UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)
 
☑
[X] 
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2016March 31, 2017
 
☐
[ ] 
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period _____ to _____
For the transition periodto
 
Commission file number 001-08675
 
UNITED STATES ANTIMONY CORPORATION
(Exact name of registrant as specified in its charter)charter)
 
Montana 81-0305822
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
 
P.O. Box 643, Thompson Falls, Montana59873
(Address of principal executive offices)(Zip code)
 
Registrant’s telephone number, including area code: (406) 827-3523
 
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 requirements for the past 90 days. Yes ☑ No ☐
YESXNo
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☑ No ☐
YESXNo
 
Indicate by check mark whether the registrant is a shell company as defined by Rule 12b-2 of the Exchange Act. Yes ☐ No ☑
YESNoX
 
At November 14, 2016,May 15, 2017, the registrant had outstanding 66,866,27867,183,466 shares of par value $0.01 common stock.
 
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
☐Smaller reporting company☑
(Do not check if a smaller reporting company)
Smaller reporting company ☒

 
 
UNITED STATES ANTIMONY CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD
ENDED SEPTEMBER 30, 2016MARCH 31, 2017
(UNAUDITED)
 
TABLE OF CONTENTS
 
 Page
PART I – FINANCIAL INFORMATION 
  
Item 1: Financial Statements (unaudited)1-14
1-12
  
Item 2: Management’s Discussion and Analysis of Results of Operations and Financial Condition15-2013-16
  
Item 3: Quantitative and Qualitative Disclosure about Market Risk2016
  
Item 4: Controls and Procedures2017
  
PART II – OTHER INFORMATION 
  
Item 1: Legal Proceedings2218
  
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
2218
  
Item 3: Defaults upon Senior Securities2218
  
Item 4: Mine Safety Disclosures2218
  
Item 5: Other Information2218
  
Item 6: Exhibits and Reports on Form 8-K2218
  
SIGNATURE2318
  
CERTIFICATIONS
 
 
[The balance of this page has been intentionally left blank.]
 
 
 
 
 
PART I-FINANCIAL INFORMATION
 
Item 1. Financial Statements
United States Antimony Corporation and Subsidiaries
Consolidated Balance Sheets
 
ASSETS
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
(Unaudited)
 
 
 
 
 
September 30, 2016
 
 
December 31, 2015
 
 
March 31,
2017
 
 
December 31,
2016
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 $43,318 
 $133,543 
 $11,129 
 $10,057 
Certificates of deposit
  251,641 
  250,414 
  252,062 
  251,641 
Accounts receivable, net of $4,031 allowance for doubtful accounts
  520,117 
  422,673 
Inventories (Note 3)
  738,118 
  1,094,238 
Accounts receivable, net
  554,380 
  552,119 
Inventories
  911,023 
  855,637 
Other current assets
  164,684 
  235,458 
  5,183 
  23,101 
Total current assets
  1,717,878 
  2,136,326 
  1,733,777 
  1,692,555 
    
    
Properties, plants and equipment, net
  15,879,575 
  16,030,333 
  15,559,890 
  15,695,966 
Restricted cash for reclamation bonds
  76,014 
  76,012 
  63,274 
Other assets
  32,520 
  17,530 
  362,370 
  314,203 
Total assets
 $17,705,987 
 $18,260,201 
 $17,719,311 
 $17,765,998 
    
    
LIABILITIES AND STOCKHOLDERS' EQUITY
    
    
Current liabilities:
    
    
Checks issued and payable
 $14,163 
 $35,682 
Accounts payable
 $1,658,225 
 $1,629,972 
  2,121,759 
  1,797,251 
Due to factor
  132,893 
  13,782 
  146,011 
  150,399 
Accrued payroll, taxes and interest
  225,462 
  221,446 
  193,280 
  213,695 
Other accrued liabilities
  184,434 
  141,545 
  128,854 
  122,968 
Payables to related parties
  42,676 
  32,396 
  2,048 
  14,525 
Deferred revenue
  78,730 
  78,730 
Notes payable to bank
  100,000 
  130,672 
  183,302 
  167,317 
Foreign income tax payable (Note 12)
  423,490 
  - 
Income taxes payable (Note 11)
  451,961 
  410,510 
Long-term debt, current portion, net of discount
  368,563 
  181,287 
  433,993 
  391,046 
Total current liabilities
  3,214,473 
  2,429,830 
  3,754,101 
  3,382,123 
    
    
Long-term debt, net of discount and current portion
  1,514,318 
  1,717,745 
  1,400,315 
  1,472,869 
Hillgrove advances payable (Note 9)
  1,145,158 
  1,254,846 
Hillgrove advances payable (Note 8)
  1,134,216 
  1,134,221 
Common stock payable to directors for services
  112,500 
  137,500 
  43,750 
  168,750 
Asset retirement obligations and accrued reclamation costs
  264,418 
  260,327 
  267,229 
  265,782 
Total liabilities
  6,250,867 
  5,800,248 
  6,599,611 
  6,423,745 
Commitments and contingencies (Note 6)
    
Commitments and contingencies (Note 5)
    
    
    
Stockholders' equity:
    
    
Preferred stock $0.01 par value, 10,000,000 shares authorized:
    
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 $909,375 and $907,500
    
    
respectively)
  7,500 
  7,500 
Series C: 177,904 shares issued and outstanding
    
    
(liquidation preference $97,847 both years)
  1,779 
  1,779 
Series D: 1,751,005 shares issued and outstanding
    
    
(liquidation preference $5,014,692 and $4,879,029
    
    
respectively)
  17,509 
  17,509 
Common stock, $0.01 par value, 90,000,000 shares authorized;
    
Common stock, $0.01 par value, 90,000,000 shares authorized;

    
66,866,278 and 66,316,278 shares issued and outstanding, respectively
  668,662 
  663,162 
67,488,063 and 66,866,278 shares issued and outstanding, respectively
  674,881 
  670,662 
Additional paid-in capital
  36,022,733 
  35,890,733 
  36,239,264 
  36,074,733 
Accumulated deficit
  (25,263,063)
  (24,120,730)
  (25,821,233)
  (25,429,930)
Total stockholders' equity
  11,455,120 
  12,459,953 
  11,119,700 
  11,342,253 
Total liabilities and stockholders' equity
 $17,705,987 
 $18,260,201 
 $17,719,311 
 $17,765,998 
 
The accompanying notes are an integral part of the consolidated financial statements.
 

 
United States Antimony Corporation and Subsidiaries
 
 
 
United States Antimony Corporation and Subsidiaries
 
 
 
Consolidated Statements of Operations (Unaudited)
 
 
 
Consolidated Statements of Operations - UnauditedConsolidated Statements of Operations - Unaudited
 
 
 
 
 
 
 
  For the three months ended    
 
 
   For the nine months ended 
 
 
For the three months ended
 
 
September 30, 2016
 
 
September 30, 2015
 
 
September 30, 2016
 
 
September 30, 2015
 
 
March 31, 2017
 
 
March 31, 2016
 
 
 
 
 
 
 
REVENUES
 $2,846,699 
 $3,505,452 
 $9,166,628 
 $9,853,127 
 $2,619,330 
 $3,322,203 
    
    
COST OF REVENUES
  2,888,660 
  (3,273,324)
  8,811,663 
  (9,632,616)
  2,529,786 
  3,111,375 
    
    
GROSS PROFIT (LOSS)
  (41,961)
  232,128 
  354,965 
  220,511 
GROSS PROFIT
  89,544 
  210,828 
    
    
OPERATING EXPENSES:
    
    
General and administrative
  309,832 
  353,285 
  850,255 
  920,128 
  200,592 
  163,877 
Salaries and benefits
  97,487 
  109,589 
Hillgrove advance - earned credit (Note 8)
  - 
  (23,991)
Professional fees
  29,004 
  45,947 
  252,469 
  188,319 
  103,338 
  143,650 
Hillgrove advance - earned credit (Note 9)
  (32,813)
  (43,388)
  (109,392)
  (101,527)
Gain on liability adjustment (Note 3)
  - 
  (914,967)
Gain on sale of assets
  - 
  (5,200)
TOTAL OPERATING EXPENSES
  306,023 
  355,844 
  993,332 
  86,753 
  401,417 
  393,125 
    
    
INCOME (LOSS) FROM OPERATIONS
  (347,984)
  (123,716)
  (638,367)
  133,758 
  (311,873)
  (182,297)
    
    
OTHER INCOME (EXPENSE):
    
    
Interest income
  19 
  2,059 
  1,421 
  6,535 
  571 
  1,183 
Interest expense
  (28,343)
  - 
  (57,203)
  - 
  (27,650)
  - 
Foreign exchange gain (loss)
  (41,451)
  - 
Factoring expense
  (9,259)
  (14,233)
  (24,694)
  (33,917)
  (10,900)
  (7,526)
TOTAL OTHER INCOME (EXPENSE)
  (37,583)
  (12,174)
  (80,476)
  (27,382)
  (79,430)
  (6,343)
    
    
INCOME (LOSS) BEFORE INCOME TAXES
  (385,567)
  (135,890)
  (718,843)
  106,376 
  (391,303)
  (188,640)
    
    
Provision for income tax (Note 12)
  (411,490)
  - 
  (423,490)
  - 
    
NET INCOME (LOSS)
  (797,057)
  (135,890)
  (1,142,333)
  106,376 
NET LOSS
  (391,303)
  (188,640)
Preferred dividends
  (12,162)
  (36,487)
  (12,162)
    
    
Net income (loss) available to common stockholders
 $(809,219)
 $(148,052)
 $(1,178,820)
 $69,889 
Net loss available to common stockholders
 $(403,465)
 $(200,802)
    
    
Net income (loss) per share of common stock:
    
Basic
 $(0.01)
 
 $ Nil
 
 $(0.02)
 
 $ Nil
 
Diluted
 $(0.01)
 
 $ Nil
 
 $(0.02)
 
 $ Nil
 
Net income (loss) per share of
    
common stock:
    
Basic and diluted
 $(0.01)
 
 Nil
 
    
    
Weighted average shares outstanding:
    
    
Basic
  66,866,278 
  66,248,887 
  66,687,981 
  66,170,495 
  67,183,466 
  66,509,685 
Diluted
  66,866,278 
  66,248,887 
  66,687,981 
  66,333,689 
  67,183,466 
  66,509,685 

The accompanying notes are an integral part of the consolidated financial statements.
 

 
United States Antimony Corporation and Subsidiaries
 
 
 
 
 
 
Consolidated Statements of Cash Flows (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the nine months ended
 
 
 
September 30, 2016
 
 
September 30, 2015
 
Cash Flows From Operating Activities:
 
 
 
 
 
 
Net income (loss)
 $(1,142,333)
 $106,376 
Adjustments to reconcile net income (loss) to net cash
    
    
provided (used) by operating activities:
    
    
Depreciation and amortization expense
  652,375 
  664,775 
Gain on sale of asset
  - 
  (5,200)
Write off of uncollectible other asset
  - 
  18,668 
Hillgrove deferred revenue
  (109,392)
  (101,527)
Amortization of loan discount
  73,058 
  - 
Gain on liability adjustment
  - 
  (914,967)
Accretion of asset retirement obligation
  4,091 
  3,853 
Common stock issued for services
  - 
  57,950 
Common stock issued for director fees
  112,500 
  112,500 
Change in:
    
    
Accounts receivable, net
  (97,444)
  (302,770)
Inventories
  356,120 
  (776,489)
Other current assets
  70,774 
  (291,060)
Other assets
  (14,990)
  63,722 
Accounts payable
  26,728 
  1,109,674 
Accrued payroll, taxes and interest
  4,016 
  2,047 
Other accrued liabilities
  42,889 
  34,147 
Foreign income tax payable
  423,490 
  - 
Deferred revenue
  - 
  198,283 
Payables to related parties
  10,280 
  26,585 
Net cash provided by operating activities
  412,162 
  6,567 
 
    
    
Cash Flows From Investing Activities:
    
    
Purchase of properties, plants and equipment
  (459,969)
  (1,349,234)
Proceeds from sale of assets
  - 
  5,200 
Net cash used by investing activities
  (459,969)
  (1,344,034)
 
    
    
Cash Flows From Financing Activities:
    
    
Net proceeds from (payments to) factor
  119,111 
  259,575 
Net proceeds from sale of common stock and exercise of warrants
  - 
  120,000 
Proceeds from note payable to bank (see Note 7)
  - 
  92,502 
Proceeds from Hillgrove
  - 
  1,014,412 
Principal paid notes payable to bank (see Note 7)
  (30,672)
  - 
Principal payments on long-term debt
  (130,857)
  (69,381)
Net cash provided (used) by financing activities
  (42,418)
  1,417,108 
 
    
    
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
  (90,225)
  79,641 
Cash and cash equivalents at beginning of period
  133,543 
  123,683 
Cash and cash equivalents at end of period
 $43,318 
 $203,324 
 
    
    
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    
    
Noncash investing and financing activities:
    
    
Properties, plants and equipment acquired with long-term debt
 $41,648 
 $1,076,348 
Properties, plants and equipment with accrued liability
    
 $36,619 
Common stock issued to directors
 $137,500 
 $125,000 
United States Antimony Corporation and Subsidiaries
 
 
 
 
 
 
Consolidated Statements of Cash Flows - Unaudited
 
 
 
 
 
 
 
 
For the three months ended
 
Cash Flows From Operating Activities:
 
March 31, 2017
 
 
March 31, 2016
 
Net income (loss)
 $(391,303)
 $(188,640)
Adjustments to reconcile net income (loss) to net cash
    
    
 provided (used) by operating activities:
    
    
Depreciation and amortization
  215,675 
  261,150 
Amortization of debt discount
  23,413 
  - 
Hillgrove advance earned credit
  - 
  (23,991)
Accretion of asset retirement obligation
  1,447 
  1,364 
Common stock payable for directors fees
  43,750 
  37,500 
Foreign exchange loss
  41,451 
  - 
Other, net
  (426)
  - 
Change in:
    
    
Accounts receivable
  (2,261)
  (445,351)
Inventories
  (55,386)
  144,154 
Other current assets
  17,918 
  114,555 
Other assets
  (48,167)
  1,000 
Accounts payable
  324,508 
  330,057 
Accrued payroll, taxes and interest
  (20,415)
  (30,766)
Other accrued liabilities
  5,886 
  51,213 
Payables to related parties
  (12,477)
  231 
Net cash provided (used) by operating activities
  143,613 
  252,476 
 
    
    
Cash Flows From Investing Activities:
    
    
Purchase of properties, plants and equipment
  (79,599)
  (245,702)
Net cash used by investing activities
  (79,599)
  (245,702)
 
    
    
Cash Flows From Financing Activities:
    
    
Change in checks issued and payable
  (21,519)
  - 
Net borrowing from factor
  (4,388)
  84,083 
Proceeds from notes payable to bank
  15,985 
  - 
Principal paid notes payable to bank
  - 
  (44,912)
Principal payments of long-term debt
  (53,020)
  (41,824)
Net cash provided (used) by financing activities
  (62,942)
  (2,653)
NET INCREASE IN CASH
    
    
    AND CASH EQUIVALENTS
  1,072 
  4,121 
Cash and cash equivalents at beginning of period
  10,057 
  133,543 
Cash and cash equivalents at end of period
 $11,129 
 $137,664 
 
    
    
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    
    
Noncash investing and financing activities:
    
    
Imputed interest capitalized as property, plant and equipment
  - 
 $24,353 
Common stock payable issued to directors
 $168,750 
  137,500 
 
The accompanying notes are an integral part of the consolidated financial statements.
 

PART I - FINANCIAL INFORMATION, CONTINUED:
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 
1. Basis of Presentation:
 
The unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three and nine month periodsperiod ended September 30, 2016,March 31, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016.
Certain consolidated financial statement amounts for the three and nine month periods ended June 30, 2015, have been reclassified to conform to the 2016 presentation.  These reclassifications had no effect on the net income (loss) or cash flows or accumulated deficit as previously reported.2017.
 
For further information refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.
During the nine months ended September 30, 2016 and 2015, the Company incurred interest expense of $96,479 and $25,295, respectively, of which $39,276, and $25,113, respectively, has been capitalized as part of the cost of construction projects in Mexico.2016.
 
2.  Income (Loss) Per Common Share:
 
Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including warrants to purchase the Company's common stock and convertible preferred stock. Warrants equal to common stock equivalents of 169,872 shares have been added to the weighted average shares of outstanding common stock of 66,130,650 at September 30, 2015, to determine the diluted income per share for the nine months ended September 30, 2015.  Management has determined that the calculation of diluted earnings per share for the nine monthsquarters ended September 30,March 31, 2017 and March 31, 2016, is not applicable since any additions to outstanding shares related to common stock equivalents would be anti-dilutive.
 
As of September 30,March 31, 2017 and 2016, and 2015, the potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive are as follows:
 
 
September 30,
2016
 
 
September 30,
2015
 
 
March 31, 2017
 
 
March 31, 2016
 
Warrants
  250,000 
  - 
  250,000 
Convertible preferred stock
  1,751,005 
  1,751,005 
Total possible dilution
  2,001,005 
  1,751,005 
  2,001,005 
 

 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
3.
3.  Inventories:
 
Inventories at September 30, 2016March 31, 2017 and December 31, 2015,2016 consisted primarily of finished antimony products, antimony metal, antimony ore, and finished zeolite products that are stated at the lower of first-in, first-out cost or estimated net realizable value. Finished antimony products, antimony metal and finished zeolite products costs include raw materials, direct labor and processing facility overhead costs and freight. Inventory at September 30, 2016March 31, 2017 and December 31, 2015,2016, is as follows:
 
 
March 31,
 
 
December 31,
 
 
September 30,
2016
 
 
December 31,
2015
 
 
2017
 
 
2016
 
Antimony Metal
 $60,491 
 $102,207 
 $235,741 
 $112,300 
Antimony Oxide
  253,110 
  332,068 
  252,553 
  326,126 
Antimony Concentrates
  48,785 
  133,954 
  28,317 
  30,815 
Antimony Ore
  151,841 
  319,631 
  172,347 
  181,815 
Total antimony
  514,227 
  887,860 
  688,958 
  651,056 
Zeolite
  223,891 
  206,378 
  222,065 
  204,581 
 $738,118 
 $1,094,238 
 $911,023 
 $855,637 
    
 
During the first quarter of 2015 the Company discovered it had been overcharged for raw material purchases from a vendor.  The Company brought the matter to the vendor’s attention and received a $914,967 credit to accounts payable due the vendor that was recorded as a gain on liability adjustment during the nine months ended September 30, 2015.
4.
4.  Accounts Receivable and Due to Factor:
 
The Company factors designated trade receivables pursuant to a factoring agreement with LSQ Funding Group L.C., an unrelated factor (the “Factor”).  The agreement specifies that eligible trade receivables are factored with recourse. We submit selected trade receivables to the factor, and receive 83% of the face value of the receivable by wire transfer. The Factor withholds 15% as retainage, and 2% as a servicing fee. Upon payment by the customer, we receive the remainder of the amount due from the factor. The 2% servicing fee is recorded on the consolidated statement of operations in the period of sale to the factor. John Lawrence, CEO, is a personal guarantor of the amount due to Factor. 
 
Trade receivables assigned to the Factor are carried at the original invoice amount less an estimate made for doubtful accounts.  Under the terms of the recourse provision, the Company is required to reimburse the Factor, upon demand, for factored receivables that are not paid on time.  Accordingly, these receivables are accounted for as a secured financing arrangement and not as a sale of financial assets.  The allowance for doubtful accounts is based on management’s regular evaluation of individual customer’s receivables and consideration of a customer’s financial condition and credit history.  Trade receivables are written off when deemed uncollectible.  Recoveries of trade receivables previously written off are recorded when received.  Interest is not charged on past due accounts.
 

PART I - FINANCIAL INFORMATION, CONTINUED:
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
4.    Accounts Receivable and Due to Factor, Continued:
We present the receivables, net of allowances, as current assets and we present the amount potentially due to the Factor as a secured financing in current liabilities.
 
Accounts Receivble
 
September 30,
2016
 
 
December 31,
2015
 
Accounts receivable - non factored
 $391,255 
 $412,922 
Accounts receivable - factored with recourse
  132,893 
  13,782 
   less allowance for doubtful accounts
  (4,031)
  (4,031)
      Accounts receivable - net
 $520,117 
 $422,673 
5.    Properties, Plants, and Equipment - Mineral Properties:
Guadalupe
On March 7, 2012 and on April 4, 2012 the Company entered into a supply agreement and a loan agreement, respectively, (“the Agreements”) with several individuals collectively referred to as ‘Grupo Roga’ or ‘Guadalupe.’  During the term of the supply agreement the Company funded certain of Guadalupe’s equipment purchases, tax payments, labor costs, milling and trucking costs, and other expenses incurred in the Guadalupe mining operations for approximately $112,000. In addition to the advances for mining costs, the Company purchased antimony ore from Guadalupe that failed to meet agreed upon antimony metal recoveries and resulted in approximately $475,000 of excess advances paid to Guadalupe.

The Agreements with Guadalupe (Grupo Roga) granted the Company an option to purchase the concessions outright for $2,000,000.  On September 29, 2015, the Company notified the owners of Guadalupe that it was exercising the option to purchase the Guadalupe property. The option exercise agreement allowed the Company to apply all amounts previously due the Company by Grupo Roga of $586,892 to the purchase price consideration, resulting in a net obligation for the purchase of the Guadalupe mine of $1,413,107. The Company is obligated to make annual payments that vary from $60,000 to $149,077 annually through 2026.  The debt payments are non-interest bearing. The Company recorded $972,722 as the cost of the concessions and the debt payable equal to total payments due of $1,413,107 less a discount of $440,385.  The discount is being amortized to interest expense using the effective interest method over the life of the debt.  During the nine months ended September 30, 2016, the Company made $45,000 in payments toward this debt and amortized $43,735 of discount as interest expense.   The net balance of the debt at September 30, 2016 was $971,085.
Accounts Receivble
 
March 31,
2017
 
 
December 31,
2016
 
Accounts receivable - non factored
 $408,369 
 $401,720 
Accounts receivable - factored with recourse
  146,011 
  150,399 
      Accounts receivable - net
 $554,380 
 $552,119 
 

 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
 
6.   
5. 
Commitments and Contingencies:
In 2005, Antimonio de Mexico S.A. de C.V. (“AM”) signed an option agreement that gives AM the exclusive right to explore and develop the San Miguel I and San Miguel II concessions for annual payments.  Total payments will not exceed $1,430,344, reduced by taxes paid.  During the year ended December 31, 2015, and the nine months ended September 30, 2016, $100,000 and $67,608, respectively, was paid and capitalized as mineral rights in accordance with the Company’s accounting policies.  At March 31, 2016, a final payment of $11,739 was made.
 
In June of 2013, the Company entered into a lease to mine antimony ore from concessions located in the Wadley Mining district in Mexico. The lease calls for a mandatory term of one year and, and as of September 30, 2016,March 31, 2017, requires payments of $10,000 plus a tax of $1,600,$1,700, per month. The lease is renewable each year with a 15 day notice to the lessor, and agreement of terms. The next lease was renewedis scheduled for renewal in June of 2016.2017.
 
From time6.   Notes Payable to time, the Company is assessed fines and penalties by the Mine Safety and Health Administration (“MSHA”).  As of September 30, 2016,Bank:
At March 31, 2017 and December 31, 2015, respectively,2016, the Company had no liabilities duethe following notes payable to MSHA.the bank:
 
During the first quarter of 2015, the Company discovered that we did not have IMMEX certification and that the Company would be required to obtain it.  Without the IMMEX certification, the Company was required to pay the national sales tax of 16% on all items that the Company imports into Mexico, including capital items and the concentrates from Hillgrove of Australia.  IMMEX requires that the Company export a minimum of 60% of everything that is imported into Mexico.  The Company has met this requirement at this time.  At September 30, 2016, and December 31, 2015, the Company had approximately $146,500 and $167,000, respectively, included in other current assets, on deposit with the Mexican tax authorities. The Company believes that this will either ultimately be refunded, or applied to reduce other tax liabilities.
 
 
March 31,
 
 
December 31,
 
 
 
2017
 
 
2016
 
Promissory note payable to First Security Bank of Missoula,
 
 
 
 
 
 
bearing interest at 5.0%, maturing February 27, 2018,
 
 
 
 
 
 
payable on demand, collateralized by a lien on Certificate of
 
 
 
 
 
 
Deposit number 48614
 $83,303 
 $76,350 
 
    
    
Promissory note payable to First Security Bank of Missoula,
    
    
bearing interest at 5.0%, maturing February 27, 2018,
    
    
payable on demand, collateralized by a lien on Certificate of
    
    
Deposit number 48615
  99,999 
  90,967 
 
    
    
Total notes payable to bank
 $183,302 
 $167,317 
 
In prior years,These notes are personally guaranteed by John C. Lawrence the Company utilized Providence Capital, Inc., a Delaware corporation (“Providence”),Company’s President and Herbert   A. Denton to provide investor relations services.  On April 1, 2015, we entered into an agreement with Providence to provide us services as our Investor Relations Representative.  We terminated this agreement in May 2015, and signed a Settlement Agreement dated July 27, 2015, and a Supplemental Settlement Agreement dated August 1, 2015.  These agreements provided for a payment to Mr. Denton of 100,000 sharesChairman of the Company’s common stock and $25,000 to be paid in five equal installments. On August 31, 2015, we issued 100,000 sharesBoard of common stock valued at $0.55 per share or $55,000 to Mr. Denton.  On October 12, 2015, we served Mr. Denton with a notice of material breach of the termination agreements and suspended the remaining payments of $15,000. We have subsequently filed an action in federal court to force Mr. Denton to comply with the terms of the termination agreements andDirectors. The maximum amount available for damages related to his non-compliance.  Subsequent to the Company’s filing, Mr. Denton filed a counterclaim against the Company seeking an award for damages for breach of contract, conversion, defamation of character, failure to exercise business judgement and intentional infliction of emotional duress and damage to reputation. During the second quarter 2016, the Company settled with Mr. Denton with a payment of $10,000.   All claims and counterclaims have been dismissed.borrowing under each note is $99,999.
 

 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
 
7. Notes Payable to Bank:
 At September 30, 2016 and December 31, 2015, the Company had the following notes payable to the bank:
 
 
September 30,
2016
 
 
December 31,
2015
 
 
 
 
 
 
 
 
Promissory note payable to First Security Bank of Missoula,
 
 
 
 
 
 
bearing interest at 5.0%, maturing February 27, 2017,
 
 
 
 
 
 
payable on demand, collateralized by a lien on Certificate of
 
 
 
 
 
 
Deposit number 48614
 $0 
 $36,881 
 
    
    
Promissory note payable to First Security Bank of Missoula,
    
    
bearing interest at 5.0%, maturing February 27, 2017,
    
    
payable on demand, collateralized by a lien on Certificate of
    
    
Deposit number 48615
  100,000 
  93,791 
Total notes payable to bank
 $100,000 
 $130,672 
These notes are personally guaranteed by John C. Lawrence the Company’s President and Chairman of the Board of Directors.
8.    Long – Term Debt:
 
Long-Term debt at September 30, 2016, and December 31, 2015, is as follows:
 
September 30,
 
 
December 31,
 
Long-Term debt at March 31, 2017 and December 31, 2016, is as follows:
 
March 31,
 
 
December 31,
 
 
2016
 
 
2015
 
 
2017
 
 
2016
 
Note payable to First Security Bank, bearing interest at 6%;
 
 
 
 
 
 
payable in monthly installments of $917; maturing
 
 
 
 
 
 
September 2018; collateralized by equipment.
 $20,700 
 $27,845 
 $15,755 
 $18,246 
Note payable to Cat Financial Services, bearing interest at 6%;
    
    
payable in monthly installments of $1,300; maturing
    
    
August 2019; collateralized by equipment.
  41,647 
    
  37,248 
  40,556 
Note payable to Wells Fargo Bank, bearing interest at 4%;
    
    
payable in monthly installments of $477; maturing
    
    
December 2016; collateralized by equipment.
  1,865 
  5,399 
  - 
  473 
Note payable toDe Lage Landen Financial Services,
    
bearing interest at 5.30%; payable in monthly installments of $549;
    
maturing March 2016; collateralized by equipment.
    
  2,171 
Note payable to De Lage Landen Financial Services,
    
    
bearing interest at 3.51%; payable in monthly installments of $655;
    
    
maturing September 2019; collateralized by equipment.
  21,766 
  27,587 
  18,195 
  20,581 
Note payable to De Lage Landen Financial Services,
    
    
bearing interest at 3.51%; payable in monthly installments of $655;
    
    
maturing December 2019; collateralized by equipment.
  24,115 
  29,300 
  20,581 
  22,944 
Note payable to Phyllis Rice, bearing interest
    
    
at 1%; payable in monthly installments of $2,000; maturing
    
    
March 2015; collateralized by equipment.
  14,146 
  14,146 
Obligation payable for Soyatal Mine, non-interest bearing,
    
    
annual payments of $100,000 or $200,000 through 2019, net of discount.
  787,557 
  820,272 
  762,167 
  776,319 
Obligation payable for Guadalupe Mine, non-interest bearing,
    
    
annual payments from $60,000 to $149,078 through 2026, net of discount.
  971,085 
  972,312 
  966,216 
  970,651 
  1,882,881 
  1,899,032 
  1,834,308 
  1,863,916 
Less current portion
  (368,563)
  (181,287)
  (433,993)
  (391,046)
Long-term portion
 $1,514,318 
 $1,717,745 
 $1,400,315 
 $1,472,870 
At March 31, 2017, principal payments on debt are due as follows:
Year Ending March 31,
 
 
 
2018
  433,993 
2019
  272,496 
2020
  275,467 
2021
  172,936 
2022
  108,312 
Thereafter
  571,104
 
 $1,834,308
 

 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
 
8. Long – Term Debt, Continued:
At September 30, 2016, principal payments on debt are due as follows:
Year Ending June 30,
 
 
 
2017
 $368,563 
2018
  236,822 
2019
  304,169 
2020
  217,748 
2021
  128,742 
2022
  111,467 
2023
  118,155 
2024
  125,244 
2025
  132,759 
2026
  139,212 
 
 $1,882,881 
9.    Hillgrove Advances Payable
 
On November 7, 2014, the Company entered into a loan and processing agreement with Hillgrove Mines Pty Ltd of Australia (Hillgrove) by which Hillgrove will advance the Company funds to be used to expand their smelter in Madero, Mexico, and in Thompson Falls, Montana, so that they may process antimony and gold concentrates produced by HillgroveísHillgrove’s mine in Australia. The agreement requires that the Company construct equipment so that it can process approximately 200 metric tons of concentrate per month,initially shipped by Hillgrove, with a provision so that the Company may expand to process more than that. The parties agreed that the equipment will be owned by USAC and USAMSA. The final terms of when the repayment takes place have not yet been agreed on. The agreement called for the Company to sell the final product for Hillgrove, and Hillgrove to have approval rights of the customers for their products. The agreement allows the Company to recover its operating costs as approved by Hillgrove, and to charge a 7.5% processing fee and a 2.0% sales commission. The initial term of the agreement wasis five years, and that agreement was amended later to be eight years; however, Hillgrove may suspend or terminate the agreement at its discretion. The Company may terminate the agreement and begin using the furnaces for their own production if Hillgrove fails to recommence shipments within 365 days of a suspension notice. If a stop notice is issued between one year and two years, there is a formula to prorateAt March 31, 2017, the repayment amount from 50% to 81.25%. If a stop order is issued after two years, the repayment obligation is 81.25% of the funds advanced at that point. At December 31, 2015, management determined that it is likely that the Company's repayment obligation will be 81.25% of the total amounts advanced. As of September 30, 2016, Hillgrove had advanced the Company approximately $1.4 million. Of this amount, $262,500 was recorded as deferred earned credit and is being recognized ratably through the period ending November 7, 2016 which is when the 81.25% repayment terms of the agreement is applicable. During the nine months ended September 30, 2016 and 2015, $109,392 and $58,139, respectively, of the deferred earned credit was recognized with $10,937 to be recognized in the remainder of 2016. At September 30, 2016, thenet amount due to Hillgrove for advances was $1,134,221 which is approximately 81.25%$1,134,216. As of March 31, 2107, repayment of the total amount advanced.
advances is not expected to occur within the next twelve months so the balance is classified as a long term liability.
 
 9. Concentrations of Risk:
Sales to Three
 
 For the Period Ended
 
Largest Customers
 
March 31, 2017
 
 
March 31, 2016
 
Kohler Corporation
 $445,178 
 $432,283 
East Penn Manufacturing
  148,643 
  536,413 
Mexichem Speciality Compounds
  786,425 
  590,423 
 
 $1,380,246 
 $1,559,119 
% of Total Revenues
  52.70%
  46.90%
 
    
    
Three Largest
    
    
Accounts Receivable
 
March 31, 2017
 
 
March 31, 2016
 
Kohler Corporation
 $149,124 
 $211,295 
Accupowder International
    
  110,000 
Mexichem Speciality Compounds
  135,680 
  95,062 
Nutreco Canada Inc.
  28,139 
  - 
 
 $312,943 
 $416,357 
% of Total Receivables
  56.50%
  48.00%
 

 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
 
10.  Concentrations of Risk:
 
 
 For the Three Months Ended
 
 
 For the Nine Months Ended
 
Sales to Three
 
September 30,
 
 
September 30,
 
 
September 30,
 
 
September 30,
 
Largest Customers
 
2016
 
 
2015
 
 
2016
 
 
2015
 
Alpha Gary Corporation
 
 
 
 $691,363 
 
 
 
 $2,541,838 
Mexichem Specialty Compounds Inc.
  414,157 
    
  1,524,253 
    
Kohler Corporation
  362,770 
  637,838 
  972,083 
  1,462,570 
East Penn Corporation
  245,514 
  631,277 
  965,564 
  963,301 
 
 $1,022,441 
 $1,960,478 
 $3,461,900 
 $4,967,709 
% of Total Revenues
  36.00%
  54.90%
  37.80%
  45.60%
 
    
    
    
    
Three Largest
    
    
    
    
Accounts Receivable
 
September 30,
2016
 
 
December 31,
2015
 
    
    
Kohler Corporation
 $133,705 
 $- 
    
    
EaRTH Innovations Inc.
 $33,150 
    
    
    
Wildfire Construction
    
  43,327 
    
    
Teck American, Inc.
    
  80,946 
    
    
Gopher Resources
    
  141,570 
    
    
East Penn Corporation
  135,828 
  - 
    
    
 
 $302,683 
 $265,843 
    
    
% of Total Receivables
  58.20%
  62.90%
    
    
11.  Related Party Transactions:
 
During the three and nine months ended September 30,March 31, 2017 and 2016, and 2015, the Chairman of the audit committee and compensation committee received $9,000$4,500 and $27,000,$9,000, respectively, for services performed. See Note 12 for shares of common stock issued to directors.
 
During the three and nine months ended September 30,March 31, 2017 and 2016, and 2015, the Company paid $6,387$2,480 and $9,443, and $12,099 and $28,865,$13,710, respectively, to John Lawrence, our President and Chief Executive Officer, as reimbursement for equipment used by the Company.
 
12.11.  Income Taxes:
United States
 
During the nine monthsquarter ended September 30,March 31, 2017, and the year ended December 31, 2016, it wasthe Company determined that after utilizationa valuation allowance equal to 100% of any deferred tax asset was appropriate, as management of the Company’sCompany cannot determine that it is more likely than not the Company will realize the benefit of a net operating loss carry forwards, adeferred tax liabilityasset. The net effect is that the deferred tax asset as of $12,979 was dueDecember 31, 2016, and any deferred tax assets that may have been incurred since then, are fully reserved for income taxes in the United States.at March 31, 2017.
 
Management estimates the effective tax rate in the United States at 0% for the current year.
 
Mexico
On October 25, 2016,In 2015, the nationalMexican 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 is approximately $666,400 in U.S. Dollars (“USD”) as of December 31, 2016. Approximately $285,000 USD of the total assessment is interest and penalties. SAT’s assessment is based on the disallowance of specific costs that the Company deducted on the 2013 USAMSA income tax return. These disallowed costs were incurred by the Company for USAMSA’s business operations. SAT claims that the costs were not deductible or were not supported by appropriate documentation. At March 31, 2017, the assessed amount is $737,000 in U.S dollars.
Management has reviewed the assessment notice from SAT and believes numerous findings have no merit. The Company has engaged accountants and tax attorneys in Mexico notifiedto defend its position. An appeal has been filed which is expected to be completed during 2017.
At December 31, 2016, management has estimated possible outcomes for this assessment and believes it will ultimately pay an amount ranging from 30% of the total assessment to the total assessed amount. The Company’s agreement with the tax professionals is that the professionals will receive 30% of the amount of tax relief they are able to achieve.
At December 31, 2016, we accrued a potential liability of $410,510 USD of which $259,490 is for unpaid income taxes, $75,510 is for interest expense, and $49,952 is for penalties. The amount accrued represents management’s best estimate of the amount that will ultimately be paid. The outcome could vary from this estimate. At March 31, 2017, the Company recognized a $41,151 increase due to the change in exchange rate. Fluctuation in exchange rates has an ongoing impact on the amount the Company will pay in U.S. dollars.
If an issue addressed during the SAT audit is resolved in a manner inconsistent with management expectations, the Company will adjust its net operating loss carryforward, or accrue any additional penalties, interest, and tax associated with the audit. Our tax professionals in Mexico have reviewed and filed tax returns with the SAT for 2014 and 2015, and have advised us that they had completed its audit of our 2013 tax filing anddo not expect us to have determined that we owe $781,947 in income taxes and penalties.  We are required to respond to SAT of our intentions by December 6, 2016.    We plan to enter into negotiation with the authorities and have engaged legal and tax counsel in Mexico to guide us through our options.   Based on preliminary discussions, we believe that it is probable that we will pay at least some type of assessment and have determined a most likely estimate of our ultimate liability will be $410,510.   Accordingly, we have recorded a tax provision and a corresponding liability for this amount as of September 30, 2016.   We hopethose years relating to be able to pay the amount over a period of 24 months.   At this time, however, there can be no assurance as to whether SAT will accept this settlement and we may need to pay the entire assessed amount.similar issues.
 

 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
 
12.  Income Taxes, Continued:
We anticipate that our assessment can be partially settled by applying our IVA tax (a national sales type tax) refund against the settlement amount.  At September 30, 2016, we have approximately $140,000 of IVA tax on deposit with the SAT which is currently a current asset as of September 30, 2016.
The assessment relates to our 2013 tax filing in Mexico.   SAT has not notified us whether other tax filings for the year 2011, 2012, 2014 or 2015 will also be examined.   We could be assessed additional amounts if this occurs.     Because of taxable operating losses in early years and the potential for offset of operating income in later years, management has not yet determined the impact of these open years as of September 30, 2016 and has not recorded any liability that may result if there are additional audits by SAT.    Management will continue to assess the situation. 
13.  Stockholder’s Equity:
 
Issuance of Common Stock for Payable to Board of Directors
 
During the nine monthsquarter ended September 30,March 31, 2016, the Board of Directors was issued a total of 550,000 shares of common stock for $137,500 in directors’ fees that were payable at December 31, 2015. In addition during the nine months ended September 30, 2016,quarter, the Company accrued $112,500$37,500 in directors’ fees payable that will be paid in common stock.
 
During the nine monthsquarter ended September  30,  2015,March 31, 2017, the Board of Directors was issued a total of 183,825421,875 shares of common stock for $125,000$168,750 in director’sdirectors’ fees that were payable at December 31, 2014.2016. In addition during the nine months ended September 30, 2015,quarter, the Company accrued $112,500$43,750 in directors’ fees payable that waswill be paid in common stock.
 
Issuance of Common Stock for Services
During the nine  months ended September 30, 2015, 105,000 shares were issued to for investor relation services totaling $57,950.
14.13.  Business Segments:
 
The Company is currently organized and managed by four segments, which represent our operating units: United States antimony operations, Mexican antimony operations, precious metals recovery and United States zeolite operations.
 
The Madero smelter and Puerto Blanco mill at the Company’s Mexico operation brings antimony up to an intermediate stage, which canmay be sold directly or shipped to the United States operation for finishing and sales at the Thompson Falls, Montana plant. The precious metals recovery plant is operated in conjunction with the antimony processing plant at Thompson Falls, Montana. The Zeolite operation produces Zeolite near Preston, Idaho. Almost all of the sales of products from the United States antimony and Zeolite operations are to customers in the United States.
 

PART I - FINANCIAL INFORMATION, CONTINUED:
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
14.  Business Segments, Continued:
Disclosure of the activity relating to our precious metals recovery requires that it be reported as a separate business segment. The prior period comparative information has been reclassified to reflect this change.
 
Segment disclosure regarding sales to major customers is located in Note 10.9.
 
Properties, plants
 
 
 
 
 
 
  and equipment, net:
 
September 30,
2016
 
 
 December 31,
2015
 
Antimony
 
 
 
 
 
 
United States
 $1,732,997 
 $1,766,328 
Mexico
  12,159,308 
  12,539,805 
Subtotal Antimony
  13,892,305 
  14,306,133 
Precious metals
  471,069 
  171,074 
Zeolite
  1,516,201 
  1,553,126 
   Total
 $15,879,575 
 $16,030,333 

 
Properties, plants and equipment, net:
 
March 31,
2017
 
 
 December 31,
2016
 
Antimony
 
 
 
United States
 $1,674,831 
 $1,694,331 
Mexico
  11,866,975 
  11,984,467 
Subtotal Antimony
  13,541,806 
  13,678,798 
Precious metals
  587,615 
  544,615 
Zeolite
  1,430,469 
  1,472,553 
Total
 $15,559,890 
 $15,695,966 
    
Total Assets:
 
September 30,
2016
 
 
December 31,
2015
 
 
March 31,
2017
 
 
December 31,
2016
 
Antimony
 
 
 
    
United States
 $2,442,746 
 $2,505,189 
 $2,360,482 
 $2,495,842 
Mexico
  12,731,914 
  13,367,960 
  12,749,939 
  12,681,109 
Subtotal Antimony
  15,174,660 
  15,873,149 
  15,110,421 
  15,176,951 
Precious metals
  471,069 
  171,074 
  587,615 
  544,615 
Zeolite
  2,060,258 
  2,215,978 
  2,021,275 
  2,044,432 
Total
 $17,705,987 
 $18,260,201 
 $17,719,311 
 $17,765,998 
 

 
 
For the three months ended
 
 
For the nine months ended
 
 
 
September 30,
2016
 
 
September 30,
2015
 
 
September 30,
2016
 
 
September 30,
2015
 
Capital expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
Antimony
 
 
 
 
 
 
 
 
 
 
 
 
United States
 $7,308 
 $31,802 
 $33,291 
 $31,802 
Mexico
  104,626 
  2,008,945 
  417,131 
  2,869,629 
Subtotal Antimony
  111,934 
  2,040,747 
  450,422 
  2,901,431 
Zeolite
  61,284 
  101,895 
  123,075 
  135,369 
   Total
 $173,218 
 $2,142,642 
 $573,497 
 $3,036,800 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
13.            
Business Segments, Continued:
 
 
 For the three months ended
 
Capital expenditures:
 
March 31, 2017
 
 
March 31, 2016
 
Antimony
 
 
 
 
 
 
United States
 $- 
 $1,035 
Mexico
  28,683 
  207,886 
Subtotal Antimony
  28,683 
  208,921 
Precious Metals
  43,000 
  19,365 
Zeolite
  7,916 
  41,769 
   Total
 $79,599 
 $270,055 

Segment Operations for the three
 
Antimony
 
 
Antimony
 
 
Precious
 
 
Bear River
 
 
 
 
months ended March 31, 2017
 
USAC
 
 
Mexico
 
 
Metals
 
 
Zeolite
 
 
Totals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 $1,968,725 
 $17,782 
 $20,811 
 $612,012 
 $2,619,330 
 
    
    
    
    
    
Depreciation and amortization
  19,500 
  146,175 
  - 
  50,000 
  215,675 
 
    
    
    
    
    
Income (loss) from operations
  328,900 
  (751,176)
  20,811 
  89,592 
  (311,873)
 
    
    
    
    
    
Other income (expense):
  (11,078)
  (64,965)
  - 
  (3,387)
  (79,430)
 
    
    
    
    
    
NET INCOME (LOSS)
 $317,822 
 $(816,141)
 $20,811 
 $86,205 
 $(391,303)
Segment Operations for the three
 
Antimony
 
 
Antimony
 
 
Precious
 
 
Bear River
 
 
 
 
months ended March 31, 2016
 
USAC
 
 
Mexico
 
 
Metals
 
 
Zeolite
 
 
Totals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 $2,504,564 
 $16,668 
 $217,617 
 $583,354 
 $3,322,203 
 
    
    
    
    
    
Depreciation and amortization
  15,500 
  188,650 
    
  57,000 
  261,150 
 
    
    
    
    
    
Income (loss) from operations
  884,197 
  (1,279,512)
  182,848 
  30,170 
  (182,297)
 
    
    
    
    
    
Other income (expense):
  (5,975)
  - 
  - 
  (368)
  (6,343)
 
    
    
    
    
    
NET INCOME (LOSS)
 $878,222 
 $(1,279,512)
 $182,848 
 $29,802 
 $(188,640)
 

 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
 
14.  Business Segments, Continued:

Segment Operations for the three
 
Antimony
 
 
Antimony
 
 
Precious
 
 
 
 
 
 
 
months ended September 30, 2016
 
USA
 
 
Mexico
 
 
Metals
 
 
Zeolite
 
 
Totals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 $2,025,755 
 
 
 
 $240,238 
 $577,149 
 $2,843,142 
 
    
 
 
 
    
    
    
Depreciation and amortization
  20,000 
  136,875 
    
  53,400 
  210,275 
 
    
    
    
    
    
Income (loss) from operations
  723,627 
  (1,421,013)
  240,238 
  109,163 
  (347,985)
 
    
    
    
    
    
Income tax expense
  (411,490)
    
    
    
  (411,490)
 
    
    
    
    
    
Other income (expense):
  (9,406)
  (24,617)
    
  (3,559)
  (37,582)
 
    
    
    
    
    
NET INCOME (LOSS)
 $302,731 
 $(1,445,630)
 $240,238 
 $105,605 
 $(797,057)
Segment Operations for the three
 
Antimony
 
 
Antimony
 
 
Precious
 
 
 
 
 
 
 
months ended September 30, 2015
 
USA
 
 
Mexico
 
 
Metals
 
 
Zeolite
 
 
Totals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 $2,741,846 
 $- 
 $169,087 
 $613,508 
 $3,524,441 
 
    
    
    
    
    
Depreciation and amortization
  14,500 
  151,875 
    
  56,000 
  222,375 
 
    
    
    
    
    
Income (loss) from operations
  1,252,016 
  (1,318,887)
  169,087 
  148,902 
  251,118 
 
    
    
    
    
    
Other income (expense):
  (363,269)
  (6,895)
  - 
  (16,844)
  (387,008)
 
    
    
    
    
    
NET INCOME (LOSS)
 $888,747 
 $(1,325,782)
 $169,087 
 $132,058 
 $(135,890)

PART I - FINANCIAL INFORMATION, CONTINUED:
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited), Continued:
14.  Business Segments, Continued:
Segment Operations for the nine
 
Antimony
 
 
Antimony
 
 
Precious
 
 
 
 
 
 
 
months ended September 30, 2016
 
USA
 
 
Mexico
 
 
Metals
 
 
Zeolite
 
 
Totals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 $6,621,732 
 $3,557 
 $564,581 
 $1,976,758 
 $9,166,628 
 
    
    
    
    
    
Depreciation and amortization
  60,400 
  431,975 
    
  160,000 
  652,375 
 
    
    
    
    
    
Income (loss) from operations
  2,582,390 
  (4,028,767)
  564,581 
  243,429 
  (638,367)
 
    
    
    
    
    
Income tax expense
  (423,490)
    
    
    
  (423,490)
 
    
    
    
    
    
Other income (expense):
  (23,837)
  (49,122)
    
  (7,517)
  (80,476)
 
    
    
    
    
    
NET INCOME (LOSS)
 $2,135,063 
 $(4,077,889)
 $564,581 
 $235,912 
 $(1,142,333)
Segment Operations for the nine
 
Antimony
 
 
Antimony
 
 
Precious
 
 
 
 
 
 
 
months ended September 30, 2015
 
USA
 
 
Mexico
 
 
Metals
 
 
Zeolite
 
 
Totals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 $7,695,372 
 $12,248 
 $365,388 
 $1,780,119 
 $9,853,127 
 
    
    
    
    
    
Depreciation and amortization
  44,150 
  452,625 
    
  168,000 
  664,775 
 
    
    
    
    
    
Income (loss) from operations
  3,732,820 
  (4,188,719)
  365,388 
  311,023 
  220,512 
 
    
    
    
    
    
Other income (expense):
  (60,341)
  (10,081)
  - 
  (43,714)
  (114,136)
 
    
    
    
    
    
NET INCOME (LOSS)
 $3,672,479 
 $(4,198,800)
 $365,388 
 $267,309 
 $106,376 

PART I - FINANCIAL INFORMATION, CONTINUED:
ITEM 2.
Management’s Discussion and Analysis of Results of Operations and Financial Condition
 
General
 
Certain matters discussed are forward-looking statements that involve risks and uncertainties, including the impact of antimony prices and production volatility, changing market conditions and the regulatory environment and other risks. Actual results may differ materially from those projected. These forward-looking statements represent our judgment as of the date of this filing. We disclaim, however, any intent or obligation to update these forward-looking statements.

Results of Operations by Division
 
 
 
 
 
 
 
 
 
Antimony and Precious Metals
 
3rd Qtr
 
 
Nine Months
 
 
1st Qtr
 
Combined USA and Mexico
 
2016
 
 
2015
 
 
2016
 
 
2015
 
 
2017
 
 
2016
 
Lbs of Antimony Metal USA
  247,505 
  329,563 
  1,027,501 
  1,061,115 
Lbs of Antimony Metal Canada
  459,666 
  486,752 
Lbs of Antimony Metal Mexico
  411,410 
  345,468 
  1,277,058 
  808,754 
  88,184 
  426,089 
Total Lbs of Antimony Metal Sold
  658,915 
  675,031 
  2,304,559 
  1,869,869 
  547,850 
  912,841 
Sales Price/Lb Metal
 $3.07 
 $4.06 
 $2.87 
 $4.12 
 $3.63 
 $2.76 
Net income (loss)/Lb Metal
 $(1.37)
 $(0.40)
 $(0.60)
 $(0.09)
 $(0.87)
 $(0.24)
    
    
Gross antimony revenue - net of discount
 $2,025,755 
 $2,741,846 
 $6,625,289 
 $7,707,620 
  1,986,507 
  2,521,232 
Precious metals revenue
  240,238 
  169,087 
  564,581 
  365,388 
  20,811 
  217,617 
Production and shipping costs
  (2,135,052)
  (2,431,018)
  (6,135,067)
  (6,992,229)
  (1,780,410)
  (2,210,291)
Mexico non-production costs
  (156,489)
  (211,324)
  (514,400)
  (674,516)
  (126,707)
  (195,642)
General and administrative - non-production
  (315,361)
  (396,840)
  (1,060,261)
  (1,098,337)
  (386,468)
  (347,871)
Other miscellaneous income
  32,813 
  43,388 
  109,392 
  1,035,483 
Net interest and gain on sale of asset
  (26,200)
  (16,712)
  (51,914)
  (7,567)
  (25,566)
  663 
EBITDA
  (334,296)
  (101,573)
  (462,380)
 $335,842 
  (311,833)
  (14,292)
Income tax expense
  (411,490)
    
  (423,490)
    
Depreciation & amortization
  (156,875)
  (166,375)
  (492,375)
  (496,775)
  (165,675)
  (204,150)
Net income (loss) - antimony and precious metals
 $(902,661)
 $(267,948)
 $(1,378,245)
 $(160,933)
 $(477,508)
 $(218,442)
    
    
Zeolite
    
    
Tons sold
  3,375 
  3,528 
  10,690 
  10,491 
  3,353 
  3,097 
Sales Price/Ton
 $171.01 
 $173.90 
 $184.92 
 $169.68 
 $182.53 
 $188.36 
Net income /Ton
 $31.29 
 $37.43 
 $22.07 
 $25.48 
Net income (Loss)/Ton
 $25.71 
 $9.62 
    
    
Gross zeolite revenue
 $577,150 
 $613,508 
 $1,976,759 
 $1,780,119 
  612,012 
  583,354 
Production costs, royalties, and shipping costs
  (386,844)
  (408,606)
  (1,509,822)
  (1,301,096)
Production costs, royalties and shipping costs
  (448,446)
  (479,061)
General and administrative - non-production
  (29,178)
  (16,946)
  (67,157)
  (44,347)
  (25,849)
  (18,010)
Net interest
  (2,124)
  102 
  (3,868)
  633 
  (1,512)
  519 
EBITDA
  159,004 
  188,058 
  395,912 
  435,309 
  136,205 
  86,802 
Depreciation
  (53,400)
  (56,000)
  (160,000)
  (168,000)
  (50,000)
  (57,000)
Net income - zeolite
 $105,604 
 $132,058 
 $235,912 
 $267,309 
Net income (loss) - zeolite
 $86,205 
 $29,802 
    
    
Company-wide
    
    
Gross revenue
 $2,846,699 
 $3,524,441 
 $9,166,628 
 $9,853,127 
 $2,619,330 
 $3,322,203 
Production costs, royalties, and shipping costs
  (2,681,941)
  (3,050,948)
  (8,159,288)
  (8,967,841)
General and administrative -non-production
  (344,539)
  (413,786)
  (1,127,418)
  (1,142,684)
Other miscellaneous income
  32,813 
  43,388 
  109,392 
  1,035,483 
Net interest and gain on sale of asset
  (28,324)
  (16,610)
  (55,782)
  (6,934)
Production costs
  (2,228,856)
  (2,689,352)
Mexico non-production costs
  (126,707)
  (195,642)
General and administrative - non-production
  (412,317)
  (365,881)
Net interest
  (27,078)
  1,182 
EBITDA
  (175,292)
  86,485 
  (66,468)
  771,151 
  (175,628)
  72,510 
Income tax expense
  (411,490)
    
  (423,490)
    
Depreciation & amortization
  (210,275)
  (222,375)
  (652,375)
  (664,775)
  (215,675)
  (261,150)
Net income (loss)
 $(797,057)
 $(135,890)
 $(1,142,333)
 $106,376 
 $(391,303)
 $(188,640)
 

 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
ITEM 2.
Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:
Antimony
Our antimony sales were 658,915 pounds for Q3 of 2016, a decrease of 16,116 pounds (8.9%) from sales of 675,031pounds in Q3 of 2015.
Our revenues for Q3 of 2016 were less than our revenues in Q3 of 2015, primarily due to the decrease in the price of antimony.  Gross antimony revenue net of discount was $2,025,755 for Q3 of 2016, down $716,091 (26.1%) from Q3 of 2015.  The decrease in revenues was due to the decrease in the price of antimony metal from $4.06 during the third quarter of 2015 to $3.07 in the third quarter of 2016, a decrease of $0.99 per pound (24.4%).
The amount of metal sold from Mexico was approximately 411,000 pounds for the third quarter of 2016 compared to approximately 345,000 pounds sold for the third quarter of 2015.  The increased sales from Mexico for Q3 of 2016 versus Q3 of 2015 was primarily because all furnaces at Madero were processing Australian concentrates in 2016, and the Madero smelter was in a transition phase from Mexico raw material to the Hillgrove raw material from Australia during 2015.  We anticipate continuing processing Australian concentrates through the end of 2016.
Our cost per pound of antimony production has fallen in 2016 compared to 2105 due to the following factors:
1.  
The cost of raw materials has dropped significantly because the price is indexed to the sale price
2.  
Realized savings from natural gas instead of more expensive propane in Mexico
3.  
Sharply reduced propane costs in Montana
4.  
Lower costs of operating in Mexico
 
The largest reduction in cost per pound will result when all Mexican operationsMexico non-production costs for the three months ending March 31, 2017, are on stream, and theprimarily due to holding costs are spread over real production. The holding costs forfrom inactivity at the Los Juarez, Wadley, Guadalupe, and Soyatal have been substantial to date.
The antimony business will realize higher productionmines and potentially better operating margins as Mexican operations are brought up to planned capacity.
The cost of Mexican production in the first six months and the second quarter of 2016 included all the holding costs for Los Juarez, 80% of the holding costs for the Puerto Blanco mill, as well as the foreign exchange loss on the outsanding tax liability in Mexico. The loss of production at the Madero smelter from transitioning to Mexican raw material due to the closing of the Hillgrove mine in Australia and the care and maintenancesubsequent loss of Hillgrove raw material contributed to non-production costs for Wadley and Guadalupe whose product could not be smelted due to lack of furnace capacity at Madero.
Precious Metals
For the first nine months of 2016, USAC shipped $914,837 of gold and silver compared to $365,388 for the same period of 2015, an increase of 163%.  This included gross revenue of $414,312 for Hillgrove gold, of which $350,256 was paid to Hillgrove, for a net precious metals revenue of $564,581 for the first nine months of 2016.
The production of gold and silver from the Los Juarez deposit in Queretaro, Mexico is awaiting two leach circuit additions. The addition at Madero is completed, and the equipment is built and installed. It is expected to result in higher metallurgical recoveries of gold and silver from the flotation concentrates.  The second addition will involve a cyanide leach circuit at the flotation mill at Puerto Blanco in Guanajuato to recover the remaining gold and silver from the floatation tailings. The application for this permit is in progress, and commencement of Los Juarez production could proceed during the second half of 2017. The Company does not claim any ore reserves for Los Juarez by definition of the SEC standards.

 PART I - FINANCIAL INFORMATION, CONTINUED:
ITEM 2.   Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:
We have vast experience mining and processing precious metals and we believe that we are ready to embark on a very substantial mining program at Los Juarez, Coahuila, Mexico.

For most of 2015, and until the end of the first quarter of 2016, the 15 small rotating furnaces at Madero have been used to process Australian concentrates and almost all of our Mexican production was put in inventory.  The start up of the large rotating furnace during November of 2015 has allowed us to process most of the Hillgrove concentrates using that furnace, and starting in Q2 of 2016 our Mexican mine subsidiary started processing Mexican raw material sourced from leased mines.
The Australian concentrates contain gold in the slag remaining after the concentrates have been processed.  We are presently processing this slag and recovering a gold dore (a mix of precious metals).   At this time, the gold dore is taken to a third party refiner, and we receive a processing fee and a 7.5% sales commission on the recovered precious metals value.
The same process being used to recover the gold from the Hillgrove slag will be used to recover the precious metals from our Los Juarez ore.
Precious Metals Production:
Precious Metals Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Silver/Gold
 
 
 
 
 
 
 
 
 
 
 
 
 
Thru Qtr 3
 
Montana
 
2012
 
 
2013
 
 
2014
 
 
2015
 
 
2016
 
Ounces Gold Shipped (Au)
  102.32 
  59.74 
  64.77 
  89.12 
  108.20 
Ounces Silver Shipped (Ag)
  20,237.70 
  22,042.46 
  29,480.22 
  30,420.75 
  41,258.08 
Revenues
 $647,554 
 $347,016 
 $461,083 
 $491,426 
 $501,611 
Mexico
    
    
    
    
    
Ounces Gold Shipped (Au)
    
  1.780 
    
    
    
Ounces Silver Shipped (Ag)
    
  1,053.240 
    
    
    
Revenues
    
 $22,690 
    
    
    
Australian - Hillgrove
    
    
    
    
    
Ounces Gold Shipped (Au)
    
    
    
    
  337.00 
Revenues - Gross
    
    
    
    
 $414,312 
Revenues to Hillgrove
    
    
    
    
  (350,256)
Revenues to USAC
    
    
    
    
 $62,970 
 
    
    
    
    
    
 Total Revenues
 $647,554 
 $369,706 
 $461,083 
 $491,426 
 $564,581 
ZEOLITE
During Q3 of 2016, BRZ sold 3,375 tons of zeolite, a decrease of 153 tons (4.3%) from the same period in 2015.
During the first nine months of 2016, BRZ sold 7,315 tons of zeolite, an increase of 199 tons (1.9%) from the same period in 2015.
During Q3 of 2016, BRZ realized net income of $105,604 compared to a net income of $132,058 for Q3 of 2015, a decrease of $26,454.
BRZ realized a net income of $235,912 for the first nine months of 2016 compared to $267,309 for the same period of 2015.

PART I - FINANCIAL INFORMATION, CONTINUED:
ITEM 2.   Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:
For BRZ, EBITDA was $395,912 for the first nine months of 2016 compared to $435,309 for the same period in 2015.
BRZ has embarked on a sales program with field representatives that have years of experience in the agricultural field, which has resulted in new orders.  We believe that this is the most cost effective and fastest way to increase revenues and profits for BRZ.2017.
 
Company-Wide
 
For the thirdfirst quarter of 2016,2017, we recognized a net loss of $385,567$391,303 on sales of $2,846,699,$2,619,330, compared to a net loss of $135,890$188,640 in the thirdfirst quarter of 20152016 on sales of $3,505,452.$3,322,203. The profit of $106,376 forloss in the first nine monthsquarter of 20152017 was primarily due to a negotiated adjustment of $914,967 to the Company’s costloss of raw materials. The gainmaterial from Hillgrove Mines of Australia. We also recognized approximately $124,732 of settlement costs related to our precious metals production during the price adjustment has been reported as other operating income in 2015.  The loss in the thirdfirst quarter of 20162017. Hillgrove Mines has given us permission to use the LRF and other furnaces built for their use for our own production.
For the first quarter of 2017, EBITDA was primarily duea negative $175,628 compared to a decrease inpositive EBITDA of $72,510 for the price of antimony, from $4.06 in Q2 of 2015 to $3.07 in Q3 of 2016, a decrease in the price of $0.99 per pound.  Although the 2016 prices are the lowest they have been in 7 years, our average sale price of $3.07 for Q3 of 2016 was an increase of $0.26 over the average sales price of $2.81 for Q2same period of 2016.
 
For the first nine months of 2016, we reported a net loss of $1,142,333.  For the same period of 2015, we reported a net income of $106,376, primarily due to a negotiated adjustment of $914,967 to the Company’s cost of raw materials
 For the third quarter of 2016, EBITDA was a negative $175,292,2017, the non-production general and administrative expenses were $412,317 compared to EBITDA of $86,485$365,881 for the same period of 2015.2016.
 
ForAntimony
We began the third quartermining and processing of 2016,ore from our own Mexican mines during Q1of 2017 and although it had produced 132,184 pounds, only 88,184 pounds were sold. Producing fromour own Mexican mines will allow the non-operating generalCompany to benefit from 100% of the price increases rather than a processing fee and administrative expenses were $344,539a small percent of the price increases.
The average sales price of antimony during Q1 2017 was $3.63 per pound compared to $413,786 for$2.76 during the same period in 2016. Unfortunately, we realized only a small part of 2015.
The largest impediments to profitability have been the decline in the price of antimony from $8.11 per poundincrease because we were selling approximately three months ahead. We are no longer taking orders this far in April of 2011 to $2.27 per pound in January of 2016, a 72% decrease, and “non-production costs” in Mexico of $514,400 for the nine months ended September 30, 2016. In the third quarter of 2016, the non-production costs were $156,849 and included the costs of mines and mills in Mexico that have been idle due to a lack of furnaces at the Madero smelter and the metallurgical problems with the Los Juarez ore.advance.
 
The metallurgical problems with the Los Juarez ore have been solved, and we will processare processing the ore presently in inventory asinventory. As soon as we are permitted, and canwe will complete construction of our leach circuit at the Puerto Blanco mill.  It appears that we may have reachedmill if it is needed.
In response to the endloss of the price declines in antimony.
Hillgrove has suspended mining and operations inraw material supply from Australia, but they may restart operations.  We estimate that we have enough antimony concentrates from Hillgrove to run our large rotating furnace throughare implementing the end of 2016.  Hillgrove has given us permission to use the large rotating furnaces and other furnaces built for their use for our own production if they are unable to supply us with concentrates.
The Mexico non-production costs for the three and nine months ending September 30, 2016, are primarily due to holding costs from inactivity at the Los Juarez and Wadley mines and the Puerto Blanco mill.  The loss of production at the Madero smelter from metalurgical testing and experimenting with various production methods and formulas contributed to non-production costs during the first quarter of 2015.

PART I - FINANCIAL INFORMATION, CONTINUED:
ITEM 2.  Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:
Other Items:following actions:
 
1.  ●
Our net loss forAt the third quarterWadley mine, production is being increased with more miners. The use of 2016 was $386,547, which includes $210,275 for depreciation and amortization, and $37,500 for directors’ compensation to be paidpneumatic hammers is planned in stock.
2.  
 USAC’s precious metals net revenue in the first nine monthslieu of 2016 was $564,581 which was equivalent to approximately $0.25 per pound of antimony sold.
3.  
During the first six months of 2016, the board of directors were issued shares of common stock with a value of $137,500 for their services in 2015, and an accrual of $112,500 for compensation to board members through September 30, 2016 was recorded.
Los Juarez
Our Los Juarez property in Queretaro, Mexico exposes mineralization for approximately 3.5 kilometers and for widths up to 1 kilometer. Previously, the deposit had been reported as a layered deposit (manto) up to 6 meters thick with silver and antimony. The property has been abandoned by major mining companies unable to solve the metallurgical problems. After 11 years and many millions of dollars, USAC has reported that:
1.  
The property is predominantly a gold property with substantial credits in silver and minor credits in antimony.explosives.
2.  ●
The property is not a manto deposit but a seriesAt the Soyatal mine, we have begun the direct shipping of deep- seated silica- rich pipes that carryhigh grade ore from the mineralization vertically for many meters and has not been fully delineated along strike and at depth.
3.  
The Company has pilot tested every aspect ofmine directly to the project including the mining, milling, and smelting, and believes it has solved the metallurgical problems to produce a gold-silver-antimony concentrate.  The Company will bring its Puerto Blanco100 ton per day pilot mill on stream after permitting a cyanide leach plant at Puerto Blanco. The leach plant at our Madero smelter is permitted, and is completed.
4.  
We claim no reserves for the mining property at Los Juarez per SEC rules.smelter.
 

 
PART I - FINANCIAL INFORMATION, CONTINUED:
 
ITEM 2.  
Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:
Precious Metals
The caustic leach of flotation concentrates from Los Juarez was successful, and the sequential pilot production of the Los Juarez gold, silver, and antimony project has commenced at an initial rate of 400 metric tons per month. Assuming that the pilot testing of Los Juarez is economic, the production will be ramped up to 2,000 metric tons per month. In addition, a cyanide leach circuit to increase the recoveries of precious metals from mill tailings and the completion of a 400 ton capacity mill at Puerto Blanco will be considered.
Precious Metals Sales
 
 
 
 
 
 
 
 
 
 
 
 
Silver/Gold
 
 
 
 
 
 
 
 
 
 
 
 
Montana
 
2014
 
 
2015
 
 
2016
 
 
2017
 
Ounces Gold Shipped (Au)
  64.77 
  89.12 
  108.10 
  24.60 
Ounces Silver Shipped (Ag)
  29,480.22 
  30,420.75 
  38,123.46 
  8,639.39 
Revenues
 $461,083 
 $491,426 
 $556,650 
 $133,506 
Australian - Hillgrove
    
    
    
    
Ounces Gold Shipped (Au)
    
    
  496.65 
  57.25 
Revenues - Gross
    
    
 $597,309 
 $53,971 
Revenues to Hillgrove
    
    
  (481,088)
  (166,666)
Revenues to USAC
    
    
 $116,221 
 $(112,695)
 
    
    
    
    
 Total Revenues
 $461,083 
 $491,426 
 $672,871 
 $20,811 
Bear River Zeolite (BRZ)
During Q1 2017, BRZ sold 3,353 tons of zeolite compared to 3,097 tons in the same period of 2016, up 256 tons or 8.3%.
BRZ realized a profit of $86,205 in Q1 of 2017, compared to $29,802 in 2016. The increase in our profit from our zeolite operations was $56,403 (189%).
BRZ realized an EBITDA for Q1 2017 of $136,205 compared to $86,802 for the same period in 2016, an increase of $49,403 (56.9%).
Our new sales program for zeolite products has two field representatives and a research person that prepares sales brochures and literature. At this time this effort is adding new customers.

PART I - FINANCIAL INFORMATION, CONTINUED:
ITEM 2.
Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:
 
Financial Position
 
Financial Condition and Liquidity
 
 
 
 
March 31,
 
 
September 30,
2016
 
 
September 30,
2015
 
 
2017
 
 
2016
 
Current Assets
 $1,717,878 
 $3,734,961 
 $1,733,777 
 $2,326,089 
Current liabilities
  (3,214,473)
  (3,092,124)
  (3,754,101)
  (2,948,379)
Net Working Capital
 $(1,496,595)
 $642,837 
 $(2,020,324)
 $(622,290)
    
    
Cash provided (used) by operations
 $412,162 
 $6,567 
 $143,613 
 $252,476 
Cash used for capital outlay
  (459,969)
  (1,344,034)
  (79,599)
  (245,702)
Cash provided (used) by financing:
    
    
Net proceeds from (payments) to factor
  119,111 
  259,575 
Net proceeds (payments to) factor
  (4,388)
  84,083 
Proceeds from notes payable to bank
  - 
  92,502 
  15,985 
  - 
Change in check issued and payable
  (21,519)
  - 
Payment of notes payable to bank
  (30,672)
  - 
  - 
  (44,912)
Principal paid on long-term debt
  (130,857)
  (69,381)
  (53,020)
  (41,824)
Proceeds from Hillgrove
  - 
  1,014,412 
Sale of Stock
  - 
  120,000 
Net change in cash
 $(90,225)
 $79,641 
 $1,072 
 $4,121 
 
Our net working capital decreased by approximately $1.2M$331,000 from December 31, 2015.2016. Our cash decreasedincreased by approximately $90,000$1,000 during the same period. The decrease in our net working capital was primarily due to an increase of approximately $325,000 in the current portion of long-term debt, the accrual of the liability for Mexican income tax,accounts payable, and expenditures of approximately $460,000$80,000 for capital outlay. An increase in inventory of approximately $55,000 and decreases in our current liabilities increased our working capital. We have estimated commitments for construction and improvements, including the final expenditures$50,000 to finish building and installing the Hillgrove furnaces and equipment at Madero, Mexico, of approximately $150,000 over the next twelve months. The cash for the Hillgrove capital improvements will come from the expected refund of IVA taxes presently deposited with the Mexican tax authorities, and from our internally generated sources.precious metals leach circuits. We believe that with our current cash balance, along with the future cash flow from operations, we have adequate liquid assets to meet these commitments and service our debt for the next twelve months. We have lines of credit of $202,000 which have been drawn down by $100,000$183,302 at September 30, 2016.March 31, 2017.
 
ITEM 3.
 
None
 

PART I - FINANCIAL INFORMATION, CONTINUED:
Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:
ITEM 4. Controls and Procedures
 
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
 
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, as appropriate, to allow timely decisions regarding required disclosure. Our chief financial officer conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of September 30, 2016.March 31, 2017. It was determined that there were material weaknesses affecting our disclosure controls and procedures and, as a result of those weaknesses, our disclosure controls and procedures were not effective as of September 30, 2016.March 31, 2017. These material weaknesses are as follows:

 
●
Inadequate design of internal control over the preparation of the financial statements and financial reporting processes;
●
Inadequate monitoring of internal controls over significant accounts and processes including controls associated with domestic and Mexican subsidiary operations and the period-end financial reporting process; and
●
The Company lacksabsence of proper segregation of duties. As with any company the size of ours, the lack of segregation of duties is due to limited resources. The president authorizes the majority of the expenditureswithin significant processes and signs checks.ineffective controls over management oversight, including antifraud programs and controls.
  ●   
During our year-end audit, our independent registered accountants discovered material misstatements in our financial statements that required audit adjustments.
MANAGEMENT'S REMEDIATION INITIATIVES
 
We are aware of these material weaknesses and havewill develop procedures to ensure that independent review of material transactions is performed. We haveThe chief financial officer will develop internal control measures to mitigate the lack of inadequate documentation of controls and the monitoring of internal controls over significant accounts and processes including controls associated with the period-ending reporting processes, and to mitigate the segregation of duties as follows:within significant accounts and processes and the absence of controls over management oversight, including antifraud programs and controls.
● 
The CFO reviews all bank reconciliations
  ●  
The CFO reviews all material transactions for capital expenditures
●  
The CFO reviews all period ending entries for preparation of financial statements, including the calculation of inventory, depreciation, and amortization
●  
The CFO reviews all material entries for compliance with generally accepted accounting principles priorWe plan to the annual audit and 10Q filings
●  
The Company has a formal capitalization policy
●  
In addition, we consult with independent experts when complex transactions are entered into.
 
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
 
There were no significant changes made to internal controls over financial reporting for the quarter ended September 30, 2016.March 31, 2017.
 

 
PART II - OTHER INFORMATION
 
Item 1.  LEGAL PROCEEDINGS
 
On October 21, 2015 United States Antimony Corporation filed a complaint against Herbert A. Denton and Providence Capital, Inc., in the United States District Court for the District of Montana, Missoula Division, alleging the following: (i) noncompliance, violation and breach of a Consulting Agreement, Settlement Agreement and Supplemental Settlement Agreement, (ii) communications with shareholders of United States Antimony Corporation, by Mr. Denton and Providence Capital, Inc., and solicitation of proxies from shareholders, in violation of reporting and disclosure requirements of federal securities laws.  As of the date of this report, this lawsuit has been settled in our favor.None
 
Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
None
 
Item 3.  DEFAULTS UPON SENIOR SECURITIES
 
The registrant has no outstanding senior securities.
 
Item 4.  MINE SAFETY DISCLOSURES
 
The 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.
 
Item 5.  OTHER INFORMATION
 
None
 
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
 
Certifications
 
Certifications Pursuant to the Sarbanes-Oxley Act
Reports on Form 8-K            None
 

 
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/ John C. Lawrence
 
Date: 
May 15, 2017 
/s/ John C. LawrenceDate: November 14, 2016
John C. Lawrence, Director and President
(Principal (Principal Executive)    
     
/s/By: /s/ Daniel L. Parks Date:May 15, 2017 Date: November 14, 2016
Daniel L. Parks, Chief Financial Officer    
/s/ Alicia HillDate: November 14, 2016
 

 
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