SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 20202021
Commission File No. 001-10156
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0735390
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporated or organization)
Post Office Box 909, Alleghany, CA 95910
(Address of principal executive offices)
(530) 287-3223
(Registrant's telephone number)
(including area code)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the past 12 months
(or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.
N/A Voluntary Filer
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
"large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer
[ ]
Non-accelerated filer [ ] (do not check if smaller reporting
company)
Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-d of the Exchange Act). Yes
[ ] N0 [X]
As of September 30, 2020, 14,390,6312021, 14,870,631 shares of Common Stock,
par value $.033 per share, were issued and outstanding.
=
Item 1. PART I
Original Sixteen to One Mine, Inc.
Condensed Balance Sheet
September 30, 20202021 & December 31, 20192020
ASSETS
2021 2020 2019
Current Assets
Cash $ 20,49522,880 $ 4,43322,126
Accounts receivable 114,132 55,775
56,525
Inventory (see Note 1) 307,920 305,691128,036 309,576
Other current assets - -
------- -------
Total current assets 384,190 366,649265,048 387,477
------- -------
Mining Property
Real estate and property rights
net of depletion of $524,145 230,401 230,401
Mineral property 47,976 47,976
------- -------
Total Mining Property (see Note 2) 278,377 278,377
------- -------
Fixed Assets at Cost
Equipment 597,602632,602 597,602
Buildings 209,487 209,487
Vehicles 168,925 168,925
--------- ---------
Total fixed assets at cost 976,0141,011,014 976,014
--------- ---------
Less accumulated depreciation (935,286) (927,961)(971,174) (969,054)
----------- -----------
Net fixed assets 40,728 48,05339,840 6,960
----------- -----------
Other Assets
Bonds and misc. deposits 14,869 14,869
--------- -------
Total Assets $ 718,164598,134 $ 707,948687,683
========== ==========
?
Original sixteen to One Mine, Inc.
Condensed Balance Sheet Continued
LIABILITIES & STOCKHOLDERS' EQUITY
2021 2020 2019
Current Liabilities
Accounts payable & accrued expenses (see Note 3)$ 1,295,737 1,342,7181,356,601 1,327,532
Due to related party (see Note 4) 259,880 247,911252,686 279,237
Notes payable Short-term (see Note 6) 538,558 538,558
-------- -------
Total Current Liabilities 2,094,175 2,129,1872,147,845 2,145,327
-------- -------
Long Term Liabilities
Notes payable due after one year (see Note 7) 97,236 101,092126,836 126,836
-------- -------
Total Liabilities 2,191,411 2,230,2792,274,682 2,272,163
---------- ---------
Stockholders' Equity
Capital stock, par value $.033:
30,000,000 shares authorized: 14,342,09714,390,631
issued and outstanding as of Dec. 31, 20182020
and 14,870,631 as of JuneSept 30, 2019
(see Note 8) 474,8912021
490,731 474,891
Additional paid-in capital 2,222,892 2,221,2902,446,044 2,221,884
(Accumulated deficit)
Retained earnings (4,171,030) (4,218,512)(4,613,323) (4,281,255)
------------ -----------
Total Stockholders' Equity (1,473,247) (1,522,331)(1,676,548) (1,584,480)
------------ -----------
Total Liabilities and
Stockholders' Equity $ 718,164598,134 $ 707,948
============687,683
=========== ============
See Accompanying Notes
?
Original Sixteen to One Mine, Inc.
Statement of Operations and Retained Earnings
Three Months Ending SeptemberSept 30, NineSix Months Ending SeptemberSept 30,
2021 2020 20192021 2020 2019
------ ------ ------ -----------
Revenues:
Gold & Jewelry
Sales (59,837) 17,130 14,935(28,411) 88,455 137,614
Other Revenue
--------- --------- ----------------- --------
Total revenues $ (59,837) $ 17,130 $ 14,935 $$(28,411) 88,455 $ 137,614
--------- --------- ------------------ --------
Operating expenses:
Salaries and wages 15,000 15,000 45,000 43,024 45,000
Contract Labor 32,453 5,715 41,32341,625 46,237
153,247
Utilities 21,674 18,830 24,57366,455 55,369
66,844
Taxes - property & payroll411 4,294 8,7865,664 13,948
17,657
Supplies 2,731 202 5,5994,433 2,903
15,694
Insurance 1,046 600 1,5926,891 2,860
4,531
Small equipment equip.&
repairs 3,674 1,662 1,4687,260 5,283
7,943
Drayage (1,134) 782 3,7435,764 5,717 11,948
Corporate expenses 7,972 7,752 7,24927,509 11,975
10,759
Legal and Legal/Compliance 34,039 25 91434,854 12,104 7,670
Mine Maintenance 793 1,052 4,8003,902 2,415 14,911
Depreciation & amortizationamort. 707 2,442 4,5202,120 7,325 14,053
Other expenses 208 251 2,6565,686 1,536
6,640
---------- ----------- ------- ------- --------- ----------
Total operating
expenses 119,574 58,607 122,223257,163 210,696 376,897
---------- ----------
-------- -------- --------- ----------
Profit (Loss) from
operationsOperations (179,411) (41,477) (107,288)(285,574) (122,241) (239,283)
Other Income: 1,200 (16)1,200 3,600 2,6783,600
Other Expense: - 3,883 - 14,0424,258 -
--------- -------- --------- --------- -------------------
Total Other income(expense)income 1,200 (3,899)1,200 (658) 3,600
(11,364)
-------- -------- --------- ---------- ------- --------
Profit (Loss)
before taxes (178,211) (40,277) (111,187)(286,232) (118,641)
(250,647)
-------- ---------- --------- --------- ---------
Income tax benefit
(expense) - - (1,600) (800) (800)
--------
---------- --------- ----------------- ---------
Net profit
(loss) $(178,211) $ (40,277) $ (111,187) $(287,832) (119,441) $(251,447)
============
=========== ========== =================== =========
Basic and diluted (loss)
earnings per share $ (.002) $ (.003) $ (.008)(.007) $ (.008) $ (.02)
============ ============(.006)
========== ========== ========= ====================
Shares used in the
calculation of net (loss)
income per share
14,338,855 14,338,855 14,338,855 14,338,85514,870,631 14,390,631 14,870,631 14,390,631
============ =========== ========== =====================
See Accompanying Notes
?
Original Sixteen to One Mine, Inc.
Statement of Cash Flows
Six Months Ended Sept 30, 2021 and Sept 30, 2020
Nine Months Ended September 30,
2021 2020 and September 30, 2019
Nine Months Ended September 30,
2020 2019
-------------- ------------
Net profit (loss) $ (119,441)(287,833) $ (251,447)(137,201)
Cash Flows From Operating Activities:
Depreciation and amortization 2,120 7,325 14,053
(Increase)Decrease in
accounts receivable (55,357) 750 10,650
Decrease(Increase) in inventory (2,229) 179,247181,747 (2,033)
(Increase)Decrease in other
current assets - -
(Decrease) increase in accounts payable
and accrued expenses 6,282 40,68129,089 5,481
(Decrease)increase in related party loans
11,969 15,004
(Decrease)(26,677) 734
Decrease) increase in short term notes - -
------------ -----------------
Net cash (used) provided by
operating activities (95,344) 8,188(159,911) (124,944)
------------ ----------
Cash Flows From Investing Activities:
Fixed Asset Purchases _ (3,450)(35,000) -
Proceed from sale real estate - -
Other assets bonds misc. deposits - 6,591-
----------- - ----------
Net cash (used) provided by
investing activities -(35,000) -
----------- -----------
Cash Flows From Financing Activities
Increase (decrease) notes payable (3,856) (6,905)(43,355) 141,006
Proceeds from sale of common stock -15,840 -
Additional paid-in capital -224,160 -
----------- -----------
Net cash provided (used) by
financing activities 115,262 (6,905)196,645 141,006
------------ ------------
(Decrease) increase in cash 1,734 16,062 4,424
Cash, beginning of period 4,433 3,29621,145 3,454
------------ ----------
Cash, end of period $ 20,49522,879 $ 7,72019,516
============ ============
Supplemental schedule of other cash flows:
Cash paid during the period for:
Interest expense $ - $ 12,633-
============ ===========
Income taxes $ 8001,600 $ 800
============ ===========
NOTES TO THE FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business: Original Sixteen to One Mine, Inc. (the
Company) incorporated in 1911, actively operates the Sixteen
to One mine in Alleghany, California.
Inventory: Inventory consists of gold bullion specimens and jewelry.gold ore.
Gold bullion is quoted at the current market price. Jewelry and specimens are
quoted at the market price for gold content plus labor cost. Inventory
is accounted for using the average cost method.
Fixed Assets: Fixed assets are stated at historical cost.
Depreciation is calculated using straight-line and
accelerated methods over the following useful lives: Vehicles
3 to 5 years, Equipment 5 to 7 years, Buildings 18 to 31.5
years. Company does not capitalize underground expenses or
exploration.
Depletion Policy: Because of the geological formation in the
Alleghany Mining District, estimates of oreproven reserves
cannot be calculated, and accordingly, a cost per unit
depletion factor cannot be determined. No depletion
deduction is recorded.
Revenue Recognition: RevenueNew production of gold is recognized using quoted market prices
for gold when mined.recorded as an
asset at the current spot price (.999 fine purity). For
income tax purposes revenues are not recognized until the
gold is sold.
Use of Estimates: Preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions.
Estimates and assumptions affect reported amounts of assets
and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the
reporting period. Actual results may differ from these
estimates.
GENERAL NOTES
1. In accordance with directive from the Securities and
Exchange Commission (SEC)and Industry Guide 7, reference for
all intent and purposes to the Company's employees as miners,
its properties as mines or its operation as mining does not
diminish the fact that the Company has no proven reserves for
the period. The "exploration state" as defined in Guide
7(a)(4)(iii) may apply.
2. Financial statements contain adjustments (consisting only
of normal recurring accruals) necessary to present fairly the
Company's financial position at September 30, 20202021 and
December 31, 2019.2020. The results of operations and cash flows
for the third quarter of 20202021 and 20192020 and showing the ninenine-
month year-to-date ending September 30, 20202021 and 2019.2020.
Unaudited financial statements are prepared in accordance
with Generally Accepted Accounting Principles for interim
financial information and with instructions to Form 10-Q and
Item 310(b) of Regulation S-B.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF
OPERATION
The Sixteen to One mine in the Alleghany Mining District is a
unique gold deposit and requires an unfamiliar operation,
which is recognized by its owners, its miners, geologists,
engineers, and some public agencies for 125 years. It is a
rare California high-grade, hard rock, underground gold mine.
The Company celebrated its 100th year anniversary on Oct. 9,
2011. It becamebecoming the oldest gold mining corporation in the
United States. Experts estimate that sixty percent or more of
the gold deposit remains. Production is approximately
1,500,000 ounces of gold.
Over thirty miles of horizontal workings and millions of
cubic feet of vertical excavations called stopes exist. The
entire grounds are not maintained for mining. Once an area
is targeted for mining, travel ways and escape routes are
brought into safety compliance. Production miners set up a
heading (face) and begin a drill-blast-muck sequence into the
quartz. Gold is hosted in the quartz vein as exceedingly
rich concentrations called "pockets". Metal detectors are
regularly used underground as a tool for guiding the
direction of the work. Metal detectors are also used as a
tool to classify the ore underground. A positive effect
reduces the volume of rock taken from the mine, thereby
reducing costs.
In 1992, the company initiated a gold marketing plan of
selling gold in quartz as a gemstone. This produces revenue
significantly greater than selling gold into the spot market.
Demand for the Sixteen to One gold-
in-quartzgold-in-quartz gemstone exceeds
supply.
Production has been termed a "feast or famine" situation for
over 100 years. Reserves in this high-grade gold mine cannot
be termed as "proven". At the Sixteen to One the search for
gold embraces: (1) historical maps; (2) geophysical
prospecting; (3) underground headings, drifts or tunnels.
When operations detect the presence of gold, the Company
evaluates the environment and changes from exploration to
development to production rapidly. The company hoards gold
and sells it according to short-term cash needs. These facts
create headaches for the Company managing cash flow between
pockets.
Balance Sheet notes:
Gold inventory is recorded at spot price despite proven additional value
for specimen and gem-stone material which is substantially greater than
spot price. Jewelry inventory is recorded at labor plus gold cost.
No value is recorded on the balance sheet for timber
reserves. The company owns 470 acres of prime forested
timberland. No value is recorded on the balance sheet for
the Company owned water-rights. Reduced value is recorded on
the balance sheet for buildings, equipment and land. No
value is recorded on the balance sheet for marketable
aggregate and decorative stone currently stockpiled. No
value is recorded on the balance sheet for goodwill. Fixed
assets are recorded at historic cost less depreciation which
cloud the true value of Company assets.
BALANCE SHEET COMPARISONS
For the nine-monththree-month period ended September 30,202030, 2021 there werewas no
significant changes to the balance sheet.
STATEMENT OF OPERATIONS
Revenues
Gold revenues for the nine-monthsix-month period ending September 30,
2020,2021, decreased by $49,159 (36%$39,695 (56%) compared with the same
period in 20192020 due to supportsupporting COVID-19 California and
federal restrictions.restrictions, decrease in sales, and the emphasis on
maintenance instead of producing gold.
Expenses
For the nine-month period ended September 30, 20202021, compared
to the same period in 20192020 total operating expenses decreased
by $173,115 (45%$33,230 (15%) to support COVID-19 California and federal restrictions to supportcomply with COVID-19
California and federal restrictions.
For the nine-month period ended September 30, 20202021, compared to
the same period in 20192020, the company showed a loss of $119,441$287,932
compared to a loss of $243,397.$137,201. The $123,956 (51%$150,632 (109%) difference
wasis due booking legal fees from 2019 that were overlooked,
bringing Directors fees up to support of COVID-19
Californiadate and federal restrictionsadjusting inventory that
limited mining.hasn?t been done for years
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
From time to time the Company makes written and oral forward-lookingforward-
looking statements about matters that involve risks and
uncertainties that could cause actual results to differ
materially from projected results. Important factors that
could cause actual results to differ materially include,
among others:
- Fluctuations in the market prices of gold
- General domestic and international economic, political and
governmental
conditions
- Unexpected geological conditions or rock stability
conditions
resulting in cave-ins, flooding, rock-bursts or rock slides
- The speculative nature of mineral exploration
- Environmental risks
- Changes in laws and government regulations, including those
relating to taxes
and the environment
- Fluctuations in interest rates and other adverse financial
market conditions
- Labor relations
- Accidents
- Unusual weather or operating conditions
- Force majeure events
These factors are beyond the Company's ability to control or
predict. Investors are cautioned not to place undue reliance
on forward-looking statements. The Company will update its
forward-looking statements, whether as a result of receiving
new information, the occurrence of future events or otherwise
if significant.
ITEM 4: CONTROLS AND PROCEDURES
Security procedures include multiple levels of gold custody,
from the mine to sales. Inventory control procedures were set
up by an SEC certified auditing firm and continue to be
followed.
PART II
Item 1 LEGAL PROCEEDINGS
NoneCompany defended criminal allegations initiated by the
California District Attorney Association. On July 12, 2021
Sierra County District Attorney dismissed all criminal
charges. The decision was approved in the California Superior
Court, Sierra County on July 13, 2021. Civil charges to be
discussed with Sierra County officials at a later date.
Item 1a RISK FACTORS
(a) Price of Gold
The dailycurrent spot price of gold between $1,700 and $1,800 an
ounce has a modestlimited financial effect on gross revenue if it's
between $1,000 and $1,300 an ounce. A significant drop below $1,000 may
have an adverse effect on the Company's operation. The Company's realized
gold values usually exceed the bullion price due to the jewelry and
specimen markets which are not affected by therevenue. Closing
spot price of gold.on December 31, 2020, was $1,803.28 and on
September 30, 2021, it was $1,742.80 an ounce.
(b) Lack of Proven Reserves
Because proven reserves are not utilized as a component for
evaluating future earnings or ore values, a sense of
uncertainty of existence is perceived by some. Caution is
always recommended in using the doctrines of reserves as an
economic tool for valuing a mining company. While (i) the
Company has recovered over one million ounces of gold and
(ii) management knows that substantial additional virgin
veins exist in the Sixteen to One mine, the Company has no
ability to measure potential gold production using the
mathematical tools generally recognized in the mining
industry; however, the company can prove that approximately
seventy percent (70%) of its vein systems have not been
developed.
(c) Governmental Regulation
The attached financial statements have not been audited by a
Securities Exchange Commission (SEC) accounting firm.
Therefore, the Company is not in full compliance with this
SEC regulation for companies listed on an exchange.
State and federal statutes regulate environmental quality,
safety, exploration procedures, reclamation, employee?s
health and safety, use of explosives, air quality standards,
pollution of stream and fresh water sources, noxious odors,
noise, dust, and other environmental protection controls as
well as the rights of adjoining property owners. Laws may
change preventing or delaying the commencement or continuance
of given operations.
The Company is substantially in compliance with all known
safety and environmental standards and regulations, however; it faces reoccurring
unreasonable and illegal demands from theregulations. The
California Central Valley Regional Water Quality Control
Board (CVRWCB) or its staff.permit was approved an additional five years in June
2021. The NPDES permit program, created in 1972 by the Clean
Water Act (C WA), helps address water pollution by regulating
point sources that discharge pollutants to waters of the
United States. The federal EPA Administration Order became
effective August 16, 2021. The Company is forced to
expendexpends working
capital and time defending this excessive and punitive behavior.
There can beis no assurance that future changes in the laws regulations or
reckless interpretations thereof will not have a material
adverse effect. CVRWCB staff accepted invitations to visit the mine
property. A definitive plan is under mutual development to re-write the
mine's discharge permit.regulations.
(d) Liquidity
Gold inventory at September 30, 2020,2021, was $307,920 primarily as specimens
or gold held as jewelry. While history of actual cash sales supports an
inventory value exceeding the spot price, no such increases are used to
compute the inventory. All inventory of raw$128,036. Raw
material is recorded at spot price per troy ounce. In addition, contract manufacturing costs of
jewelry are included in the finished jewelry inventory. Periodic
shortfalls in liquidity occur which are not likely to be bridged by
institutional debt financing. Management addresses these issues as they
arise.
(e) Price of Stock
Bids and offers are publicly recorded on the stock page of
the Company's web site and a gray market. There were no
trades listed for the past three years. Exposure is limited.
The price of stock may not accurately reflect its fair market
value because of the limited marketplace and the existence of
a wild and free gray market. The company deferred programs
to support or promote its stock.
There are conflicting bids, offers and trades between the Company's
website and the unregulated Pink Sheet Gray Market, ticker symbol OSTO.
Because of these discrepancies the market price is unreliable.
Item 2 UNREGISTERED SALES OF EQUITY
None
Item 3. DEFAULTS ON SECURITIES
None
Item 4. MINE SAFETY DISCLOSURES
For the nine-month ended September 30, 2020,2021, the Mine Safety
and Health Administration (MSHA) issued no citations or
orders.orders to report.
Item 5. OTHER INFORMATION
The unaudited interim consolidated financial statements of
the Company are prepared by management in accordance with
generally accepted accounting practices. Such rules allow
the omission of certain information and footnote disclosures
normally included in financial statements prepared in
accordance with generally accepted audited accounting
principles as long as the statements are not misleading.
In the opinion of management, verified by signature below,
all adjustments necessary for a fair presentation of these
interim statements have been included. These adjustments are
of a normal recurring nature.
The preparation of the Company's financial statements in
conformity with accounting principles accepted in the United
States requires management to make estimates and assumptions.
These estimates and assumptions affect reported amounts of
assets and liabilities and disclosure of contingent
liabilities at the date of financial statements, as well as
reported amounts of revenues and expenses during the
reporting period. On an ongoing basis, management evaluates
its estimates and assumptions; however, actual amounts may
differ. No accounting principle upon which the Company's
financial status depends, requires estimates of proven and
probable reserves and/or assumptions of future gold prices.
Commodity prices may significantly affect the company's
profitability and cash flow. No independent accounting firm
or auditors have any responsibility for the accounting and
written statements of the Form 10-Q.
The Company and its president assume responsibility for the
accuracy of this filing and certify the financial statements
present fairly in all material respects, the financial
position of Original Sixteen to One Mine, Inc at September
30, 2020.2021.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Registrant)
Michael M. Miller
President and Director
Dated: November 10, 2020December 21, 2021