UNITED STATES ANTIMONY CORP 10-Q

ITEM 1. FINANCIAL STATEMENTS UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, 2022 December 31, 2021 ASSETS CURRENT ASSETS Cash and cash equivalents $ 8,312,469 $ 21,363,048 Certificates of deposit 259,210 259,210 Accounts receivable 1,604,660 891,314 Prepaid expenses 60,916 - Inventories (NOTE 5) 590,204 1,055,420 Investments (NOTE 11) 13,299,393 - Total current assets 24,126,852 23,568,992 Properties, plants and equipment, net (NOTE 6) 11,242,721 11,133,733 Restricted cash for reclamation bonds 57,281 57,281 IVA receivable and other assets 329,163 242,721 Total assets $ 35,756,017 $ 35,002,727 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 679,597 $ 1,385,752 Payable to related parties 4,084 - Accrued liabilities 685,918 621,873 Long-term debt, current portion (NOTE 8) 91,347 13,230 Total current liabilities 1,460,946 2,020,855 Long-term debt, net of current portion (NOTE 8) 265,636 201,920 Stock payable to directors for services 187,500 112,500 Asset retirement obligations and accrued reclamation costs (NOTE 7) 325,657 298,649 Total liabilities 2,239,739 2,633,924 COMMITMENTS AND CONTINGENCIES (NOTE 9) STOCKHOLDERS’ EQUITY 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 $ 956,250 and $ 952,500 , respectively) 7,500 7,500 Series C: 177,904 shares issued and outstanding (liquidation preference $ 97,847 both periods) 1,779 1,779 Series D: 1,692,672 shares issued and outstanding (liquidation preference $ 4,979,632 both periods) 16,926 16,926 Common stock, $ 0.001 par value; 300,000,000 shares authorized; 106,240,361 shares issued and outstanding 1,062,402 1,062,402 Additional paid-in capital 63,991,459 63,991,459 Accumulated deficit ( 31,563,788 ) ( 32,711,263 ) Total stockholders’ equity 33,516,278 32,368,803 Total liabilities and stockholders’ equity $ 35,756,017 $ 35,002,727 The accompanying notes are an integral part of these condensed consolidated unaudited financial statements. Page 3 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 REVENUE $ 3,587,925 $ 2,275,562 $ 7,168,231 $ 3,528,849 COST OF REVENUE 2,865,515 2,079,164 5,306,433 3,120,294 GROSS PROFIT 722,410 196,398 1,861,798 408,555 OPERATING EXPENSES General and administrative 220,591 290,111 381,272 460,161 Salaries and benefits 72,912 77,278 146,047 153,937 Other operating expenses 14,045 - 17,960 184,037 Legal and professional fees 47,927 61,199 170,004 184,336 TOTAL OPERATING EXPENSES 355,475 428,588 715,283 982,471 INCOME (LOSS) FROM OPERATIONS 366,935 ( 232,190 ) 1,146,515 ( 573,916 ) OTHER INCOME (EXPENSE) Interest expense ( 3,081 ) ( 880 ) ( 6,063 ) ( 3,135 ) Interest and investment income 30,052 13,389 39,706 21,882 Change in fair value of investments ( 93,458 ) - ( 93,458 ) - Trademark and licensing income 60,775 - 60,775 Gain on forgiveness – CARES Act debt - 443,400 - 443,400 Gain on settlement of Hillgrove advance - 113,422 - 113,422 TOTAL OTHER INCOME (EXPENSE) ( 5,712 ) 569,331 960 575,569 NET INCOME 361,223 337,141 1,147,475 1,653 Preferred dividends ( 11,819 ) ( 12,162 ) ( 23,639 ) ( 24,325 ) Net income available to common stockholders 349,404 324,979 1,123,836 ( 22,672 ) Net income per share of common stock Basic and diluted $ Nil $ Nil $ 0.01 $ Nil Weighted average shares outstanding: Basic 106,240,361 106,315,419 106,240,361 99,513,378 Diluted 106,240,361 108,696,704 106,240,361 99,513,378 The accompanying notes are an integral part of these condensed consolidated unaudited financial statements. Page 4 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) For the three and six months ended June 30, 2022 and 2021 Total Preferred Stock Common Stock Additional Accumulated Total Stockholders’ Shares Amount Shares Amount Paid in Capital Deficit Equity BALANCE, December 31, 2020 2,678,909 $ 26,788 75,949,757 $ 759,496 $ 39,050,899 $ ( 32,650,794 ) $ 7,186,389 Common shares issued for cash - - 26,290,000 262,900 24,734,100 - 24,997,000 Common stock issuance costs - - - - ( 1,654,820 ) - ( 1,654,820 ) Common stock issued for exercise of warrants - - 3,723,810 37,238 1,726,381 - 1,763,619 Net loss - - - - - ( 335,488 ) ( 335,488 ) BALANCE, March 31, 2021 2,678,909 $ 26,788 105,963,567 $ 1,059,634 $ 63,856,560 $ ( 32,986,282 ) $ 31,956,700 Common stock issued for exercise of warrants - - 41,667 417 26,667 - 27,084 Net income - - - - - 337,141 337,141 BALANCE, June 30, 2021 2,678,909 $ 26,788 106,005,234 $ 1,060,051 $ 63,883,227 $ ( 32,649,141 ) $ 32,320,925 BALANCE, December 31, 2021 2,620,576 $ 26,205 106,240,361 $ 1,062,402 $ 63,991,459 $ ( 32,711,263 ) $ 32,368,803 Net income - - - - - 786,252 786,252 BALANCE, March 31, 2022 2,620,576 $ 26,205 106,240,361 $ 1,062,402 $ 63,991,459 $ ( 31,925,011 ) $ 33,155,055 Net income - - - - - 361,223 361,223 BALANCE, June 30, 2022 2,620,576 $ 26,205 106,240,361 $ 1,062,402 $ 63,991,459 $ ( 31,563,788 ) $ 33,516,278 The accompanying notes are an integral part of these condensed consolidated unaudited financial statements. Page 5 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six months ended June 30, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,147,475 $ 1,653 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 451,207 442,408 Accretion of asset retirement obligation 11,412 1,732 Common stock payable for directors fees 75,000 56,250 Gain on settlement of Hillgrove advance - ( 113,422 ) Gain on forgiveness of Cares Act debt - ( 443,400 ) Write down of inventory to net realizable value 136,836 66,054 Change in fair value of investments 93,458 - Changes in operating assets and liabilities: Accounts receivable ( 713,346 ) ( 362,681 ) Inventories 328,380 17,448 Prepaid expenses ( 60,916 ) - IVA receivable and other assets ( 86,442 ) ( 15,402 ) Accounts payable ( 706,155 ) ( 519,570 ) Accrued liabilities 64,045 ( 92,927 ) Export tax assessment payable - ( 1,120,730 ) Payable to related parties 4,084 ( 154,022 ) Net cash provided (used) by operating activities 745,038 ( 2,236,609 ) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from redemption of certificates of deposit - 210,184 Purchase of investments ( 13,789,772 ) - Proceeds from sales of investments 396,921 - Purchase of properties, plants and equipment ( 382,999 ) ( 115,127 ) Net cash provided (used) by investing activities ( 13,775,850 ) 95,057 CASH FLOWS FROM FINANCING ACTIVITIES: Change in checks issued and payable - ( 86,685 ) Payments on advances from related party - ( 56,416 ) Proceeds from issuance of common stock, net of issuance costs - 23,342,180 Proceeds from exercise of warrants - 1,790,703 Payments on Hillgrove advances payable - ( 1,020,799 ) Principal paid on notes payable to bank - ( 100,000 ) Principal payments of long-term debt ( 19,767 ) ( 27,926 ) Net cash provided (used) by financing activities ( 19,767 ) 23,841,057 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH ( 13,050,579 ) 21,699,505 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD 21,420,329 722,377 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $ 8,369,750 $ 22,421,882 NON-CASH FINANCING AND INVESTING ACTIVITIES: Equipment purchased with note payable $ 161,600 $ - Common stock payable to directors - 130,483 Payable to related party satisfied with exercise of stock purchase warrants - 62,500 The accompanying notes are an integral part of these condensed consolidated unaudited financial statements. Page 6 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 NOTE 1 - NATURE OF OPERATIONS AGAU Mines, Inc., predecessor of United States Antimony Corporation (“USAC” or “the Company”), was incorporated in June 1968 as a Delaware corporation to mine gold and silver. USAC was incorporated in Montana in January 1970 to mine and produce antimony products. In June 1973, AGAU Mines, Inc. was merged into USAC. In December 1983, the Company suspended its antimony mining operations when it became possible to purchase antimony raw materials more economically from foreign sources. The principal business of the Company has been the production and sale of antimony products. During 2000, the Company formed a 75 % owned subsidiary, Bear River Zeolite Company (“BRZ”), to mine and market zeolite and zeolite products from a mineral deposit in southeastern Idaho . In 2001, an operating plant was constructed at the zeolite site and zeolite production and sales commenced. During 2002, the Company acquired the remaining 25 % of BRZ and continued to produce and sell zeolite products. During 2005, the Company formed a 100 % owned subsidiary, Antimonio de Mexico S.A. de C.V . (“AM”), to explore and develop potential antimony properties in Mexico . During 2006, the Company acquired 100 % ownership in United States Antimony, Mexico S.A. de C.V . (“USAMSA”), which became a wholly-owned subsidiary of the Company. In 2018, the Company acquired 100 % ownership in Stibnite Holding Company US Inc. (previously Lanxess Holding Company US Inc.), Antimony Mining and Milling US LLC (previously Lanxess Laurel US LLC), a Delaware limited liability company and Lanxess Laurel de Mexico, S.A. de C.V (“Lanxess Laurel Mexico”), a Mexico corporation, both of which became a wholly-owned subsidiary of the Company. In its operations in Montana, the Company produces antimony oxide, antimony metal, and precious metals. Antimony oxide is a fine, white powder that is used primarily in conjunction with a halogen to form a synergistic flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings and paper. Antimony oxide is also used as a color fastener in paint, as a catalyst for production of polyester resins for fibers and film, as a catalyst for production of polyethylene pthalate in plastic bottles, as a phosphorescent agent in fluorescent light bulbs, and as an opacifier for porcelains. The Company also sells antimony metal for use in bearings, storage batteries and ordnance. In its operations in Idaho, the Company produces zeolite, a group of industrial minerals used in a variety of purposes including soil amendment and fertilizer. Zeolite is also used for water filtration, sewage treatment, nuclear waste and other environmental cleanup, odor control, gas separation and other miscellaneous applications. NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2022, and its results of operations for the three and six months ended June 30, 2022, and 2021, and cash flows for the six months ended June 30, 2022 and 2021. The condensed consolidated balance sheet at December 31, 2021, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. Operating results for the three and six month periods ended June 30, 2022, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (“U.S. GAAP”). These unaudited interim financial statements should be read in conjunction with the annual audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 31, 2022. This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to U.S. GAAP and have been consistently applied in the preparation of the financial statements. Page 7 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 Reclassifications Certain reclassifications have been made to conform prior periods’ amounts to the current presentation. These reclassifications have no effect on the results of operations, stockholders’ equity and cash flows as previously reported. COVID -19 The Company’s operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic spreading throughout the United States and elsewhere, causing disruptions to the Company’s business operations and management. These disruptions are most evident in the Company’s ability to retain and house employees and properly manage them while maintaining proper social distancing and with delays in obtaining materials and supplies. The effects of the continued outbreak of COVID-19 and related government responses could also include extended disruptions to supply chains and capital markets, reduced availability of contractors and a prolonged reduction in economic activity. These effects could have a variety of adverse impacts on the Company, including its ability to conduct operations. The Company has taken steps to mitigate the potential risks to suppliers and employees posed by the spread of COVID-19, including work from home policies where appropriate. The Company will continue to monitor developments affecting both its workforce and contractors, and will take additional precautions as necessary. The ultimate impact of COVID-19 depends on factors beyond management’s knowledge or control, including its duration and third-party actions to contain its spread and mitigate its public health effects. Therefore, the Company cannot estimate the potential future impact to its financial position, results of operations and cash flows, but the impacts could be material. Investments The Company determines the appropriate classification of investments at the time of acquisition and re-evaluates such determinations at each reporting date. Equity securities that have a readily determinable fair value are carried at fair value determined using Level 1 fair value measurement inputs with the change in fair value recognized as unrealized gain (loss) in the consolidated statement of operations each reporting period. Gains and losses on the sale of securities are recognized on a specific identification basis. New Accounting Pronouncements 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. NOTE 3– EARNINGS PER SHARE Basic Earnings Per Share (“EPS”) is computed as net income (loss) available to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options and warrants. At June 30, 2022 and 2021, 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: June 30, 2022 June 30, 2021 Warrants 12,489,922 2,471,089 Convertible preferred stock 1,692,672 1,751,005 TOTAL POSSIBLE DILUTIVE SHARES 14,182,594 4,222,094 Page 8 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 NOTE 4 – REVENUE RECOGNITION Products consist of the following: · Antimony: includes antimony oxide, sodium antimonate, antimony trisulfide and antimony metal · Zeolite: includes coarse and fine zeolite crushed in various sizes · Precious metals: includes unrefined and refined gold and silver Sales of products for the three-months ended June 30, 2022 and 2021 were as follows: For the three months ended June 30, 2022 June 30, 2021 Antimony $ 2,472,081 $ 1,428,939 Zeolite 1,020,391 716,428 Precious metals 95,453 130,195 TOTAL REVENUE BY PRODUCT $ 3,587,925 $ 2,275,562 Sales of products for the six months ended June 30, 2022 and 2021 were as follows: For the six months ended June 30, 2022 June 30, 2021 Antimony $ 5,301,011 $ 2,086,046 Zeolite 1,694,433 1,236,375 Precious metals 172,787 206,428 TOTAL REVENUE BY PRODUCT $ 7,168,231 $ 3,528,849 For the three and six months ended June 30, 2022, the Company also received royalties related to a trademark and licensing agreement in its antimony business segment. For the three and six months ended June 30, 2022, trademark and licensing income of $ 60,775 is included in other income in the antimony business segment (Note 12). For the three and six months ended June 30, 2021, trademark and licensing income was $Nil. The Company’s trade accounts receivable balance related to contracts with customers was $ 1,604,660 at June 30, 2022 and $ 891,314 at December 31, 2021. The Company’s products do not involve any warranty agreements and product returns are not typical. NOTE 5– INVENTORIES Inventories at June 30, 2022 and December 31, 2021 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. Inventories at June 30, 2022 and December 31, 2021 are as follows: June 30, 2022 December 31, 2021 Antimony Metal $ 128,591 $ 234,461 Antimony Oxide 278,134 439,086 Antimony Ore Concentrates 28,392 119,046 Total antimony 435,117 792,593 Zeolite 155,087 262,827 TOTAL INVENTORIES $ 590,204 $ 1,055,420 Page 9 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 Inventories are valued at cost except for the portion related to Mexican operations which are valued at net realizable value because the production costs of the Mexican inventory were greater than the amount the Company expected to receive on the sale of the pounds of antimony contained in inventory. The adjustment to inventory, which is included in cost of revenue on the statements of operations was $ 136,836 and $ 66,054 for the six months ended June 30, 2022 and 2021, respectively. Antimony oxide and metal inventory consisted of finished product held at the Company’s plants in Montana and Mexico. Antimony concentrates and ore were held primarily at sites in Mexico. The Company’s zeolite inventory consists of saleable zeolite material. NOTE 6 – PROPERTIES, PLANTS AND EQUIPMENT The major components of the Company’s properties, plants and equipment by segment at June 30, 2022 and December 31, 2021 are shown below: Antimony Segment Zeolite Segment Precious Metals June 30, 2022 USAC USAMSA BRZ Segment TOTAL Plant and equipment $ 1,759,271 $ 9,197,870 $ 4,051,016 $ 1,347,912 $ 16,356,069 Buildings 243,248 590,128 801,764 - 1,635,140 Construction in progress - 280,406 332,629 - 613,035 Land and other 2,431,387 2,656,037 16,753 - 5,104,177 4,433,906 12,724,441 5,202,162 1,347,912 23,708,421 Accumulated depreciation ( 2,747,396 ) ( 5,904,748 ) ( 3,318,286 ) ( 495,270 ) ( 12,465,700 ) $ 1,686,510 $ 6,819,693 $ 1,883,876 $ 852,642 $ 11,242,721 Antimony Segment Zeolite Segment Precious Metals December 31, 2021 USAC USAMSA BRZ Segment TOTAL Plant and equipment $ 1,684,977 $ 8,905,899 $ 3,853,056 $ 1,330,394 $ 15,774,326 Buildings 243,248 870,534 801,764 - 1,915,546 Construction in progress - 280,406 184,972 - 465,378 Land and other 2,431,387 2,640,441 16,753 - 5,088,581 $ 4,359,612 $ 12,697,280 $ 4,856,545 $ 1,330,394 $ 23,243,831 Accumulated depreciation ( 2,732,809 ) ( 5,622,555 ) ( 3,314,658 ) ( 440,076 ) ( 12,110,098 ) $ 1,626,803 $ 7,074,725 $ 1,541,887 $ 890,318 $ 11,133,733 At June 30, 2022 and December 31, 2021, the Company had $ 613,035 and $ 665,175 , respectively, of assets that were not yet placed in service and have not yet been depreciated. Page 10 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 NOTE 7 – ASSET RETIREMENT OBLIGATION AND ACCRUED RECLAMATION COSTS Changes in the asset retirement obligation for the three and six months ended June 30, 2022 and 2021 are as follows: Three months ended June 30, 2022 2021 Asset retirement obligation, beginning of period $ 192,881 $ 184,219 Change in estimate of asset retirement obligation 15,596 - Accretion expense 9,680 1,732 Asset retirement obligation, end of period $ 218,157 $ 185,951 Six months ended June 30, 2022 2021 Asset retirement obligation, beginning of period $ 191,149 $ 184,219 Change in estimate of asset retirement obligation 15,596 - Accretion expense 11,412 1,732 Asset retirement obligation, end of period $ 218,157 $ 185,951 The Company’s total asset retirement obligation and accrued reclamation costs of $ 325,657 and $ 298,649 , at June 30, 2022 and December 31, 2021, respectively, includes reclamation obligations for the Idaho and Montana operations of $ 107,500 . NOTE 8 – DEBT Long term debt at June 30, 2022 and December 31, 2021 is as follows: June 30, 2022 December 31, 2021 Promissory note payable to First Security Bank of Missoula, bearing interest at 2.25%, payable in 59 monthly installments of $1,409 with a final payment of $152,726 maturing November 9, 2026; collateralized by a lien on Certificate of Deposit $ 208,046 $ 215,150 Installment contract payable to Caterpillar Financial Services, bearing interest at 6.65%, payable in 24 monthly installments of $7,210 maturing April 28, 2024; collateralized by 2007 Caterpillar 740 articulated truck 148,937 - 356,983 215,150 Less current portion ( 91,347 ) ( 13,230 ) Long term portion $ 265,636 $ 201,920 At June 30, 2022, principal payments on debt are due as follows: Twelve months ending June 30, Principal payment 2023 $ 91,347 2024 82,573 2025 12,925 2026 13,219 2027 156,919 $ 356,983 Page 11 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 NOTE 9 – COMMITMENTS AND CONTINGENCIES The Company follows U.S. GAAP guidance in determining its accrual and disclosures with respect to loss contingencies, and evaluate such accruals and contingencies for each reporting period. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred. From time to time, the Company is assessed fines and penalties by the Mine Safety and Health Administration (“MSHA”). Using appropriate regulatory channels, management may contest these proposed assessments. At June 30, 2022 and December 31, 2021, the Company had accrued liabilities of $ 1,270 and $Nil, respectively, relating to such assessments. The Company pays various royalties on the sale of zeolite products. On a combined basis, royalties vary from 8 %- 13 %. During the three months ended June 30, 2022 and 2021, the Company incurred royalty expense of $ 85,870 and $ 69,437 , respectively. During the six months ended June 30, 2022 and 2021, the Company incurred royalty expense of $ 147,900 and $ 131,567 respectively. Royalty expense is included in cost of goods sold on the condensed consolidated statement of operations. At June 30, 2022 and December 31, 2021, the Company had accrued royalties payable of $ 409,887 and $ 346,242 respectively, which is included in accrued liabilities on the condensed consolidated balance sheets. The Company is currently in negotiations with certain royalty holders to modify the terms of the agreements. NOTE 10 – STOCKHOLDERS’ EQUITY During the six months ended June 30, 2021, the Company sold shares of its common stock in two separate transactions: on February 3, 2021, 15,300,000 shares were sold at $ 0.70 for gross proceeds of $ 10,710,000 ; and on February 18, 2021, 10,990,000 shares were sold at $ 1.30 for gross proceeds of $ 14,287,000 . A total of $ 1,654,820 of issuance costs were incurred on these sales. During the six months ended June 30, 2021, the Company issued 3,765,477 shares of common stock and received $ 1,790,703 in cash from the exercise of warrants. During the three months ended June 30, 2022 and June 30, 2021, the Company expensed $ 46,875 and $ 28,125 , respectively, in directors’ fees payable that are anticipated to be paid in common stock. During the six months ended June 30, 2022 and June 30, 2021, the Company expensed $ 75,000 and $ 28,125 , respectively in directors’ fees payable At June 30, 2022 and December 31, 2021, the accrued balance of stock payable to directors fees for services was $ 187,500 and $ 112,500 , respectively. The Company issued no shares of common stock during the three or six months ended June 30, 2022. During the three and six months ended June 30, 2022, no warrants were exercised. Common stock warrants In February 2021, concurrent with sale of common stock, the Company issued warrants to purchase 7,650,000 shares of common stock at an exercise price of $ 0.85 per share. The warrants are initially exercisable six months following issuance and expire five and one-half years from the issuance date. In connection with the February 2021 sales of common stock, the Company also issued 1,606,500 warrants with an exercise price of $ 0.85 and 804,000 warrants with an exercise price of $ 0.46 as commission to the placement agent. There were no warrants exercised during the three or six months ended June 30, 2022. The Company issued no warrants to purchase common stock during the three or six months ended June 30, 2022. Page 12 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 The following is a summary of the Company’s warrants to purchase shares of common stock activity: Number of warrants Exercise prices Balance outstanding at December 31, 2020 6,194,899 $ 0.65 Issued 10,060,500 $ 0.46 - $ 0.85 Exercised ( 3,765,477 ) $ 0.46 - $ 0.65 Balance outstanding at December 31, 2021 and June 30, 2022 12,489,922 $ 0.75 The composition of the Company’s warrants outstanding at June 30, 2022 is as follows: Number of warrants Exercise Price Expiration Date Remaining life (years) 143,707 $ 0.65 8/12/2022 0.12 2,285,715 0.46 7/31/ 2025 3.09 804,000 0.46 1/27/ 2026 3.58 7,650,000 0.85 8/3/2026 4.10 1,606,500 0.85 2/1/2026 3.59 12,489,922 NOTE 11 – INVESTMENTS In April 2022, the Company opened an investment account composed of U.S. Treasury bonds which are measured using Level 1 fair value inputs that are based on quoted prices in active markets. For the three and six months ended June 30, 2022, the Company recognized $ 93,458 in the change in fair value of investments on the condensed consolidated statement of operations. As of June 30, 2022, the cost and fair value of the investment portion of the account was $ 13,492,655 and $ 13,431,774 , respectively. As of June 30, 2022, the cash and cash equivalent portion of the account was $ 132,380 , which is included in cash and cash equivalents on the condensed consolidated balance sheet. NOTE 12 – BUSINESS SEGEMENTS 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. Page 13 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 The Puerto Blanco mill and the Madero smelter at the Company’s Mexico operation bring antimony up to an intermediate or finished stage, which may be sold directly or shipped to the United States operation for finishing at the Thompson Falls, Montana plant. The Puerto Blanco mill in Mexico is the site of our crushing and flotation plant, and a cyanide leach plant which will recover precious metals after the ore goes through the crushing and flotation cycles. A precious metals recovery plant is operated in conjunction with the antimony processing plant at Thompson Falls, Montana, where a 99% precious metals mix will be produced. 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, although the Company does have a sales operation in Canada. For the three months ended June 30, For the six months ended June 30, Capital expenditures 2022 2021 2022 2021 Antimony United States $ 51,927 $ - $ 80,277 $ - Mexico 10,724 4,872 11,565 9,744 Subtotal antimony 62,651 4,872 91,842 9,744 Precious metals 9,138 18,921 17,518 37,347 Zeolite 299,865 68,036 435,239 68,036 Total $ 371,654 $ 91,829 $ 544,599 $ 115,127 Total Assets: June 30, 2022 December 31, 2021 Antimony United States $ 24,552,558 $ 24,130,348 Mexico 7,446,054 7,771,515 Subtotal antimony 31,998,612 31,901,863 Precious metals United States 183,713 107,464 Mexico 668,929 782,854 Subtotal precious metals 852,642 890,318 Zeolite 2,904,763 2,210,546 TOTAL $ 35,756,017 $ 35,002,727 Page 14 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 Segment operations for the three months ended June 30, 2022 Antimony - USA Antimony -Mexico Total antimony Precious Metals Zeolite Total Total revenues $ 1,644,259 $ 827,822 $ 2,472,081 $ 95,453 $ 1,020,391 $ 3,587,925 Depreciation and amortization $ 11,101 $ 143,736 $ 154,837 $ 27,674 $ 48,546 $ 231,057 Income from operations $ 120,636 $ 24,396 $ 145,032 $ 67,779 $ 154,124 $ 366,935 Other income (expense) ( 3,975 ) - ( 3,975 ) - ( 1,737 ) ( 5,712 ) NET INCOME $ 116,661 $ 24,396 $ 141,057 $ 67,779 $ 152,387 $ 361,223 Page 15 of 32 Table of Contents UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2022 Segment operations for the three months ended June 30, 2021 Antimony - USA Antimony -Mexico Total antimony Precious Metals Zeolite Total Total revenues $ 1,428,939 $ - $ 1,428,939 $ 130,195 $ 716,428 $ 2,275,562 Depreciation and amortization $ 7,893 $ 144,999 $ 152,892 $ 28,226 $ 38,826 $ 219,944 Income (loss) from operations $ 99,642 $ ( 575,363 ) $ ( 475,721 ) $ 101,969 $ 141,562 $ ( 232,190 ) Other income (expense) 456,725 113,422 570,147 - ( 816 ) 569,331 NET LOSS $ 556,367 $ ( 461,941 ) $ 94,426 $ 101,969 $ 140,746 $ 337,141 Segment operations for the six months ended June 30, 2022 Antimony - USA Antimony -Mexico Total antimony Precious Metals Zeolite Total Total revenues $ 4,473,189 $ 827,822 $ 5,301,011 $ 172,787 $ 1,694,433 $ 7,168,231 Depreciation and amortization $ 20,570 $ 282,193 $ 302,763 $ 55,194 $ 93,250 $ 451,207 Income (loss) from operations $ 1,512,148 $ ( 659,641 ) $ 852,507 $ 117,593 $ 176,415 $ 1,146,515 Other income (expense) 3,335 - 3,335 - ( 2,375 ) 960 NET INCOME (LOSS) $ 1,515,483 $ ( 659,641 ) $ 855,842 $ 117,593 $ 174,040 $ 1,147,475 Segment operations for the six months ended June 30, 2021 Antimony - USA Antimony -Mexico Total antimony Precious Metals Zeolite Total Total revenues $ 2,086,046 $ - $ 2,086,046 $ 206,428 $ 1,236,375 $ 3,528,849 Depreciation and amortization $ 15,784 $ 289,951 $ 305,735 $ 55,830 $ 80,843 $ 442,408 Income (loss) from operations $ ( 119,027 ) $ ( 813,931 ) $ ( 932,958 ) $ 150,598 $ 208,444 $ ( 573,916 ) Other income (expense) 463,360 113,422 576,782 - ( 1,213 ) 575,569 NET INCOME (LOSS) $ 344,333 $ ( 700,509 ) $ ( 356,176 ) $ 150,598 $ 207,231 $ 1,653 NOTE 13 – SUBSEQUENT EVENTS On August 8, 2022, the Company executed a Purchase Option Agreement (the ‘agreement”) with SB Wadley SA de CV (“Wadley”) whereby the Company leases, with an option to acquire, mining claims located in Mexico known as the Wadley Property. Under the agreement, the Company will pay Wadley eight monthly installments of $ 11,600 for the right to mine and conduct geological and resource studies on the Wadley Property. At the end of the eight months, should the Company choose to exercise the option following due diligence and assessment of geological and resource studies, the Company will pay Wadley $ 2,230,000 and seven annual payments of $ 1,160,000 . Page 16 of 32 Table of Contents