United States Antimony Corporation — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; comparison with FY2020. The company produces and sells antimony products, zeolite, and recovered precious metals, with operations in the United States and Mexico.
Financial and operating performance
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $7.75 million | $5.24 million |
| Gross profit (margin) | $838,605 (10.8%) | $205,698 (3.9%) |
| Operating loss | $660,257 | $3.30 million |
| Net loss | $60,469 | $3.29 million |
| Net loss attributable to common stockholders | $108,663 | $3.34 million |
| Operating cash flow | $(2.43) million | $(1.31) million |
| Cash and cash equivalents at year-end | $21.36 million | $665,102 |
| Current assets / current liabilities | $23.57 million / $2.02 million | $1.81 million / $4.48 million |
| Total debt | $215,150 | $86,426 |
Net working capital improved to $21.55 million from a deficit of $2.67 million. Cash provided by financing was $23.78 million, primarily from equity offerings and warrant exercises; investing activities used $653,126. The company reported non-GAAP EBITDA of $825,950, versus negative $2.38 million in 2020. EBITDA is not operating cash flow; operating cash use increased year over year.
- Antimony: Revenue was $4.82 million; sales volume rose 11.7% to 911,079 pounds, and average selling price increased 46.5% to $5.29 per pound. Average cost was $4.99 per pound, versus $3.86 in 2020; reported gross profit was $266,722, compared with a $205,326 gross loss.
- Zeolite: Revenue increased 22.4% to $2.59 million; volume rose 10.1% to 11,747 tons. Gross profit increased to $340,806, but gross margin fell to 13.1% from 15.3%; segment net income declined to $193,675 from $262,861.
- Precious metals: Revenue rose to $338,341 from $174,079. All FY2021 precious-metals sales were to one customer.
Material changes and notable items
- Two February 2021 stock offerings generated $25.0 million gross proceeds; issuance costs were $1.65 million. The company also received $1.79 million from warrant exercises. Common shares outstanding increased from 75.95 million at year-end 2020 to 106.24 million at year-end 2021.
- The company settled the Hillgrove advance for $1.02 million, recognizing a $113,422 gain, and recognized a $443,400 gain when its PPP loan was forgiven. The 2020 comparison included a $1.12 million Mexican export-tax expense and a $318,502 loss on a mineral lease.
- Year-end assets were $35.00 million, including $11.13 million of property, plant and equipment. Total liabilities were $2.63 million. The company states it retired much outstanding debt, but the reported year-end debt balance was $215,150.
Outlook, risks, and contingencies
Management’s 2022 plans include upgrading the Madero smelter, expanding processing and direct metal sales, continuing work on Los Juarez ore, and increasing zeolite capacity. These are operating plans, not quantified financial guidance. Management reported antimony prices of approximately $6.06 per pound in early 2022 and expects direct sales of ingots from Madero to reduce shipping and finishing costs by at least $0.29 per pound.
- Raw-material sourcing relies substantially on foreign suppliers; management cites supply interruptions, freight cost and availability, labor constraints, and volatile antimony prices as risks. China supplies a substantial majority of world antimony demand, according to the filing.
- The company claims no SEC-defined proven or probable antimony reserves and no zeolite reserves or resources. Los Juarez historical mineralization estimates cited in the filing are not SEC-recognized reserves and are not supported by a feasibility study.
- A Mexican tax assessment of approximately $795,000 remains under appeal. Management expects a favorable outcome and accrued no liability; the filing says an adverse result could materially affect results or financial position.
- Environmental reclamation and asset-retirement liabilities totaled $298,649. The company says it has no environmental liability insurance; potential losses beyond accrued amounts cannot be reasonably estimated.
- Disclosure controls and internal control over financial reporting were deemed ineffective due to material weaknesses, including inadequate control design and monitoring, insufficient segregation of duties, and weaknesses in management oversight and antifraud controls.
- Sales concentration increased: four largest customers represented 55% of revenue, versus 31% in 2020. One customer accounted for all precious-metals revenue.
- The independent auditor issued an unqualified opinion on the financial statements and identified evaluation of property, plant and equipment impairment indicators as a critical audit matter; the auditor did not opine on internal-control effectiveness.
Most important facts for investors to verify
- Reconcile the filing’s zeolite EBITDA figures: narrative and one schedule report $357,927 for 2021, while another segment schedule reports $449,351.
- Assess whether recurring operations can generate cash: FY2021 operating cash use was $2.43 million despite reported positive EBITDA and substantial year-end cash raised through financing.
- Review dilution and potential further dilution from 12.49 million outstanding warrants, preferred stock, and the increased common share count.
- Track the Mexican tax appeal, environmental obligations, and the company’s progress in remediating identified financial-reporting control weaknesses.
- Validate production, processing, supply, and cost assumptions underlying the 2022 plans, including the status of Los Juarez studies and any reserve or feasibility work.