UNITED STATES ANTIMONY CORP 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This quarterly report and the exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements concern the Company’s anticipated results and developments in the Company’s operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statement that expresses or involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates”, or “intends”, or states that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation risks related to: · The Company’s properties being in the exploration stage; · The mineral operations being subject to government regulation; · The Company’s ability to obtain additional capital to develop the Company’s resources, if any; · Mineral exploration and development activities; · Mineral estimates; · The Company’s insurance coverage for operating risks; · The fluctuation of prices for precious and base metals, such as gold and silver; · The competitive industry of mineral exploration; · The title and rights in the Company’s mineral properties; · Environmental hazards; · The possible dilution of the Company’s common stock from additional financing activities; · Metallurgical and other processing problems; · Unexpected geological formations; · Global economic and political conditions; · Staffing in remote locations; · Changes in product costing; · Inflation on operational costs and profitability; · Competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, flooding, landslides, power outages, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities); · Global pandemics or civil unrest; · Mexican labor and cartel issues regarding safety and organized control over our properties; · The positions and associated outcomes of Mexican and other taxing authorities; · The possible dilution of the Company’s common stock from additional financing activities; · Potential conflicts of interest with the Company’s management; and · The Company’s common stock. 14 Table of Contents This list is not exhaustive of the factors that may affect the Company’s forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the sections titled “Risk Factors”, “Description of Business” and “Management’s Discussion and Analysis and Plan of Operation” of this Quarterly Report. If one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. United States Antimony Corporation disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law. The Company advises readers to carefully review the reports and documents filed from time to time with the Securities and Exchange Commission (the “SEC”), particularly the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. As used in this Quarterly Report, the terms “we,” “us,” “our,” “United State Antimony Corporation,”, “US Antimony,” “USAC,” and the “Company”, mean United States Antimony Corporation, unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated. Management’s Discussion and Analysis is intended to be read in conjunction with the Company’s condensed consolidated financial statements and the integral notes (“Notes”) thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2022. The following statements may be forward-looking in nature and actual results may differ materially. DESCRIPTION OF BUSINESS History United States Antimony Corporation was incorporated in Montana in January 1970 to mine and produce antimony products. In December 1983, the Company suspended antimony ore mining operations in the U.S. but continued to produce antimony products using foreign sources of antimony ore. In April 1998, the Company formed United States Antimony Mexico SA de CV (“USAMSA”) to smelt antimony in Mexico, and, in August 2005, the Company formed Antimonio de Mexico, S. A. de C. V. (“ADM”) to explore and develop antimony and silver deposits in Mexico. The Company formed Bear River Zeolite Company (“BRZ”) in 2000 for the purpose of mining and producing zeolite in southeastern Idaho. Our principal business is the production and sale of antimony, silver, gold, and zeolite products. In May 2012, our shares of common stock started trading on the NYSE MKT (now NYSE AMERICAN) under the symbol UAMY. Although we extract minerals from the Los Juarez, Mexico antimony property and the Bear River, Idaho zeolite property that we later process and sell, each of our properties is classified under Regulation S-K Item 1300 as an exploration stage property and the Company is classified as an exploration stage issuer because we have not prepared a technical report summary for any of our properties making a determination that the property contains proven mineral reserves or probable mineral reserves. 15 Table of Contents Antimony Segment The Burns Mining District of Sanders County, MT, which is approximately 15 miles west of Thompson Falls, MT, is the location of one of our antimony smelters and precious metals plants. We hold 2 patented claims, where the plant is located. Mining was suspended at this site in December 1983, because antimony ore could be purchased more economically from foreign sources; currently, the environmental permitting process precludes any mining at this site. Since 1983, we have relied on foreign sources for antimony ore, and there are risks of interruption in procurement from these sources and/or volatile changes in world market prices for these materials that are not controllable by us. We have sources of antimony in Mexico, but we also depend on foreign companies for antimony ore. We anticipate continuing to receive antimony from our owned and leased properties in Mexico and from foreign suppliers in Canada, Mexico, and Central America, assuming economics are profitable. In Montana, we primarily produce antimony oxide, antimony metal, antimony trisulfide, and precious metals. Our antimony oxide is used in conjunction with a halogen to form a synergistic flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings, and paper. Our antimony oxide is also used as a color fastener in paint and as a phosphorescent agent in fluorescent light bulbs. Our antimony metal is used in bearings, storage batteries and ordnance. Our antimony trisulfide is used as a primer in ammunition. We estimate (but have not independently confirmed) that our present share of the domestic market and international market for antimony oxide products is approximately 4% and less than 1%, respectively. We are the only significant U.S. producer of antimony products, while China supplies approximately 92% of the world antimony demand. We believe we are competitive both domestically and worldwide due to the following factors: · We have a reputation for quality products delivered on a timely basis. · We have the only two operating, permitted antimony smelters in North and Central America. · We are the only U.S. producer of antimony products. · We can ship on short notice to domestic customers. · Our smelter in Coahuila is the largest operating antimony smelter in Mexico or the United States with a current maximum processing capacity of approximately 32,600 pounds of antimony ore per day. Zeolite Segment We own 100% of BRZ. BRZ has a lease with Zeolite LLC (f/k/a Webster Farm, L.L.C.) that entitles BRZ to surface mine and process zeolite on property located near Preston, Idaho, in exchange for a royalty payment. The annual royalty payment is the greater of: (1) the minimum annual royalty of $60,000, adjusted annually for the Consumer Price Index for all Urban Consumers, or (2) $11.00 per ton for the first ten thousand tons, $9.90 per ton for tons in excess of ten thousand up to twenty thousand, and $8.80 per ton for tons in excess of twenty thousand. This Zeolite LLC lease also requires BRZ to pay $10,000 to the lessor on March 1 of each year during the term of the lease which ends March 1, 2025. BRZ also pays other royalties on the sale of zeolite products. In total, royalties vary from 8% to 13% of sales. In addition, BRZ can surface mine and process zeolite on property owned by the U.S. Bureau of Land Management that is adjacent to the Company’s Preston, Idaho property after obtaining certain permits. Also, given the mining difficulties in the winter season, BRZ constructed warehouses to store mined zeolite prior to the winter season allow production to continue during the winter season. “Zeolite” refers to a group of industrial minerals that consist of hydrated aluminosilicates that hold cations such as calcium, sodium, ammonium, various heavy metals, and potassium in their crystal lattice. Water is loosely held in cavities in the lattice. BRZ zeolite is regarded as one of the best zeolites in the world due to its high cation exchange capacity (CEC) of approximately 180-220 meq/100 gr. (which predicts plant nutrient availability and retention in soil), its hardness and high clinoptilolite content (which is an effective barrier to prevent problematic radionuclide movement), its absence of clay minerals, and its low sodium content. Our zeolite is used in: ☐ Soil Amendment and Fertilizer . Zeolite has been successfully used to fertilize golf courses, sports fields, parks and common areas, and high value agricultural crops. ☐ Water Filtration . Zeolite is used for particulate, heavy metal and ammonium removal in swimming pools, municipal water systems, fisheries, fish farms, and aquariums. ☐ Sewage Treatment . Zeolite is used in sewage treatment plants to remove nitrogen and as a carrier for microorganisms. 16 Table of Contents ☐ Nuclear Waste and Other Environmental Cleanup . Zeolite has shown a strong ability to selectively remove strontium, cesium, radium, uranium, and various other radioactive isotopes from solutions. Zeolite can also be used for the cleanup of soluble metals such as mercury, chromium, copper, lead, zinc, arsenic, molybdenum, nickel, cobalt, antimony, calcium, silver and uranium. ☐ Odor Control . A major cause of odor around cattle, hog, and poultry feed lots is the generation of the ammonium in urea and manure. The ability of zeolite to absorb ammonium prevents the formation of ammonia gas, which disperses the odor. ☐ Gas Separation . Zeolite has been used for some time to separate gases, to re-oxygenate downstream water from sewage plants, smelters, pulp and paper plants, and fishponds and tanks, and to remove carbon dioxide, sulfur dioxide and hydrogen sulfide from methane generators as organic waste, sanitary landfills, municipal sewage systems, animal waste treatment facilities, and is excellent in pressure swing apparatuses. ☐ Animal Nutrition . According to certain third-party research, feeding up to 2% zeolite increases growth rates, decreases conversion rates, and prevents scours. A large number of cattle are currently being fed zeolite in feed lots located in the United States. ☐ Miscellaneous Uses . Other uses include catalysts, petroleum refining, concrete, solar energy and heat exchange, desiccants, pellet binding, horse and kitty litter, floor cleaner, traction control, ammonia removal from mining waste, and carriers for insecticides, pesticides and herbicides. SELECTED FINANCIAL DATA. Results of Operations : For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Revenues $ 2,313,491 $ 2,463,984 $ 7,027,908 $ 9,624,611 Costs of revenues 3,374,563 2,033,066 8,328,503 7,339,499 Gross profit (loss) $ (1,061,072 ) $ 430,918 $ (1,300,595 ) $ 2,285,112 Total operating expenses 763,489 370,432 2,045,911 1,085,715 Income (loss) from operations $ (1,824,561 ) $ 60,486 $ (3,346,506 ) $ 1,199,397 Other income (expense) 180,033 (10,084 ) 558,529 (9,124 ) Net income (loss) $ (1,644,528 ) $ 50,402 $ (2,787,977 ) $ 1,190,273 Weighted average shares of common stock (basic) 107,647,317 106,293,842 107,519,786 106,258,384 Weighted average shares of common stock (diluted) 107,647,317 106,293,842 107,519,786 106,258,384 Balance Sheet Information: September 30, December 31, 2023 2022 Working capital $ 15,349,110 $ 19,397,489 Total assets $ 30,926,730 $ 34,700,450 Accumulated deficit $ (35,858,309 ) $ (33,070,332 ) Stockholders’ equity $ 29,081,278 $ 31,869,255 17 Table of Contents Operational and financial performance by Segment: Antimony Segment Financial and operational performance of antimony for the three months ended September 30, 2023 and 2022 was as follows: Antimony - Combined USA and Mexico 2023 2022 $ Change (Decrease) Revenue $ 1,641,666 $ 1,671,301 $ (29,635 ) (1.8 %) Gross profit $ (683,029 ) $ 329,233 $ (1,012,262 ) (307.5 %) Pounds of antimony sold 332,565 250,244 82,321 32.9 % Average sales price per pound $ 4.94 $ 6.68 $ (1.74 ) (26.1 %) Average cost per pound $ 6.99 $ 5.36 $ 1.63 30.4 % Average gross profit per pound $ (2.05 ) $ 1.32 $ (3.37 ) (255.7 %) Financial and operational performance of antimony for the nine months ended September 30, 2023 and 2022 was as follows: Nine months ended September 30, Percent Increase/ Antimony - Combined USA and Mexico 2023 2022 $ Change (Decrease) Revenue $ 4,844,466 $ 6,972,312 $ (2,127,846 ) (30.5 %) Gross profit (loss) $ (1,264,545 ) $ 1,875,569 $ (3,140,114 ) (167.4 %) Pounds of antimony sold 998,573 1,046,722 (48,149 ) (4.6 %) Average sales price per pound $ 4.85 $ 6.66 $ (1.81 ) (27.2 %) Average cost per pound $ 6.12 $ 4.87 $ 1.25 25.7 % Average gross profit per pound $ (1.27 ) $ 1.79 $ (3.06 ) (170.8 %) During the three and nine months ended September 30, 2023, antimony revenue decreased $29,635 and $2,127,846, respectively, or 2% and 31%, respectively, compared to the three and nine months ended September 30, 2022. The decrease was primarily due to the lower sales price per pound, which was consistent with the decline in market rates for antimony. Gross profit for the three and nine months ended September 30, 2023 was lower by $1,012,262 and $3,140,114, respectively, compared to the three and nine months ended September 30, 2022, primarily due to the lower sales price per pound, which was consistent with the decline in market rates for antimony, and processing of antimony ore with less antimony percentage concentrate. Zeolite Segment Financial and operational performance of zeolite for the three months ended September 30, 2023 and 2022 was as follows: Three months ended September 30, Percent Increase/ Zeolite 2023 2022 $ Change (Decrease) Revenue $ 671,825 $ 792,683 $ (120,858 ) (15.2 %) Gross profit $ (350,370 ) $ 129,358 $ (479,728 ) (370.9 %) Tons of zeolite sold 2,254 3,264 (1,010 ) (30.9 %) Average sales price per ton $ 298.06 $ 242.86 $ 55.20 22.7 % Average cost per ton $ 453.50 $ 203.22 $ 250.28 123.2 % Average gross profit per ton $ (155.44 ) $ 39.63 $ (195.08 ) (492.2 %) 18 Table of Contents Financial and operational performance of zeolite for the nine months ended September 30, 2023 and 2022 was as follows: Nine months ended September 30, Percent Increase/ Zeolite 2023 2022 $ Change (Decrease) Revenue $ 1,941,009 $ 2,487,116 $ (546,107 ) (22.0 %) Gross profit $ (195,464 ) $ 327,227 $ (522,691 ) (159.7 %) Tons of zeolite sold 8,007 10,336 $ (2,329 ) (22.5 %) Average sales price per ton $ 242.41 $ 240.63 $ 1.79 0.7 % Average cost per ton $ 266.83 $ 208.97 $ 57.86 27.7 % Average gross profit per ton $ (24.41 ) $ 31.66 $ (56.07 ) (177.1 %) During the three and nine months ended September 30, 2023, zeolite revenue decreased $120,858 and $546,107, respectively, or 15% and 22%, respectively, compared to the three and nine months ended September 30, 2022. The decrease was primarily due to the decrease in tons sold, which was primarily due to a significant equipment failure for approximately 14 weeks during the nine months ended September 30, 2023. The cone of BRZ’s main cone crusher failed and production was curtailed until a new cone could be sourced, delivered, and installed. The new cone is equipped with performance monitoring features that are expected to eventually enhance our preventive maintenance program, contribute to longer and more reliable run times, and enable a material increase in production. The failure of the original cone curtailed production for approximately two months in the first quarter of 2023 until completion of the new cone acquisition and installation. The curtailment of production resulted in lower revenue for the nine months ended September 30, 2023. During the three and nine months ended September 30, 2023, zeolite gross profit decreased $479,728 and $522,691, respectively, compared to the three and nine months ended September 30, 2022. The decrease was primarily due to increased maintenance costs and equipment and facility-related labor costs during production downtime during the nine months ended September 30, 2023. Precious Metals Segment Financial and operational performance of precious metals for the three months ended September 30, 2023 and 2022 was as follows: Three months ended September 30, Percent Increase/ Precious metals 2023 2022 $ Change (Decrease) Revenue $ - $ - $ - - Gross profit $ (27,673 ) $ (27,673 ) $ - - Ounces sold - gold - - - - Ounces sold - silver - - - - Financial and operational performance of precious metals for the nine months ended September 30, 2023 and 2022 was as follows: Nine months ended September 30, Percent Increase/ Precious metals 2023 2022 $ Change (Decrease) Revenue $ 242,433 $ 165,183 $ 77,250 46.8 % Gross profit $ 159,414 $ 82,316 $ 77,098 93.7 % Ounces sold-gold 24.30 21.35 2.95 13.8 % Ounces sold-silver 15,074 8,175 6,899 84.4 % Earnings before Interest, Tax, Depreciation and Amortization (“EBITDA”) We present EBTIDA, a non-GAAP financial measurement, to supplement other measures of our financial performance. We believe that EBITDA is a useful measure of our operating performance because it eliminates non-cash expenses that do not reflect our underlying business performance. We use this measure to facilitate a comparison of our operating performance on a consistent basis from period to period, to analyze the factors and trends affecting our business and to evaluate our performance. 19 Table of Contents We had an EBITDA loss of ($2,065,050) for the nine months ended September 30, 2023, compared to positive EBITDA of $1,894,533 for the nine months ended September 30, 2022. EBIDTA by segment for the three months ended September 30, 2023 and 2022 was as follows: Antimony - Combined USA and Mexico Three months ended Three months ended September 30, 2023 September 30, 2022 Revenue $ 1,641,666 100.0 % $ 1,671,301 100.0 % Cost of sales $ (2,324,695 ) (141.6 %) $ (1,342,068 ) (80.3 %) Gross profit (loss) $ (683,029 ) (41.6 %) $ 329,233 19.7 % Operating expenses $ (734,437 ) (44.7 %) $ (344,162 ) (20.6 %) Income (loss) from operations $ (1,417,466 ) (86.3 %) $ (14,929 ) (0.9 %) Non-operating income (expense) $ 182,734 11.1 % $ (7,058 ) (0.4 %) Net income (loss) $ (1,234,731 ) (75.2 %) $ (21,987 ) (1.3 %) Interest expense $ 1,126 0.1 % $ 1,181 0.1 % Depreciation and amortization $ 148,095 9.0 % $ 164,500 9.8 % EBITDA $ (1,085,510 ) (66.1%) $ 143,694 8.6 % Zeolite Three months ended Three months ended September 30, 2023 September 30, 2022 Revenue $ 671,825 100.0 % $ 792,683 100.0 % Cost of sales $ (1,022,195 ) (152.2 %) $ (663,325 ) (83.7 %) Gross profit (loss) $ (350,370 ) (52.2 %) $ 129,358 16.3 % Operating expenses $ (29,052 ) (4.3 %) $ (26,270 ) (3.3 %) Income (loss) from operations $ (379,422 ) (56.5 %) $ 103,088 13.0 % Non-operating income (expense) $ (2,701 ) (0.4 %) $ (3,026 ) (0.4 %) Net income (loss) $ (382,123 ) (56.9 %) $ 100,062 12.6 % Interest expense $ 1,049 0.2 % $ 3,026 0.4 % Depreciation and amortization $ 73,193 10.9 % $ 50,610 6.4 % EBITDA $ (307,881 ) (45.8%) $ 153,698 19.4 % Precious Metals Three months ended September 30, 2023 2022 Revenue $ - $ - Cost of sales $ (27,673 ) $ (27,673 ) Gross profit (loss) $ (27,673 ) $ (27,673 ) Operating expenses $ - $ - Income (loss) from operations $ (27,673 ) $ (27,673 ) Non-operating income (expense) $ - $ - Net income (loss) $ (27,673 ) $ (27,673 ) Interest expense $ - $ - Depreciation and amortization $ 27,673 $ 27,673 EBITDA $ - $ - 20 Table of Contents Company-wide Three months ended Three months ended September 30, 2023 September 30, 2022 Revenue $ 2,313,491 100.0 % $ 2,463,984 100.0 % Cost of sales $ (3,374,563 ) (145.9 %) $ (2,033,066 ) (82.5 %) Gross profit (loss) $ (1,061,072 ) (45.9 %) $ 430,918 17.5 % Operating expenses $ (763,489 ) (33.0 %) $ (370,432 ) (15.0 %) Income (loss) from operations $ (1,824,561 ) (78.9 %) $ 60,486 2.5 % Non-operating income (expense) $ 180,033 7.8 % $ (10,084 ) (0.4 %) Net income (loss) $ (1,644,528 ) (71.1 %) $ 50,402 2.0 % Interest expense $ 2,175 0.1 % $ 4,207 0.2 % Depreciation and amortization $ 248,961 10.8 % $ 242,783 9.9 % EBITDA $ (1,393,392 ) (60.2 %) $ 297,392 12.1 % EBIDTA by segment for the nine months ended September 30, 2023 and 2022 was as follows: Antimony - Combined USA and Mexico Nine months ended Nine months ended September 30, 2023 September 30, 2022 Revenue $ 4,844,466 100.0 % $ 6,972,312 100.0 % Cost of sales $ (6,109,011 ) (126.1 %) $ (5,096,743 ) (73.1 %) Gross profit (loss) $ (1,264,545 ) (26.1 %) $ 1,875,569 26.9 % Operating expenses $ (1,821,200 ) (37.6 %) $ (1,037,991 ) (14.9 %) Income (loss) from operations $ (3,085,745 ) (63.7 %) $ 837,578 12.0 % Non-operating income (expense) $ 564,852 11.7 % $ (3,723 ) (0.1 %) Net income (loss) $ (2,520,892 ) (52.0 %) $ 833,855 12.0 % Interest expense $ 3,843 0.1 % $ 4,869 0.1 % Depreciation and amortization $ 442,021 9.1 % $ 467,263 6.7 % EBITDA $ (2,075,028 ) (42.8 %) $ 1,305,987 18.7 % 21 Table of Contents Zeolite Nine months ended Nine months ended September 30, 2023 September 30, 2022 Revenue $ 1,941,009 100.0 % $ 2,487,116 100.0 % Cost of sales $ (2,136,473 ) (110.1 %) $ (2,159,889 ) (86.8 %) Gross profit (loss) $ (195,464 ) (10.1 %) $ 327,227 13.2 % Operating expenses $ (224,711 ) (11.6 %) $ (47,724 ) (1.9 %) Income (loss) from operations $ (420,175 ) (21.6 %) $ 279,503 11.2 % Non-operating income (expense) $ (6,323 ) (0.3 %) $ (5,401 ) (0.2 %) Net income (loss) $ (426,498 ) (22.0 %) $ 274,102 11.0 % Interest expense $ 4,782 0.2 % $ 5,401 0.2 % Depreciation and amortization $ 189,262 9.8 % $ 143,860 5.8 % EBITDA $ (232,454 ) (12.0 %) $ 423,363 17.0 % Precious Metals Nine months ended Nine months ended September 30, 2023 September 30, 2022 Revenue $ 242,433 100.0 % $ 165,183 100.0 % Cost of sales $ (83,019 ) (34.2 %) $ (82,867 ) (50.2 %) Gross profit (loss) $ 159,414 65.8 % $ 82,316 49.8 % Operating expenses $ - 0.0 % $ - 0.0 % Income (loss) from operations $ 159,414 65.8 % $ 82,316 49.8 % Non-operating income (expense) $ - 0.0 % $ - 0.0 % Net income (loss) $ 159,414 65.8 % $ 82,316 49.8 % Interest expense $ - 0.0 % $ - 0.0 % Depreciation and amortization $ 83,019 34.2 % $ 82,867 50.2 % EBITDA $ 242,433 100.0 % $ 165,183 100.0 % Company-wide Nine months ended Nine months ended September 30, 2023 September 30, 2022 Revenue $ 7,027,908 100.0 % $ 9,624,611 100.0 % Cost of sales $ (8,328,503 ) (118.5 %) $ (7,339,499 ) (76.3 %) Gross profit (loss) $ (1,300,595 ) (18.5 %) $ 2,285,112 23.7 % Operating expenses $ (2,045,911 ) (29.1 %) $ (1,085,715 ) (11.3 %) Income (loss) from operations $ (3,346,506 ) (47.6 %) $ 1,199,397 12.5 % Non-operating income (expense) $ 558,529 7.9 % $ (9,124 ) (0.1 %) Net income (loss) $ (2,787,977 ) (39.7 %) $ 1,190,273 12.4 % Interest expense $ 8,625 0.1 % $ 10,270 0.1 % Depreciation and amortization $ 714,302 10.2 % $ 693,990 7.2 % EBITDA $ (2,065,050 ) (29.4 %) $ 1,894,533 19.7 % 22 Table of Contents Capital Resources and Liquidity: Working Capital: September 30, 2023 December 31, 2022 Current assets $ 16,628,806 $ 21,617,359 Current liabilities (1,279,696 ) (2,219,870 ) Working capital $ 15,349,110 $ 19,397,489 Cash Flows: For the nine months ended September 30, 2023 September 30, 2022 Cash flow provided (used) by operating activities $ (3,817,887 ) $ 22,916 Cash flow used by investing activities (1,519,720 ) (13,685,072 ) Cash flow used by financing activities (857,779 ) (42,080 ) Net decrease in cash and cash equivalents during the period $ (6,195,386 ) $ (13,704,236 ) As of September 30, 2023, the Company had cash and cash equivalents of $12,864,992. Cash flow used by operating activities was $3,817,887 for the nine months ended September 30, 2023, compared to cash flow provided by operating activities of $22,916 for the nine months ended September 30, 2022. The $3,840,803 decrease in cash flow from operating activities was attributable primarily to the differential between the net loss generated during 2023 compared to the net income generated during 2022, an increase in the use of cash in inventories in 2023, and an increase in the payment of royalties in 2023. The increase in the use of cash in inventories was primarily due to an increase in antimony ore inventory in Mexico in 2023, which can be used in future processing. The increase in the payment of royalties was primarily due to the Company finalizing its estimates and paying a royalty obligation in 2023 that had been accumulating since 2016. Cash flow used by investing activities was $1,519,720 for the nine months ended September 30, 2023, compared to $13,685,072 for the nine months ended September 30, 2022. The use of cash in 2023 related to purchases of fixed assets primarily at BRZ, which included the purchase of a new cone for the cone crusher. The use of cash in 2022 related primarily to investing cash in U.S. treasury bonds and other fixed income funds to improve return on cash. Cash flow used by financing activities increased by $815,699 to $857,779 for the nine months ended September 30, 2023, compared to $42,080 for the nine months ended September 30, 2022. This increase in the use of cash was primarily due to the payment of dividends of $787,730 on January 25, 2023 to the holders of 1,692,672 shares of Series D Preferred Stock related to the conversion of these shares into common stock. We are planning to continue using our funds to make improvements to our operations with the goal of increasing production and decreasing costs and for revenue growth. Also, we plan to continue to review the operations and financial results of each segment in order to make informed decisions that benefit the Company overall. In the past, the Company has been successful in raising required capital from the sale of common stock and, to a lesser extent, from debt issuance. As a result of planned operations and potential equity sales and debt borrowings, management believes cash flows from operations and existing cash and cash equivalents are sufficient to conduct planned operations and meet contractual obligations for the next 12 months. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.