SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31,June 30, 2009 Commission File No. 001-10156
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0735390
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporated or organization)organization
Post Office Box 909, Alleghany, CA 95910
(Address of principal executive offices)
(530) 287-3223
(Registrant's telephone number)
(including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days.
Yes: No: Xx
As of March 31,June 30, 2009, 13,373,505 shares of Common Stock, par value $.03 per
share, were issued and outstanding.
PART I
1. FINANCIAL INFORMATION
Original Sixteen to One Mine, Inc.
Condensed Balance Sheet
March 31,June 30, 2009 and December 31, 2008
March 31,June 30, 2009 December 31, 2008
ASSETS
Current Assets
Cash $ 4,0207,120 $ -
Accounts receivable 3,9054,666 3,266
Inventory 641,816604,097 631,852
---------- ----------
Total current assets 649,741615,883 635,118
---------- ----------
Mining Property
Real estate and property rights
net of depletion of $524,145 218,287 218,287
Real estate and mineral property 500,707 500,707
---------- ----------
718,994 718,994
---------- ----------
Fixed Assets at Cost
Equipment 925,243 925,243
Buildings 209,487 209,487
Vehicles 255,128 255,128
---------- ----------
1,389,858 1,389,858
Less accumulated depreciation (1,289,172)(1,294,070) (1,284,275)
---------- ----------
Net fixed assets 100,68695,788 105,583
---------- ----------
Other Assets
Bonds and misc. deposits 5,460 5,460
---------- ----------
Total Assets $1,474,881$1,436,125 $1,465,155
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable &
accrued expenses 794,573801,856 484,697
Due to related party 365,344367,593 626,727
Notes payable due within one year 400,000 400,000
---------- ----------
Total Current Liabilities 1,559,9171,569,449 1,511,424
---------- ----------
Long Term Liabilities
Notes payable due after one year 97,236 97,236
---------- ----------
Total Liabilities 1,657,1531,666,685 1,608,660
---------- ----------
Stockholders' Equity
Capital stock, par value $.03:
30,000,000 shares authorized:
13,373,505 shares issued and
outstanding as of March 31,June 30, 2009 and
as of December 31, 2008 439,876 439,876
Additional paid-in capital 2,005,282 2,005,2742,005,282
(Accumulated deficit)
retained earnings (2,627,430)(2,675,718) (2,588,663)
---------- ----------
Total Stockholders' Equity (182,272)(230,560) (143,505)
---------- ----------
Total Liabilities and
Stockholders' Equity $1,474,881$1,436,125 $1,465,155
========== ==========
See Accompanying Notes
Original Sixteen to One Mine, Inc.
Statement of Operations and Retained Earnings
Three Months Ended March 31, 2009 and March 31, 2008
ThreeEnding June 30, Six Months Ending March 31,June 30,
2009 2008 2009 2008
------ ------ ------ -----
Revenues:
Gold & jewelry sales $ 47,33350,013 $ 100,43019,990 $ 97,346 $ 120,420
----------- ----------- -------- --------
Total revenues 47,333 100,43050,013 19,990 97,346 120,420
----------- ----------- -------- --------
Operating expenses:
Salaries and wages 17,282 30,07916,958 17,888 34,240 47,966
Contract Labor 6,765 8,28615,594 3,359 22,359 11,645
Telephone & utilities 8,266 11,51712,895 11,321 21,161 22,838
Taxes - property & payroll 9,075 9,7129,116 9,107 18,192 18,820
Insurance 190 846190 380 1,038
Supplies 4,571 9,7593,187 2,115 7,758 11,874
Small equipment & repairs 5,054 4,3952,112 456 7,166 4,850
Drayage 1,524 6,0204,294 6,594 5,818 12,614
Corporate expenses 2,775 2,600
Compliance/safety 73 255,300 7,245 8,075 9,845
Legal and accounting 245124 - 369 88,572
Compliance/Safety 258 121 330 146
Depreciation & amortization 4,898 4,902 9,796 9,804
Other expenses 2,208 3,4882,780 2,746 4,989 6,234
---------- ---------- ------- -------
Total operating expenses 62,926 180,20177,706 66,044 140,633 246,246
---------- ---------- Profit (Loss)-------- --------
Loss from operations (15,593) (79,771)(27,692) (46,054) $ (43,287) $ (125,826)
Other Income & (Expense):
Other Incomeincome (expense) (23,175) (20,490)(19,795) (32,737) (42,968) (53,228)
---------- ----------- ------- --------
Profit (Loss) before taxes (38,768) (100,261)(47,487) (78,791) (86,255) (179,054)
---------- ----------- --------- ----------
Income Tax Benefittax benefit (expense) (800) - 800(800) (800)
---------- ----------- --------- ----------
Net Profit (Loss)profit (loss) $ (38,768)(48,287) $ (101,061)(78,791) $ (87,055) $ (179,854)
============ =========== ========== ==========
Basic and diluted (loss)
Gain
(Loss) per share $ (.002)(.0036) $ (.008)(.006) $ (.0065) $ (.01)
============ ============ ========= =========
Shares used in the
calculation of net
loss income per share 13,373,505 12,905,505 13,373,505 12,905,505
============ =========== ========== ===========
See Accompanying Notes
Original Sixteen to One Mine, Inc.
Statement of Cash Flows
ThreeSix Months Ended March 31, 2009June 30,2009 and March 31, 2008
ThreeJune 30,2008
Six Months Ended March 31,June 30,
2009 2008
-------------- --------------
Cash Flows From Operating Activities:
Net (loss) profit (loss) $ (38,768)(87,055) $ (101,061)(179,854)
operating activities:
Depreciation and amortization 4,898 4,9029,796 9,804
(Increase)Decrease in
accounts receivable (639) 832(1,400) 1,441
Decrease(Increase) in inventory (9,964) (17,898)27,755 25,237
(Increase)Decrease in other
current assets - 625
(Decrease) increase in accounts payable
and accrued expenses 309,876 45,997317,159 124,412
(Decrease) increase in short term notes (261,383) 56,099(259,135) 14,579
------------ ----------
Net cash (used) provided by
operating activities (4,020) (10,504)7,120 (3,756)
------------ -----------
Cash Flows From Investing Activities:
SalePurchase of Real Estatemining property - -
Purchase of fixed assets - -
Other assets bonds misc. deposits - -
------------- -----------
Net cash (used) providedused by
investing activities - -
------------- -----------
Cash Flows From Financing Activities
Increase (decrease) notes payable - 3,307
(Increase) decrease in notes receivable - -5,943
Proceeds from sale of common stock - 459
Additional paid-in capital - 13,005
------------ ------------
Net cash provided (used) by
financing activities - 16,77119,407
------------ ------------
(Decrease) increase in cash 4,020 6,2677,120 15,651
Cash, beginning of period - 642
------------ ----------
Cash, end of period $ 4,0207,120 $ 6,90916,293
============ ============
Supplemental schedule of other cash flows:
Cash paid during the period for:
Interest expense $ 26,20846,826 $ 35,87360,026
============ ============
Income Taxestaxes $ -800 $ 800
============ ============
See Accompanying Notes
NOTES TO THE FINANCIAL STATEMENTS
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business: Original Sixteen to One Mine, Inc. (the Company) was
incorporated in 1911 and is actively involved in operating gold mines in
Alleghany, California; currently inon maintenance-only status.
Inventory: Inventory consists of gold bullion, specimens and jewelry. Gold
bullion and specimens are quoted at the market price for gold bullion.
Jewelry is quoted at the market price for the gold content plus labor cost.
Gold bullion is accounted for using the FIFO method. All other inventory is
Accountedaccounted for using the specific identification method.
Fixed Assets: Fixed assets are stated at historical cost. Depreciation is
calculated using straight-line and accelerated methods over the following
useful lives: Vehicles 3 to 5 years, Equipment 5 to 7 years, Buildings 18 to
31.5 years.
Depletion Policy: Because of the geological formation in the Alleghany Mining
District, estimates of ore reserves currently cannot be calculated, and
accordingly, a cost per unit depletion factor cannot be determined. Should
estimates of ore reserves become available, the units of production method of
depletion will be used. Until such time, no depletion deduction will be
recorded.
Revenue Recognition: As they are mined, gold specimens are recorded in
inventory and revenue is recognized using quoted market prices for gold.
For income tax purposes revenues are not recognized until the gold is sold.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amounts
of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates.
GENERAL NOTES
1. In accordance with directive from the Securities and Exchange Commission
(SEC)and Industry Guide 7, reference for all intent and purposes to the
Company's employees as miners, its properties as mines or its operation as
mining does not diminish the fact that the Company has no proven reserves and
is in the "exploration state" as defined in Guide 7(a)(4)(iii).
2. In the opinion of management, the financial statements contain all
adjustments (consisting only of normal recurring accruals) necessary to present
fairly the Company's financial position at March 31,June 30, 2009 and December 31,
2008, the results of operations and cash flows for the three-monthsix-month periods
ended March 31,June, 2009 and 2008. The unaudited financial statements have been
prepared in accordance with Generally Accepted Accounting Principles for
interim financial information and with the instructions to Form 10-Q and Item
310(b) of Regulation S-B.
II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
The Sixteen to One mine in the Alleghany Mining District is a unique mine and
requires a unique operation, which has been recognized by its owners, its
miners, geologists, engineers, and some public agencies during the last decade
of the twentieth century and to the present. It is a traditional high-grade,
hard rock, underground gold mine. The same company owns and operates
(maintains) the mine.Original Sixteen to One Mine Inc, (owner) was incorporated
in California in 1911. Experts estimate that less than twenty percent of the
proven and probable ore deposit has been mined. Production is approximately
1,500,000 ounces of gold.
There are over twenty-eightthirty miles of horizontal workings and millions of cubic
feet of vertical excavations called stopes. The entire grounds are not
maintained for mining. Once an area is targeted for mining, travel ways and
escape routes are brought into safety compliance. Production miners set up a
heading (face) and begin a drill-blast-muck sequence into the quartz. Gold is
hosted in the quartz vein in exceedingly rich concentrations called "pockets".
Metal detectors are regularly used underground as a tool for guiding the
direction of the work. Metal detectors are also used as a tool to separate the
ore underground. This has the positive affect of reducing the volume of shot
rock from the mine, thereby reducing costs.
In 1992, the company initiated a gold marketing plan of selling gold in quartz
as a gemstone. This produces revenue significantly greater than selling gold
into the spot market. Demand for the Sixteen to One gold-in-quartz gemstone
exceeds supply.
Production has been termed a "feast or famine" situation for over 100 years.
Reserves in a high-grade gold mine cannot be termed as "proven". The company
hoards gold and sells it according to short-term cash needs. This fact
requires an operator to manage its cash flow to operate between pockets. It is
difficult to undertake major expansion plans with an uncertain supply of
capital. The Company has announced general plans to build a new shaft in the
northern section of its Alleghany patented claims.
BALANCE SHEET COMPARISONS
For the three-monthsix-month period ending Marchfrom December 31, 2008 to June 30, 2009 there was very littlethe only
substantial change to the balance sheet. Most notablysheet is an increase of $317,159 (65%) in
Accounts Payable and Accrued Expenses
increased by $309,876 (64%an increase of $259,134 (41%) and Notes Payable Related Party decreased by
$261,383 (42%) duein Due to related party
notes. Both of these changes are primarily to the result of a reclassification of
an existing debt.a liability from related party notes to accounts payable and accrued expenses.
STATEMENT OF OPERATIONS
Revenues for the three-month period ending March 31,ended June 30, 2008 increased by $30,023
(150%) due to more sales in the second quarter of 2009 decreased by $53,097
(52%) compared withto 2008. For
the six-month period ended June 30, 2009 compared to the same period forin 2008
due to a lack of gold production.revenue decreased by $23,074 (19%).
Changes in the Company's operating expenses for the three-month periodthree and six-month periods
ended March 31,June 30, 2009 compared to the same periodperiods in 2008 are reflected as
follows:
1. For the six-month period Salaries and wagesWages decreased by $112,797 (42%) due to reduced operations
in 2009.
2. Contract labor decreased by $1,521 (18%) as the number of contract
workers decreased in 2009.
3. Telephone and utilities decreased by $3,251$13,726 (28%)
as the resultcompany relied primarily on contract labor in 2009.
2. For the three and six-month periods Contract Labor increased by
$12,235 (364%) and $10,714 (92%)respectively as the company relied on contract
labor more in 2009.
3. For the three-month period Supplies increased by $1,072 (51%) due to
the purchase of a maintenance-only operationmore supplies in the first quarter of 2009 than in 2008.
For the six-month period Supplies decreased by $4,116 (35%) as the company
purchased less supplies in 2009 withthan in 2008.
4. For the three and six-month periods Small Equipment and Repairs increased by
$1,656 (363%) and $2,316 (48%) respectively due to repairs done in 2009 that
were not done in 2008.
5. For the three and six-month periods Drayage decreased activities$2,300 (35%) and
$6,796 (54%) respectively due to the decrease in fuel prices in 2009 compared
to 2008.
4. Supplies6. For the three and six-month periods Corporate Expense decreased by $5,188 (53%$1,945
(27%) and $1,770 (18%) respectively due to not utilizing a decreased maintenance-only
operationprinter to print
the annual report in 2009.
5. Drayage decreased by $4,496 (74%) because of2009 as well as the decreased activity
in 2009.
6.associated reduced postage required
to mail it.
7. For the six-month period Legal and accountingAccounting decreased by $88,327$88,203 (99%)
due to the issuance of an order on January 7, 2008 for plaintiff Original
Sixteen to One Mine, Inc. to reimburse defendants CDAA et al $88,376 for
attorneys fees.
7. Total operating expenses decreased by $117,275 (65%) due to decreased
activity in 2009.
8. Other income and expenses increased by 2,685 (13%) due to increased
interest expense in 2009.
9. For the three-month period ended March 31,June 30, 2009, the Company recorded a
loss of $38,768$48,287 (before taxes) compared to a loss of $101,061$78,791 for same period
in 2008. The $62,293 (62%$30,504 (39%) difference is due primarily to more gold sales in
the second quarter of 2009 compared to 2008. For the six-month period ended
June 30, 2009, the Company recorded a loss of $87,055 (before taxes) compared
to a loss of $179,854 for the same period in 2008. The $92,799 (52%)
difference is due to lower expenses for the reduced expensesfirst six months of 2009 compared to
2008. The legal fee billed in 2009.2008 is the main contributing factor.
SUBSEQUENT EVENTS
In July the Company and its president were served a complaint for damages in
Superior Court of the State of California, County of Sierra by the California
Regional Water Quality Control Board, Central Valley Region. Both defendants
filed an answer on August 20, 2009 denying that the state is entitled to any
damages. A case management hearing is scheduled for January 5, 2010. The case
number is: No. 7019.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity is substantially dependent upon the results of
operations. The Company maintains a gold inventory which it liquidates to
satisfy working capital needs. There is no assurance that inventory is
adequate to sustain the Company.
PART II
LEGAL PROCEEDINGS
None
SUBSEQUENT EVENTS
noneSee "subsequent events".
OTHER INFORMATION
The unaudited interim consolidated financial statements of Original Sixteen to
One Mine, Inc. (the Company) have been prepared by management in accordance
with generally accepted accounting practices. Such rules allow the omission of
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted audited accounting
principles as long as the statements are not misleading.
In the opinion of management, verified by signature below, all adjustments
necessary for a fair presentation of these interim statements have been
included. These adjustments are of a normal recurring nature.
The preparation of the Company's financial statements in conformity with
accounting principles accepted in the United States requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and disclosure of contingent liabilities at
the date of the financial statements, as well as the reported amount of
revenues and expenses during the reporting period. On an ongoing basis,
management evaluates its estimates and assumptions; however, actual amounts
could differ from those based on such estimates and assumptions. No accounting
principle upon which the Company's financial status depends, requires estimates
of proven and probable reserves and/or assumptions of future gold prices.
Commodity prices may significantly affect the company's profitability and cash
flow. No independent accounting firm or auditors have any responsibility for
the accounting and written statements of the Form 10-QSB.
The Company and its president assume responsibility for the accuracy of this
filing and certify the financial statements present fairly in all material
respects, the financial position of Original Sixteen to One Mine, Inc at March
31,June
30, 2009.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
From time to time the Original Sixteen to One Mine, Inc. (the Company), will
make written and oral forward-looking statements about matters that involve
risks and uncertainties that could cause actual results to differ materially
from projected results. Important factors that could cause actual results to
differ materially include, among others:
- - Fluctuations in the market prices of gold
- - General domestic and international economic and political
conditions
- - Unexpected geological conditions or rock stability conditions
resulting in cave-ins, flooding, rock-bursts or rock slides
- - Difficulties associated with managing complex operations in remote areas
- - Unanticipated milling and other processing problems
- - The speculative nature of mineral exploration
- - Environmental risks
- - Changes in laws and government regulations, including those
relating to taxes and the environment
- - The availability and timing of receipt of necessary governmental
permits and approval relating to operations, expansion of operations,
and financing of operations
- - Fluctuations in interest rates and other adverse financial market conditions
- - Other unanticipated difficulties in obtaining necessary financing with
specifications or expectations
- - Labor relations
- - Accidents
- - Unusual weather or operating conditions
- - Force majeure events
- - Other risk factors described from time to time in the Original Sixteen to One
Mine, Inc., filings with the Securities and Exchange Commission
Many of these factors are beyond the Company's ability to control or predict.
Investors are cautioned not to place undue reliance on forward-looking
statements. The Company disclaims any intent or obligation to update its
forward-looking statements, whether as a result of receiving new information,
the occurrence of future events or otherwise.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Registrant)
/s/Michael M. Miller
President and Director
Dated: May 14, 2009October 16,2009