regulatory definition of “waters of the United States”
that are protected by the Clean Water Act was expanded by the EPA, thereby imposing significant additional restrictions on waterway discharges and land uses.
However, in 2018, implementation of the relevant rule was suspended for two years, and in December 2019 a revised definition that narrows the 2015 version was
implemented. In late 2021, the EPA and US Army Corps of Engineers proposed to revise the definition again, moving it back to its more inclusive, pre-2018 definition.
If this rule change were to take effect or states take action to address a perceived fall-off in protection under the Clean Water Act, litigation involving water discharge
permits could increase, which may result in delays in, or in some instances preclude, the commencement or continuation of development or production operations.
Enforcement actions by the EPA or other federal or state agencies could also result. Adverse outcomes in lawsuits challenging permits or failure to comply with
applicable regulations or permits could result in the suspension, denial, or revocation of required permits, or the imposition of penalties, any of which could have a
material adverse impact on our cash flows, results of operations, or financial condition.
Some of the mining wastes from our U.S. mines currently are exempt to a limited extent from the extensive set of EPA regulations governing hazardous waste under
the Resource Conservation and Recovery Act (“RCRA”). If the EPA were to repeal this exemption, and designate these mining wastes as hazardous under RCRA, we
would be required to expend additional amounts on the handling of such wastes and to make significant expenditures to construct hazardous waste storage or
disposal facilities. In addition, if any of these wastes or other substances we release or cause to be released into the environment cause or has caused contamination
in or damage to the environment at a U.S. mining facility, that facility could be designated as a “Superfund” site under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (“CERCLA”). Under CERCLA, any present owner or operator of a Superfund site or the owner or operator at the time of
contamination may be held jointly and severally liable regardless of fault and may be forced to undertake extensive remedial cleanup action or to pay for the cleanup
efforts. The owner or operator also may be liable to federal, state and tribal governmental entities for the cost of damages to natural resources, which could be
substantial. Additional regulations or requirements also are imposed on our tailings and waste disposal areas under the federal Clean Water Act.
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Legislative and regulatory measures to address climate change and greenhouse gas emissions are in various phases of consideration. If adopted, such measures
could increase our cost of environmental compliance and also delay or otherwise negatively affect efforts to obtain permits and other regulatory approvals with
regard to existing and new facilities. Proposed measures could also result in increased cost of fuel and other consumables used at our operations.
Adoption of these or similar new environmental regulations or more stringent application of existing regulations may materially increase our costs, threaten certain
operating activities and constrain our expansion opportunities.
Some of our facilities are located in or near environmentally sensitive areas such as salmon fisheries, endangered species habitats, wilderness areas, national
monuments and national forests, and we may incur additional costs to mitigate potential environmental harm in such areas.
Laws in the U.S. such as CERCLA and similar state laws may expose us to joint and several liability or claims for contribution made by the government (state or
federal) or private parties. Moreover, exposure to these liabilities arises not only from our existing but also from closed operations, operations sold to third parties, or
operations in which we had a leasehold, joint venture, or other interest. Because liability under CERCLA is often alleged on a joint and several basis against any
property owner or operator or arranger for the transport of hazardous waste, and because we have been in operation since around 1968, our exposure to
environmental claims may be greater because of the bankruptcy or dissolution of other mining companies which may have engaged in more significant activities at a
mining site than we but which are no longer available for governmental agencies or other claimants to make claims against or obtain judgments from. Similarly, there is
also the potential for claims against us based on agreements entered into by certain affiliates and predecessor companies relating to the transfer of businesses or
properties, which contained indemnification provisions relating to environmental matters. In each of the types of cases described in this paragraph, the government
(federal or state) or private parties could seek to hold the Company liable for the actions of their subsidiaries or predecessors.
The laws and regulations, changes in such laws and regulations, and lawsuits and enforcement actions described in this risk factor could lead to the imposition of
substantial fines, remediation costs, penalties and other civil and criminal sanctions against us. Further, substantial costs and liabilities, including for restoring the
environment after the closure of mines, are inherent in our operations. There is no assurance that any such law, regulation, enforcement or private claim, or
reclamation activity, would not have a material adverse effect on our financial condition, results of operations or cash flows.
We are required by U.S. federal and state laws and regulations and by laws and regulations in the foreign jurisdictions in which we operate to reclaim our mining
properties. The specific requirements may change and vary among jurisdictions, but they are similar in that they aim to minimize long term effects of exploration and
mining and processing disturbance by requiring the control of possible deleterious effluents and re-establishment to some degree of pre-disturbance land forms and
vegetation. In some cases, we are required to provide financial assurances as security for reclamation costs, which may exceed our estimates for such costs.
Conversely, our reclamation costs may exceed the financial assurances in place and those assurances may ultimately be unavailable to us.
The EPA and other state, provincial or federal agencies may also require financial assurance for investigation and remediation actions that are required under
settlements of enforcement actions under CERCLA or equivalent state regulations. Currently there are no financial assurance requirements for active mining
operations under CERCLA, and a lawsuit filed by several environmental organizations which sought to require the EPA to adopt financial assurance rules for mining
companies with active mining operations was dismissed by a federal court. In the future, financial assurance rules under CERCLA, if adopted, could be financially
material and adverse to us.
We are required to obtain governmental permits and other approvals in order to conduct mining operations.
In the ordinary course of business, mining companies are required to seek governmental permits and other approvals for continuation or expansion of existing
operations or for the commencement of new operations. Obtaining the necessary governmental permits is a complex, time-consuming and costly process. The
duration and success of our efforts to obtain permits are contingent upon many variables not within our control. Obtaining environmental permits, including the
approval of reclamation plans, may increase costs and cause delays or halt the continuation of mining operations depending on the nature of the activity to be
permitted and the interpretation of applicable requirements established by the permitting authority. Interested parties, including governmental agencies and non-
governmental organizations or civic groups, may seek to prevent issuance of permits and intervene in the process or pursue extensive appeal rights. Past or ongoing
violations of laws or regulations involving obtaining or complying with permits could provide a basis to revoke existing permits, deny the issuance of additional
permits, or commence a regulatory enforcement action, each of which could have a material adverse impact on our operations or financial condition. In addition,
evolving reclamation or environmental concerns may threaten our ability to renew existing permits or obtain new permits in connection with future development,
expansions and operations. We cannot assure you that all necessary approvals and permits will be obtained and, if obtained, that the costs involved will not exceed
those that we previously estimated. It is possible that the costs and delays associated with the compliance with evolving standards and regulations could become
such that we would not proceed with a particular development or operation.
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We are often required to post surety bonds or cash collateral to secure our reclamation obligations and we may be unable to obtain the required surety bonds or may
not have the resources to provide cash collateral, and the bonds or collateral may not fully cover the cost of reclamation and any such shortfall could have a material
adverse impact on our financial condition. Further, when we use the services of a surety company to provide the required bond for reclamation, the surety companies
often require us to post collateral with them, including letters of credit. In the event that we are unable to obtain necessary bonds or to post sufficient collateral, we
may experience a material adverse effect on our operations or financial results.
New federal and state laws, regulations and initiatives could impact our operations.
In recent years there have been several proposed or implemented ballot initiatives that sought to directly or indirectly curtail or eliminate mining in certain states
including Montana. While a water treatment initiative in Montana was defeated by voters in November 2018, in the future similar or other initiatives that could impact
our operations may be on the ballot in these states or other jurisdictions (including local or international) in which we currently or may in the future operate. To the
extent any such initiative was passed and became law, there could be a material adverse impact on our financial condition, results of operations or cash flows.
We cannot guarantee title to all of our properties.
We cannot guarantee title to all our properties as the properties may be subject to prior mineral rights applications with priority, prior unregistered agreements or
transfers or indigenous peoples' land claims, and title may be affected by undetected defects. Certain of the mineral rights held by us are held under applications for
mineral rights or are subject to renewal applications and, until final approval of such applications is received, our rights to such mineral rights may not materialize and
the exact boundaries of the Company's properties may be subject to adjustment. For our operations in Mexico, we hold mining claims, mineral concession titles and
mining leases that are obtained and held in accordance with the laws of the country, which provide the Company the right to exploit and explore the properties. The
validity of the claims, concessions and leases could be uncertain and may be contested. Although we have conducted title reviews of our property holdings, title
review does not necessarily preclude third parties (including governments) from challenging our title. In accordance with mining industry practice, we do not
generally obtain title opinions until we decide to develop a property. Therefore, while we have attempted to acquire satisfactory title to our undeveloped properties,
some titles may be defective. We do not maintain title insurance on our properties.
There is uncertainty as to the termination and renewal of our mining concessions.
Under the laws of Mexico, mineral resources belong to the state, and therefore, concessions are required to explore or exploit mineral reserves. In Mexico, mineral
rights derive from concessions granted, on a discretionary basis, by the Ministry of Economy, pursuant to Mexican mining law and regulations thereunder.
Mining concessions in Mexico may be terminated if the obligations of the concessioner are not satisfied. In Mexico, we are obligated, among other things, to explore
or exploit the relevant concession, to pay any relevant fees, to comply with all environmental and safety standards, to provide information to the Ministry of
Economy and to allow inspections by the Ministry of Economy. Any termination or unfavorable modification of the terms of one or more of our concessions, or
failure to obtain renewals of such concessions subject to renewal or extensions, could have an adverse effect on our financial condition and prospects.
Mexican economic and political conditions, as well as drug-related violence, may have an adverse impact on our business.
The Mexican economy is highly sensitive to economic developments in the United States, mainly because of its high level of exports to this market. Other risks in
Mexico are increases in taxes on the mining sector, higher royalties, and increased government regulations, requirements, and restrictions on Value Added Tax
(“VAT” or “IVA”) refunds. As has occurred in other metal producing countries, the mining industry may be perceived as a source of additional fiscal revenue.
In addition, public safety organizations in Mexico are under significant stress, because of drug-related violence. This situation creates potential risks, particularly for
transportation of minerals and finished products, which may affect a small portion of our production. Drug-related violence has had a limited impact on our
operations, as it has tended to concentrate outside of our areas of production. The potential risks to our operations might increase if the violence spreads to our
areas of production.
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As described in the “Recent Developments” section in this Annual Report, the Company announced the shutdown of the operational activities of USAMSA, which
primarily includes USAMSA’s Madero and Puerto Blanco antimony and precious metals plants in Mexico. The Company intends to sell or lease its USAMSA entity,
operations, or assets over the next year. However, we cannot provide any assurance that political developments and economic conditions in Mexico, including any
changes to economic policies, changes to government regulations, requirements, and restrictions on VAT refunds, the adoption of other reforms proposed by
existing or future administrations in Mexico, or the advent of drug-related violence in the country, will have no material adverse effect on the price of our securities,
our ability to obtain financing, and our results of operations or financial condition.
Mexican inflation, restrictive exchange control policies and fluctuations in the peso exchange rate may adversely affect our financial condition and results of
operations.
Although all our Mexican operations’ sales of metals are priced and invoiced in U.S. dollars, a substantial portion of its costs are denominated in pesos. Accordingly,
when inflation in Mexico increases without a corresponding depreciation of the peso, the net income generated by our Mexican operations is adversely affected. The
peso has been subject in the past to significant volatility, which may not have been proportionate to the inflation rate and may not be proportionate to the inflation
rate in the future.
Currently, the Mexican government does not restrict the ability of Mexican companies or individuals to convert pesos into dollars or other currencies. While we do
not expect the Mexican government to impose any restrictions or exchange control policies in the future, it is an area we closely monitor. We cannot assure you the
Mexican government will maintain its current policies with regard to the peso or that the peso’s value will not fluctuate significantly in the future. The imposition of
exchange control policies could impair our ability to obtain imported goods and to meet its U.S. dollar-denominated obligations and could have an adverse effect on
our business and financial condition.
Not realizing the value of our USAMSA assets in Mexico upon sale, lease, or disposal may adversely affect our results of operations and financial condition.
The Company may not be able to obtain the value it expects or the net book value of its USAMSA assets upon sale or lease and the Company may not be able to sell
or lease the assets of USAMSA, which would adversely affect the results of operations and financial condition.
Item 1B. Unresolved Staff Comments.
As a smaller reporting company, we are not required to provide disclosure under this item.
Item 1C. Cybersecurity.
Risk Management and Strategy
Our cybersecurity strategy prioritizes detection, analysis and response to known, anticipated or unexpected threats, effective management of security risks, and
resiliency against incidents. Our cybersecurity risk management processes include accessing security controls, monitoring systems, tools and related services from
third-party providers, and management oversight to assess, identify and manage material risks from cybersecurity threats. We engage a third-party information
security officer who maintains, monitors, and ensures the security of our digital assets. We implement risk-based controls to protect our information, the information
of our customers, suppliers, and other third parties, our information systems, our business operations, and our products. We maintain security programs that include
physical and technical safeguards. We monitor cybersecurity vulnerabilities and potential attacks, and we evaluate the potential operational and financial effects of
any threat and of cybersecurity countermeasures made to defend against such threats. We continue to integrate our cyber practices into our enterprise risk
management practices, which is overseen by our Board of Directors. In addition, we assess the risks from cybersecurity threats, periodically engage third-party tools
to assist us in enhancing and monitoring our cybersecurity risks, primarily spam and suspicious email filters, and regularly back up company information.
We have experienced cybersecurity incidents, primarily related to phishing emails, and may in the future experience, whether directly or indirectly, cybersecurity
incidents. While prior incidents have not materially affected our business strategy, results of operations, or financial condition, there is no guarantee that a future
cyber incident would not materially affect our business strategy, results of operations, or financial condition. See risks related to cybersecurity and business
disruptions in “Risk Factors” in this Form 10-K.
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Governance
Our Board of Directors is responsible for risk oversight. Our chief executive officer and chief financial officer, with input from and potentially attendance by our third-
party information security officer, provide presentations to the Board of Directors on cybersecurity risks or threats as necessary. In the event of a potentially material
cybersecurity event, the Chairman of the Board is notified and briefed, and a meeting of the full Board of Directors would be held, as appropriate.
Management and the Company’s third-party information security officer discuss information technology needs and activity and assess and manage material
cybersecurity risks and the Company’s practices for the prevention, detection, mitigation, and remediation of cybersecurity incidents, as necessary and appropriate.
Our third-party information security officer has 30 years of experience in the IT management field and has consulted with large and mid-size corporations on proper IT
processes and security. Our CEO during the year ended December 31, 2023 and our CFO have managed information technology departments during their careers. Our
CFO was trained as an auditor and an information technology auditor at the public accounting firm of Ernst & Young LLP and audited public companies, information
technology departments, and third-party information technology service providers for 12 years.
Item 2. Properties.
The following table provides a summary of the properties we were affiliated with at December 31, 2023:
Segment
US Antimony
US Antimony
Mexico Antimony
Mexico Antimony
Mexico Antimony
Zeolite
Precious Metals
Precious Metals
Zeolite
Location
Sanders County, Montana
Sanders County, Montana
Madero in Coahuila, Mexico
Puerto Blanco in Guanajuato, Mexico
Los Juarez, Mexico
Preston, Idaho
Sanders County, Montana
Puerto Blanco and Madero in Mexico
Lethbridge, Canada
Owned or Leased
Owned
Owned
Owned
Owned
Leased
Leased
Owned
Owned
Leased
Mine, Mill, Processing
Plant, or Warehouse
Processing Plant
Mine and Mill
Processing Plant
Processing Plant
Mine
Mine and Processing
Plant
Processing Plant
Processing Plant
Warehouse
Active or
Inactive
Active
Inactive
Active (A)
Active (A)
Active
Active
Active
Active (A)
Active
Own Mining
Claims
n/a
Yes
n/a
n/a
(B)
Yes
Executed
Surface Rights
Agreement
n/a
n/a
n/a
n/a
(B)
Yes
n/a
n/a
n/a
n/a
n/a
n/a
(A) As described in the “Recent Developments” section in this Annual Report, the Company announced the shutdown of the operational activities of USAMSA,
which primarily includes USAMSA's Madero and Puerto Blanco antimony and precious metals plants in Mexico. The Company intends to sell or lease its USAMSA
entity, operations, or assets over the next year and has initiated an active search for buyers or leasing opportunities of its operations and/or existing assets.
(B) Mining claims are owned by ADM other than two mining claims that have been purchased by ADM, but ownership has not transferred to ADM. Executed
surface rights agreements exist with ADM other than one surface rights agreement that has lapsed, and a new agreement will be negotiated.
Although we extract minerals from the Bear River Zeolite property in Idaho that we later process and sell, we have not prepared a technical report summary for the
Bear River Zeolite property making a determination on the property’s mineral resources or mineral reserves.
There are no material encumbrances on any of our properties.
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Also, we own the following properties that are not material:
·
·
A house in Preston, Idaho, which is used to house workers who are working at our zeolite operation; and
Our corporate office is at our plant in Sanders County, Montana.
DESCRIPTION OF PROPERTIES
Properties in Sanders County, Montana
We own 14 acres of land in the Burns Mining District in Sanders County, Montana, where we operate a plant that includes our antimony smelter plant, which is our
US Antimony Segment, and our precious metals equipment, which is in our Precious Metals Segment. The plant was built in 1971 and started operating in 1972. We
built the road system, but it was purchased and is currently operated and maintained by the USFS. The antimony smelter plant includes furnaces of a proprietary
design to produce antimony metal, antimony oxide, antimony trisulfide, and various other antimony products. We have 6 operational Small Rotary Furnaces (SRF’s)
and 2 operational electric furnaces and have permits for up to 9 SRF’s and 4 electrical furnaces. The SRF’s are used to roast various antimony ore inputs and can
produce either finished antimony oxide or finished antimony metal in the form of ingots. The electrical furnaces are used to produce antimony trisulfide. The furnaces
are maintained to modern standards. Annual antimony production was approximately 1,181,000 pounds in 2023 and approximately 1,291,000 pounds in 2022. This
plant is also equipped for the treatment and production of precious metals. Annual gold production was approximately 36 ounces in 2023 and approximately 44
ounces in 2022. Annual silver production was approximately 21,400 ounces in 2023 and approximately 25,100 ounces in 2022. We do not mine at this plant but rather
process ore only.
Our mine and mill in Montana, which are approximately 1.5 miles (3 miles by USFS roads) northwest of our smelter and precious metals plant on National Forest Road
2179 and approximately 4,100 feet north of Prospect Creek, hold one five-acre patented mill site that we own in fee-simple. Our mine was an underground antimony
mine known as the Stibnite Hill Mine (Operating Permit #00045). Our mine and mill operated from approximately 1968 to 1983 when they suspended operations
because antimony ore could be purchased more economically from foreign sources. As a result, since 1983, we have relied on sources outside the U.S. for antimony
ore, which is used by our smelter and precious metals plant. There are no plans to resume mining, although the mineral rights have been retained on the patented
mining claims. Currently, the environmental permitting process precludes any mining at this site.
Our antimony smelter plant is approximately 16 miles west of Thompson Falls on Montana Secondary Highway 471 with GPS coordinates latitude 47.548077 north and
longitude 115.591828 west. Our plant is approximately 850 feet north-northeast of Prospect Creek in Cox Gulch, which resides in the northern Bitterroot Mountain
range. This Highway 471 is asphalt, and the property is accessible by car or truck. There is a smaller airport, Sanders Airport, that is about 2 hours from our plant and
a major airport in Spokane, WA, that is about 2 and a half hours from our plant. The plant is serviced with electricity from Northwestern Energy, and water is pumped
from a well. Personnel are sourced from nearby cities like Belknap, Plains, and Missoula. Our plant is considered a large quantity generator (“LQG”) of hazardous
waste and must comply with the Montana Hazardous Waste Act, which is regulated by the Montana Department of Environmental Quality (“DEQ”). Following are
location maps related to this property:
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Properties in Mexico
The Company has two subsidiaries in Mexico, USAMSA and ADM. As described in the “ Recent Developments” section in this Annual Report, we shut down the
operational activities of USAMSA on March 11, 2024, which primarily includes our two antimony and precious metals processing plants in Mexico as follows: (1) the
Madero smelter in Coahuila, and (2) the Puerto Blanco flotation mill, oxide circuit, and cyanide leach circuit in Guanajuato. The Company intends to sell or lease its
USAMSA entity, operations, or assets over the next year and has initiated an active search for buyers or leasing opportunities of its operations and/or existing
assets. The Company will maintain its existing Los Juarez mining claims and concessions in Cadereyta de Montes Queretaro, Mexico, which are included in our ADM
subsidiary. There are presently no active operations at Los Juarez.
The following map shows the location of the properties in Mexico we are affiliated with at December 31, 2023, including the location of our freight forwarder and the
Wadley mine, both of which we have no affiliation:
Los Juarez Antimony Mine in Queretaro, Mexico
The Los Juarez Property is in the state of Queretaro, Mexico. In 2019, we commenced open pit mining on our Los Juarez property and extracted 2,000 metric tons to
test at our Puerto Blanco flotation mill in Mexico. However, extraction was halted in 2020 to conduct several rounds of geological study. Further study is ongoing,
and depending on the results, the Company will decide what course of action to take. There has been no mining of the Los Juarez property since 2020. Some of the
major equipment at the site includes an excavator, an older Cat D-6, a gas welder/generator, a small break shack, and an explosives magazine, all of which are
functional.
The Los Juarez property consists of:
1.
2.
3.
San Miguel I and II mining claims, which were purchased by ADM for $1,480,500 and paid in full as of December 31, 2018. The transfer of ownership of the
mining claims to ADM is still in process. The property consists of 100 acres (40 hectares);
San Juan I and II mining concessions, which are concessions owned by ADM and include 1,152 acres (466 hectares); and
San Juan III mining concession, which is held by a lease agreement by ADM, the terms of which include a monthly payment of $1,000 and a 10% royalty based
on the net smelter returns of USAMSA. It consists of 529 acres (214 hectares).
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The concessions collectively constitute 1,780 acres (720 hectares). The claims are accessed by roads that lead to highways. The Los Juarez property is approximately
40 kms (about 24.85 mi) by road from the town of Vizzaron. It is located within 4 kms of the ejido of Los Juarez situated near the top of the mountain. GPS coordinates
at the center of the Los Juarez property are 20.86528, -99.67590. The property is accessible by truck by paved road except for the last 4 kms which is a dirt road made
by the Company. Following are location maps related to this property:
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Puerto Blanco Flotation Mill and Precious Metals Processing Plant in Guanajuato, Mexico
The flotation mill known as Puerto Blanco is in Guanajuato, Mexico. The Puerto Blanco property is owned by USAMSA. Construction started on the property in 2010
and the plant was shut down on March 11, 2024, as described in the “Recent Developments” section in this Annual Report. The Puerto Blanco property is about 100
acres. The flotation mill and oxide circuit are part of the Mexico Antimony Segment, and the cyanide leach circuit is part of the Mexico portion of the Precious Metals
Segment. The flotation mill has a capacity of 100 metric tons per day and can be used for the processing of ore from Los Juarez and other third-party properties. An
oxide circuit was added to the plant in 2013 and 2014 to mill oxide ores from Los Juarez and other properties. The capacity of the oxide circuit is 50 tons per day. In
2019 a cyanide leach circuit for recovery of precious metals was built and permits were obtained for this circuit. This cyanide leach circuity is not yet in operation and
has not been used. Puerto Blanco processed approximately 20,000 pounds of antimony ore in 2023, which contained antimony of an average of approximately 25%,
and approximately 40,000 pounds of antimony ore in 2022, which contained antimony of an average of approximately 32%.
The Puerto Blanco property is approximately 15 kms (about 9.32 mi) north of the city of San Jose Iturbide along state highway 57 in the state of Guanjuato, Mexico
with GPS coordinates of 21.07827, -100.54144 and is located approximately 144 kms (about 89.48 mi) from our Los Juarez property. It is accessible by highway to all
vehicles. Following are location maps related to this property:
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Madero Smelter and Precious Metals Processing Plant in Coahuila, Mexico
The Madero antimony smelter at Estacion Madero, in the Municipio of Parras de la Fuente, Coahuila, Mexico, is part of the Mexico Antimony Segment. The Madero
property is owned by USAMSA. Construction started on the property in 2009 and the plant was shut down on March 11, 2024, as described in the “Recent
Developments” section in this Annual Report. The property is about 16 acres with seventeen small rotating furnaces (“SRF’s”) and four large rotating furnaces
(“LRF”) with an associated stack and scrubbers. The plant has a feed capacity of 14 to 25 metric tons of ore per day depending on the grade of the feedstock. If the
feedstock is 45% antimony, we believe the smelter could produce as much as 10 million pounds of contained antimony annually. The Madero antimony production is
sold as metal or crude oxide, the oxide of which is shipped to our plant in Montana to produce finished antimony products. In 2019, we completed the installation of a
caustic leach circuit to process concentrates from the Puerto Blanco cyanide leach plant containing any precious metals from our Los Juarez Mining property, which
is part of the Mexico portion of the Precious Metals Segment and which has not been used. Annual antimony finished goods production was 189,965 pounds of
antimony metal and oxide in 2023 and 352,949 pounds of antimony metal and oxide in 2022.
This property is about 7 kms north of the gas station known as Paila Coahuila and less than 1 km from a railroad and the ejido Estacion Madero, Coahuila. Paila is
about halfway between Torreon and Saltillo, both in the state of Coahila on state highway 40, and is accessible by truck. Electricity is supplied by CFE, the socialized
electricity provider in Mexico and provides adequate and fairly reliable power. Water is sourced from a well at the smelter. Personnel are sourced mainly from the
nearby community of about 100 people. Following is a location map related to this property:
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Bear River Zeolite Mine and Processing Plant in Preston, Idaho
Bear River Zeolite (“BRZ”), which represents our Zeolite Segment, has operated a mine and processing plant on private land owned by Zeolite, LLC since 2000. BRZ
leases 320 acres from Zeolite, LLC that entitles BRZ to surface mine and process zeolite on property in Preston, Idaho, in exchange for a royalty payment. The annual
royalty payment is the greater of: (1) the minimum annual royalty of $60,000, adjusted annually for the Consumer Price Index for all Urban Consumers, or (2) $11.00 per
ton for the first ten thousand tons, $9.90 per ton for tons in excess of ten thousand up to twenty thousand, and $8.80 per ton for tons in excess of twenty thousand.
This Zeolite LLC lease also requires BRZ to pay $10,000 to the lessor on March 1 of each year during the term of the lease, which ends March 1, 2025. BRZ also pays
two other royalties based on the sale of zeolite products. On a combined basis, BRZ pays royalties ranging from 8% to 13% on the sale of zeolite products. BRZ has
all necessary MSHA and operational permits and is regularly inspected by MSHA for compliance with State and Federal requirements. See Note 10 of the Notes to
Consolidated Financial Statements in this Annual Report for the status of inspections by MSHA. Annual zeolite production was approximately 10,100 tons in 2023
and approximately 13,000 tons in 2022. In addition, BRZ can surface mine and process zeolite on the 480 acres of property owned by the U.S. Bureau of Land
Management and held by our 24, 20-acre Placer claims, that is adjacent to the Company’s Preston, Idaho property, after obtaining required permits.
The deposit on the land owned by Zeolite, LLC is a thick, sedimentary deposit of zeolitized volcanic ash of Tertiary age known as the Salt Lake Formation. The
sedimentary interval where the clinoptilolite occurs is over 1,000 feet thick. Thick intervals of the zeolite are separated by thin limestone and sandstone beds
deposited in the freshwater lake where the volcanic ash accumulated. The deposit includes an 800-foot mountain. Zeolite can be sampled over a vertical extent of 800
feet on more than 700 acres. The current pit covers more than 3 acres.
Depending on the location, the zeolite is overlain by 1 to 12 feet of zeolite-rich soil. On the ridges, the cover is very little, and in the draws, the soil is thicker. The
overburden is stripped using a tractor dozer, moved to the toe of the pit, and will eventually be dozed back over the pit for reclamation.
Although near-surface rock is easily ripped, it is more economical to drill and blast it as breakage is generally good. Initial benches are 20 feet high, and each bench is
accessed by a road.
Haulage is over approximately 4,000 feet of road on an uphill grade of 2.5% to the mill. On higher benches, the grade will eventually be downhill. Rock trucks are being
used to haul 18 to 20 tons per load, and the cycle time is approximately 30 minutes.
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BRZ is in the southeast corner of Idaho and is accessible by seven miles of paved road and about l/4 mile of gravel road from Preston, Idaho. Preston is a city in
Franklin County, Idaho and is near the major north-south Interstate Highway 15 to Salt Lake City, UT or Pocatello, ID. Water is sourced from the landowner during
the early spring and summer months. Late summer, water is generally scarcer but is obtained from the same source. Electricity is provided by the local electric
company and is fairly reliable. Personnel are sourced, mainly from Preston, but also from North Logan. Following are location maps related to this property:
Location Map
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Item 3. Legal Proceedings.
United States Antimony Corporation is not a party to any pending material legal proceedings. No director, officer or affiliate of United States Antimony Corporation
and no owner of record or beneficial owner of more than 5% of the Company’s securities or any associate of any such director, officer or security holder is a party
adverse to United States Antimony Corporation or has a material interest adverse to United States Antimony Corporation in reference to pending litigation.
Historically, from time to time, the Company is assessed fines and penalties by the Mine Safety and Health Administration (“MSHA”). Using appropriate regulatory
channels, management may contest these proposed assessments. At December 31, 2023 and December 31, 2022, the Company had no accrued liabilities relating to
such assessments. However, in 2023, Bear River Zeolite Company (“BRZ”), a wholly owned subsidiary of the Company, received fourteen significant and substantial
citations and three orders from MSHA, all of which have been rectified by BRZ prior to the filing of this Annual Report. BRZ works to create a safe environment for
its employees at its plant; however, there can be no assurances that future MSHA inspections will not have a material adverse impact on the Company’s results of
operations and financial condition.
Item 4. Mine Safety Disclosures.
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.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market information
The principal market for our common stock is the NYSE American where it is traded under the symbol UAMY.
Holders of Record
The approximate number of shareholders of record of our common stock at December 31, 2023 is 10,956. The number of record holders is based upon the actual
number of holders registered on our books at such date and does not include holders of shares in street name or persons, partnerships, associations, corporations or
other entities identified in security position listings maintained by depository trust companies.
Dividend Policy
We have not declared or paid any cash dividends to our common stockholders during the last five years and do not anticipate paying cash dividends on our common
stock in the foreseeable future. Instead, we expect to retain earnings for the operation, improvement, and expansion of our business.
On November 28, 2022, the Company declared a dividend on the Series D Preferred Stock in the aggregate amount of $787,730, which was included in “dividends
payable” in the Consolidated Balance Sheet at December 31, 2022 and was paid on January 18, 2023.
Sales of Unregistered Equity Securities
On August 24, 2022, the Company issued 132,980 shares of common stock to the board of directors to satisfy the stock payable to directors for their board services of
$62,501 that were outstanding and accrued at December 31, 2021.
On November 28, 2022, the holders of 1,692,672 outstanding shares of Series D Preferred stock, which represents all outstanding shares of Series D Preferred Stock,
agreed to convert their preferred shares for 1,692,672 shares of common stock of the Company. As of December 31, 2022, common shares had not yet been issued in
conversion of the preferred shares. On January 25, 2023, the holders of such shares of Series D Preferred stock converted their respective preferred shares and the
Company issued 1,692,672 shares of common stock.
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Securities Authorized for Issuance Under Equity Compensation Plans
Information regarding our equity compensation plans as of December 31, 2023 is described in Item 12 “Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters” of this Annual Report.
Issuer Purchases of Equity Securities
There were no repurchases of the Company’s common stock during the quarter ended December 31, 2023.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited
consolidated financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual
Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-
Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report.
Overview
Our Company has been building its business strategy since inception around 1970. This strategy started with its antimony and precious metals operations in
Montana and then continued with the antimony and precious metals operations in Mexico and the zeolite operations in Idaho. Antimony mining was halted in the
U.S., including our antimony mining in Montana, in the 1980’s due to less expensive antimony ore imported into the U.S. from other countries, primarily China.
However, the Company continues to process antimony ore into finished antimony oxide, metal, trisulfide, and other products at its plant in Montana.
Since the 1980s, our Company has been attempting to secure antimony mining and processing operations in Mexico to restore a vertically integrated antimony mining
to marketing process. The building of operations in Mexico since 2009 has been costly with expenditures on fixed assets of approximately $13 million. Along with this
capital spent on fixed assets, our Mexico operations have generated losses cumulatively since inception. As a result, the Company shut down the operational
activities in Mexico on March 11, 2024, as described in the “Recent Developments” section of this Annual Report.
Our zeolite operations are vertically integrated from mining to selling zeolite. We review initiatives to ensure an adequate return on our investment. We also review
the performance of our segments and our Company with a focus on generating positive cash flow. In addition, we are focused on improving our customer service
based on the needs of our customers. A cornerstone of our strategy is the well-being of our employees as they are our most valuable asset. Our mission is to service
our employees, customers, and vendors well and grow our business profitably both organically as well as through strategic acquisitions to increase shareholder
value. Recently, our Company added some key elements and personnel to its strategy related to customer service, finance, and plant management along with several
new board members to help achieve our goals and our mission.
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Consolidated Financial Information
Comparison of the Years Ended December 31, 2023 and 2022
Consolidated Statements of Operations Information:
Revenues
Costs of revenues
Gross profit (loss)
Total operating expenses
Income (loss) from operations
Total other income (expense)
Income tax expense
Net income (loss)
Weighted average shares of common stock (basic)
Weighted average shares of common stock (diluted)
Consolidated Balance Sheet Information:
Working capital
Total assets
Accumulated deficit
Total stockholders’ equity
Revenues
For the year ended
December 31,
2023
8,693,155 $
12,037,939
(3,344,784) $
3,724,217
(7,069,001) $
720,714
-
(6,348,287) $
107,551,931
107,551,931
2022
11,044,707
9,048,517
1,996,190
1,647,985
348,205
96,529
16,073
428,661
106,287,359
106,287,359
$
$
$
$
December 31, December 31,
$
2023
12,642,282 $
28,094,995
(39,418,619)
25,520,968
2022
19,397,489
34,700,450
(33,070,332)
31,869,255
Revenue decreased by $2.4 million, or 21%, in fiscal year 2023 compared to fiscal year 2022 primarily due to: (1) the lower average antimony sales price per pound in
2023, which accounted for approximately $1 million of the revenue decrease, (2) less pounds of antimony sold in 2023, which accounted for approximately $0.6 million
of the revenue decrease, and (3) less tons of zeolite sold in 2023, which accounted for approximately $0.7 million of the revenue decrease.
Our average antimony sales price per pound is impacted by the market price for antimony, which fluctuates widely based on variables out of our control. These
variables, which can change in the future, include the availability and price of imported antimony metal, the quantity of new antimony metal supply, and the industrial
demand for antimony metal. As a result, the results of our operations and financial condition could be materially affected, positively or negatively, going forward by
changes in the market price of antimony.
Our zeolite business sold less tons of its product in 2023 compared to 2022 primarily due to production downtime in 2023. BRZ experienced 18 weeks of unexpected
production downtime in 2023 primarily due to machinery and equipment inadequacies or failures. We remain vigilant in improving or replacing our fixed assets,
including machinery, equipment, and vehicles, that can cause production downtime as our production of zeolite products is contingent on the proper functioning of
our fixed assets. However, our fixed assets may be inadequate or fail in the future, which could affect our ability to produce finished zeolite products to sell to our
customers and generate revenue and could have a material adverse impact on the results of our operations and financial condition.
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Gross Profit (Loss)
In fiscal year 2023, there was a gross loss of ($3.3 million) compared to a gross profit of $2 million in fiscal year 2022. This decrease between the years was primarily
due to the following:
·
·
·
·
·
·
Higher plant processing costs at our Mexico antimony segment caused finished goods inventory cost to be higher than its sales value. As a result, our
Mexico antimony segment recorded an expense to write-down its inventory cost to its net realizable value, which was higher in 2023 compared to 2022.
The higher plant processing costs were primarily due to the low percentage of antimony contained in the ore purchased in Mexico.
Lower average antimony sales price per pound in 2023, as described above in the “Revenues” section above,
Production downtime at our zeolite operations in 2023 not only caused lower revenues, as described above in the “Revenues” section above, but also
caused increased maintenance costs and inefficient facility-related costs in rectifying these production downtime issues, both of which caused lower
gross profit,
Higher reserve on Mexico Value Added Tax (“VAT” or “IVA”) receivable primarily due to increased government regulations and restrictions,
Fixed production costs with lower sales volume at our Montana and Idaho plants lowered gross profit and gross margin, and
Lower gross profit and gross margin on sales of purchased finished antimony trioxide.
Operating Expenses
Operating expense increased by $2.1 million in fiscal year 2023 compared to fiscal year 2022 primarily due to:
·
·
·
·
·
Increased asset retirement obligation (“ARO”) and other expenses in the Mexico antimony segment primarily due to the announced shutdown of Mexico
operations on March 11, 2024, as described in the “Recent Developments” of this Annual Report.
Increased professional fees relating primarily to Mexico legal matters and regaining compliance with SEC filings,
Increased Board fees associated with market pay comparability and adjustments,
Increased bad debt expense due primarily to one customer who received an antimony product from our Montana location,
Loss on the disposal of Wadley assets due to the termination of the Wadley acquisition agreement.
Other Income (Expense)
Other income increased by $0.6 million in fiscal year 2023 compared to fiscal year 2022 primarily due to increased investment income in 2023.
Working Capital
Working capital decreased by $6.8 million during the year ended December 31, 2023 primarily due to inventory, production, and operational costs at our Mexico
antimony segment, which decreased working capital by approximately $4.5 million.
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Segment Financial Information
Comparison of the Years Ended December 31, 2023 and 2022
US and Mexico Antimony Segment
Financial and operational metrics of our antimony segment for the years ended December 31, 2023 and 2022 was as follows:
Antimony - Combined USA and Mexico
Revenue
Gross profit (loss)
Pounds of antimony sold
Average sales price per pound
Average cost per pound
Average gross profit per pound
Year ended December 31,
2022
2023
$ Change
% Change
$
$
$
$
$
5,904,480 $
(3,064,606) $
1,269,131
4.65 $
7.06 $
(2.41) $
7,631,670 $
1,505,116 $
1,394,036
5.47 $
4.39 $
1.08 $
(1,727,190)
(4,569,722)
(124,905)
(0.82)
2.67
(3.49)
-22.6%
-303.6%
-9.0%
-15.0%
60.8%
-323.2%
The average antimony sales price per pound decreased by $0.82, or 15%, in 2023 compared to 2022 primarily due to the: (1) decrease in the antimony market price, and
(2) lower demand and increased competition during various periods in 2023 resulting from national or international developments (e.g., auto strike).
The average antimony gross profit per pound decreased by $3.49 in 2023 compared to 2022 primarily due to:
·
·
·
·
·
Higher plant processing costs at our Mexico antimony segment caused finished goods inventory cost to be higher than its sales value. As a result, our
Mexico antimony segment recorded an expense to write-down its inventory cost to its net realizable value, which was higher in 2023 compared to 2022.
The higher plant processing costs were primarily due to the low percentage of antimony contained in the ore purchased in Mexico.
Lower average antimony sales price per pound in 2023, as described above in the “Revenues” section above,
Higher reserve on Mexico IVA receivable primarily due to increased government regulations and restrictions,
Fixed production costs with lower sales volume at our Montana plant lowered gross profit and gross margin, and
Lower gross margin on sales of purchased finished antimony trioxide.
Zeolite Segment
Financial and operational metrics of our zeolite segment for the years ended December 31, 2023 and 2022 was as follows:
Zeolite
Revenue
Gross profit (loss)
Tons of zeolite sold
Average sales price per ton
Average cost per ton
Average gross profit per ton
Year ended December 31,
2022
2023
$
$
$
$
$
2,462,179 $
(495,981) $
10,145
242.70 $
291.59 $
(48.89) $
3,151,330 $
339,907 $
13,047
241.54 $
215.49 $
26.05 $
$ Change
% Change
(689,151)
(835,888)
(2,902)
1.16
76.10
(74.94)
-21.9%
-245.9%
-22.2%
0.5%
35.3%
-287.7%
The average zeolite gross profit per ton decreased by $74.94 in 2023 compared to 2022 primarily due to:
·
·
Production downtime in 2023, which not only caused lower revenues, but also caused increased maintenance costs and inefficient facility-related costs
in rectifying these production downtime issues, both of which caused lower gross profit, and
Fixed production costs with lower sales volume at our Idaho plant lowered gross profit and gross margin.
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Precious Metals Segment
Financial and operational metrics of our precious metals segment for the years ended December 31, 2023 and 2022 was as follows:
Precious metals
Revenue
Gross profit (loss)
Ounces sold - gold
Ounces sold - silver
Non-GAAP Financial Measure
Year ended December 31,
2022
2023
$ Change
% Change
$
$
326,496 $
215,803 $
36.45
21,426
261,707 $
151,167 $
43.77
25,122
64,789
64,636
(7.32)
(3,696)
24.8%
42.8%
-16.7%
-14.7%
In addition to our results determined in accordance with GAAP, we believe Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”), a non-GAAP
financial measure, is a useful measure of our operating performance because it eliminates non-cash expenses that do not reflect our underlying business performance.
We use this measure to facilitate a comparison of our operating performance on a consistent basis from period to period and to analyze the factors and trends
affecting our business.
EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. We believe that the use of
EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of
comparable companies, which may present similar non-GAAP financial measures to investors. EBITDA should not be considered in isolation or as a substitute for
performance measures calculated in accordance with GAAP.
We had an EBITDA loss of ($5,387,063) for the year ended December 31, 2023, compared to positive EBITDA of $1,369,095 for the year ended December 31, 2022.
EBITDA by segment for the years ended December 31, 2023 and 2022 was as follows:
Antimony – Combined USA and Mexico
Revenue
Cost of sales
Gross profit (loss)
Total operating expenses
Income (loss) from operations
Total other income (expense)
Income tax expense
Net income (loss) - antimony
Interest expense
Income tax expense
Depreciation and amortization
EBITDA - antimony
Year ended December 31,
2022
2023
$ Change
% Change
$
$
$
$
$
5,904,480 $
(8,969,086)
(3,064,606) $
(3,455,592)
(6,520,198) $
736,378
-
(5,783,820) $
(6,504)
-
590,011
(5,200,313) $
7,631,670 $
(6,126,554)
1,505,116 $
(1,482,526)
22,590 $
129,481
16,073
135,998 $
6,884
16,073
630,855
789,810 $
(1,727,190)
(2,842,532)
(4,569,722)
(1,973,066)
(6,542,788)
606,897
(16,073)
(5,919,818)
(13,388)
(16,073)
(40,844)
(5,990,123)
-22.6%
46.4%
-303.6%
133.1%
-28963.2%
468.7%
-100.0%
-4352.9%
-194.5%
-100.0%
-6.5%
-758.4%
41
Table of Contents
Zeolite
Revenue
Cost of sales
Gross profit (loss)
Total operating expenses
Income (loss) from operations
Total other income (expense)
Income tax expense
Net income (loss) - zeolite
Interest expense
Income tax expense
Depreciation and amortization
EBITDA - zeolite
Precious Metals
Revenue
Cost of sales
Gross profit (loss)
Total operating expenses
Income (loss) from operations
Total other income (expense)
Net income (loss) - precious metals
Interest expense
Depreciation and amortization
EBITDA - precious metals
Year ended December 31,
2022
2023
$ Change
% Change
2,462,179 $
(2,958,160)
(495,981) $
(268,625)
(764,606) $
(15,664)
-
(780,270) $
8,283
-
258,741
(513,246) $
3,151,330 $
(2,811,423)
339,907 $
(165,459)
174,448 $
(32,952)
-
141,496 $
8,257
-
167,825
317,578 $
(689,151)
(146,737)
(835,888)
(103,166)
(939,054)
17,288
-
(921,766)
26
-
90,916
(830,824)
-21.9%
5.2%
-245.9%
62.4%
-538.3%
-52.5%
n/a
-651.4%
0.3%
n/a
54.2%
-261.6%
Year ended December 31,
2022
2023
$ Change
% Change
326,496 $
(110,693)
215,803 $
-
215,803 $
-
215,803 $
-
110,693
326,496 $
261,707 $
(110,540)
151,167 $
-
151,167 $
-
151,167 $
-
110,540
261,707 $
64,789
(153)
64,636
-
64,636
-
64,636
-
153
64,789
24.8%
0.1%
42.8%
n/a
42.8%
n/a
42.8%
n/a
0.1%
24.8%
$
$
$
$
$
$
$
$
$
$
42
Table of Contents
Consolidated
Revenue
Cost of sales
Gross profit (loss)
Total operating expenses
Income (loss) from operations
Total other income (expense)
Income tax expense
Net income (loss) - consolidated
Interest expense
Income tax expense
Depreciation and amortization
EBITDA - consolidated
Liquidity and Capital Resources
Year ended December 31,
2022
2023
11,044,707 $
(9,048,517)
1,996,190 $
(1,647,985)
348,205 $
96,529
16,073
428,661 $
15,141
16,073
909,220
1,369,095 $
8,693,155 $
(12,037,939) $
(3,344,784) $
(3,724,217) $
(7,069,001) $
720,714 $
- $
(6,348,287) $
1,779 $
- $
959,445 $
(5,387,063) $
$
$
$
$
$
$
$
$
$
$
$
$
$ Change
% Change
(2,351,552)
(2,989,422)
(5,340,974)
(2,076,232)
(7,417,206)
624,185
(16,073)
(6,776,948)
(13,362)
(16,073)
50,225
(6,756,158)
-21.3%
33.0%
-267.6%
126.0%
-2130.1%
646.6%
-100.0%
-1581.0%
-88.3%
-100.0%
5.5%
-493.5%
Our Mexico Antimony Segment has generated significant negative cash flow cumulatively since starting construction in 2009. In fiscal year 2023, our Mexico
Antimony Segment had negative cash flow of approximately $4.1 million. On March 11, 2024, the Company shut down the operations of its Mexico Antimony
Segment, as described in the “Recent Developments” section of this Annual Report. Also, the Company intends to sell or lease its USAMSA entity, operations, or
assets over the next year and has initiated an active search for buyers or leasing opportunities of its operations and/or existing assets. Such sale or lease would
provide additional cash.
In the past, the Company has been successful in raising necessary capital from the sale of common stock and warrants and, to a lesser extent, from debt issuance.
However, our ability to access capital when needed is not assured and, if capital is not available when, and in the amounts and terms needed, or if capital is not
available at all, the Company could be required to significantly curtail its operations, modify existing strategic plans, and/or dispose of certain operations or assets,
which could materially harm our business, prospects, financial condition, and operating results.
Our cash and cash equivalents balance at December 31, 2023 was $11,899,574. We believe that our cash and cash equivalents should be sufficient to fund our
operations and meet our working capital, capital expenditure, and contractual obligations for the next 12 months.
Material Cash Requirements
We plan to continue reviewing the operations and financial results of each segment to make informed decisions that benefit the Company. Also, we intend to
continue to invest in people, customers, infrastructure, and operations with the goals of increasing production, decreasing costs, and growing revenue profitably
and, we intend to fund our cash requirements in 2024 with our cash and cash equivalents. We may use cash to acquire businesses. The nature of these investments
and transactions, however, makes it difficult to predict the amount and timing of such cash requirements.
43
Table of Contents
Cash Flows Summary
WORKING CAPITAL
Current assets
Current liabilities
Working Capital
CASH FLOWS
Cash provided (used) by operations
Cash provided (used) by investing
Cash provided (used) by financing
Net change in cash and restricted cash for the year ended period
December 31, December 31,
2023
14,076,206 $
(1,433,924)
12,642,282 $
2022
21,617,359
(2,219,870)
19,397,489
$
$
For the year ended
December 31, December 31,
2023
(4,750,026) $
(1,341,713)
(1,071,292)
(7,163,031) $
2022
(249,277)
(1,785,661)
(267,725)
(2,302,663)
$
$
Cash and restricted cash decreased by $7.2 million during the year ended December 31, 2023 primarily due to: 1) $4.1 million of negative cash flow of our Mexico
Antimony Segment, 2) $1.3 million on fixed asset purchases for our Zeolite Segment, 3) $0.8 million on a payment to the holders of Series D Preferred Stock, and 4)
$0.4 million towards a payment on a royalty obligation that had been accumulating since 2016.
Cash flows used by operating activities increased by $4.5 million in 2023 compared to 2022 primarily due to the differential between the net loss generated during 2023
compared to the net income generated during 2022 as well as the increase in the use of cash for inventory in 2023, both of which were primarily due to our Mexico
Antimony Segment. The increase was partially offset by increases in non-cash charges related to the write-down of our Mexico inventory to net realizable value and
reserves recorded on our Mexico VAT receivable and on one customer receivable in our US Antimony Segment.
Cash flow used by investing activities decreased by $0.4 million in 2023 compared to 2022 primarily due to lower purchases of fixed assets in 2023. Purchases of
property, plant, and equipment, which were primarily for our Zeolite Segment, were $1.5 million in 2023 and $1.7 million in 2022, which excludes $0.2 million of fixed
assets purchased with equipment financing for our Mexico antimony segment in 2022.
Cash flow used by financing activities increased by $0.8 million in 2023 compared to 2022 primarily due to the payment of dividends of $787,730 on January 25, 2023 to
the holders of Series D Preferred Stock.
Off-Balance Sheet Arrangements
The Company has no significant off-balance sheet arrangements as defined by the SEC regulations.
44
Table of Contents
Critical Accounting Estimates
We have the following critical accounting estimates:
·
·
The Company reviews and evaluates the net carrying value of its long-lived assets for impairment upon the occurrence of events or changes in
circumstances that indicate that the related carrying amounts may not be recoverable. A test for recoverability is performed based on the estimated
undiscounted future cash flows that will be generated from operations at each property and the estimated salvage value of asset. There are many
assumptions underlying future cash flows that are subject to significant risks and uncertainties, which include the estimated value of the assets.
Estimates of undiscounted future cash flows and salvage values are dependent upon, among other factors, estimates of: (i) product and metals to be
recovered from identified mineralization and other resources, (ii) future production and capital costs, (iii) estimated selling prices over the estimated
remaining life of the asset and (iv) market values of assets. The Company reviews its business and operations for indications of impairment and, when
indications are present, performs an impairment test. The Company will involve a third-party expert when needed. However, it is possible that changes
could occur in the near term that could adversely affect the estimate of future cash flows and salvage values to be generated from operating assets
resulting in an impairment loss.
The asset retirement obligation in our Consolidated Balance Sheet is based on an estimate of future costs to reclaim properties and retire fixed assets as
required by permits, government regulations, and lease or other contractual requirements upon cessation of our operations. Determination of any
amounts included in the determination of the fair value of the asset retirement obligation can change periodically as the calculation of the fair value of
the asset retirement obligation is based upon numerous estimates and assumptions, including, among others, future retirement costs, future inflation
rate, and the Company’s credit-adjusted risk-free interest rate. Also, there are uncertainties associated with the nature, timing, and extent of costs
associated with asset retirement obligations, including, among others, the extent of environmental contamination, revisions to laws and regulations by
regulatory authorities, and changes in remediation technology. As a result, the ultimate cost as well as the timing of the retirement obligation could
change in the future. The Company continually reviews its asset retirement obligations for indications that its asset retirement obligation cost or timing
has changed and, when indications are present, recalculates its asset retirement obligation. Also, there are many technical components of an asset
retirement obligation. Therefore, the Company will involve a third-party expert when needed to recalculate its asset retirement obligations. However,
actual costs to reclaim and retire property and fixed assets when we cease operations may differ from our estimates.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
45
Table of Contents
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements:
1.
2.
3.
4.
5.
6.
Report of Independent Registered Public Accounting Firm; PCAOB ID - 444
Consolidated Balance Sheets as of December 31, 2023 and 2022;
Consolidated Statements of Operations for the years ended December 31, 2023 and 2022
Consolidated Statements of Changes in Stockholders’ Equity
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022
Notes to Consolidated Financial Statements
46
F-1
F-2
F-3
F-4
F-5
F-6
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the board of directors of United States Antimony Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of United States Antimony Corporation (the "Company") as of December 31, 2023 and 2022, the
related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the years then ended, and the related notes (collectively
referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over
financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we
express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit
committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. We determined that there are no critical audit matters.
We have served as the Company's independent auditor since 1998.
Assure CPA, LLC
Spokane, WA
April 12, 2024
F-1
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2023 and 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Certificates of deposit
Accounts receivable, net
Inventories, net
Prepaid expenses and other current assets
Total current assets
Properties, plants and equipment, net
Restricted cash for reclamation bonds
IVA receivable and other assets, net
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable
Accrued liabilities
Accrued liabilities - directors
Royalties payable
Dividends payable
Long-term debt, current portion
Total current liabilities
Long-term debt, net of current portion
Stock payable to directors
Asset retirement obligations and accrued reclamation costs
Total liabilities
COMMITMENTS AND CONTINGENCIES (Note 10)
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 $967,500 and $960,000, respectively)
Series C: 177,904 shares issued and outstanding (liquidation preference $97,847 both years)
Series D: 0 and 1,692,672 shares issued and outstanding (liquidation preference $0 and $5,019,410, respectively)
Common stock, $0.01 par value, 150,000,000 shares authorized; 107,647,317 and 106,373,341 shares issued and outstanding,
respectively
Additional paid-in capital
Shares to be returned to treasury
Accumulated deficit
Total stockholders' equity
Total liabilities and stockholders' equity
The accompanying notes are an integral part of these consolidated financial statements.
F-2
December 31,
2023
December 31,
2022
$
$
$
11,899,574 $
72,898
625,256
1,386,109
92,369
14,076,206
13,454,491
55,061
509,237
28,094,995 $
456,935 $
133,841
124,810
153,429
-
28,443
897,458
-
38,542
1,638,027
2,574,027
19,060,378
259,857
784,457
1,375,068
137,599
21,617,359
12,128,124
57,288
897,679
34,700,450
628,803
201,149
72,963
435,075
787,730
94,150
2,219,870
217,855
61,459
332,011
2,831,195
-
7,500
1,779
-
-
7,500
1,779
16,926
1,076,472
63,853,836
-
(39,418,619)
25,520,968
28,094,995 $
1,063,732
64,052,630
(202,980)
(33,070,332)
31,869,255
34,700,450
$
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2023 and 2022
REVENUES
COST OF REVENUES
GROSS PROFIT (LOSS)
OPERATING EXPENSES:
General and administrative
Salaries and benefits
Professional fees
Loss on disposal of property, plant & equipment
Other operating expenses
TOTAL OPERATING EXPENSES
INCOME (LOSS) FROM OPERATIONS
OTHER INCOME (EXPENSE):
Interest and investment income
Change in fair value of investments
Trademark and licensing income
Other miscellaneous income (expense)
TOTAL OTHER INCOME (EXPENSE)
INCOME (LOSS) BEFORE INCOME TAX
Income tax expense
NET INCOME (LOSS)
Preferred dividends
Net income (loss) available to common stockholders
Net income (loss) per share of common stock:
Basic
Diluted
Weighted average shares outstanding:
Basic
Diluted
For the years ended December 31,
$
2023
8,693,155 $
12,037,939
(3,344,784)
2022
11,044,707
9,048,517
1,996,190
1,642,269
639,172
643,208
217,921
581,647
3,724,217
(7,069,001)
618,762
-
32,007
69,945
720,714
(6,348,287)
-
(6,348,287)
(7,500)
(6,355,787) $
(0.06)
(0.06)
658,242
481,106
302,901
-
205,736
1,647,985
348,205
103,800
(37,882)
70,502
(39,891)
96,529
444,734
16,073
428,661
(47,278)
381,383
Nil
Nil
107,551,931
107,551,931
106,287,359
106,287,359
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
F-3
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the years ended December 31, 2023 and 2022
Total Preferred Stock
Shares
Amount
Common stock
Additional
Paid In
Amount Capital
Shares
Shares to
be
returned
to
treasury
Accumulated
Deficit
Total
Balances, December 31, 2021
Issuance of common stock for directors' fees
Series D preferred dividends declared
Repurchase of common stock
Net income
Balances, December 31, 2022
Common stock buyback and retirement
Conversion of Preferred Series D to Common
Stock
Net loss
Balances, December 31, 2023
2,620,576 $
-
-
-
-
2,620,576 $
-
(1,692,672)
-
927,904 $
-
-
-
-
26,205 106,240,361 $ 1,062,402 $63,991,459 $
61,171
-
-
-
- $ (32,711,263) $32,368,803
62,501
-
(787,730)
-
(202,980)
(202,980)
428,661
-
26,205 106,373,341 $ 1,063,732 $64,052,630 $ (202,980) $ (33,070,332) $31,869,255
-
(198,793)
-
(787,730)
-
428,661
132,980
-
-
-
1,330
-
-
-
(418,696)
202,980
(4,187)
-
-
(16,926)
1,692,672
(1)
-
9,279 107,647,317 $ 1,076,472 $63,853,836 $
16,927
-
-
-
-
-
-
-
(6,348,287) (6,348,287)
- $ (39,418,619) $25,520,968
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2023 and 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash
used by operating activities:
Depreciation and amortization
Accretion of asset retirement obligation
Changes in asset retirement obligation estimates
Stock payable to directors
Loss on disposal of property, plant & equipment
Write down of inventory to net realizable value
Allowance for doubtful accounts on accounts receivable
Reserve on IVA receivable
Change in fair value of investments
Other non-cash items
Change in:
Accounts receivable, net
Inventories, net
Prepaid expenses and other current assets
IVA receivable and other assets, net
Accounts payable
Accrued liabilities
Accrued liabilities – directors
Royalties payable
Net cash used by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from redemption of certificates of deposit
Purchase of investments
Proceeds from sale of investments
Purchases of properties, plants and equipment
Net cash used by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Dividends Payable
Principal payments on long-term debt
Repurchase of common stock
Net cash used by financing activities
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
|CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid in cash
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Equipment purchased with note payable
Issuance of common stock for directors
Preferred Series D dividends payable declared
Common stock buyback and retirement
Conversion of Preferred Series D to Common Stock
2023
2022
$
(6,348,287) $
428,661
959,445
13,471
324,984
(22,917)
217,921
2,073,404
239,772
687,534
-
(7,500)
(80,571)
(2,084,445)
45,230
(299,092)
(171,868)
(67,308)
51,847
(281,646)
(4,750,026)
186,959
-
-
(1,528,672)
(1,341,713)
(787,730)
(283,562)
-
(1,071,292)
(7,163,031)
19,117,666
11,954,635 $
909,220
17,766
-
61,459
-
277,146
59,350
-
59,246
(647)
47,507
(596,794)
(137,599)
(654,958)
(756,949)
(72,636)
21,118
88,833
(249,277)
-
(16,184,893)
16,125,647
(1,726,415)
(1,785,661)
-
(64,745)
(202,980)
(267,725)
(2,302,663)
21,420,329
19,117,666
10,521 $
15,141
- $
- $
- $
202,980 $
16,926 $
161,600
62,501
787,730
-
-
$
$
$
$
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS
United States Antimony Corporation and its subsidiaries in the U.S. and Mexico (“USAC”, the “Company”, “Our”, “Us”, or “We”) sell processed antimony, zeolite,
and precious metals products in the U.S. and Canada. The Company processes antimony ore primarily into antimony oxide, antimony metal, and antimony trisulfide.
Our antimony oxide is used to form a flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings and paper, as a color fastener in paint, and
as a phosphorescent agent in fluorescent light bulbs. Our antimony metal is used in bearings, storage batteries, and ordnance. Our antimony trisulfide is used as a
primer in ammunition. In its operations in Idaho, the Company mines and processes zeolite, a group of industrial minerals used in soil amendment and fertilizer, water
filtration, sewage treatment, nuclear waste and other environmental cleanup, odor control, gas separation, animal nutrition, and other miscellaneous applications. We
recover precious metals, primarily gold and silver, at our plant in Montana from antimony concentrates.
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The Company’s consolidated financial statements include the accounts of its wholly owned subsidiaries, Bear River Zeolite Company (“BRZ”), AGUA Mines, Inc.,
Stibnite Holding Company US Inc., Antimony Mining and Milling US LLC, and Lanxess Laurel de Mexico, S.A. de C.V., and its majority owned subsidiaries,
USAMSA and ADM. All intercompany balances and transactions are eliminated in consolidation. AGUA Mines, Inc., Stibnite Holding Company US Inc., Antimony
Mining and Milling US LLC, and Lanxess Laurel de Mexico, S.A. de C.V. are inactive.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical accounting estimates include impairment of
long-lived assets, antimony content of mineral resources, and asset retirement obligations. Actual results could differ from those estimates.
Reclassifications
Certain reclassifications have been made to conform prior period amounts to the current presentation. These reclassifications have no effect on the results of
operations, stockholders’ equity and cash flows as previously reported.
Cash and Cash Equivalents
The Company considers cash in banks and investments with original maturities of three months or less when purchased to be cash and cash equivalents. At
December 31, 2023 and 2022, restricted cash for reclamation bonds of $55,061 and $57,288 is included with the cash and cash equivalents and restricted cash balances
in the statements of cash flows.
Restricted Cash
Restricted cash at December 31, 2023 and 2022 consists of cash held for reclamation performance bonds and is held in certificates of deposit with financial
institutions.
F-6
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accounts Receivable
Accounts receivables are stated at the amount the Company expects to collect from outstanding balances. The Company provides for probable uncollectible amounts
through an allowance for doubtful accounts. Changes to the allowance for doubtful accounts are based on the Company’s judgment, considering historical write-
offs, collections, and current credit conditions. Balances which remain outstanding after the Company has made reasonable collection efforts are written off through a
charge to the allowance for doubtful accounts and a credit to the applicable accounts receivable. Payments received on receivables after being written off are
considered a bad debt recovery.
Inventories
Inventories at December 31, 2023 and 2022 consisted of finished antimony products (oxide and metal), antimony concentrates, antimony ore, and finished zeolite
products, and are stated at the lower of first-in, first-out weighted average cost or estimated net realizable value, whichever is lower. Finished antimony products
(oxide and metal) and finished zeolite products costs include direct materials, direct labor, facility overhead costs, depreciation, and freight allocated based on
production quantity. Stockpiled ore is carried at the lower of average cost or net realizable value. Since the Company’s antimony inventory is a commodity with a
sales value that is subject to world prices for antimony that are beyond the Company’s control, a significant change in the world market price of antimony could have
a significant effect on the net realizable value of inventories. The Company periodically reviews its inventories to identify excess and obsolete inventories and to
estimate reserves for obsolete inventories as necessary to reflect inventories at net realizable value.
Foreign Currency Transactions
All amounts in the financial statements are presented in U.S. dollars, which is the functional currency of the Company and its subsidiaries. Foreign currency
transaction gains and losses are recognized as a foreign currency exchange gain or loss in “other miscellaneous income (expense)” in the Consolidated Statements of
Operations.
F-7
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Properties, Plants and Equipment
Properties, plants, and equipment are stated at historical cost and are depreciated using the straight-line method over estimated useful lives ranging from three to
forty years. The estimated useful life of plant and equipment ranges from three to twenty years and buildings ranges from twenty to forty years. Maintenance and
repairs are charged to operations as incurred. Expenditures for property, plant, equipment, and improvements that extend the useful life or functionality of the asset
are capitalized. When assets are retired or sold, the costs and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is
reflected in the results of operations.
The costs to obtain the legal right to explore, extract and retain at least a portion of the benefits from mineral deposits are capitalized as mineral rights in the year of
acquisition. These capitalized costs are amortized in the statement of operations using the units-of-production method, based upon estimated the units of mineral
resource, or the straight-line method, based upon the estimated lives of the properties.
The Company expenses costs as incurred during the mine exploration stage. The mine development stage begins once the Company has determined an ore body is
feasible. Expenditures incurred during the development stage are capitalized as deferred development costs and amortized using the units-of-production method,
based upon estimated the units of mineral resource, or the straight-line method, based upon the estimated lives of the properties. Costs to improve, alter, or
rehabilitate primary development assets which appreciably extend the life, increase capacity, or improve the efficiency of such assets are also capitalized. The
development stage ends when the production stage of mining begins.
Impairment of Long-lived Assets
The Company reviews and evaluates the net carrying value of its long-lived assets for impairment upon the occurrence of events or changes in circumstances that
indicate that the related carrying amounts may not be recoverable. A test for recoverability is performed based on the estimated undiscounted future cash flows that
will be generated from operations at each property and the estimated salvage value of asset. Although management has made what it believes to be a reasonable
estimate of factors based on current conditions and information, assumptions underlying future cash flows, which includes the estimated value of assets, are subject
to significant risks and uncertainties. Estimates of undiscounted future cash flows and salvage values are dependent upon, among other factors, estimates of: (i)
product and metals to be recovered from identified mineralization and other resources (ii) future production and capital costs, (iii) estimated selling prices (considering
current, historical, and future prices) over the estimated remaining life of the asset and (iv) market values of assets. It is possible that changes could occur in the near
term that could adversely affect the estimate of future cash flows and salvage values to be generated from operating assets. If estimated undiscounted cash flows or
salvage values are less than the carrying value of an asset, an impairment loss is recognized for the difference between the carrying value and fair value of the asset.
Prepaid Expenses and Other Long-Term Assets
Prepaid expenses relate to goods or services that have been paid for but for which the good or service has not been received yet. These expenses are recorded as an
asset in the Consolidated Balance Sheet and expensed in the Consolidated Statement of Operations as the asset's benefits are realized. Prepaid expenses are recorded
as a current asset in the Consolidated Balance Sheet if the benefits will be realized within twelve months from the date of the Consolidated Balance Sheet or as a long-
term asset if the benefits will be realized after twelve months from the date of the Consolidated Balance Sheet.
F-8
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Asset Retirement Obligations
The Company’s mining operations are subject to retirement requirements, which include mine retirement standards that have been established by various
governmental agencies and retirement requirements included in certain Company contracts, including contracts related to the leasing of certain of the Company’s
properties. There are costs that will be incurred to satisfy these retirement requirements upon cessation of our operations. The Company records the fair value of
these costs as an asset retirement obligation in its Consolidated Balance Sheet in the period in which the Company has both a legal obligation and an obligating
event for the retirement of long-lived assets if it is probable, meaning it can reasonably be expected or believed, that such costs will be incurred and if the costs are
reasonably estimable. A corresponding asset is also recorded and amortized over the life of the assets on a units-of-production or straight-line basis. After the initial
measurement of the asset retirement obligation, this liability will be adjusted to reflect changes in the estimated costs or timing of the future cash flows underlying the
obligation. Determination of any amounts included in the determination of the fair value of the asset retirement obligation can change periodically as the calculation
of the fair value of the asset retirement obligation is based upon numerous estimates and assumptions, including, among others, future retirement costs, future
inflation rate, and the Company’s credit-adjusted risk-free interest rate. The asset retirement obligation is classified as current or noncurrent based on the expected
timing of expenditures.
There are uncertainties associated with the nature, timing, and extent of costs associated with asset retirement obligations, including, among others, the extent of
environmental contamination, revisions to laws and regulations by regulatory authorities, and changes in remediation technology. As a result, the ultimate cost as
well as the timing of the retirement obligation could change in the future. The Company continually reviews its asset retirement obligations for indications that its
asset retirement obligation cost or timing has changed and, when indications are present, recalculates its asset retirement obligation.
Revenue Recognition
Products consist primarily of the following:
☐ Antimony: includes antimony oxide, antimony metal, and antimony trisulfide
☐ Zeolite: includes coarse and fine zeolite crushed in various sizes
☐ Precious Metals: includes unrefined and refined gold and silver
For antimony, zeolite, and precious metals products, revenue is recognized when the following have been satisfied: 1) the completion of the contractual performance
obligations, in which rarely will there be more than one performance obligation, that being shipment of the specified quantity of the specified product per the
customer’s sales order or similar document, 2) the amount of consideration or price for the transaction can be reasonably estimated, 3) legal title to and risk and
rewards of ownership of the product are transferred to the customer, which typically occurs either upon shipment of the product from the Company’s warehouse
locations or upon receipt of the product by the customer as specified in individual sales orders and/or shipping documents, 4) it is assessed as very unlikely product
will be rejected by the customer, and 5) the Company has the right to payment for the product. Shipping costs related to sales of our products are recorded to cost of
sales as incurred. For zeolite products, royalty expenses due to a third party by the Company are also recorded to cost of sales upon sale in accordance with terms of
underlying royalty agreements. Refining related to sales of precious metals are recorded to cost of sales as incurred.
The Company has determined that its customer contracts do not include a significant financing component. Prepayments from customers, which are not common,
received prior to satisfaction of revenue recognition criteria are recorded as deferred revenue. The Company does not have warranty obligations and sales returns
have been historically immaterial. For precious metals sales, a provisional payment of 75% is typically received within 45 days of the date the product is delivered to
the customer. After an exchange of assays, a final payment is normally received within 90 days of product delivery.
F-9
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Common Stock Issued for Consideration Other than Cash
All transactions in which goods or services are received for the issuance of shares of the Company’s common stock are accounted for based on the fair value of the
common stock issued.
Treasury Stock
When the Company’s stock is acquired, it is initially valued at cost and presented as treasury stock. Other than formal or constructive retirement or when ultimate
disposition has not yet been decided, the cost of the acquired stock is presented as treasury stock separately as a deduction from the total of common stock,
additional paid-in capital and accumulated deficit. Gains on sales of treasury stock not previously accounted for as constructively retired are credited to additional
paid-in capital, and losses are charged to additional paid-in capital to the extent that previous net gains from sales or retirements of the same class of stock are
included therein, with the remainder charged to accumulated deficit. When the Company's stock is purchased for constructive retirement, any excess purchase price
over par value is allocated between additional paid-in capital to the extent that previous net gains from sales or retirements are included therein, and the remainder to
accumulated deficit.
Income Taxes
The Company’s income tax expense and deferred tax assets and liabilities reflect the Company’s best assessment of estimated future taxes to be paid or refunded.
Significant judgments and estimates are required in determining the consolidated income tax expense. Deferred income taxes arise from temporary differences between
the tax and financial statement recognition of revenue and expense. In evaluating the Company’s ability to recover its deferred tax assets, the Company considers all
available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent
financial operations. In projecting future taxable income, the Company develops assumptions including the amount of future state and federal pretax operating
income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment
about the forecasts of future taxable income and the assumptions are consistent with the plans and estimates that the Company is using to manage its underlying
businesses. The Company provides a valuation allowance for deferred tax assets that the Company does not consider more likely than not to be realized. Changes in
tax laws and rates could also affect recorded deferred tax assets and liabilities in the future and are reflected on a prospective nature in the period of the enactment.
The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. The Company evaluates its tax positions taken or
expected to be taken while preparing its tax returns to determine whether the tax positions will more likely than not be sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold are not recorded as a tax benefit or expense in the current year. No reserve for uncertain tax positions
has been recorded.
Fair Value of Financial Instruments
The Company’s financial instruments include cash and cash equivalents, certificates of deposits, restricted cash, and long-term debt. The carrying value of these
instruments approximates fair value based on their contractual terms.
F-10
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fair Value Measurements
When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence
surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The
categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in
active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the
total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still
held at the reporting date. At December 31, 2023 and 2022, the Company has no financial assets or liabilities that are adjusted to fair value on a recurring basis.
Contingencies
In determining accruals and disclosures with respect to loss contingencies, the Company evaluates such accruals and contingencies for each reporting period.
Estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it
is probable that a liability could be incurred, and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed
as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least
reasonably possible that a material loss could be incurred.
New Accounting Pronouncements
The Company does not believe that issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s
financial statements.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments – Credit
Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires entities to use a forward-looking approach based on expected losses to
estimate credit losses on certain types of financial instruments, including trade receivables. The FASB has subsequently issued updates to the standard to provide
additional clarification on specific topics. The Company adopted the ASU on January 1, 2023, and determined that it had no material impact on the Company’s
consolidated financial statements and disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, amending reportable segment
disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the disclosure enhancements are new
disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of
segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in ASU 2023-07
are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, and are applied
retrospectively. Early adoption is permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements
for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are
applied prospectively. Early adoption and retrospective application of the amendments are permitted. We are currently evaluating the impact of this update on our
consolidated financial statements and disclosures.
F-11
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 – EARNINGS PER SHARE
Basic Earnings Per Share (“EPS”) is computed as net income (loss) available to common stockholders divided by the weighted average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through convertible preferred stock and
warrants.
At December 31, 2023 and 2022, the potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would
have been anti-dilutive were as follows:
Warrants
Convertible preferred stock
TOTAL POSSIBLE DILUTIVE SHARES
NOTE 4 – REVENUE RECOGNITION
Products consist of the following:
·
·
·
Antimony: includes antimony oxide, antimony metal, and antimony trisulfide
Zeolite: includes coarse and fine zeolite crushed in various sizes
Precious metals: includes unrefined and refined gold and silver
Sales by product for the years ended December 31, 2023 and 2022 were as follows:
Antimony product revenue
Zeolite product revenue
Precious metals product revenue
TOTAL REVENUES
December 31, December 31,
2023
12,346,215
-
12,346,215
2022
12,346,215
1,692,672
14,038,887
For the year ended
December 31, December 31,
2023
5,904,480 $
2,462,179
326,496
8,693,155 $
2022
7,631,670
3,151,330
261,707
11,044,707
$
$
The Company also received royalties related to a trademark and licensing agreement in its antimony business segment, which is recorded in “Trademark and licensing
income” under the caption “Other Income (Expense)” in its Consolidated Statements Operations.
F-12
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is sales information by geographic area based on the location of customers for the years ended December 31, 2023 and 2022:
United States revenue
Canada revenue
TOTAL REVENUES
For the year ended
December 31, December 31,
2023
6,854,740 $
1,838,415
8,693,155 $
2022
9,272,698
1,772,009
11,044,707
$
$
Sales to customers representing more than 10% of our total revenues during the years ended December 31, 2023 and 2022 were as follows:
For the year ended
December 31,
2023
December 31,
2022
Customer A revenue
Customer B revenue
Customer C revenue
Total significant customer revenue
Customer revenue as a % of total revenues
$
$
$
1,548,283
1,451,950
1,037,307
4,037,540
$
46%
1,882,667
1,863,958
-
3,746,625
34%
All precious metals sales of $326,496 and $261,707 for the years ended December 31, 2023 and 2022, respectively were to one customer, Teck American, Inc.
Customer receivables representing more than 10% of our net accounts receivable balance as of December 31, 2023 and 2022 were as follows:
December 31,
2023
December 31,
2022
Customer B receivables
Customer A receivables
Customer E receivables
Total significant customer receivables
Customer receivables as a % of net accounts receivable
$
$
$
202,382
194,007
-
396,389
$
63%
-
-
188,187
188,187
24%
The Company’s net accounts receivable balance related to contracts with customers was $625,256 at December 31, 2023 and $784,457 at December 31, 2022. The
Company’s allowance for doubtful accounts related to accounts receivable was $271,212 at December 31, 2023 and $31,440 at December 31, 2022, the increase of
which was primarily included in our U.S. Antimony Segment. The Company’s products do not involve any warranty agreements and product returns are not typical.
F-13
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – INVENTORIES
Inventories by type at December 31, 2023 and 2022 were as follows:
Antimony oxide
Antimony metal
Antimony ore and concentrates
Total antimony inventory
Zeolite
TOTAL INVENTORIES
December 31, December 31,
2023
2022
$
$
$
354,431 $
454,748
71,884
881,063 $
505,046
1,386,109 $
142,230
509,643
545,373
1,197,246
177,822
1,375,068
As of December 31, 2023 and 2022, inventories were valued at cost except for the portion of the inventory related to our Mexico Antimony Segment operations, which
was valued at net realizable value because the cost of our Mexico inventory was greater than the amount the Company expected to receive upon the sale of the
inventory. The adjustment to inventory to net realizable value was $2,073,404 and $277,146 for the years ended December 31, 2023 and 2022, respectively.
Antimony oxide and metal inventory consisted of finished product held at the Company’s plants in Montana and Mexico. Antimony concentrates and ore were held
primarily at sites in Mexico. The Company’s zeolite inventory consists primarily of saleable zeolite material in Idaho.
F-14
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 – PROPERTIES, PLANTS AND EQUIPMENT
The components of the Company’s properties, plants and equipment (“PP&E”) by segment at December 31, 2023 and December 31, 2022 were as follows:
December 31, 2023
Plant and equipment
Buildings
Land and other
Construction in progress
PP&E, gross
Accumulated depreciation
PP&E, net
December 31, 2022
Plant and equipment
Buildings
Land and other
Construction in progress
PP&E, gross
Accumulated depreciation
PP&E, net
Antimony Segment
USAC
USAMSA
1,675,444 $
243,248
2,727,198
-
4,645,890 $
(2,661,719)
1,984,171 $
9,395,022 $
875,024
2,764,401
-
13,034,447 $
(6,785,041)
6,249,406 $
Antimony Segment
USAC
USAMSA
1,760,926 $
243,248
2,431,387
-
4,435,561 $
(2,767,803)
1,667,758 $
9,090,860 $
870,534
2,796,037
280,406
13,037,837 $
(6,212,433)
6,825,404 $
$
$
$
$
$
$
Zeolite
Segment
BRZ
Precious
Metals
Segment
5,336,808 $
2,025,043
687,639
8,951
8,058,441 $
(3,524,130)
4,534,311 $
1,347,912 $
-
-
-
1,347,912 $
(661,309)
686,603 $
Zeolite
Segment
BRZ
Precious
Metals
Segment
4,996,216 $
1,047,023
16,753
170,535
6,230,527 $
(3,392,861)
2,837,666 $
1,347,912 $
-
-
-
1,347,912 $
(550,616)
797,296 $
TOTAL
17,755,186
3,143,315
6,179,238
8,951
27,086,690
(13,632,199)
13,454,491
TOTAL
17,195,914
2,160,805
5,244,177
450,941
25,051,837
(12,923,713)
12,128,124
The properties, plants and equipment by location was as follows:
United States properties, plants and equipment, net
Mexico properties, plants and equipment, net
Total PP&E, net
2023
6,579,111 $
6,875,380
13,454,491 $
2022
4,677,428
7,450,696
12,128,124
$
$
The Company’s precious metals segment includes properties, plants and equipment in both the United States and Mexico.
At December 31, 2023 and December 31, 2022, the Company had $289,357 and $1,117,041, respectively, of assets that were not yet placed in service and have not yet
been depreciated.
F-15
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – ASSET RETIREMENT OBLIGATION
Changes in the asset retirement obligations for the years ended December 31, 2023 and 2022 were as follows:
Asset retirement obligation, beginning of period
Revisions to estimate of retirement obligations
Accretion expense
Changes in asset retirement obligation estimates
Asset retirement obligation, end of period
Year ended December 31,
2022
2023
$
$
224,511 $
1,075,061
13,471
324,984
1,638,027 $
191,149
15,596
17,766
-
224,511
The Company recalculated its asset retirement obligations based on indications that the associated costs had changed. Based on these changes in the estimate of
cash flow costs and timing, the Company's asset retirement obligation liability increased by $1,075,061 and $15,596 and the Company’s asset retirement obligation
expense increased by $324,984 and $nil during the years ended December 31, 2023 and 2022, respectively. The Company added layers to its asset retirement
obligations and assets at its credit-adjusted risk-free rate of 6.65% and 6% during the years ended December 31, 2023 and 2022, respectively. At December 31, 2022,
the Company had an asset retirement obligation and an accrued reclamation liability of $332,011, which included accrued reclamation liabilities for Montana and Idaho
totaling $107,500.
NOTE 8 – DEBT
Long term debt at December 31, 2023 and December 31, 2022 was as follows:
Promissory note payable to First Security Bank of Missoula, bearing interest at 2.25%, payable in 59 monthly installments of
$1,409 with a final payment of $152,726 maturing November 9, 2026; collateralized by a lien on Certificate of Deposit
Installment contract payable to Caterpillar Financial Services, bearing interest at 6.65%, payable in 24 monthly installments of
$7,210 maturing April 28, 2024; collateralized by 2007 Caterpillar 740 articulated truck
Total debt
Less current portion of debt
Long term portion of debt
$
$
$
At December 31,
2023
2022
-
$
201,908
28,443
28,443 $
(28,443)
- $
110,097
312,005
(94,150)
217,855
The Company paid off the promissory note payable to First Security Bank in the fourth quarter of 2023 with no prepayment penalty. The principal payments owed
Caterpillar Financial Services of $28,443 at December 31, 2023 will be due in 2024.
F-16
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 – INCOME AND OTHER TAXES
Income tax expense for the years ended December 31, 2023 and 2022 consisted of the following:
Current income tax expense:
Domestic
Foreign
Total current
Deferred income tax expense:
Domestic
Foreign
Total deferred
Total income tax expense
2023
2022
- $
-
-
-
-
-
- $
16,073
-
16,073
-
-
-
16,073
$
$
Domestic and foreign components of income (loss) before income taxes for the years ended December 31, 2023 and 2022 were as follows:
Domestic
Foreign
Income (loss) before income taxes
2023
(397,156) $
(5,951,131)
(6,348,287) $
2022
2,729,793
(2,285,059)
444,734
$
$
The income tax expense (benefit) differs from the amount of income tax determined by applying the U.S. federal income tax rate to pre-tax income (loss) for the years
ended December 31, 2023 and 2022 due to the following:
U.S. federal statutory tax provision (benefit)
State income tax provision (benefit) net
Foreign taxes
VAT refund reserve and other non-deductible items
Adjustment for prior year tax estimate to actual-domestic
Adjustment for prior year tax estimate to actual-foreign
Impact on change in state tax rate
Impact on change in foreign exchange rate
Change in valuation allowance - Domestic
Change in valuation allowance - Foreign
Total income tax expense
F-17
2023
(1,333,000) $
(88,000)
(536,000)
1,008,000
(7,000)
136,000
-
(275,000)
170,000
925,000
- $
2022
93,073
67,000
(136,000)
4,000
69,000
(32,000)
7,000
(83,000)
(358,000)
385,000
16,073
$
$
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
At December 31, 2023 and 2022, the Company had net deferred tax assets and liabilities as follows:
Deferred tax asset:
Domestic net operating loss carry forward
Foreign net operating loss carry forward
Allowance for doubtful accounts
Other
Deferred tax asset
Valuation allowance (domestic)
Valuation allowance (foreign)
Total deferred tax asset
Deferred tax liability:
Property, plant, and equipment
Other
Total deferred tax liability
Net deferred tax asset after valuation allowance
2023
2022
646,000 $
2,883,000
64,000
5,000
3,598,000 $
307,000
1,958,000
7,000
-
2,272,000
(228,000)
(2,883,000)
487,000 $
(58,000)
(1,958,000)
256,000
(487,000)
-
(487,000) $
(245,000)
(11,000)
(256,000)
- $
-
$
$
$
$
$
At December 31, 2023 and 2022, the Company had deferred tax assets arising principally from net operating loss carry forwards for income tax purposes. As
management cannot determine that it is more likely than not the benefit of the net deferred tax asset will be realized, a valuation allowance equal to 100% of the net
deferred tax asset has been recorded at December 31, 2023 and 2022.
At December 31, 2023, the Company has federal net operating loss (“NOL”) carry forwards of approximately $1.66 million, $1.61 million of which will never expire but is
limited to offsetting up to 80% of taxable income in any future year, and $0.05 million of which will expire at the end of 2037 but is not limited regarding offsetting
taxable income in future years. The Company has Montana state NOL carry forwards of approximately $4.2 million which expire between 2024 and 2030, and Idaho
state NOL carry forwards of approximately $1.7 million, which expire between 2034 and 2043. The Company has approximately $9.6 million of Mexican NOL carry
forwards which expire between 2025 and 2033. All carryforwards in all jurisdictions are subject to certain limitations.
During the years ended December 31, 2023 and 2022, there were no material uncertain tax positions taken by the Company. The Company’s United States income tax
filings are subject to examination for the years 2020 through 2022 and for the years 2019 through 2023 in Mexico. However, for tax attributes from prior years, the
statute remains open. The Company charges penalties on assessments to general and administrative expense and charges interest to interest expense.
F-18
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Mexican Tax Assessment
In 2015, the Mexican tax authority (“SAT”) initiated an audit of the USAMSA’s 2013 income tax return. In October 2016, as a result of its audit, SAT assessed the
Company $13.8 million pesos, which was approximately $666,400 in U.S. Dollars (“USD”) as of December 31, 2016. SAT’s assessment was based on the disallowance
of specific costs that the Company deducted on the 2013 USAMSA income tax return. The assessment was settled in 2018 with no assessment due from the
Company.
In early 2019, the Company was notified that SAT re-opened its assessment of USAMSA’s 2013 income tax return and, in November 2019, SAT assessed the
Company $16.3 million pesos, which was approximately $795,000 USD as of December 31, 2021.
Management reviewed the 2019 assessment notice from SAT and, similar to the earlier assessment, believes the findings have no merit. An appeal was filed by the
Company in November 2019 suspending SAT from taking immediate action regarding the assessment. The Company posted a guarantee of the amount in March 2020
as is required under the appeal process. In August 2020, the Company filed a lawsuit against SAT for resolution of the process and, in December 2020, filed closing
arguments. In 2022, the Mexican court ruled against the Company in the above matter. The Company subsequently appealed the ruling.
As of December 31, 2023, the updated SAT assessment was approximately $22.4 million pesos, or approximately $1,320,000 USD, which includes $352,000 of unpaid
income taxes and $968,000 of interest and penalties. Management, along with its legal counsel, assessed the possible outcomes for this tax audit and believes, based
on discussions with its attorneys located in Mexico, that the most likely outcome will be that the Company will be successful in its appeal resulting in no tax due.
Management determined that no amount should be accrued at December 31, 2023 or December 31, 2022 relating to this potential tax liability.
In March 2024, the Company received a favorable ruling from its appeal with no assessment due related to this audit of USAMSA’s 2013 income tax return by SAT.
This ruling supports the Company’s position on this tax matter and has no impact on the Company’s financial statements at December 31, 2023. Mexico’s lower court
will issue a final ruling on this matter as to whether this decision can be appealed.
Mexico Value Added Tax
USAMSA, which is part of the Mexico Antimony Segment, records a receivable for the Value Added Tax (“VAT” or “IVA”) it pays on certain goods and services as
it should be reimbursed from the Mexican government. USAMSA has a reserve of $687,534 and $nil on its IVA receivable balance at December 31, 2023 and 2022,
respectively. The net IVA receivable of $435,094 and $526,536 at December 31, 2023 and 2022, respectively, is recorded in “IVA receivable and other assets, net” in
the Consolidated Balance Sheet.
NOTE 10 – COMMITMENTS AND CONTINGENCIES
Historically, from time to time, the Company is assessed fines and penalties by the Mine Safety and Health Administration (“MSHA”). Using appropriate regulatory
channels, management may contest these proposed assessments. At December 31, 2023 and December 31, 2022, the Company had no accrued liabilities relating to
such assessments. However, in 2023, Bear River Zeolite Company (“BRZ”), a wholly owned subsidiary of the Company, received fourteen significant and substantial
citations and three orders from MSHA, all of which have been rectified by BRZ prior to the filing of this Annual Report.
On a combined basis, BRZ pays royalties ranging from 8% to 13% on the sale of zeolite products. At December 31, 2023 and 2022, the Company had accrued royalties
payable of $153,429 and $435,075, respectively.
F-19
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On August 8, 2022, USAMSA executed a preliminary Purchase Option Agreement (the “Agreement”) with SB Wadley SA de CV (“Wadley”) whereby USAMSA
leases, with an option to acquire, mining claims located in Mexico known as the Wadley Property. Under the Agreement, USAMSA agreed to pay Wadley eight
monthly installments of $10,000 plus VAT for the right to mine and conduct geological and resource studies as due diligence and exploration on the Wadley Property.
At the end of such eight-month period, should USAMSA choose to exercise its option to acquire following due diligence and assessment of geological and resource
studies, USAMSA agreed to pay Wadley $2,230,000 and seven annual payments of $1,160,000. The due diligence period under the Agreement was extended to
October 15, 2023. After evaluation in October 2023 of Wadley Property information and the Agreement, USAMSA officially notified Wadley on October 12, 2023 that
it did not intend to acquire the Wadley Property and terminated this Agreement. During the fourth quarter of 2023, USAMSA, which is part of the Mexico Antimony
Segment, recorded a loss on disposal of assets of approximately $130,000 related to the termination of this Agreement.
NOTE 11 – STOCKHOLDERS’ EQUITY
Issuance of Common Stock
On August 24, 2022, the Company issued 132,980 shares of common stock to the board of directors to satisfy the stock payable to directors for their board services
that were outstanding and accrued at December 31, 2021. The number of shares issued was based on the amount of board service fees due of $62,501 divided by the
market price of the Company’s common shares on the date of issuance.
On January 25, 2023, the holders of 1,692,672 shares of Series D Preferred stock, which represents all outstanding shares of Series D Preferred Stock, converted their
respective preferred shares and the Company issued 1,692,672 shares of common stock. The Company also paid the holders $787,730 on January 18, 2023 for
dividends payable as declared on November 28, 2022. 1,590,672 shares of the 1,692,672 shares of Series D Preferred stock that were converted and $740,261 of the
$787,730 of dividends paid related to the estate of John Lawrence, who was a prior President and Chairman of the Company.
On January 26, 2023, in conjunction with its share repurchase plan, the Company returned to treasury and cancelled 418,696 of its common shares which were
repurchased prior to December 31, 2022 for $202,980.
Common Stock Warrants
No warrants were issued, expired, or exercised during the years ended December 31, 2023 and 2022, other than 143,707 warrants with an exercise price of $0.65 expired
on August 12, 2022.
The composition of the Company’s warrants outstanding at December 31, 2023 and 2022 were as follows:
Number of warrants
Exercise Price
2,285,715
804,000
7,650,000
1,606,500
12,346,215
0.46
0.46
0.85
0.85
F-20
Expiration Date
7/31/2025
1/27/2026
8/3/2026
2/1/2026
Remaining life (years)
1.58
2.08
2.59
2.09
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Preferred Stock
The Company’s Articles of Incorporation authorize 10,000,000 shares of $0.01 par value preferred stock available for issuance with such rights and preferences,
including liquidation, dividend, conversion, and voting rights, as the Board of Directors may determine.
Series B
In 1993, the Board established a Series B preferred stock, consisting of 750,000 shares. The Series B preferred stock has preference over the Company’s common
stock and Series A preferred stock (none of which are outstanding); has no voting rights (absent default in payment of declared dividends); and is entitled to
cumulative dividends of $0.01 per share per year, payable if and when declared by the Board of Directors. During each of the years ended December 31, 2023 and
2022, the Company recognized $7,500 in Series B preferred stock dividend. In the event of dissolution or liquidation of the Company, the preferential amount payable
to Series B preferred stockholders is $1.00 per share plus dividends in arrears. No dividends have been declared or paid with respect to the Series B preferred stock.
The Series B Preferred stock is no longer convertible to shares of the Company’s common stock. At December 31, 2023 and 2022, cumulative dividends in arrears on
the outstanding Series B shares were $217,500 and $210,000, respectively.
Series C
In 2000, the Board established a Series C preferred stock. The Series C preferred stock has preference over the Company’s common stock and has voting rights equal
to that number of shares outstanding, but no conversion or dividend rights. In the event of dissolution or liquidation of the Company, the preferential amount
payable to Series C preferred stockholders is $0.55 per share.
Stock Repurchase Program
On November 21, 2022 the Board of Directors of the Company approved a stock repurchase program under which management is authorized to repurchase up to
5,000,000 shares of the Company’s outstanding common stock. Repurchases under the program may be made occasionally, as the Company deems appropriate,
based on a variety of factors such as share price, capital position, liquidity, financial performance, alternative uses of capital and overall market conditions.
NOTE 12 – 2023 Equity Incentive Plan
In December 2023, the shareholders of the Company approved United States Antimony Corporation’s 2023 Equity Incentive Plan (“the Plan”). The Plan provides for
the grant of incentive stock options and non-qualified stock options to purchase shares of our common stock and other types of awards. The general purpose of the
Equity Incentive Plan is to provide a means whereby eligible employees, officers, non-employee directors and other individual service providers develop a sense of
proprietorship and personal involvement in our development and financial success, and to encourage them to devote their best efforts to our business, thereby
advancing our interests and the interests of our shareholders. By means of the Equity Incentive Plan, we seek to retain the services of such eligible persons and to
provide incentives for such persons to exert maximum efforts for our success and the success of our subsidiaries. The maximum number of shares of common stock
available for issuance in connection with options and other awards granted under the Equity Incentive Plan is 8,700,000. At December 31, 2023, no shares had been
issued under the Plan.
F-21
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 – BUSINESS SEGEMENTS
The Company is organized and managed via four segments, which represent our operating units: United States antimony operations, Mexico antimony operations,
precious metals recovery operations, and United States zeolite operations.
Total assets by segment at December 31, 2023 and 2022 were as follows:
Total Assets:
Antimony segment:
United States total assets
Mexico total assets
Subtotal antimony segment
Precious metals segment:
United States total assets
Mexico total assets
Subtotal precious metals segment
Zeolite segment
Total Assets
Total capital expenditures by segment for the years ended December 31, 2023 and 2022 were as follows:
Capital expenditures
Antimony segment:
United States capital expenditures
Mexico capital expenditures
Subtotal antimony segment
Precious metals segment
Zeolite segment
TOTAL CAPITAL EXPENDITURES
F-22
December 31, December 31,
2023
2022
$
$
$
$
$
14,769,408 $
7,132,885
21,902,293 $
92,718 $
625,974
718,692 $
5,474,010
28,094,995 $
21,636,386
8,484,131
30,120,517
172,004
625,292
797,296
3,782,637
34,700,450
December 31, December 31,
2023
2022
$
$
$
61,851 $
182,321
244,172 $
-
1,284,500
1,528,672 $
81,931
324,961
406,892
17,518
1,463,605
1,888,015
Table of Contents
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Selected segment operational information for the years ended December 31, 2023 and 2022 were as follows:
Segment operations for the year ended December 31, 2023
Total revenues
Depreciation and amortization
Income (loss) from operations
Other income (expense)
Income tax expense
NET INCOME (LOSS)
Segment operations for the year ended December 31, 2022
Total revenues
Depreciation and amortization
Income (loss) from operations
Other income (expense)
Income tax expense
NET INCOME (LOSS)
NOTE 14 – SUBSEQUENT EVENTS
Antimony Antimony
Total
Precious
USA Mexico Antimony Metals
Zeolite
Total
5,416,092
39,328
488,388 5,904,480
590,011
550,683
(662,326) (5,857,872) (6,520,198)
326,496 2,462,179 8,693,155
258,741
110,693
959,445
(764,606) (7,069,001)
215,803
720,714
-
(6,348,287)
Antimony Antimony
Total
Precious
USA Mexico Antimony Metals
Zeolite
Total
6,803,848
40,978
827,822 7,631,670
630,855
589,877
22,590
2,307,649 (2,285,059)
261,707 3,151,330 11,044,707
909,220
167,825
110,540
348,205
174,448
151,167
96,529
(16,073)
428,661
The Company has two subsidiaries in Mexico, US Antimony de Mexico, S.A. de C.V. (“USAMSA”) and Antimonio de Mexico, S.A. de C.V. (“ADM”). On March 11,
2024, the Company shut down the operations of USAMSA, terminated a majority of USAMSA employees, the cost of which related to this employee termination was
approximately $40,000, and announced its plans to sell, lease, or dispose of its USAMSA subsidiary, operations, or assets. The USAMSA subsidiary primarily
includes the Company’s Madero antimony and precious metals plant in Parras de la Fuente Coahuila, Mexico and its Puerto Blanco antimony and precious metals
plant in San Luis de la Paz Guanajuato, Mexico. The Company intends to sell or lease its USAMSA subsidiary, operations, or assets over the next year and has
initiated an active search for buyers or leasing opportunities of its operations and/or existing assets. The Company will maintain its existing Los Juarez mining claims
and concessions in Cadereyta de Montes Queretaro, Mexico, which are included in our ADM subsidiary. There are presently no active operations at Los Juarez.
In March 2024, the Company received a favorable ruling from its appeal with no assessment due related to this audit of USAMSA’s 2013 income tax return by SAT.
This ruling supports the Company’s position on this tax matter and has no impact on the Company’s financial statements at December 31, 2023. Mexico’s lower court
will issue a final ruling on this matter as to whether this decision can be appealed.
F-23
Table of Contents
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of disclosure controls and procedures
As of the end of the period covered by this Annual Report, an evaluation was carried out under the supervision of and with the participation of our management,
including the principal executive officer and the principal financial officer of the effectiveness of the design and operations of our disclosure controls and procedures
(as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the principal
executive officer and the principal financial officer have concluded that our disclosure controls and procedures were not effective in ensuring that: (i) information
required to be disclosed by the Company in reports that it files or submits to the SEC under the Exchange Act is recorded, processed, summarized, and reported
within the time periods specified in applicable rules and forms, and (ii) material information required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for accurate and
timely decisions regarding required disclosure.
Disclosure controls and procedures were not effective due primarily to a material weakness in the segregation of duties in the Company’s internal control of financial
reporting as discussed below.
Internal control over financial reporting
Management’s annual report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the
reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of our company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made
only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
Management assessed our internal control over financial reporting as of December 31, 2023, the end of our fiscal year. Management based its assessment on criteria
established
in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013).
Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process
documentation, accounting policies, and our overall control environment.
Based on our assessment, management has concluded that our internal control over financial reporting was not effective, as of the end of the fiscal year, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with
generally accepted accounting principles, because management identified a material weakness in the Company’s internal control over financial reporting related to the
segregation of duties. This is due primarily to the limited staff and small size of the Company, although internal controls have improved over the fiscal year with the
replacement of the chief financial officer and controller.
While the Company does adhere to internal controls and processes that were designed and implemented to be effective, it is difficult with a very limited staff to
maintain appropriate segregation of duties in the initiating and recording of transactions, thereby creating a segregation of duties weakness. Due to: (i) the
significance of segregation of duties to the preparation of reliable financial statements; (ii) the significance of potential misstatement that could have resulted due to
the deficient controls; and (iii) the absence of sufficient other mitigating controls, we determined that this control deficiency resulted in more than a remote likelihood
that a material misstatement or lack of disclosure within the annual or interim financial statements may not be prevented or detected.
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Table of Contents
Management’s Remediation Initiatives
Management has evaluated, and continues to evaluate, avenues for mitigating our internal controls weaknesses, but mitigating controls to completely mitigate
internal control weaknesses have been deemed to be impractical and prohibitively costly, due to the size of our organization at the current time. Management expects
to continue to use reasonable care in following and seeking improvements to effective internal control processes that have been and continue to be in use at the
Company. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or
fraud will not occur or that all control issues within the Company have been detected. These inherent limitations include the realities that judgments in decision-
making can be faulty and that breakdowns can occur because of simple errors or mistakes. The design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks.
Management’s remediation initiatives include replacing the Company’s chief financial officer and controller with experienced personnel in these areas. These
personnel have experience with public company financial reporting and designing and implementing effective internal control environments. Our chief financial officer
was trained as an auditor and an information technology auditor at the public accounting firm of Ernst & Young LLP, and audited public companies, information
technology departments, and third-party information technology service providers for 12 years. He has also implemented, documented and tested multiple internal
control environments over his career. The Company has also added Board members to its audit committee who have extensive background in publicly traded
companies and governance.
The Company implemented several initiatives related to internal controls including implementing software designed to enhance segregation of duties, workflow
authorization, and payment processing. Also, the Company implemented a cloud-based folder system with controls for sharing, organizing, training, protecting, and
storing its data. Further, the Company is evaluating other cloud-based financial reporting applications which allow for increased collaboration, transparency and
review of financial reporting, including with respect to the preparation of statutory reporting.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 15d-15(f) under the Exchange Act) that occurred during our most recent
quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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Table of Contents
Item 10. Directors, Executive Officers and Corporate Governance
Executive Officers and Directors
PART III
The following sets forth certain information related to our executive officers and directors as of March 18, 2024:
Name
Gary C. Evans
Lloyd Joseph Bardswich
Jeffrey Fink
John C. Gustavsen
Richard R. Isaak
David Welch
Dr. Blaise Aguirre
Joseph A. Carrabba
Michael A. McManus
Position
Age
67
79
39
75
56
65
59
71
80
Co-CEO and Chairman (Co-PEO)
Co-CEO and Director (Co-PEO)
VP & General Manger of BRZ
President of Antimony Division
SVP, Chief Financial Officer (PFO)
Controller
Director
Director
Director
Business Experience of Executive Officers and Directors
Gary C. Evans – Co-CEO & Chairman – Gary C. Evans joined the Board of Directors in November 2022 and has served as Chairman of our Board since July 2023
and Co-CEO since March 2024. He is a serial entrepreneur. Throughout his career, he has taken three separate energy companies public on the NYSE. At present, he
has served since 2016 as Chairman of the Board and Chief Executive Officer, and is the largest shareholder of Evergreen Sustainable Enterprises, Inc. ("Evergreen").
Mr. Evans launched Evergreen as an evolution from his hemp company, Generation Hemp, Inc, while developing diversified green energy plants designed to use
hemp biomass as biofuel to generate power to mine Bitcoin. Throughout his career, Mr. Evans has raised various forms of capital on Wall Street that have exceeded
$7 billion. Mr. Evans has previously served for 24 years as a Director of Novavax Inc. (Nasdaq: “NVAX”), a clinical-stage vaccine biotechnology company involved
in the development of COVID-19 vaccines, which achieved a market capitalization in excess of $18 billion during the pandemic, where he also previously served as
Chairman, CEO and Lead Director. He has extensive experience in the public and private financial business sectors as well as entrepreneurial expertise in start-up
enterprises to multi-billion-dollar corporations. Additionally, Gary C. Evans has a history of successful dealings with investor relations and financial institutions. Mr.
Evans was recognized by Ernst and Young as the Southwest Area 2004 Entrepreneur of the Year for the Energy Sector and was subsequently inducted into the
World Hall of Fame for Ernst & Young Entrepreneurs. Mr. Evans was also recognized as the Energy Industry Leader of the year in 2013 and chosen by Finance
Monthly in 2013 as one of the most respected CEO's. Mr. Evans was chosen as the Best CEO in the "Large Company" category by Texas Top Producers in 2013. He
additionally won the Deal Maker of the Year Award in 2013 by Finance Monthly. Mr. Evans serves on the Board of the Maguire Energy Institute at Southern
Methodist University and now speaks on the current affairs of the hemp industry at hemp industry conferences, on radio networks, and podcasts.
Lloyd Joseph Bardswich – Co-CEO & Director - Lloyd Joseph Bardswich, who joined the Board of Directors in February 2021 and who also has served as Co-CEO
since March 2024, has extensive experience in mining, mining engineering, management, drilling, metallurgy and plant design. He is a registered Professional Mining
Engineer and can serve as a QP (Qualified Person) regarding reporting to NI43-101 standards and has worked as a Mine Safety Engineer, Mine Foreman, Mine
Manager and Mining Consultant. Since July 15, 2015, he has served as President of L.J. Bardswich Mine Consultant Inc., a Montana S corporation which provides
consulting services to the mining industry. He also presently serves as the President of Golden Vertex Corp. the who owned (Arizona C Corporation) subsidiary of
Elevation Gold Mining Corporation (TSXV -ELVT), from July 10, 2017. He also served as a director of Northern Vertex Mining Corporation (TSXV-NEE) from 2010 to
February 2021, when Northern Vertex Mining Corporation (TSXV -NEE) acquired Eclipse Gold Mining Corporation (EGLD - TSXV). On September 24, 2021, Northern
Vertex Mining Corporation (TSXV -NEE) changed its name to Elevation Gold Mining Corporation TSXV-ELVT. (OTC: NHVCD). He also presently serves as President
and as a Director of Frisco Gold Corporation, an Arizona S corporation, since October 14, 2019, to the present.
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Table of Contents
Jeffrey Fink – VP & General Manager of Bear River Zeolite – Jeffrey Fink has served as VP & General Manager of Bear River Zeolite since January 2024. He
recently worked at Enviva Biomass as Regional Director of Operations, responsible for all aspects of manufacturing operations for three pellet manufacturing mills
with about 300 employees. Prior to Enviva, Jeff was Vice President of Operations at US Minerals where he led all manufacturing operations at five plants located
throughout the U.S. Accomplishments included reducing direct per ton production costs and closing unprofitable businesses. Jeff holds a degree in Mechanical
Engineering (Magna Cum Laude) and a master's in business administration, both from Virginia Tech University. He also holds several relevant industry licenses.
John C. Gustavsen –President of Antimony Division - John C. Gustavsen has served as President of our Antimony Division since March 2024. He joined the
Company in November 2011 as one of its Vice Presidents and, from June 2020 to March 2024, served as our Chief Executive Officer. He also served on our Board of
Directors from August 2022 to August 2023. He graduated from Rutgers University in 1970 with a BS in chemistry and started work for Harshaw Chemical (purchased
by Amspec Chemical Corporation), a major producer of antimony trioxide, where he became president and treasurer in 1983 and was promoted to CEO in 1990.
Richard R. Isaak – SVP, Chief Financial Officer – Richard R. Isaak has served as the Company’s SVP, Chief Financial Officer since July 2023. Rick started his career
at Ernst & Young as a CPA in the assurance and advisory business services area for 12 years with extensive experience with managing public company audits and
SEC reporting primarily for large, multinational companies. After Ernst & Young, Rick served in several senior leadership roles including CFO, Chief Accounting
Officer, Controller, Treasurer, and Head of Investor Relations at four different companies over 20 years.
David Welch – Controller – David Welch has served as our Controller since August 2023. He has extensive experience working in the accounting and finance
departments, which includes all areas of the monthly financial close process, of multiple types of businesses. Over the past nine years, he worked in the finance
department of organization in the mining, non-profit, and banking industries.
Dr. Blaise Aguirre – Director – Dr. Blaise Aguirre, who joined the Board of Directors in August 2019, is an Assistant Professor of Psychiatry at Harvard Medical
School and is the founding Medical Director of 3East at McLean Hospital in Belmont, Massachusetts. In 2011, Mr. Aguirre was elected to the Board of Directors at
Investors Capital Holdings, Ltd, and remained on the Board until it was sold to RCS Capital Corporation. In addition, Dr. Aguirre sits on the boards of various
privately held companies. He has developed and maintained relationships with institutional money managers, venture capitalists, angel investors and has developed
expertise as a small cap stock analyst as a broker with series 7 and 63 securities licenses. He received his Medical Doctor’s degree in 1989 from the University of
Witwatersrand, Johannesburg, South Africa, and performed his residency at Boston University School of Medicine from 1991 to 1994.
Joseph A. Carrabba – Director – Joseph A. Carrabba joined the Board of Directors in February 2024. He is the Retired Chairman, President and Chief Executive
Officer of Cliffs Natural Resources, Inc., formerly Cleveland-Cliffs, Inc., from May 2007 to November 2013. He also previously served as Cliffs President & CEO from
2006 to 2007 and as President and Chief Operating Officer from 2005 to 2006. Prior to these executive positions, Mr. Carrabba previously served as President and Chief
Operating Officer of Diavik Diamond Mines from 2003 to 2006. He serves or has previously served on the boards of several other NYSE listed companies including
Newmont Mining and Timken Steel, as well as several TSX listed companies, AECON and NioCorp.
Michael A. McManus – Director – Michael A. McManus joined the Board of Directors in August 2023. He is a recognized leader and builder of enterprises with
successes as a public company CEO, senior government experience, a lawyer, new product development leader, and has served as a board member of several
companies. He served as a board member of Novavax, a biotechnology company committed to help address serious infectious diseases globally through the
discovery, development, and delivery of innovative vaccines to patients around the world. Mr. McManus has previously served as president, chief executive officer,
and director at Misonix, Inc., a medical, scientific, and industrial provider of ultrasonic and air pollution systems, since 1998. Prior to that tenure, he was president and
chief executive officer at New York Bancorp Inc. from 1991 to 1998. From 1990 through November 1991, Mr. McManus was president and chief executive officer at
Jamcor Pharmaceuticals Inc. Previously, Mr. McManus served as an assistant to the President of the United States from 1982 to 1985 and held positions with Pfizer
Inc. and Revlon Group. Mr. McManus received a BA in economics from the University of Notre Dame and a JD from the Georgetown University Law Center. He
served in the US Army Infantry from 1968 through 1970. He is also a recipient of the Ellis Island Medal of Honor.
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Legal Proceedings
We are not aware of any involvement by our directors or executive officers during the past ten years in legal proceedings that are material to an evaluation of the
ability or integrity of any director or executive officer.
Corporate Governance
Our Board directs the management of our business and affairs and conducts its business through meetings of the Board and standing committees. We have a
standing audit committee, compensation committee and corporate governance and directors’ nominating committee. The Board previously had an executive
committee, which was dissolved on February 2, 2023. The Board has determined that three of our five directors, Blaise Aguirre, Michael McManus, and Joseph
Carrabba, are “independent” within the meaning of applicable NYSE American and SEC standards for service on the Board of an NYSE American listed company.
During the year ended December 31, 2023, the Board of Directors held eleven meetings.
Audit Committee
We have a standing Audit Committee and audit committee charter, which complies with Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and the requirements of the NYSE American. The Audit Committee consists of Michael McManus, Blaise Aguirre, and Joseph Carrabba, each of
whom is independent (in accordance with Rule 10A-3 of the Exchange Act and the requirements of Section 803A of the NYSE American Company Guide) and
financially sophisticated (pursuant to the requirements of Section 803B of the NYSE American Company Guide). Mr. McManus satisfies the requirement of an “audit
committee financial expert” as defined under Item 407(d)(5) of Regulation S-K.
Our Audit Committee meets with our management and our external auditors to review matters affecting financial reporting, the system of internal accounting and
financial controls and procedures and audit procedures and audit plans. Our Audit Committee reviews our significant financial risks and is involved in the
appointment of senior financial executives.
Our Audit Committee monitors our audit and the preparation of financial statements, and all financial disclosures contained in our SEC filings. Our Audit Committee
appoints our external auditors, monitors their qualifications and independence, and determines the appropriate level of their remuneration. The external auditors
report directly to the Audit Committee. Our Audit Committee can terminate our external auditors’ engagement and approve in advance any services provided by them
that are not related to the audit.
During the fiscal year ended December 31, 2023, the Audit Committee met five times. A copy of the Audit Committee charter is available on our website at
www.usantimony.com.
Compensation Committee
Our Compensation Committee is composed of the following directors, each of whom is independent (under Section 803A of the NYSE American Company Guide):
Blaise Aguirre, Michael McManus, and Joseph Carrabba.
We have a Compensation Committee charter that complies with the requirements of the NYSE American. Our Compensation Committee is responsible for considering
and authorizing terms of employment and compensation of executive officers and providing advice on compensation structures in the various jurisdictions in which
we operate. Our Chief Executive Officer may not be present during the voting determination or deliberations of his or her compensation; however, our Compensation
Committee does consult with our Chief Executive Officer in determining and recommending the compensation of directors and other executive officers.
In addition, our Compensation Committee reviews both our overall salary objectives and significant modifications made to employee benefit plans, including those
applicable to executive officers, and proposes awards of stock options, if any. The Compensation Committee has determined that the Company’s compensation
policies and practices for its employees generally, not only with respect to executive officers, are not reasonably likely to encourage behavior that would create an
abnormal amount of risk to the Company.
The Compensation Committee does not and cannot delegate its authority to determine director and executive officer compensation.
During the fiscal year ended December 31, 2023, the Compensation Committee met two times. A copy of the Compensation Committee charter is available on our
website at www.usantimony.com.
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Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee is composed of the following directors, each of whom is independent as determined under Section 803A of the
NYSE American Company Guide: Joseph Carrabba, Michael McManus, and Blaise Aguirre.
Our Nominating and Corporate Governance Committee is responsible for developing our approach to corporate governance issues. The Committee evaluates the
qualifications of potential candidates for director positions and recommends to the Board nominees for election at the next annual meeting or any special meetings of
shareholders, and any person to be considered to fill a Board vacancy resulting from death, disability, removal, resignation or an increase in Board size. The
Committee’s charter describes the criteria the Board will assess in connection with the consideration of a candidate, including the candidate’s integrity, reputation,
judgment, knowledge, independence, experience, accomplishments, commitment and skills, all in the context of an assessment of the perceived needs of the Board at
that time.
We do not have a formal policy regarding diversity in the selection of nominees for directors. The Nominating and Corporate Governance Committee does, however,
consider diversity as part of its overall selection strategy. In considering diversity of the Board as a criterion for selecting nominees, the Nominating and Corporate
Governance Committee considers various factors and perspectives, including differences of viewpoint, professional experience, education, personal and professional
skills and other individual qualities and attributes that contribute to Board heterogeneity, as well as race, gender and national origin. The Nominating and Corporate
Governance Committee seeks persons with leadership experience in many contexts. The Nominating and Corporate Governance Committee believes that this
conceptualization of diversity is the most effective means to implement Board diversity. The Nominating and Corporate Governance Committee will assess the
effectiveness of this approach as part of its annual review of its charter.
The Committee will consider recommendations for director nominees made by shareholders and others if these individuals meet the criteria set forth in the
Committee’s charter. For consideration by the Committee, the nominating shareholder or other person must provide the Corporate Secretary’s Office with information
about the nominee, including a detailed background of the suggested candidate that will demonstrate how the individual meets our director nomination criteria. If a
candidate proposed by a shareholder meets the criteria, the individual will be considered on the same basis as other candidates. No shareholder or shareholders
holding 5% or more of our outstanding stock, either individually or in aggregate, has recommended a nominee for election to the Board.
During the fiscal year ended December 31, 2023, the Nominating and Corporate Governance Committee met four times. A copy of the Nominating and Corporate
Governance Committee charter is available on our website at www.usantimony.com.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors and executive officers and the holders of 10% or more of our common stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers, directors and stockholders holding more than 10% of our common stock are required
by the regulation to furnish us with copies of all Section 16(a) forms they have filed.
Based solely on our review of copies of Forms 3, 4 and 5 filed with the SEC during or relating to 2023 and written representations provided to the Company, the
Company has determined that Richard R. Isaak filed his Form 3 late in an earlier fiscal period, Michael McManus and Joseph Carrabba have failed to file their Form
3’s, and former director Hart Baitis and former officer Kelly Stopher failed to file their Form 3’s.
Code of Ethics
The Company has adopted a Code of Ethics that applies to the Company’s directors, officers, and employees, including our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code is available on our corporate website, at
https://www.usantimony.com. We intend to disclose any amendment to, or waiver from, a provision of the code of business conduct that applies to our principal
executive officer, principal financial officer or principal accounting officer or controller on our corporate website. The information on any of our websites is deemed
not to be incorporated in this Annual Report or to be part of this Annual Report.
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Item 11. Executive Compensation.
This section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary Compensation
Table” below. We comply with the executive compensation disclosure rules applicable to “smaller reporting companies,” as such term is defined in the rules
promulgated under the Securities Act, which require compensation disclosure for our principal executive officer during the year ended December 31, 2023, the two
most highly compensated executive officers other than our principal executive officer who were serving as executive officers as of December 31, 2023 and whose total
compensation for 2023 exceeded $100,000, and up to two additional individuals for whom disclosure would have been provided but for the fact that the individual
was not serving as an executive officer as of December 31, 2023. These officers are referred to as our named executive officers.
In 2023, our “named executive officers” and their positions were as follows:
·
·
·
John C. Gustavsen, President of Antimony Division (PEO during the year ended December 31, 2023); and
Richard R. Isaak, SVP, Chief Financial Officer
Kelly Stopher, former Chief Financial Officer
Summary Compensation Table
The following table provides summary information concerning compensation paid or accrued by us to or on behalf of our named executive officers:
Name and Principal Position
John C. Gustavsen, President of Antimony Division
Richard R. Isaak, SVP, Chief Financial Officer
Kelly J. Stopher, Chief Financial Officer (2)
Other
Compensation
(1)
Stock
Awards
Salary
140,994 $
111,250 $
100,000 $
10,642 $
11,405 $
10,667 $
107,692 $
1,958 $
115,080 $
72,000 $
6,000 $
- $
- $
- $
Year
2023
2022
2021
2023
2023
2022
2021
$
$
$
$
$
$
$
Total
151,636
122,655
110,667
109,650
115,080
72,000
6,000
- $
- $
- $
- $
- $
- $
- $
Other compensation represents health insurance costs paid by the Company.
(1)
(2) Mr. Stopher resigned as CFO of the Company effective July 31, 2023.
Compensation for all executive officers, except for the CEO position, is recommended to the compensation committee of the Board by the CEO. The compensation
committee makes a recommendation for the compensation of the CEO. The compensation committee has identified a peer group of mining companies to aid in
reviewing the CEO’s compensation recommendations for executives, and for reviewing the compensation of the CEO. The full Board approves the compensation
amounts recommended by the compensation committee. Currently, the executive managements’ compensation only includes base salary and health insurance. For
the year ended December 31, 2023, the Company did not have annual performance-based salary increases, long term performance-based cash incentives, deferred
compensation, retirement benefits, or disability benefits. However, the Company has started annual performance-based salary increases and equity incentive awards
in 2024.
No equity awards or plan based awards to officers or directors were outstanding as of December 31, 2023.
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Table of Contents
Director Compensation
Following is a summary of all compensation earned by or paid to directors (excluding named executive officers) during the year ended December 31, 2023:
Name and Principal Position
Gary C. Evans, Co-CEO and Chairman
Lloyd Joseph Bardswich, Co-CEO and Director
Dr. Blaise Aguirre, Director
Michael A. McManus, Director
Fees Earned
paid in Cash
Fees Earned paid
in Stock
Total Fees,
Awards and
Other
Compensation
$
$
$
$
150,612 $
95,460 $
91,877 $
54,067 $
- $
- $
- $
- $
150,612
95,460
91,877
54,067
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth information regarding beneficial ownership of our common stock as of March 18, 2024 by (i) each person who is known by us to
beneficially own more than 5% of our Series B and C preferred stock or common stock; (ii) each of our named executive officers and directors; and (iii) all of our
executive officers and directors as a group. Unless otherwise stated, each person's address is c/o United States Antimony Corporation, P.O. Box 643, 47 Cox Gulch,
Thompson Falls, Montana 59873.
Title of Class of Stock
Name and Address of Beneficial Owner (1)
More than 5% owners:
Common Stock
Common Stock
Common Stock
Common Stock
Series B Preferred
Series C Preferred
Series C Preferred
Series C Preferred
Series C Preferred
Russell Lawrence, 1500 Johnson Road, Deary, ID 83823
Creative Planning, LLC, 5454 W. 110th Street Overland Park, KS
66211
Kenneth M Reed, 4 Betsy Lane, Dover, MA 02030
Lydia Dugan & Patrick Dugan, 3009 Post Oak Boulevard Suite
1212, Houston, Texas
Excel Mineral Company, P.O. Box 3800 Santa Barbara, CA 93130
Walter Maquire, Sr., PO Box 129, Keller, VA 23401
Richard A. Woods, 59 Penn Circle West Penn Plaza Apts.
Pittsburgh, PA 15206
Dr. Warren A. Evans, 69 Ponfret Landing Road Brooklyn, CT
06234
Edward Robinson, 1007 Spruce Street, 1st floor Philadelphia, PA
19107
Directors and Officers:
Dr. Blaise Aguirre
Common Stock
Lloyd Joseph Bardswich
Common Stock
Gary C. Evans
Common Stock
Common Stock
All Directors and Executive Officers as a Group
Common and Preferred Voting Stock All Directors and Executive Officers as a Group
54
Amount and
Nature of
Beneficial
Ownership
Percent of
Class (1)
Percent of
Voting Stock
(1)
6,743,147
7,435,101
8,118,729
8,114,027
750,000)
49,091)
48,305)
48,305)
32,203)
93,806
26,596
1,078,818
1,199,220
1,199,220
6.3%
6.9%
7.5%
7.5%
100.0%
27.6%
27.2%
27.2%
18.1%
0.1%
0.0%
1.0%
1.1%
1.1%
6.3%
6.9%
7.5%
7.5%
N/A
0.05%
0.04%
0.04%
0.03%
0.1%
0.0%
1.0%
1.1%
1.1%
Table of Contents
(1)
Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment
power with respect to securities, which includes the power to dispose of or to direct the disposition of the security or the right to acquire such powers within
60 days. In computing the number of shares of our common stock beneficially owned by a person or entity and the percentage ownership, we deem
outstanding shares of our stock subject to options, warrants or other rights held by that person or entity that are currently exercisable or exercisable within 60
days of March 18, 2024. We do not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person or
entity. Unless otherwise indicated, and subject to applicable community property laws, we believe that the persons and entities named in the table have sole
voting and investment power with respect to all shares of stock beneficially owned by them. “Percent of Class” is based on 107,647,317 shares of common
stock, 750,000 shares of Series B Preferred Stock and 177,904 shares of Series C Preferred Stock outstanding on March 18, 2024. “Percent of Voting Stock” is
based on 107,825,221 shares, which is the total of all the common stock issued and all Series C Preferred Stock outstanding at March 18, 2024.
(2)
The outstanding Series B preferred shares carry voting rights only if the Company is in default in the payment of declared dividends. The Board of Directors
has not declared any dividends as due and payable for the Series B preferred stock.
(3)
The outstanding Series C preferred shares carry voting rights equal to the same number of shares of common stock.
Securities Authorized for Issuance under Equity Compensation Plans
The following table summarizes equity compensation plans that were approved by our shareholders and equity compensation plans that were not approved by our
shareholders as of December 31, 2023:
Number of
securities
remaining
available for
future issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a))
(c)
8,700,000
-
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
(a)
Weighted-average
exercise price of
outstanding
options, warrants
and rights
(b)
-
-
-
-
Plan category
Equity compensation plans approved by shareholders
Equity compensation plans not approved by shareholders
Item 13. Certain Relationships and Related Transactions, and Director Independence
During 2023, there were no transactions in which we were a party and in which any director, executive officer or beneficial owner of five percent (5%) or more of any
class of our voting securities or relatives of our directors, executive officers or five percent (5%) beneficial owners had a direct or indirect material interest other than
as follows: The Company incurred cost of $12,884 during the year ended December 31, 2023 from an entity owned by Russell Lawrence, the Company’s former
President and board member, while he was employed by the Company for lodging and meals provided to employees, board members, consultants and customers of
the Company.
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Item 14. Principal Accountant Fees and Services
Principal Accounting Fees and Services
The aggregate fees billed by Assure CPA, LLC (“Assure CPA”) for professional services rendered to us for the years ended December 31, 2023 and 2022 were as
follows:
Audit Fees (1)
Tax Fees (2)
All Other Fees (3)
Total
For the Fiscal Years Ended
December 31,
2023
2022
$
$
169,738 $
14,430
4,400
188,568 $
133,459
12,000
2,438
147,897
(1)
(2)
(3)
Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and review of interim consolidated financial
statements included in quarterly reports and services that are normally provided by the principal accountants in connection with statutory and
regulatory filings or engagements.
Tax fees consist of fees billed for professional services for tax compliance, tax advice and tax planning.
All other fees consist of fees not otherwise reported as audit or tax fees.
Pre-Approval Policy
Our Board and audit committee review and approve audit and permissible non-audit services performed by Assure CPA, as well as the fees charged by Assure CPA
for such services. In its review of non-audit service fees and its appointment of Assure CPA as our independent accountants, the Board considered whether the
provision of such services is compatible with maintaining Assure CPA independence. All services provided, and fees charged by Assure CPA in 2023 were pre-
approved by the Board and the audit committee.
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Item 15. Exhibits and Financial Statement Schedules
1. EXHIBITS
PART IV
The exhibits listed in (b) below are filed as part of this Annual Report and incorporated herein by reference.
(b) Exhibits:
Exhibit
Number
Description
3.1
3.2
4.1 *
10.1 *
21.1 *
31.1a *
31.1b *
31.2 *
32.1 *
Second Restated Articles of Incorporation (incorporated by reference as Exhibit 3.1 to the Company’s current Report on Form 8-K filed with the SEC
on January 15, 2021).
Second Restated Amended and Restated Bylaws (incorporated by reference to Exhibit 3.02 to the Company’s Current Report on Form 8-K filed with
the SEC on December 20, 2012)
Description of Company’s Securities Registered Pursuant to Section 12 of the Exchange Act
United States Antimony Corporation 2023 Equity Incentive Plan
Subsidiaries of the Company
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302
of the Sarbanes Oxley Act of 2002.
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302
of the Sarbanes Oxley Act of 2002.
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302
of the Sarbanes Oxley Act of 2002.
Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes Oxley Act of 2002.
Mine Safety Disclosure
United States Antimony Corporation Clawback Policy
95 *
97 *
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
104
_____________________
* Filed herewith.
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Definition Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
Item 16. Form 10-K Summary
Not applicable.
57
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(b) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
UNITED STATES ANTIMONY CORPORATION
(Registrant)
By /s/ Gary C. Evans
Date: April 12, 2024
Gary C. Evans
Co-Chief Executive Officer and Chairman of the Board
(co-principal executive officer)
By /s/ Lloyd Joseph Bardswich
Date: April 12, 2024
Lloyd Joseph Bardswich
Co-Chief Executive Officer and Director
(co-principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.
By: /s/ Gary C. Evans
Gary C. Evans, Co-Chief Executive Officer and Chairman
of the Board
(co-principal executive officer)
By: /s/ Lloyd Joseph Bardswich
Lloyd Joseph Bardswich, Co-Chief Executive Officer and
Director
(co-principal executive officer)
By: /s/ Richard R. Isaak
Richard R. Isaak, SVP, Chief Financial Officer (principal
financial officer)
By: /s/ John C. Gustavsen
John C. Gustavsen, President of Antimony Division
By: /s/ David Welch
David Welch, Controller
(principal accounting officer)
By: /s/ Dr. Blaise Aguirre
Dr. Blaise Aguirre, Director
By: /s/ Michael A. McManus
Michael A. McManus, Director
58
Date: April 12, 2024
Date: April 12, 2024
Date: April 12, 2024
Date: April 12, 2024
Date: April 12, 2024
Date: April 12, 2024
Date: April 12, 2024
EXHIBIT 4.1
Common Stock
DESCRIPTION OF SECURITIES
We are authorized to issue 150,000,000 shares of our common stock, par value $0.01 per share, each share of common stock having equal rights and
preferences. There were 107,647,317 shares of common stock outstanding as of March 18, 2024.
The shares of our common stock constitute equity interests in the Company entitling each shareholder to a pro rata share of cash distributions made to
common shareholders, including dividend payments. We had net losses in our last fiscal year. Therefore, it is unlikely that we will pay dividends on our common
stock in the next year. We currently intend to retain our future earnings, if any, for use in our business. Any dividends declared in the future will be at the discretion
of our Board of Directors and subject to any restrictions that may be imposed by our lenders.
The holders of our common stock are entitled to one vote for each share of record. Shareholders are entitled to vote cumulatively with respect to the election
of directors of the Company. Directors are elected by a plurality of the votes cast by the voting stock entitled to vote at a meeting if a quorum is present. With respect
to matters other than the election of directors, such matters must be approved by a majority of the votes entitled to be cast by all shares of common stock that are
present in person or represented by proxy. Holders of shares of our common stock representing a majority of our capital stock issued, outstanding and entitled to
vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our shareholders. A vote by the holders of a majority of our
outstanding shares of common stock is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of
Incorporation.
In the event of our liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining for distribution to
them after payment of our liabilities and after provision has been made for each class of stock having preference in relation to our common stock. Holders of our
common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to our common stock. All of the
outstanding shares of our common stock are duly authorized, validly issued, fully paid and non-assessable.
In the event of any merger or consolidation with or into another company in connection with which shares of our common stock are converted into or
exchangeable for shares of stock, other securities or property (including cash), all holders of shares of our common stock will be entitled to receive the same kind and
amount of shares of stock and other securities and property (including cash).
Preferred Stock
We are authorized to issue up to 10,000,000 shares of preferred stock. There were 750,000 shares of Series B preferred stock and 177,904 shares of Series C
preferred stock outstanding as of March 18, 2024. Subject to amounts of outstanding preferred stock, additional shares of our preferred stock may be divided into and
issued in one or more additional series. Our board of directors is authorized to divide the authorized but unissued shares of preferred stock into one or more series,
each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. Our board of directors is authorized, within
the limitations prescribed by law and our Articles of Incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of
the shares of any series of preferred stock.
The following is a description of our outstanding series of preferred stock (there are no shares of Series A or Series D preferred stock outstanding):
Series B Preferred Stock
In 1993, the Board established a Series B preferred stock, consisting of 750,000 shares. The Series B preferred stock has preference over the Company’s
common stock and Series A preferred stock (none of which are outstanding); has no voting rights (absent default in payment of declared dividends); and is entitled
to cumulative dividends of $0.01 per share per year, payable if and when declared by the Board of Directors. During each of the years ended December 31, 2023 and
2022, the Company recognized $7,500 in Series B preferred stock dividend. In the event of dissolution or liquidation of the Company, the preferential amount payable
to Series B preferred stockholders is $1.00 per share plus dividends in arrears. No dividends have been declared or paid with respect to the Series B preferred stock.
The Series B Preferred stock is no longer convertible to shares of the Company’s common stock. At December 31, 2023 and 2022, cumulative dividends in arrears on
the outstanding Series B shares were $217,500 and $210,000, respectively and the aggregate Series B liquidation preference at December 31, 2023 and 2022 were
$967,500 and $960,000, respectively.
Series C Preferred Stock
In 2000, the Board established a Series C preferred stock. The Series C preferred stock has preference over the Company’s common stock and has voting
rights equal to that number of shares outstanding, but no conversion or dividend rights. In the event of dissolution or liquidation of the Company, the preferential
amount payable to Series C preferred stockholders is $0.55 per share.
We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the State of Montana for a more complete description of the rights and
liabilities of holders of our securities.
EXHIBIT 10.1
1. Purpose; Eligibility.
UNITED STATES ANTIMONY CORPORATION
2023 EQUITY INCENTIVE PLAN
1.1 General Purpose. The name of this plan is the United States Antimony Corporation 2023 Equity Incentive Plan (the “Plan”). The purposes of the Plan are
to (a) enable United States Antimony Corporation, a Montana corporation (the “Company”), and any Affiliate to attract and retain the types of Employees,
Consultants and Directors who will contribute to the Company’s long-range success; (b) provide incentives that align the interests of Employees, Consultants and
Directors with those of the shareholders of the Company; and (c) promote the success of the Company’s business.
1.2 Eligible Award Recipients. The persons eligible to receive Awards are the Employees, Consultants and Directors of the Company and its Affiliates.
1.3 Available Awards . Awards that may be granted under the Plan include: (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock
Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, (f) Cash Awards, and (g) Other Equity-Based Awards.
2. Definitions.
“Affiliate” means a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common
control with, the Company.
“Applicable Laws” means the requirements related to or implicated by the administration of the Plan under applicable state corporate law, United
States federal and state securities laws, the Code, any stock exchange or quotation system on which the shares of Common Stock are listed or quoted, and the
applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.
“Award” means any right granted under the Plan, including an Incentive Stock Option, a Non-qualified Stock Option, a Stock Appreciation Right, a
Restricted Award, a Performance Share Award, a Cash Award, or an Other Equity-Based Award.
“Award Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an
individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award Agreement shall
be subject to the terms and conditions of the Plan.
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by
conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns”
and “Beneficially Owned” have a corresponding meaning.
“Board” means the Board of Directors of the Company, as constituted at any time.
“Cash Award” means an Award denominated in cash that is granted under Section 10 of the Plan.
“Cause” means:
1
With respect to any Employee or Consultant, unless the applicable Award Agreement states otherwise:
(a) If the Employee or Consultant is a party to an employment or service agreement with the Company or its Affiliates and such agreement provides for a
definition of Cause, the definition contained therein; or
(b) If no such agreement exists, or if such agreement does not define Cause: (i) the commission of, or plea of guilty or no contest to, a felony or a crime
involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an Affiliate; (ii)
conduct that brings or is reasonably likely to bring the Company or an Affiliate negative publicity or into public disgrace, embarrassment, or disrepute; (iii) gross
negligence or willful misconduct with respect to the Company or an Affiliate; (iv) material violation of state or federal securities laws; or (v) material violation of the
Company’s written policies or codes of conduct, including written policies related to discrimination, harassment, performance of illegal or unethical activities, and
ethical misconduct.
With respect to any Director, unless the applicable Award Agreement states otherwise, a determination by a majority of the disinterested Board members
that the Director has engaged in any of the following:
(a) malfeasance in office;
(b) gross misconduct or neglect; or
(e) repeated failure to participate in Board meetings on a regular basis despite having received proper notice of the meetings in advance.
The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been discharged for
Cause.
“Change in Control”
(a) The direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries, taken as a whole, to any Person that is not a subsidiary of the
Company;
(b) The Incumbent Directors cease for any reason to constitute at least a majority of the Board;
(c) The date which is 10 business days prior to the consummation of a complete liquidation or dissolution of the Company;
(d) The acquisition by any Person of Beneficial Ownership of 50% or more (on a fully diluted basis) of either (i) the then outstanding shares of Common
Stock of the Company, taking into account as outstanding for this purpose such Common Stock issuable upon the exercise of options or warrants, the conversion of
convertible stock or debt, and the exercise of any similar right to acquire such Common Stock (the “Outstanding Company Common Stock”) or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this Plan, the following acquisitions shall not constitute a Change in Control: (A) any acquisition by the
Company or any Affiliate, (B) any acquisition by any employee benefit plan sponsored or maintained by the Company or any subsidiary, (C) any acquisition which
complies with clauses, (i), (ii) and (iii) of subsection (e) of this definition or (D) in respect of an Award held by a particular Participant, any acquisition by the
Participant or any group of persons including the Participant (or any entity controlled by the Participant or any group of persons including the Participant); or
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(e) The consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company
that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”),
unless immediately following such Business Combination: (i) more than 50% of the total voting power of (A) the entity resulting from such Business Combination
(the “Surviving Company”), or (B) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of sufficient voting securities eligible to
elect a majority of the members of the board of directors (or the analogous governing body) of the Surviving Company (the “Parent Company”), is represented by the
Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which
the Outstanding Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business
Combination; (ii) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company) is or becomes the
Beneficial Owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect members of the board of
directors of the Parent Company (or the analogous governing body) (or, if there is no Parent Company, the Surviving Company); and (iii) at least a majority of the
members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following
the consummation of the Business Combination were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such
Business Combination.
“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed to
include a reference to any regulations promulgated thereunder.
“Committee” means a committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with Section 3.3
and Section 3.4.
“Common Stock” means the common stock, $0.00001 par value per share, of the Company, or such other securities of the Company as may be
designated by the Committee from time to time in substitution thereof.
“Company” means United States Antimony Corporation, a Montana corporation, and any successor thereto.
“Consultant” means any individual or entity which performs bona fide services to the Company or an Affiliate, other than as an Employee or
Director, and who may be offered securities registerable pursuant to a registration statement on Form S-8 under the Securities Act.
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“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Consultant or Director, is not
interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the
Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participant’s Continuous Service; provided further that if any Award is subject to Section 409A
of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an Employee of the
Company to a Director of an Affiliate will not constitute an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any
other personal or family leave of absence. The Committee or its delegate, in its sole discretion, may determine whether a Company transaction, such as a sale or spin-
off of a division or subsidiary that employs a Participant, shall be deemed to result in a termination of Continuous Service for purposes of affected Awards, and such
decision shall be final, conclusive and binding.
“Deferred Stock Units (DSUs)” has the meaning set forth in Section 8.1(b) hereof.
“Director” means a member of the Board.
“Disability” means, unless the applicable Award Agreement says otherwise, that the Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment; provided, however, for purposes of determining the term of an Incentive Stock
Option pursuant to Section 6.10 hereof, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether an
individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability for
purposes of the term of an Incentive Stock Option pursuant to Section 6.10 hereof within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any
determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a
Participant participates.
“Disqualifying Disposition” has the meaning set forth in Section 17.12.
“Effective Date” means the date as of which this Plan is approved by the Company shareholders, if such approval occurs before the first anniversary
of the date the Plan is adopted by the Board.
“Employee” means any person, including an Officer or Director, employed by the Company or an Affiliate; provided, that, for purposes of
determining eligibility to receive Incentive Stock Options, an Employee shall mean an employee of the Company or a parent or subsidiary corporation within the
meaning of Section 424 of the Code. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute
“employment” by the Company or an Affiliate.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means, as of any date, the value of the Common Stock as determined below. If the Common Stock is listed on any established
stock exchange or a national market system, the Fair Market Value shall be the closing price of a share of Common Stock (or if no sales were reported the closing price
on the date immediately preceding such date) as quoted on such exchange or system on the day of determination, as reported in the Wall Street Journal or a
reputable alternative publication determined by the Board. In the absence of an established market for the Common Stock, the Fair Market Value shall be determined
in good faith by the Committee and such determination shall be conclusive and binding on all persons.
“Fiscal Year” means the Company’s fiscal year.
“Free Standing Rights” has the meaning set forth in Section 7.
“Good Reason” means, unless the applicable Award Agreement states otherwise:
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(a) If an Employee or Consultant is a party to an employment or service agreement with the Company or its Affiliates and such agreement provides for a
definition of Good Reason, the definition contained therein; or
(b) If no such agreement exists or if such agreement does not define Good Reason, the occurrence of one or more of the following without the Participant’s
written consent, which circumstances are not remedied by the Company within 30 days of its receipt of a written notice from the Participant describing the applicable
circumstances (which notice must be provided by the Participant within 90 days of the Participant’s knowledge of the applicable circumstances): (i) any material,
adverse change in the Participant’s duties, responsibilities, authority, title, status or reporting structure; (ii) a material reduction in the Participant’s base salary or
bonus opportunity; or (iii) a geographical relocation of the Participant’s principal office location by more than 50 miles.
“Grant Date” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award to a
Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.
“Incentive Stock Option” means an Option that is designated by the Committee as an incentive stock option within the meaning of Section 422 of
the Code and that meets the requirements set out in the Plan.
“Incumbent Directors” means individuals who, on the Effective Date, constitute the Board, provided that any individual becoming a Director
subsequent to the Effective Date whose election or nomination for election to the Board was approved by a vote of at least two-thirds of the Incumbent Directors
then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director without
objection to such nomination) shall be an Incumbent Director. No individual initially elected or nominated as a director of the Company as a result of an actual or
threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than
the Board shall be an Incumbent Director.
“Non-Employee Director” means a Director who is a “non-employee director” within the meaning of Rule 16b-3.
“Non-qualified Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
“Option” means an Incentive Stock Option or a Non-qualified Stock Option granted pursuant to the Plan.
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding
Option.
“Option Exercise Price” means the price at which a share of Common Stock may be purchased upon the exercise of an Option.
“Other Equity-Based Award” means an Award that is not an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or
Performance Share Award that is granted under Section 10 and is payable by delivery of Common Stock and/or which is measured by reference to the value of
Common Stock.
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“Participant” means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Award.
“Performance Goals” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon
business criteria or other performance measures determined by the Committee in its discretion.
“Performance Period” means the one or more periods of time, as the Committee may select, over which the attainment of one or more Performance
Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Share Award or a Cash Award.
“Performance Share Award” means any Award granted pursuant to Section 9 hereof.
“Performance Share” means the grant of a right to receive a number of actual shares of Common Stock or share units based upon the performance
of the Company during a Performance Period, as determined by the Committee.
“Permitted Transferee” means: (a) a member of the Optionholder’s immediate family (child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships), any person sharing the Optionholder’s household (other than a tenant or employee), a trust in which these persons have more than 50% of the
beneficial interest, a foundation in which these persons (or the Optionholder) control the management of assets, and any other entity in which these persons (or the
Optionholder) own more than 50% of the voting interests; (b) third parties designated by the Committee in connection with a program established and approved by
the Committee pursuant to which Participants may receive a cash payment or other consideration in consideration for the transfer of a Non-qualified Stock Option;
and (c) such other transferees as may be permitted by the Committee in its sole discretion.
“Person” means a person as defined in Section 13(d)(3) of the Exchange Act.
“Plan” means this United States Antimony Corporation 2023 Equity Incentive Plan, as amended and/or amended and restated from time to time.
“Related Rights” has the meaning set forth in Section 7.
“Restricted Award” means any Award granted pursuant to Section 8.
“Restricted Period” has the meaning set forth in Section 8.
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
“Securities Act” means the Securities Act of 1933, as amended.
“Stock Appreciation Right” means the right pursuant to an Award granted under Section 7 to receive, upon exercise, an amount payable in cash or
shares equal to the number of shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (a) the Fair Market Value of a share of
Common Stock on the date the Award is exercised, over (b) the exercise price specified in the Stock Appreciation Right Award Agreement.
“Stock for Stock Exchange” has the meaning set forth in Section 6.4.
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“Substitute Award” has the meaning set forth in Section 4.6.
“Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than
10% of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.
“Total Share Reserve” has the meaning set forth in Section 4.1.
3. Administration.
3.1 Authority of Committee. The Plan shall be administered by the Committee or, in the Board’s sole discretion, by the Board. Subject to the terms of the
Plan, the Committee’s charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Committee shall have the
authority:
(a) to construe and interpret the Plan and apply its provisions;
(b) to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;
(c) to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;
(d) to delegate its authority to one or more Officers of the Company with respect to Awards that do not involve “insiders” within the meaning of
Section 16 of the Exchange Act;
(e) to determine when Awards are to be granted under the Plan and the applicable Grant Date;
(f) from time to time to select, subject to the limitations set forth in this Plan, those eligible Award recipients to whom Awards shall be granted;
(g) to determine the number of shares of Common Stock to be made subject to each Award;
(h) to determine whether each Option is to be an Incentive Stock Option or a Non-qualified Stock Option;
(i) to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and vesting
provisions, and to specify the provisions of the Award Agreement relating to such grant;
(j) to determine the target number of Performance Shares to be granted pursuant to a Performance Share Award, the performance measures that will
be used to establish the Performance Goals, the Performance Period(s) and the number of Performance Shares earned by a Participant;
(k) to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award;
provided, however, that if any such amendment impairs a Participant’s rights or increases a Participant’s obligations under his or her Award or creates or increases a
Participant’s federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant’s consent;
(l) to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their
employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company’s employment
policies;
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(m) to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers
anti-dilution adjustments;
(n) to interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or
agreement relating to, or Award granted under, the Plan; and
(o) to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan.
The Committee also may modify the purchase price or the exercise price of any outstanding Award, provided that if the modification effects a
repricing, shareholder approval shall be required before the repricing is effective.
3.2 Committee Decisions Final. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on the Company and
the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.
3.3 Delegation. The Committee or, if no Committee has been appointed, the Board may delegate administration of the Plan to a committee or committees of
one or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. The Committee shall
have the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board or the
Committee shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. The members of the
Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Committee, add
additional members to, remove members (with or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the
Committee. The Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous
consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies
thereof shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and follow such rules and
regulations for the conduct of its business as it may determine to be advisable.
3.4 Committee Composition. Except as otherwise determined by the Board, the Committee shall consist solely of two or more Non-Employee Directors. The
Board shall have discretion to determine whether or not it intends to comply with the exemption requirements of Rule 16b-3. However, if the Board intends to satisfy
such exemption requirements, with respect to any insider subject to Section 16 of the Exchange Act, the Committee shall be a compensation committee of the Board
that at all times consists solely of two or more Non-Employee Directors. Within the scope of such authority, the Board or the Committee may delegate to a committee
of one or more members of the Board who are not Non-Employee Directors the authority to grant Awards to eligible persons who are not then subject to Section 16 of
the Exchange Act. Nothing herein shall create an inference that an Award is not validly granted under the Plan in the event Awards are granted under the Plan by a
compensation committee of the Board that does not at all times consist solely of two or more Non-Employee Directors.
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3.5 Indemnification. In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed
by Applicable Laws, the Committee shall be indemnified by the Company against the reasonable expenses, including attorney’s fees, actually incurred in connection
with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party by reason of any action taken or failure to act
under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Committee in settlement thereof ( provided, however,
that the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in
any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee did not act in
good faith and in a manner which such person reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason
to believe that the conduct complained of was unlawful; provided, however, that within 60 days after the institution of any such action, suit or proceeding, such
Committee shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.
4. Shares Subject to the Plan.
4.1 Subject to adjustment in accordance with Section 14, no more than 8,700,000 shares of Common Stock shall be available for the grant of Awards under the
Plan (the “Total Share Reserve”). During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to
satisfy such Awards.
4.2 Shares of Common Stock available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares or
shares reacquired by the Company in any manner.
4.3 Subject to adjustment in accordance with Section 14, no more than 8,700,000 shares of Common Stock may be issued in the aggregate pursuant to the
exercise of Incentive Stock Options (the “ISO Limit”).
4.4 The maximum number of shares of Common Stock subject to Awards granted during a single Fiscal Year to any Non-Employee Director, together with any
cash fees paid to such Non-Employee Director during the Fiscal Year shall not exceed a total value of $400,000 (calculating the value of any Awards based on the
grant date fair value for financial reporting purposes).
4.5 Any shares of Common Stock subject to an Award that expires or is canceled, forfeited, or terminated without issuance of the full number of shares of
Common Stock to which the Award related will again be available for issuance under the Plan. Notwithstanding anything to the contrary contained herein: shares
subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of an
Option, (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation, or (c) shares covered by a stock-settled Stock Appreciation Right
or other Awards that were not issued upon the settlement of the Award.
4.6 Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously
granted by an entity acquired by the Company or with which the Company combines (“Substitute Awards ”). Substitute Awards shall not be counted against the
Total Share Reserve; provided, that, Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding options intended to qualify
as Incentive Stock Options shall be counted against the ISO limit. Subject to applicable stock exchange requirements, available shares under a shareholder-approved
plan of an entity directly or indirectly acquired by the Company or with which the Company combines (as appropriately adjusted to reflect such acquisition or
transaction) may be used for Awards under the Plan and shall not count toward the Total Share Limit.
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5. Eligibility.
5.1 Eligibility for Specific Awards. Incentive Stock Options may be granted only to Employees. Awards other than Incentive Stock Options may be granted
to Employees, Consultants and Directors.
5.2 Ten Percent Shareholders . A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the Option Exercise Price is at least 110%
of the Fair Market Value of the Common Stock on the Grant Date and the Option is not exercisable after the expiration of five years from the Grant Date.
6. Option Provisions. Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall be subject to the conditions set
forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options shall be
separately designated Incentive Stock Options or Non-qualified Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have no liability to any
Participant or any other person if an Option designated as an Incentive Stock Option fails to qualify as such at any time or if an Option is determined to constitute
“nonqualified deferred compensation” within the meaning of Section 409A of the Code and the terms of such Option do not satisfy the requirements of Section 409A
of the Code. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the
Option or otherwise) the substance of each of the following provisions:
6.1 Term. Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, no Incentive Stock Option shall be exercisable after the expiration of
10 years from the Grant Date. The term of a Non-qualified Stock Option granted under the Plan shall be determined by the Committee.
6.2 Exercise Price of an Incentive Stock Option. Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, the Option Exercise Price of
each Incentive Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the
foregoing, an Incentive Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted
pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.
6.3 Exercise Price of a Non-qualified Stock Option. The Option Exercise Price of each Non-qualified Stock Option shall be not less than 100% of the Fair
Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, a Non-qualified Stock Option may be granted with an
Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a
manner satisfying the provisions of Section 409A of the Code.
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6.4 Consideration. The Option Exercise Price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes
and regulations, either (a) in cash or by certified or bank check at the time the Option is exercised or (b) in the discretion of the Committee, upon such terms as the
Committee shall approve, the Option Exercise Price may be paid: (i) by delivery to the Company of other Common Stock, duly endorsed for transfer to the Company,
with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired, or by means of
attestation whereby the Participant identifies for delivery specific shares of Common Stock that have an aggregate Fair Market Value on the date of attestation equal
to the Option Exercise Price (or portion thereof) and receives a number of shares of Common Stock equal to the difference between the number of shares thereby
purchased and the number of identified attestation shares of Common Stock (a “Stock for Stock Exchange”); (ii) a “cashless” exercise program established with a
broker; (iii) by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the
aggregate Option Exercise Price at the time of exercise; (iv) by any combination of the foregoing methods; or (v) in any other form of legal consideration that may be
acceptable to the Committee. Unless otherwise specifically provided in the Option, the exercise price of Common Stock acquired pursuant to an Option that is paid by
delivery (or attestation) to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock
of the Company that have been held for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting
purposes). Notwithstanding the foregoing, during any period for which the Common Stock is publicly traded (i.e., the Common Stock is listed on any established
stock exchange or a national market system) an exercise by a Director or Officer that involves or may involve a direct or indirect extension of credit or arrangement of
an extension of credit by the Company, directly or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any
Award under this Plan.
6.5 Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.
6.6 Transferability of a Non-qualified Stock Option. A Non-qualified Stock Option may, in the sole discretion of the Committee, be transferable to a
Permitted Transferee, upon written approval by the Committee to the extent provided in the Award Agreement. If the Non-qualified Stock Option does not provide for
transferability, then the Non-qualified Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during
the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a
form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
6.7 Vesting of Options. Each Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The
Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the
Committee may deem appropriate. The vesting provisions of individual Options may vary, provided that each Option shall have a minimum vesting period of one
year. No Option may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting
and exercisability in the terms of any Award Agreement upon the occurrence of a specified event.
6.8 Termination of Continuous Service. Unless otherwise provided in an Award Agreement or in an employment agreement the terms of which have been
approved by the Committee, in the event an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s death or Disability), the
Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) prior to the
expiration of the term of the Option as set forth in the Award Agreement (or, if earlier, the date three months following the termination of the Optionholder’s
Continuous Service if the Option is an Incentive Stock Option); provided that, if the termination of Continuous Service is by the Company for Cause, all outstanding
Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionholder does not exercise his or her Option
within the time specified in the Award Agreement, the Option shall terminate.
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6.9 Extension of Termination Date. An Optionholder’s Award Agreement may also provide that if the exercise of the Option following the termination of the
Optionholder’s Continuous Service for any reason would be prohibited at any time because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act or any other state or federal securities law or the rules of any securities exchange or interdealer quotation system, then the
Option shall terminate on the earlier of (a) the expiration of the term of the Option in accordance with Section 6.1 or (b) the expiration of a period after termination of
the Participant’s Continuous Service that is three months after the end of the period during which the exercise of the Option would be in violation of such registration
or other securities law requirements.
6.10 Disability of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder’s Continuous Service terminates as a
result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination), prior to the expiration of the term of the Option as set forth in the Award Agreement (or, if earlier, the date 12 months following such
termination if the Option is an Incentive Stock Option). If, after termination, the Optionholder does not exercise his or her Option within the time specified herein or in
the Award Agreement, the Option shall terminate.
6.11 Death of Optionholder. Unless otherwise provided in an Award Agreement, in the event an Optionholder’s Continuous Service terminates as a result of
the Optionholder’s death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the
Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the
Optionholder’s death, prior to the expiration of the term of the Option as set forth in the Award Agreement (or, if earlier, the date 12 months following the date of
death if the Option is an Incentive Stock Option). If, after the Optionholder’s death, the Option is not exercised within the time specified herein or in the Award
Agreement, the Option shall terminate.
6.12 Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its
Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Non-
qualified Stock Options.
7. Stock Appreciation Rights. Each Stock Appreciation Right granted under the Plan shall be evidenced by an Award Agreement. Each Stock Appreciation Right so
granted shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable
Award Agreement. Stock Appreciation Rights may be granted alone (“ Free Standing Rights”) or in tandem with an Option granted under the Plan (“Related
Rights”).
7.1 Grant Requirements for Related Rights. Any Related Right that relates to a Non-qualified Stock Option may be granted at the same time the Option is
granted or at any time thereafter but before the exercise or expiration of the Option. Any Related Right that relates to an Incentive Stock Option must be granted at
the same time the Incentive Stock Option is granted.
7.2 Term. The term of a Stock Appreciation Right granted under the Plan shall be determined by the Committee; provided, however, no Stock Appreciation
Right shall be exercisable later than the tenth anniversary of the Grant Date.
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7.3 Vesting. Each Stock Appreciation Right may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be
equal. The Stock Appreciation Right may be subject to such other terms and conditions on the time or times when it may be exercised as the Committee may deem
appropriate. The vesting provisions of individual Stock Appreciation Rights may vary, provided that each Stock Appreciation Right shall have a minimum vesting
period of one year. No Stock Appreciation Right may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to,
provide for an acceleration of vesting and exercisability in the terms of any Stock Appreciation Right upon the occurrence of a specified event.
7.4 Exercise and Payment. Upon exercise of a Stock Appreciation Right, the holder shall be entitled to receive from the Company an amount equal to the
number of shares of Common Stock subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (i) the Fair Market Value of a share of
Common Stock on the date the Award is exercised, over (ii) the exercise price specified in the Stock Appreciation Right or related Option. Payment with respect to the
exercise of a Stock Appreciation Right shall be made on the date of exercise. Payment shall be made in the form of shares of Common Stock (with or without
restrictions as to substantial risk of forfeiture and transferability, as determined by the Committee in its sole discretion), cash or a combination thereof, as determined
by the Committee.
7.5 Exercise Price. The exercise price of a Free Standing Right shall be determined by the Committee, but shall not be less than 100% of the Fair Market
Value of one share of Common Stock on the Grant Date of such Stock Appreciation Right. A Related Right granted simultaneously with or subsequent to the grant of
an Option and in conjunction therewith or in the alternative thereto shall have the same exercise price as the related Option, shall be transferable only upon the same
terms and conditions as the related Option, and shall be exercisable only to the same extent as the related Option; provided, however, that a Stock Appreciation
Right, by its terms, shall be exercisable only when the Fair Market Value per share of Common Stock subject to the Stock Appreciation Right and related Option
exceeds the exercise price per share thereof and no Stock Appreciation Rights may be granted in tandem with an Option unless the Committee determines that the
requirements of Section 7.1 are satisfied.
7.6 Reduction in the Underlying Option Shares. Upon any exercise of a Related Right, the number of shares of Common Stock for which any related Option
shall be exercisable shall be reduced by the number of shares for which the Stock Appreciation Right has been exercised. The number of shares of Common Stock for
which a Related Right shall be exercisable shall be reduced upon any exercise of any related Option by the number of shares of Common Stock for which such Option
has been exercised.
8. Restricted Awards . A Restricted Award is an Award of actual shares of Common Stock (“ Restricted Stock”) or hypothetical Common Stock units (“Restricted
Stock Units”) having a value equal to the Fair Market Value of an identical number of shares of Common Stock, which may, but need not, provide that such
Restricted Award may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral for a loan or as security for the performance
of any obligation or for any other purpose for such period (the “Restricted Period”) as the Committee shall determine. Each Restricted Award granted under the Plan
shall be evidenced by an Award Agreement. Each Restricted Award so granted shall be subject to the conditions set forth in this Section 8, and to such other
conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.
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8.1 Restricted Stock and Restricted Stock Units.
(a) Each Participant granted Restricted Stock shall execute and deliver to the Company an Award Agreement with respect to the Restricted Stock
setting forth the restrictions and other terms and conditions applicable to such Restricted Stock. If the Committee determines that the Restricted Stock shall be held
by the Company or in escrow rather than delivered to the Participant pending the release of the applicable restrictions, the Committee may require the Participant to
additionally execute and deliver to the Company (A) an escrow agreement satisfactory to the Committee, if applicable and (B) the appropriate blank stock power with
respect to the Restricted Stock covered by such agreement. If a Participant fails to execute an agreement evidencing an Award of Restricted Stock and, if applicable,
an escrow agreement and stock power, the Award shall be null and void. Subject to the restrictions set forth in the Award, the Participant generally shall have the
rights and privileges of a shareholder as to such Restricted Stock, including the right to vote such Restricted Stock and the right to receive dividends; provided that,
any cash dividends and stock dividends with respect to the Restricted Stock shall be withheld by the Company for the Participant’s account, and interest may be
credited on the amount of the cash dividends withheld at a rate and subject to such terms as determined by the Committee. The cash dividends or stock dividends so
withheld by the Committee and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall be distributed to the Participant in
cash or, at the discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such dividends, if applicable, upon the
release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends.
(b) The terms and conditions of a grant of Restricted Stock Units shall be reflected in an Award Agreement. No shares of Common Stock shall be
issued at the time a Restricted Stock Unit is granted, and the Company will not be required to set aside funds for the payment of any such Award. A Participant shall
have no voting rights with respect to any Restricted Stock Units granted hereunder. The Committee may also grant Restricted Stock Units with a deferral feature,
whereby settlement is deferred beyond the vesting date until the occurrence of a future payment date or event set forth in an Award Agreement (“ Deferred Stock
Units”). At the discretion of the Committee, each Restricted Stock Unit or Deferred Stock Unit (representing one share of Common Stock) may be credited with an
amount equal to the cash and stock dividends paid by the Company in respect of one share of Common Stock (“Dividend Equivalents”). Dividend Equivalents shall
be paid currently (and in no case later than the end of the calendar year in which the dividend is paid to the holders of the Common Stock or, if later, the 15th day of
the third month following the date the dividend is paid to holders of the Common Stock). Dividend Equivalents shall be withheld by the Company and credited to the
Participant’s account, and interest may be credited on the amount of cash Dividend Equivalents credited to the Participant’s account at a rate and subject to such
terms as determined by the Committee. Dividend Equivalents credited to a Participant’s account and attributable to any particular Restricted Stock Unit or Deferred
Stock Unit (and earnings thereon, if applicable) shall be distributed in cash or, at the discretion of the Committee, in shares of Common Stock having a Fair Market
Value equal to the amount of such Dividend Equivalents and earnings, if applicable, to the Participant upon settlement of such Restricted Stock Unit or Deferred
Stock Unit and, if such Restricted Stock Unit or Deferred Stock Unit is forfeited, the Participant shall have no right to such Dividend Equivalents./Dividend
Equivalents will be deemed re-invested in additional Restricted Stock Units or Deferred Stock Units based on the Fair Market Value of a share of Common Stock on
the applicable dividend payment date and rounded down to the nearest whole share.
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8.2 Restrictions.
(a) Restricted Stock awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period, and to such
other terms and conditions as may be set forth in the applicable Award Agreement: (A) if an escrow arrangement is used, the Participant shall not be entitled to
delivery of the stock certificate; (B) the shares shall be subject to the restrictions on transferability set forth in the Award Agreement; (C) the shares shall be subject
to forfeiture to the extent provided in the applicable Award Agreement; and (D) to the extent such shares are forfeited, the stock certificates shall be returned to the
Company, and all rights of the Participant to such shares and as a shareholder with respect to such shares shall terminate without further obligation on the part of the
Company.
(b) Restricted Stock Units and Deferred Stock Units awarded to any Participant shall be subject to (A) forfeiture until the expiration of the Restricted
Period, and satisfaction of any applicable Performance Goals during such period, to the extent provided in the applicable Award Agreement, and to the extent such
Restricted Stock Units or Deferred Stock Units are forfeited, all rights of the Participant to such Restricted Stock Units or Deferred Stock Units shall terminate without
further obligation on the part of the Company and (B) such other terms and conditions as may be set forth in the applicable Award Agreement.
(c) The Committee shall have the authority to remove any or all of the restrictions on the Restricted Stock, Restricted Stock Units and Deferred Stock
Units whenever it may determine that, by reason of changes in Applicable Laws or other changes in circumstances arising after the date the Restricted Stock or
Restricted Stock Units or Deferred Stock Units are granted, such action is appropriate.
8.3 Restricted Period. With respect to Restricted Awards, the Restricted Period shall commence on the Grant Date and end at the time or times set forth on a
schedule established by the Committee in the applicable Award Agreement. No Restricted Award may be granted or settled for a fraction of a share of Common
Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting in the terms of any Award Agreement upon the occurrence of a
specified event.
8.4 Delivery of Restricted Stock and Settlement of Restricted Stock Units. Upon the expiration of the Restricted Period with respect to any shares of
Restricted Stock, the restrictions set forth in Section 8.2 and the applicable Award Agreement shall be of no further force or effect with respect to such shares, except
as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his or her
beneficiary, without charge, the stock certificate evidencing the shares of Restricted Stock which have not then been forfeited and with respect to which the
Restricted Period has expired (to the nearest full share) and any cash dividends or stock dividends credited to the Participant’s account with respect to such
Restricted Stock and the interest thereon, if any. Upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, or at the
expiration of the deferral period with respect to any outstanding Deferred Stock Units, the Company shall deliver to the Participant, or his or her beneficiary, without
charge, one share of Common Stock for each such outstanding vested Restricted Stock Unit or Deferred Stock Unit (“Vested Unit”) and cash equal to any Dividend
Equivalents credited with respect to each such Vested Unit in accordance with Section 8.1(b) hereof and the interest thereon or, at the discretion of the Committee, in
shares of Common Stock having a Fair Market Value equal to such Dividend Equivalents and the interest thereon, if any; provided, however, that, if explicitly
provided in the applicable Award Agreement, the Committee may, in its sole discretion, elect to pay cash or part cash and part Common Stock in lieu of delivering
only shares of Common Stock for Vested Units. If a cash payment is made in lieu of delivering shares of Common Stock, the amount of such payment shall be equal to
the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed in the case of Restricted Stock Units, or the delivery date in the case
of Deferred Stock Units, with respect to each Vested Unit.
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8.5 Stock Restrictions. Each certificate representing Restricted Stock awarded under the Plan shall bear a legend in such form as the Company deems
appropriate.
9. Performance Share Awards. Each Performance Share Award granted under the Plan shall be evidenced by an Award Agreement. Each Performance Share Award
so granted shall be subject to the conditions set forth in this Section 9, and to such other conditions not inconsistent with the Plan as may be reflected in the
applicable Award Agreement. The Committee shall have the discretion to determine: (i) the number of shares of Common Stock or stock-denominated units subject to
a Performance Share Award granted to any Participant; (ii) the Performance Period applicable to any Award; (iii) the conditions that must be satisfied for a Participant
to earn an Award; and (iv) the other terms, conditions and restrictions of the Award. The number of Performance Shares earned by a Participant will depend on the
extent to which the performance goals established by the Committee are attained within the applicable Performance Period, as determined by the Committee.
10. Other Equity-Based Awards and Cash Awards. The Committee may grant Other Equity-Based Awards, either alone or in tandem with other Awards, in such
amounts and subject to such conditions as the Committee shall determine in its sole discretion. Each Equity-Based Award shall be evidenced by an Award
Agreement and shall be subject to such conditions, not inconsistent with the Plan, as may be reflected in the applicable Award Agreement. The Committee may grant
Cash Awards in such amounts and subject to such Performance Goals, other vesting conditions, and such other terms as the Committee determines in its discretion.
Cash Awards shall be evidenced in such form as the Committee may determine.
11. Securities Law Compliance. No shares of Common Stock shall be purchased or sold under this Plan or any Award Agreement unless and until (a) any then
applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel and (b) if
required to do so by the Company, the Participant has executed and delivered to the Company a letter of investment intent in such form and containing such
provisions as the Committee may require. The Company shall use reasonable efforts to seek to obtain from each regulatory commission or agency having jurisdiction
over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise of the Awards; provided, however,
that this undertaking shall not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to
any such Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and
sell Common Stock upon exercise of such Awards unless and until such authority is obtained.
12. Use of Proceeds from Stock. Proceeds from the sale of Common Stock pursuant to Awards, or upon exercise thereof, shall constitute general funds of the
Company.
13. Miscellaneous.
13.1 Acceleration of Exercisability and Vesting. The Committee shall have the power to accelerate the time at which an Award may first be exercised or the
time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may
first be exercised or the time during which it will vest.
13.2 Shareholder Rights. Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until such Participant has satisfied all requirements for exercise of
the Award pursuant to its terms and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or
distributions of other rights for which the record date is prior to the date such Common Stock certificate is issued, except as provided in Section 14 hereof.
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13.3 No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the
Company or an Affiliate to terminate (a) the employment of an Employee with or without notice and with or without Cause or (b) the service of a Director pursuant to
the By-laws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as
the case may be.
13.4 Transfer; Approved Leave of Absence. For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a)
a transfer of employment to the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another, or (b) an approved leave of absence
for military service or sickness, or for any other purpose approved by the Company, if the Employee’s right to reemployment is guaranteed either by a statute or by
contract or under the policy pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except to the
extent inconsistent with Section 409A of the Code if the applicable Award is subject thereto.
13.5 Withholding Obligations. To the extent provided by the terms of an Award Agreement and subject to the discretion of the Committee, the Participant
may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following
means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (a)
tendering a cash payment; (b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant
as a result of the exercise or acquisition of Common Stock under the Award, provided, however, that no shares of Common Stock are withheld with a value exceeding
the maximum amount of tax required to be withheld by law; (c) delivering to the Company previously owned and unencumbered shares of Common Stock of the
Company; or (d) through a cashless exercise program, provided that the Committee is satisfied that such program does not violated the Company’s insider trading
policies.
14. Adjustments Upon Changes in Stock. In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any
stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger,
consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted under the Plan and any
Award Agreements, the exercise price of Options and Stock Appreciation Rights, the Performance Goals to which Performance Share Awards and Cash Awards are
subject, the maximum number of shares of Common Stock subject to all Awards stated in Section 4 will be equitably adjusted or substituted, as to the number, price or
kind of a share of Common Stock or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case
of adjustments made pursuant to this Section 14, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its
Affiliates, the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments under this Section 14 will not constitute a modification, extension
or renewal of the Incentive Stock Options within the meaning of Section 424(h)(3) of the Code and in the case of Non-qualified Stock Options, ensure that any
adjustments under this Section 14 will not constitute a modification of such Non-qualified Stock Options within the meaning of Section 409A of the Code. Any
adjustments made under this Section 14 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all
purposes.
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15. Effect of Change in Control.
15.1 Unless otherwise provided in an Award Agreement, notwithstanding any provision of the Plan to the contrary:
(a) In the event of a Participant’s termination of Continuous Service without Cause or for Good Reason during the 12-month period following a
Change in Control, notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, all outstanding Options and Stock Appreciation
Rights shall become immediately exercisable with respect to 100% of the shares subject to such Options or Stock Appreciation Rights, and/or the Restricted Period
shall expire immediately with respect to 100% of the outstanding shares of Restricted Stock or Restricted Stock Units as of the date of the Participant’s termination of
Continuous Service.
(b) With respect to Performance Share Awards and Cash Awards, in the event of a Change in Control, all incomplete Performance Periods in respect
of such Awards in effect on the date the Change in Control occurs shall end on the date of such change and the Committee shall (i) determine the extent to which
Performance Goals with respect to each such Performance Period have been met based upon such audited or unaudited financial information then available as it
deems relevant and (ii) cause to be paid to the applicable Participant partial or full Awards with respect to Performance Goals for each such Performance Period based
upon the Committee’s determination of the degree of attainment of Performance Goals or, if not determinable, assuming that the applicable “target” levels of
performance have been attained, or on such other basis determined by the Committee.
To the extent practicable, any actions taken by the Committee under the immediately preceding clauses (a) and (b) shall occur in a manner and at a
time which allows affected Participants the ability to participate in the Change in Control with respect to the shares of Common Stock subject to their Awards.
15.2 In addition, in the event of a Change in Control, the Committee may in its discretion and upon at least 10 days’ advance notice to the affected persons,
cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such Awards based upon the price per
share of Common Stock received or to be received by other shareholders of the Company in the event. In the case of any Option or Stock Appreciation Right with an
exercise price (or SAR Exercise Price in the case of a Stock Appreciation Right) that equals or exceeds the price paid for a share of Common Stock in connection with
the Change in Control, the Committee may cancel the Option or Stock Appreciation Right without the payment of consideration therefor.
15.3 The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and
business of the Company and its Affiliates, taken as a whole.
16. Amendment of the Plan and Awards.
16.1 Amendment of Plan. The Board at any time, and from time to time, may amend or terminate the Plan. However, except as provided in Section 14 relating to
adjustments upon changes in Common Stock and Section 16.3, no amendment shall be effective unless approved by the shareholders of the Company to the extent
shareholder approval is necessary to satisfy any Applicable Laws. At the time of such amendment, the Board shall determine, upon advice from counsel, whether
such amendment will be contingent on shareholder approval.
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16.2 Shareholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval.
16.3 Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees, Consultants and Directors with the maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options or to the nonqualified deferred compensation provisions of Section 409A of the Code and/or to bring the
Plan and/or Awards granted under it into compliance therewith.
16.4 No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a)
the Company requests the consent of the Participant and (b) the Participant consents in writing.
16.5 Amendment of Awards. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the
Committee may not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless (a) the Company requests the
consent of the Participant and (b) the Participant consents in writing.
17. General Provisions.
17.1 Forfeiture Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award
shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to applicable vesting conditions of an Award.
Such events may include, without limitation, breach of non-competition, non-solicitation, confidentiality, or other restrictive covenants that are contained in the
Award Agreement or otherwise applicable to the Participant, a termination of the Participant’s Continuous Service for Cause, or other conduct by the Participant that
is detrimental to the business or reputation of the Company and/or its Affiliates.
17.2 Clawback. Notwithstanding any other provisions in this Plan, the Company may cancel any Award, require reimbursement of any Award by a
Participant, and effect any other right of recoupment of equity or other compensation provided under the Plan in accordance with any Company policies that may be
adopted and/or modified from time to time (“Clawback Policy”). In addition, a Participant may be required to repay to the Company previously paid compensation,
whether provided pursuant to the Plan or an Award Agreement, in accordance with the Clawback Policy. By accepting an Award, the Participant is agreeing to be
bound by the Clawback Policy, as in effect or as may be adopted and/or modified from time to time by the Company in its discretion (including, without limitation, to
comply with applicable law or stock exchange listing requirements).
17.3 Other Compensation Arrangements . Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation
arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific
cases.
17.4 Sub-Plans. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying securities, tax or other laws of various
jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee
determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for
which the sub-plan was designed.
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17.5 Deferral of Awards. The Committee may establish one or more programs under the Plan to permit selected Participants the opportunity to elect to defer
receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Participant to
payment or receipt of shares of Common Stock or other consideration under an Award. The Committee may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, shares or other consideration so deferred, and such other
terms, conditions, rules and procedures that the Committee deems advisable for the administration of any such deferral program.
17.6 Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to establish any special or separate
fund or to segregate any assets to assure the performance of its obligations under the Plan.
17.7 Recapitalizations. Each Award Agreement shall contain provisions required to reflect the provisions of Section 14.
17.8 Delivery. Upon exercise of a right granted under this Plan, the Company shall issue Common Stock or pay any amounts due within a reasonable period
of time thereafter. Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days shall be considered a
reasonable period of time.
17.9 No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether
cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be
rounded, forfeited or otherwise eliminated.
17.10 Other Provisions. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including,
without limitation, restrictions upon the exercise of Awards, as the Committee may deem advisable.
17.11 Section 409A. The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent
permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the “short-term
deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding
anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would
otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Participant’s
termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant’s separation from service (or the
Participant’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the
assessment of any additional tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee will have any liability to
any Participant for such tax or penalty.
17.12 Disqualifying Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion of shares of
Common Stock acquired upon exercise of an Incentive Stock Option within two years from the Grant Date of such Incentive Stock Option or within one year after the
issuance of the shares of Common Stock acquired upon exercise of such Incentive Stock Option (a “Disqualifying Disposition”) shall be required to immediately
advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock.
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17.13 Section 16. It is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3
as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 16
of the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of the Plan
would conflict with the intent expressed in this Section 17.13, such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such
conflict.
17.14 Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the
Plan is to be exercised in case of such Participant’s death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably
prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.
17.15 Expenses. The costs of administering the Plan shall be paid by the Company.
17.16 Severability. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part,
such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not
be affected thereby.
17.17 Plan Headings. The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the
provisions hereof.
17.18 Non-Uniform Treatment. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among persons who
are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective
determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.
18. Effective Date of Plan. The Plan shall become effective as of the Effective Date, but no Award shall be exercised (or, in the case of a stock Award, shall be
granted) unless and until the Plan has been approved by the shareholders of the Company, which approval shall be within 12 months before or after the date the Plan
is adopted by the Board.
19. Termination or Suspension of the Plan. The Plan shall terminate automatically on December 29, 2033. No Award shall be granted pursuant to the Plan after such
date, but Awards theretofore granted may extend beyond that date. The Board may suspend or terminate the Plan at any earlier date pursuant to Section 16.1 hereof.
No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
20. Choice of Law. The law of the State of Montana shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to
such state’s conflict of law rules.
As adopted by the Board of Directors of United States Antimony Corporation on November 3, 2023.
As approved by the shareholders of United States Antimony Corporation on December 29, 2023.
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Subsidiaries of Registrant as of December 31, 2023
Name:
Bear River Zeolite Company
Antimonio de Mexico, S.A. de C.V.
United States Antimony, Mexico, S.A. de C.V.
Stibnite Holding Company US Inc.
Antimony Mining and Milling US LLC
AGUA Mines, Inc.
Lanxess Laurel de Mexico, S.A. de C.V.
EXHIBIT 21.1
Jurisdiction
Idaho
Mexico
Mexico
Montana
Montana
Montana
Mexico
EXHIBIT 31.1a
Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Gary C. Evans, certify that:
(1)
(2)
(3)
(4)
I have reviewed this annual report on Form 10-K of United States Antimony Corporation;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities,
particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusion about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
(5)
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
Date: April 12, 2024
/s/ Gary C. Evans
Gary C. Evans
Co-Chief Executive Officer and Chairman of the Board
EXHIBIT 31.1b
Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Lloyd Joseph Bardswich, certify that:
(1)
(2)
(3)
(4)
I have reviewed this annual report on Form 10-K of United States Antimony Corporation;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities,
particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusion about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
(5)
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
Date: April 12, 2024
/s/ Lloyd Joseph Bardswich
Lloyd Joseph Bardswich
Co-Chief Executive Officer and Director
EXHIBIT 31.2
Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Richard R. Isaak, certify that:
(1)
(2)
(3)
(4)
I have reviewed this annual report on Form 10-K of United States Antimony Corporation;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities,
particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusion about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
(5)
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
Date: April 12, 2024
/s/ Richard R. Isaak
Richard R. Isaak
SVP, Chief Financial Officer
CERTIFICATIONS PURSUANT TO SECURITIES EXCHANGE ACT OF 1934
RULE 13a-14(b) OR 15d-14(b) AND
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
EXHIBIT 32.1
In connection with the Annual Report of United States Antimony Corporation (the “Company”) for the year ended December 31, 2023, as filed with the Securities and
Exchange Commission on the date hereof (the “Report”), Gary C. Evans, Co-Chief Executive Officer and Chairman of the Board of the Company, Lloyd Joseph
Bardswich, Co-Chief Executive Officer and Director of the Company, and Richard R. Isaak, SVP and Chief Financial Officer of the Company, each certifies for the
purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63
of Title 18 of the United States Code, that:
(1)
(2)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 12, 2024
/s/ Gary C. Evans
Gary C. Evans
Co-Chief Executive Officer and Chairman of the Board
Date: April 12, 2024
/s/ Lloyd Joseph Bardswich
Lloyd Joseph Bardswich
Co-Chief Executive Officer and Director
Date: April 12, 2024
/s/ Richard R. Isaak
Richard R. Isaak
SVP, Chief Financial Officer
MINE SAFETY DISCLOSURE
EXHIBIT 95
Pursuant to Section 1503(a) of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), issuers that are operators,
or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information
regarding specified health and safety violations, orders and citations, issued under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) by the Mine
Safety and Health Administration (the “MSHA”), as well as related assessments and legal actions, and mining-related fatalities.
The following table provides information for the year ended December 31, 2023:
§104
Significant
and
Substantial
Citations (1)
14
Mine
Bear River Zeolite
§104(b)
Orders
(2)
3
§104(d)
Citations
and
Orders (3)
0
§110(b)(2)
Violations
(4)
0
§107(a)
Orders (5)
0
Proposed
Assessments
from MSHA
(In dollars $)
$39,623
Mining
Related
Fatalities
0
§104(e)
Notice
(yes/no)
(6)
No
Pending Legal
Action before
Federal Mine Safety
and Health Review
Commission
(yes/no)
No
(1)
(2)
(3)
(4)
(5)
(6)
The total number of violations received from MSHA under §104 of the Mine Act, which includes citations for health or safety standards that could
significantly and substantially contribute to a serious injury if left unabated.
The total number of orders issued by MSHA under §104(b) of the Mine Act, which represents a failure to abate a citation under §104(a) within the period of
time prescribed by MSHA.
The total number of citations and orders issued by MSHA under §104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety
standards.
The total number of flagrant violations issued by MSHA under §110(b)(2) of the Mine Act.
The total number of orders issued by MSHA under §107(a) of the Mine Act for situations in which MSHA determined an imminent danger existed.
A written notice from the MSHA regarding a pattern of violations, or a potential to have such pattern under §104(e) of the Mine Act.
UNITED STATES ANTIMONY CORPORATION
CLAWBACK POLICY
EXHIBIT 97
1. Introduction. The Board of Directors (the “Board”) of United States Antimony Corporation (the “Company”) believes that it is in the best interests of the Company
and its shareholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company’s pay-for-performance
compensation philosophy. The Board has therefore adopted this policy which authorizes the recoupment of certain executive compensation in the event of an
accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws (the “Policy”).
2. Administration. This Policy will be administered by the Board or by the Compensation Committee, in which case references herein to the Board shall be deemed
references to the Compensation Committee. Any determinations made by the Board will be final and binding on all affected individuals.
3. Covered Executives. This Policy applies to the Company’s current and former executive officers, as determined by the Board, and such other senior leadership team
members who may from time to time be deemed subject to the Policy by the Board (the “Covered Executives”). Covered Executives must include the individuals
specified in CFR §240.10D-1 and in any national securities exchange listing standards adopted pursuant to such rule that are applicable to the Company (“Listing
Standards”).
4. Recoupment; Accounting Restatement. In the event the Company is required to prepare an accounting restatement of its financial statements due to the
Company’s material noncompliance with any financial reporting requirement under the securities laws, irrespective of if or when a financial restatement is filed with
the Securities and Exchange Commission (the “SEC”), the Board will promptly require reimbursement or forfeiture of any Erroneously Awarded Compensation
(defined below) received by any Covered Executive during the three completed fiscal years immediately preceding the date on which the Company is required to
prepare an accounting restatement and any transition period (that results from a change in the Company’s fiscal year) within or immediately following those three
completed fiscal years.
5. Incentive Compensation. For purposes of this Policy, Incentive Compensation means any of the following; provided that, such compensation is granted, earned or
vested based wholly or in part on the attainment of a financial reporting measure:
·
·
·
·
·
·
·
Annual bonuses and other short- and long-term cash incentives.
Stock options.
Stock appreciation rights.
Restricted stock.
Restricted stock units.
Performance shares.
Performance units.
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Financial reporting measures include:
·
·
·
·
·
·
·
·
·
Company stock price.
Total shareholder return.
Revenues.
Net income.
EBITDA.
Funds from operations.
Liquidity measures such as working capital or operating cash flow.
Return measures such as return on invested capital or return on assets.
Earnings measures such as earnings per share.
6. Erroneously Awarded Compensation. The amount to be recovered (the “Erroneously Awarded Compensation") will be the excess of the Incentive Compensation
paid to the Covered Executive based on the erroneous data over the Incentive Compensation that would have been paid to the Covered Executive had it been based
on the restated results, which must be computed without regard to any taxes paid, as determined by the Board. If the Erroneously Awarded Compensation received
by the Covered Executive is not subject to mathematical recalculation directly from the information in the accounting restatement, the Board will make its
determination based on a reasonable estimate of the effect of the accounting restatement. If approved by the Board and not prohibited by SEC rules or Listing
Standards, the Company may cooperate with the Covered Executive in filing any amended tax returns required as a result of the exercise by the Company of its rights
pursuant to this Policy.
7. Method of Recoupment. The Board will determine, in its sole discretion, the method for recouping Incentive Compensation hereunder which may include, without
limitation:
(a)
(b)
(c)
(d)
(e)
requiring reimbursement of cash Incentive Compensation previously paid;
seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer or other disposition of any equity-based awards;
offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive;
cancelling outstanding vested or unvested equity awards; and/or
taking any other remedial and recovery action permitted by law, as determined by the Board.
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8. No Indemnification. The Company shall not indemnify any Covered Executives against the loss of any incorrectly calculated Incentive Compensation or any
amount recovered under this Policy.
9 . Interpretation. The Board is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate or advisable for the
administration of this Policy.
10. Effective Date. This Policy will be effective as of the date it is adopted by the Board (the “Effective Date”) and will apply to Incentive Compensation that is
approved, awarded or granted to Covered Executives before, on or after that date.
11. Amendment; Termination. The Board may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary to comply with
any applicable rules and Listing Standards. The Board may terminate this Policy or adopt a new policy at any time.
12. Other Recoupment Rights. The Board may require that any employment agreement, equity award agreement or similar agreement entered into shall, as a condition
to the grant of any benefit thereunder, require a Covered Executive to agree to abide by the terms of this Policy. Any right of recoupment under this Policy is in
addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any similar policy in any
employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company.
13. Impracticability. The Company may forego recovery of Erroneously Awarded Compensation only (a) on conditions specified in applicable SEC rules and Listing
Standards and (b) if the Compensation Committee or a majority of independent directors serving on the Board determines that recovery would be impractical.
14. Successors. This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators or other legal
representatives.
Adopted: October 26, 2023
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