What changed in this filing

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Item 1. Financial Statements

2023-08-14 compared with 2023-05-15 · 106 added, 82 removed, 307 unchanged (38% of the section changed)

31 unchanged sentences

Common stock, no par value, 200,000,000 shares authorized;

March 31, 2023- 12,256,523 and December 31, 2022- 12,098,070 shares issued and outstanding

June 30, 2023- 12,256,523 and December 31, 2022- 12,098,070 shares issued and outstanding

Accumulated deficit

8 unchanged sentences

Condensed Consolidated Statements of Operations (Unaudited)

For the Three-Month Periods Ended March 31, 2023 and 2022

June 30, 2023

June 30, 2022

Sales of products

7 unchanged sentences

General and administrative

Loss on sale of equipment

(Gain) loss on disposal of equipment

Total other operating expenses

Operating income (loss)

( 1,272,887 )

Other (income) expense:

1 unchanged sentence

Timber revenue net of costs

Unrealized gain on equity security

Gain on forgiveness of SBA loan

Loss on investment in equity securities

Interest income

2 unchanged sentences

Net income (loss)

( 1,325,318 )

Net loss attributable to non-controlling interest

1 unchanged sentence

$ ( 818,598 )

$ ( 1,274,200 )

Net income (loss) per common share-basic

5 unchanged sentences

Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)

For the Three-Month Periods Ended March 31, 2023 and 2022

Accumulated Deficit Attributable to Idaho Strategic Resources, Inc

For the Three and Six-Month Periods Ended June 30, 2023 and 2022

Common Stock Shares

Common Stock Amount

Attributable to

Idaho Strategic Resources, Inc

Non-Controlling Interest

Stockholders’ Equity

Stockholders’

Balance January 1, 2022

8 unchanged sentences

$ ( 16,288,557 )

Contribution from non-controlling interest in New Jersey Mill Joint Venture

Issuance of common stock for cash, net of offering costs

Issuance of common stock for warrants exercised

Issuance of common stock for cashless option exercise

Balance June 30, 2022

$ ( 17,107,155 )

Balance January 1, 2023

5 unchanged sentences

$ ( 18,307,785 )

Contribution from non-controlling interest in New Jersey Mill Joint Venture

Net income (loss)

Balance June 30, 2023

$ ( 17,979,992 )

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

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Three-Month Periods Ended March 31, 2023 and 2022

For the Six-Month Periods Ended June 30, 2023 and 2022

Cash flows from operating activities:

3 unchanged sentences

Depreciation and amortization

Loss on disposal of equipment

Accretion of asset retirement obligation

Loss on sale of equipment

Issuance of common stock for services

Gain on forgiveness of SBA loan

Loss in investment in equity securities

Equity income on investment in Buckskin

3 unchanged sentences

Other current assets

Accounts payable and other accrued liabilities

Accounts payable and accrued expenses

Accrued payroll and related payroll expenses

Net cash provided (used) by operating activities

( 1,694,476 )

Cash flows from investing activities:

2 unchanged sentences

Proceeds from sale of equipment

Purchase of reclamation bonds

Additions to mineral property

2 unchanged sentences

Cash flows from financing activities:

Proceeds from sale of common stock, net of offering cost

Proceeds from sale of common stock, net of issuance cost

Proceeds from exercise of common stock warrants

7 unchanged sentences

Non-cash investing and financing activities:

Notes payable for equipment purchased

Deposit on equipment paid by lender

Deposit on equipment applied to purchase

Notes payable for equipment and land purchase

Conversion of convertible debt to common stock

Deposit applied to equipment

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

6 unchanged sentences

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period.

Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements;

accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's financial position and results of operations.

Operating results for the three-month period ended March 31, 2023, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023.

Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's consolidated financial statements;

Operating results for the three and six-month periods ended June 30, 2023, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023.

For further information refer to the financial statements and footnotes thereto in the Company’s audited consolidated financial statements for the year ended December 31, 2022, in the Company’s Form 10-K as filed with the Securities and Exchange Commission on March 31, 2023.

6 unchanged sentences

For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement.

Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of our concentrates will be settled are estimated.

Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of concentrates will be settled are estimated.

Previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement by the customer.

18 unchanged sentences

Amortization of deferred development costs is calculated using the units-of-production method over the expected life of the operation based on the estimated recoverable mineral ounces.

Idaho Strategic Resources, Inc

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company and Significant Accounting Policies (continued)

Fair Value Measurements

4 unchanged sentences

The amount of the total gains or losses for the period that are included in earnings are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.

At March 31, 2023, the Company had marketable equity securities measured at fair value using level 1 quoted prices, no liabilities required measurement at fair value.

At June 30, 2023, the Company had equity securities measured at fair value using level 1 quoted prices and no liabilities required measurement at fair value.

At December 31, 2022, the Company had no assets or liabilities that required measurement at fair value on a recurring basis.

Idaho Strategic Resources, Inc

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company and Significant Accounting Policies (continued)

Accounting for Investments in Joint Ventures and Equity Method Investments

10 unchanged sentences

If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

At March 31, 2023, and December 31, 2022, the Company's 37 % common stock holding of Buckskin Gold and Silver, Inc.

At June 30, 2023, and December 31, 2022, the Company's 37 % common stock holding of Buckskin Gold and Silver, Inc.

is accounted for using the equity method (Note 10).

At March 31, 2023 and December 31, 2022, the Company’s percentage ownership and method of accounting for each joint venture and equity method investment is as follows:

March 31, 2023

At June 30, 2023 and December 31, 2022, the Company’s percentage ownership and method of accounting for each joint venture and equity method investment is as follows:

June 30, 2023

December 31, 2022

5 unchanged sentences

Butte Highlands Joint Venture (“BHJV”)

Buckskin Gold and Silver

Buckskin Gold and Silver Inc.

Reclassifications

8 unchanged sentences

Upon sale of an equity security, the realized gain or loss is recognized in current earnings.

The Company and Significant Accounting Policies (continued)

New Accounting Pronouncement

Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

Accounting standards that have been issued or proposed by the Financial Accounting Standards Board (“FASB”) that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

Going Concern

The Company is currently producing from both the open-pit and underground at the Golden Chest Mine.

The Company is currently producing from underground at the Golden Chest Mine.

In the past, the Company has been successful in raising required capital from sale of common stock, forward gold contracts, and debt.

As a result of its planned production, equity sales and potential debt borrowings or restructurings, management believes cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the next 12 months.

At March 31, 2023 and December 31, 2022, the Company’s inventories consisted of the following:

March 31, 2023

December 31, 2022

At June 30, 2023 and December 31, 2022, the Company’s inventories consisted of the following:

Concentrate inventory

6 unchanged sentences

Total supplies inventory

Idaho Strategic Resources, Inc

Notes to Condensed Consolidated Financial Statements (Unaudited)

Sales of Products

Our products consist of both gold flotation concentrates which we sell to a single broker (H&H Metal), and an unrefined gold-silver product known as doré which we sell to a precious metal refinery.

At March 31, 2023, metals that had been sold but not finally settled included 5,844 ounces of which 4,500 ounces were sold at a predetermined price with the remaining 1,344 exposed to future price changes.

At June 30, 2023, metals that had been sold but not finally settled included 5,223 ounces of which 4,276 ounces were sold at a predetermined price with the remaining 947 exposed to future price changes.

The Company has received provisional payments on the sale of these ounces with the remaining amount due reflected in gold sales receivable.

Sales of products by metal type for the three-month periods ended March 31, 2023 and 2022 were as follows:

Sales of products by metal type for the three and six-month periods ended June 30, 2023 and 2022 were as follows:

June 30, 2023

June 30, 2022

Smelter and refining charges

Sales by significant product type for the three-month periods ended March 31, 2023, and 2022 were as follows:

Sales by significant product type for the three and six-month periods ended June 30, 2023, and 2022 were as follows:

June 30, 2023

June 30, 2022

Concentrate sales to H&H Metal

Dore sales to refinery

At March 31, 2023 and December 31, 2022, our gold sales receivable balance related to contracts with customers of $ 1,342,390 and $ 909,997 , respectively, consist only of amounts due from H&H Metal.

At June 30, 2023 and December 31, 2022, our gold sales receivable balance related to contracts with customers of $ 840,288 and $ 909,997 , respectively, consist only of amounts due from H&H Metal.

There is no allowance for doubtful accounts.

Idaho Strategic Resources, Inc

Notes to Condensed Consolidated Financial Statements (Unaudited)

Related Party Transactions

At March 31, 2023 and December 31, 2022, the Company had the following note payable to related parties:

Ophir Holdings LLC, a company owned by two officers of the Company, 3.99% interest, monthly payments of $1,250 with a balloon payment of $39,854 in February 2025

Current portion

Long term portion

As of March 31, 2023 and December 31, 2022, there was no accrued interest payable to related parties.

Related party interest expense for the three-months ended March 31, 2023 and 2022 is as follows.

At December 31, 2022, the Company had a note payable to Ophir Holdings, a company owned by two officers and one former officer of the Company, with a balance of $ 75,183 of which $ 12,226 was due within one year and the remaining $ 62,957 due thereafter.

The Company paid the remaining amount due to Ophir Holdings on May 10, 2023.

This payment resulted in a negative net interest charge for the three and six-months ended June 30, 2023.

Related party interest expense for the three and six-months ended June 30, 2023 and 2022 is as follows.

June 30, 2023

June 30, 2022

The Company leases office space from certain related parties on a month-to-month basis.

$ 1,500 per month is paid to NP Depot, a company owned by the Company’s president, John Swallow and approximately $ 1,700 is paid quarterly to Mine Systems Design which is partially owned by the Company’ vice president Grant Brackebusch.

Payments under these short-term lease arrangements are included in general and administrative expenses on the Consolidated Statement of Operations and for the three-months ended March 31, 2023 and 2022 are as follows:

Payments under these short-term lease arrangements are included in general and administrative expenses on the Consolidated Statement of Operations and for the three and six-months ended June 30, 2023 and 2022 are as follows:

June 30, 2023

June 30, 2022

Joint Ventures

2 unchanged sentences

Thus, the venture is included in the consolidated financial statements along with presentation of the non-controlling interest.

At March 31, 2023 and December 31, 2022, an account receivable existed with Crescent Silver, LLC, the other joint venture participant (“Crescent”), for $ 3,527 and $ 1,926 , respectively, for shared operating costs as defined in the JV agreement.

At June 30, 2023 and December 31, 2022, an account receivable existed with Crescent Silver, LLC, the other joint venture participant (“Crescent”), for $ 1,554 and $ 1,926 , respectively, for shared operating costs as defined in the JV agreement.

Butte Highlands JV, LLC (“BHJV”)

4 unchanged sentences

The Company has determined that because it does not currently have significant influence over the joint venture’s activities, it accounts for its investment on a cost basis.

Idaho Strategic Resources, Inc

Notes to Condensed Consolidated Financial Statements (Unaudited)

Earnings per Share

2 unchanged sentences

Such common stock equivalents are included or excluded from the calculation of diluted net income (loss) per share for each period as follows:

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

Incremental shares included in diluted net income (loss) per share

4 unchanged sentences

Stock purchase warrants

Idaho Strategic Resources, Inc

Notes to Condensed Consolidated Financial Statements (Unaudited)

Property, Plant, and Equipment

Property, plant and equipment at March 31, 2023 and December 31, 2022 consisted of the following:

March 31, 2023

December 31, 2022

Property, plant and equipment at June 30, 2023 and December 31, 2022 consisted of the following:

Less accumulated depreciation

8 unchanged sentences

Mineral Properties

Mineral properties at March 31, 2023 and December 31, 2022 consisted of the following:

Mineral properties at June 30, 2023 and December 31, 2022 consisted of the following:

Mineral Property

3 unchanged sentences

Less accumulated amortization

For the three-month periods ended March 31, 2023 and 2022 interest expense was capitalized in association with the ramp access project at the Golden Chest as follows.

March 31, 2023

March 31, 2022

Idaho Strategic Resources, Inc

Notes to Condensed Consolidated Financial Statements (Unaudited)

Mineral Properties (continued)

For the three and six-month periods ended June 30, 2023 and 2022, interest expense was capitalized in association with the ramp access project at the Golden Chest as follows.

June 30, 2023

June 30, 2022

Investment in Buckskin

In August 2021, the Company exchanged 45,940 shares of the Company’s common stock for 22 % of Buckskin Gold and Silver Inc.

The Company’s closing share price on the date of the agreement (August 18, 2021) was recorded as the cost basis for the property.

In October 2021 the Company exchanged an additional 30,358 shares of the Company’s common stock for an additional 15 % of Buckskin.

The Company’s closing share price on the date of the exchange (October 15, 2021) was recorded as the cost basis for the investment addition.

This investment in Buckskin is being accounted for using the equity method and resulted in recognition of equity income on the investment of $ 350 and $ 331 during the quarters ended March 31, 2023 and 2022 respectively.

The Company makes an annual payment of $ 12,000 to Buckskin per a lease covering 218 acres of patented mining claims.

As of March 31, 2023, the Company holds 37 % of Buckskin’s outstanding shares.

The investment in Buckskin is being accounted for using the equity method and resulted in recognition of equity income on the investment of $ 1,007 and $ 1,357 for the respective three and six-month periods ended June 30, 2023 and $ 339 and $ 670 in 2022 for the respective three and six month periods ended June 30, 2022.

The Company makes an annual payment of $ 12,000 to Buckskin per a mineral lease covering 218 acres of patented mining claims.

As of June 30, 2023, the Company holds 37 % of Buckskin’s outstanding shares.

Notes Payable

At March 31, 2023 and December 31, 2022, notes payable are as follows:

March 31, 2023

December 31, 2022

At June 30, 2023 and December 31, 2022, notes payable are as follows:

Building in Salmon, Idaho, 60-month note payable, 7 .00% interest payable monthly through June 2027, monthly payments of $ 2,500 with a balloon payment of $ 260,886 in July 2027

6 unchanged sentences

CarryAll transport, 36-month note payable, 6.3 % interest rate payable monthly through June 2025, monthly payments of $ 866

Two CarryAll transports, 48-month note payable, 5.9% interest rate payable monthly through June 2027, monthly payments of $1,174

Atlas Copco loader, 60-month note payable, 10.5 % interest rate payable monthly through June 2023, monthly payments of $ 3,550

6 unchanged sentences

Caterpillar AD22 underground truck, 48-month note payable, 6.45 % interest rate payable through June 2023, monthly payments of $ 12,979

Caterpillar AD30 underground truck, 40-month note payable, 8.01 % interest rate payable through October 2026, monthly payments of $ 29,656

Small Business Administration EIDL 30 year note payable, 3.75 % interest payable monthly through December 2054, monthly payments of $ 731

7 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Unaudited)

Notes Payable;

Notes Payable (continued)

All notes are collateralized by the property or equipment purchased in connection with each note.

Future principal payments of notes payable at March 31, 2023 are as follows:

12 months ended March 31,

Future principal payments of notes payable at June 30, 2023 are as follows:

12 months ended June 30,

The balance of convertible debt at December 31, 2021 consisted of $ 200,000 convertible to Common shares at a price of $ 5.60 per share ( 35,715 shares) and $ 1,750,000 convertible to Common shares at a price of $ 4.90 per share ( 357,151 shares).

3 unchanged sentences

The Company closed a private placement in February 2023.

Under the private placement, the Company sold 123,365 shares at $ 5.50 per share and 35,088 shares at $ 5.70 per share for net proceeds of $ 878,503 .

Under the private placement, the Company sold 123,365 shares of common stock at $ 5.50 per share and 35,088 shares of common stock at $ 5.70 per share for net proceeds of $ 878,503 .

No shares were issued in the second quarter of 2023.

The Company closed a private placement in February 2022.

Under the private placement, the Company sold 360,134 shares at $ 7.50 per share for net proceeds of $ 2,701,000 .

Under the private placement, the Company sold 360,134 shares of common stock at $ 7.50 per share for net proceeds of $ 2,701,000 .

In the first quarter of 2022 the Company issued 3,572 shares of common stock at $ 9.05 per share for services provided for a total value of $ 32,326 .

In the second quarter of 2022, the Company sold 138,665 shares of common stock for net proceeds of 980,107 .

Stock Purchase Warrants Outstanding

In the six months ended June 30, 2022, 93,976 shares of common stock were issued in exchange for outstanding warrants for net proceeds of $ 465,453 .

The activity in stock purchase warrants is as follows:

Exercise Prices

Balance December 31, 2021

$ 2.52 - 7 .00

$ 2.52 - 5.60

Exercised quarter 1, 2022

$ 2.52 - 5.60

Exercised quarter 2, 2022

Exercised in remainder of 2022

Balance December 31, 2022 and March 31, 2023

Balance December 31, 2022 and June 30, 2023

$ 5.60 - 7.00

5 unchanged sentences

Stock Options

There were no stock options granted during the three months ended March 31, 2022 or 2023.

There were no stock options granted during the six months ended June 30, 2023 or 2022.

Activity in the Company’s stock options is as follows:

2 unchanged sentences

Exercised quarter 1, 2022

Exercised quarter 2, 2022

Expired quarter 2, 2022

Exercised in remainder of 2022

Balance December 31, 2022 and March 31, 2023

Outstanding and exercisable at March 31, 2023

At March 31, 2023, outstanding stock options have a weighted average remaining term of approximately 1.58 years and have an intrinsic value of $ 1,800 .

There were no stock options exercised during the first three months of 2023.

Balance December 31, 2022 and June 30, 2023

Outstanding and exercisable at June 30, 2023

At June 30, 2023, outstanding stock options have a weighted average remaining term of approximately 1.31 years and have an intrinsic value of $ 21,810 .

There were no stock options exercised during the first six months of 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements