SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(x)ANNAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
Commission File No. 001-10156
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0735390
(State or other jurisdiction of (I.R.S. Employer ID#)
incorporation or organization)
Post Office Box 909, Alleghany, CA 95910
(Address of principal executive offices)
(530) 287-3223
(Registrant's telephone number)
(including area code)
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [] No [x]
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the act.
Yes [] No [x]
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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 [x]
Indicate by check mark whether the registrant has submitted
electronically 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[x]
?
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (229.405 of this chapter)
is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form
10-K. Yes[x] No[]
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 [X]
Indicate by check mark whether the registrant is a shell company
(as defined in rule 12b-d of the act). Yes [] No[x]
As of December 31, 2019, 14,390,631 shares of Common Stock, par
value $.033 per share, were issued and outstanding.
PART I
GENERAL NOTE
In accordance with directive from the Securities and Exchange
Commission(SEC) and Industry Guide 7, reference for all intent
and purposes to the Company's employees as miners, its
properties as mines or its operation as mining does not diminish
the fact that the Company has no proven reserves and is in the
"exploration state" as defined in Guide 7(a)(4)(iii); however,
the Company continues to produce gold over its 108 years of
operating its mines in the Alleghany Mining district. Proceeds
from the annual production for 2015 and 2016 realized profitable
years. Gold production in 2018 and 2019 was minimal as
management directed the crew to begin a tough but significant
project December 2016: reestablish the 49 WINZE for mining. Work
continued through 2019, as planned. The 49 WINZE, access to the
deep levels of the Sixteen was abandoned in 2005. The winze is a
vital component for resuming gold production on established gold
headings.
?
In addition, safe travel was secured and approve by the federal
regulatory agency known as MSHA in the winze, the 1000 foot
level and the 1700 foot level. Another primary goal included
lowering the water. As of December 31, 2019, the water is 10
feet below the 1900 level.
During 2019, very little time was spent detecting for and mining
gold. With one prior profitable year, management decided to
place rehabilitation/maintenance ahead of mining for gold.
Operating capital came from inventory and recent production,
which were sold to preexisting markets.
In addition to significant underground improvements, relations
with federal and California regulators improved significantly
during 2019. California is known for its active environmental
perspectives and advocates. Its reputation is global.
Significant progress continues towards achieving lawful
interpretation of the Porter Cologne Act, the basis of water
administration.
SUBSEQUENT EVENTS
In 2012, a shareholder approached Michael Miller with his idea
?to develop and apply the latest in sensing and detection
technology to enhance the odds of finding gold?. He was a
Silicon Valley promoter capable of hiring engineers to develop
new technology in locating gold in quartz veins. The Shareholder
wrote ?our development team has over forty years combined
experience in all fields of RF technology and is confident it
can enhance current detection ability by a considerable margin.?
The Silicon Valley group formed a shell company with a
billionaire?s money. A contract with the mine was negotiated.
This group became a California code violating triumvirate!
The Company?s agreement entitled it to use a portion of the mine
to develop new technology in locating gold in exchange for a
percentage of gold found using their technology. It was
unsuccessful, a 100% failure as no gold target was ever
identified. Years of our time were lost, including expenses
billed to this shell which were unpaid and ignored.
The triumvirate?s true plan was a scheme called ?loan to own?
the mine.
The billionaire supplied the money as his partners led us into
worthless pursuits underground. The objective, according to a
later statement, was to give the Sixteen to One mine to the
billionaire. When that didn?t work the trio modified its
business. Their plans to interfere with the mining operations at
the Sixteen to One became more devious. Harassing 16 to 1
miners, putting hidden cameras in the mine, and intimidating key
associates until they disassociate themselves from the mine is
called ?Intentional Interference in a Business Relationship?. It
worked. I lost a director. Scott didn?t need the hassles and
knew the triumvirate would continue hoping to bankrupt Original
Sixteen to One Mine, Inc. Our shareholders and I lost time and
money but we repaid a $500,000 loan. Nevertheless, the
interferences continue.
The trio contacted government mining regulating agencies
(Central Valley Water Board, MSHA, etc.), local law enforcements
and Sixteen to One shareholders with bogus accusations to draw
negative attention to the mine and its operations.
Last October (2019) our property found itself under siege by
County, State, and Federal government bureaucrats. The
triumvirate had secured two former disgruntled employees guilty
of violating serious Company policies to file an affidavit that
1000 gallons of oil was buried near Kanaka Creek. The
regulators, some armed with pistols and rifles (about 50 of them
all told), spent a week occupying the property, excluding our
miners from entering.
Neither the Company nor I authorized the placement of toxic
material in a pit prepared for a small amount of worthless
metal. Kanaka Creek is about three football fields away from the
pit. Personal garbage (not ours) and small amount of some
liquids were placed in the pit by these ex-employees.
JUDICIAL EVENT
Nine months later in June 2020, the Company and I were cited for
four pollution criminal violations. We are defending this
injustice. These are bad actors with deep pockets and will stop
at nothing to trash my credibility and take over our beloved
mine. It is my responsibility to shareholders to protect and
promote the rich history of the mine, our town and the
California Gold Rush era, which continued for 30+ years. Of
course, we are looking for gold. If these dirty birds win, say
good bye to the last real authentic gold mining operation in
California and, just as important, any opportunity for kids and
young adults to experience what it was like in those golden days
of yesteryear.
ITEM 1: BUSINESS
Description of Business
Original Sixteen to One Mine, Inc. (the Company) was
incorporated in 1911 in California. It mines gold on properties
it owns under fee simple grant deeds. The Alleghany Mining
District is about 65 miles northeast of the intersection of I-80
and California State Route 49.
Sixteen to One mine from which more than 1,113,266 troy ounces
of gold have been retrieved is the primary operation. It is a
traditional hard rock underground mine where miners create
horizontal levels at various elevations and raise into favorable
areas. Geology of the mineral deposit is well documented. Gold
is not distributed evenly within the quartz veins; however,
concentrations of gold deposits are found scattered within these
quartz veins, in recognized ore shoots. Because the gold appears
intermittently, the Company has never declared reserves
according to contemporary industry standards.
Operations are characterized by significant amounts of
preparation, tunneling, underground maintenance and upgrading.
The Company from time to time focuses substantially all of its
resources on infrastructure development or maintenance. During
these periods little gold is mined. At other times, miners are
primarily exploring for gold. Accordingly, business is subjected
to very different cycles: one dependent on whether the Company
is directing its resources towards infrastructure or underground
development and the other is gold production. The operation
resembles the classical "boom or bust" cycles regardless of
outside influences.
Metal detection technology enables exploration to detect gold
from zero to 48 inches from quartz faces in the wall rock.(The
size of the concentration is a factor).
Advancement in off the shelf metal detection technology has
steadily progressed over the past twenty years. Greater
sensitivity in metal detectors has historically increased gold
production throughout the mine. It is impossible to predict when
new devices will be developed. Twenty-first century detection
skills have yet to find the Sixteen to One.
For accounting purposes gold revenues are accrued when the metal
is recovered. For tax purposes revenues are not recognized until
the gold is sold. Rare high-grade gold and quartz is sold at a
premium to museums, collectors and jewelry manufacturers. This
market is a significant financial factor with revenue
significantly greater than prevailing spot price. Demand for the
Sixteen to One gold quartz gemstone is greater than the amount
mined.
The Company lacks sufficient funds to implement its long-term
construction projects: sinking a new shaft in the center of the
property is a long-standing objective. Other Company projects
are: joining a public stock exchange, building and testing a
gold detector specifically designed for the Sixteen to One vein
and dewatering the entire mine.
Supplies and equipment used for underground exploration are
commonly available. Labor requirements are available, but are a
concern throughout the mining industry.
No particular seasonality exists for the marketing of gold.
Adverse effects of winter storms sometimes limit the ability of
the crew to access the mine. Management believes it is in
substantial compliance with all applicable federal, state and
local laws and regulations relating to the environment. The
Company does not presently anticipate any material capital
expenditures for environmental control facilities, either for
the remainder of its current fiscal year or for the succeeding
fiscal year.
The Company's executive office is located at 527 Miners Street,
Alleghany, California 95910. It maintains two websites:
origsix.com and original16to1.com.
ITEM 1A RISK FACTORS
(a) Price of Gold
The daily spot price of gold has a modest effect on gross
revenue if it's between $1,000 and $1,300 an ounce. A
significant drop below $1,000 may have an adverse effect on the
Company's operation. Closing spot price on December 31 2019 was
$1,520. The Company's realized gold values usually exceed the
bullion price due to the jewelry and specimen markets which are
not affected by the spot price of gold.
(b) Lack of Proven Reserves
Because proven reserves are not utilized as a component for
evaluating future earnings or ore values, a sense of uncertainty
of existence is perceived by some. Caution is recommended in
using the doctrines of reserves as an economic tool for valuing
the Sixteen to One mine. While (i) the Company has recovered
over one million ounces of gold and (ii) management knows that
substantial additional virgin veins exists in the Sixteen to One
mine, the Company has no ability to measure potential gold
production using the mathematical tools generally recognized in
the mining industry; however, the company can prove that
approximately seventy percent (70%) of its vein systems have not
been developed.
(c) Governmental Regulation
The attached financial statements have not been audited by a
Securities Exchange Commission (SEC) accounting firm. Therefore,
the Company is not in full compliance with this SEC regulation
for companies listed on an exchange.
Mining is generally subjected to regulation. State and federal
statutes regulate environmental quality, safety, exploration
procedures, reclamation, employee?s health and safety, use of
explosives, air quality standards, pollution of stream and fresh
water sources, noxious odors, noise, dust, and other
environmental protection controls as well as the rights of
adjoining property owners. Laws may change preventing or
delaying the commencement or continuance of given operations.
The Company is substantially in compliance with all known safety
and environmental standards and regulations, however; it faces
reoccurring unreasonable and unlawful demands from the Central
Valley Regional Water Quality Control Board (CVRWCB) or its
staff. The Company is forced to expend working capital and time
defending excessive and punitive behavior. There
can be no assurance that future changes in the laws, regulations
or reckless interpretations will not have a material adverse
effect. During 2018, CVRWCB staff was invited and accepted
invitations to visit the mine property. Ongoing discussions
during 2019 have improved the requirements of our 5-year
discharge permit.
(d) Liquidity
Gold inventory at December 31, 2019, was $305,691 primarily as
specimens or gold held as jewelry. While history of actual cash
sales supports an inventory value exceeding the spot price, no
such increases are used to compute the inventory. All inventory
of raw material is recorded at spot price per troy ounce. In
addition, contract manufacturing costs of jewelry are included
in the finished jewelry inventory. Periodic shortfalls in
liquidity occur which are not likely to be bridged by
institutional debt financing. Management addresses these issues
as they arise.
(e) Price of Stock
Bids and offers are publicly recorded on the stock page of the
Company's web site. Exposure is limited. The price of stock may
not accurately reflect its fair market value because of the
limited marketplace and the existence of a wild and free Gray
Market. The company maintains no program to support or promote
its stock and is unlikely to conduct a program until a public
marketplace is secured.
There are conflicting bids, offers and trades between the
Company's website and the unregulated Pink Sheet Gray Market,
ticker symbol OSTO. Because of these discrepancies the market
price is unpredictable.
ITEM 2: PROPERTIES
Properties
The Sixteen to One Mine was incorporated into Original Sixteen
to One Mine, Inc. in 1911. Properties acquired prior to 1925 are
carried on the Company's books at their original purchase price
and are fully amortized through depletion.
In 1999, the Company acquired the Plumbago mine in the Alleghany
Mining District, which is located approximately two miles
southeast of the Sixteen to One mine. The property includes a
twenty-acre patented claim, mineral rights to eight patented
claims and sixteen unpatented claims. The property has a history
of rich gold production. The Company will pursue the potential
within this property when funding becomes available for
exploration and development.
On June 22, 2005, the Company acquired the mineral rights to
fourteen claims, the patent rights to one claim and the mill of
the Gold Crown mine, adjacent to the Sixteen to One Mine. The
Board of Directors decided that it is a long-term investment and
important to the long-term welfare of the Company. No depletion
has been applied to the Gold Crown or Plumbago properties.
The Alleghany properties consist of 26 patented claims (470
acres), 160 acres of mineral rights on patented claims and
approximately 320 acres of unpatented claims. The following
table sets forth further information with respect to the
Company's mining claims.
PATENTED MINING CLAIMS OWNED 100% BY THE COMPANY
NAME OF CLAIM NAME OF CLAIM
Belmont Rainbow Fraction
Number Three Twenty-One
Eclipse Quartz Eclipse Extension
Tightner Extension Contract
Alene Valentine
Red Star Bartlett
Farnham Gold Quartz Mine Belmont #2
Contract Extension Hanley Quartz Mine
Noble Sixteen to One
Groves Gold Quartz Mine Denver
Happy Jack Extension Ophir
Rainbow Extension Happy Jack
Marion Lode Sphoon
MINERAL RIGHTS - PATENTED CLAIMS
NAME OF CLAIM NAME OF CLAIM
Standard Lode Standard Lode Extension
Gold Beater Lode Clute Lode
Hope Extension Lode Crafts Lode
Plumbago Mine Mill Site Enterprise Quartz
UNPATENTED CLAIMS
NAME OF CLAIM NAME OF CLAIM
Alice Alice Annex
General Sherman N.Ext. Jumbo
No Better No Better Ext.
Right Place Wonder #1
Wonder #2 Wonder Goldmines MS
Tightner #2 Lode Tightner #3 Lode
Tightner #4 Lode Tightner #5 Lode
Tightner #6 Lode Alene Ext. Quartz
Bartlett Ext. Quartz Illocano Quartz
East Bartlett Lode Bal Quartz
ITEM 3: LEGAL PROCEEDINGS
See subsequent events on page 3
ITEM 4 MINE SAFETY DISCLOSURES
For the twelve-month period ended December 31, 2019 a total of 8
citations were issued with a total assessed value of $1,976.
The 8 citations included eight 104(a) S&S citations and no
104(b) orders.
All of the citations were contested and a settlement was reached
for most of them.
?
PART II
ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Market Information
Currently there is no public marketplace for the Company's
common stock. Data from 2013 through 2017 is based upon activity
on the X-Mart posted on the Company's web-site.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
High Low High Low High Low High Low
------ ----- ------ ----- ------ ----- ------ -----
2019 NO TRADES ON XMART FOR 2019
2018 NO TRADES ON XMART FOR 2018
2017 $ .52 $ .52 $ * $ * $ .49 $ .49 $ .49 $ .49
2016 * * * * * * .52 .52
2015 * * .44 .44 .56 .56 * *
2014 * * .46 .54 * * .42 .42
2013 .89 .89 .86 .65 * * * *
2012 .49 .49 .49 .49 * * * *
2011 * * .55 .55 * * * *
2010 * * .89 .45 * * .55 .50
* No trades took place on the Company website in these quarters.
ITEM 6: SELECTED FINANCIAL DATA
Year 2019 2018 2017 2016 2015
---- ---- ---- ---- ----
Sales 228,286 204,570 287,212 1,452,169 1,037,972
Income(loss)(230,933) (359,736) (429,965) 610,160 76,443
Income(loss)
per share (.016) (.025) (.03) .04 .01
Total Assets 707,948 862,814 1,127,813 1,537,443 1,757,262
Total Debt 2,230,279 2,152,912 2,062,927 2,042,593 3,060,443
SH Equity (1,522,331) (1,290,098) (935,114) (505,150) (1,303,181)
?
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Balance Sheet
Original Sixteen to One Mine, Inc. is a distinct company in that
it is the only operating company of its kind remaining in the
United States. Management knows the assets of the Company are
understated due to the age of acquisition. Exploration and
development expenses are not capitalized. The Company celebrated
its 100-year anniversary on Oct. 9, 2011. It is the oldest gold
mining corporation in the United States. Gold inventory is
recorded at spot price despite proven additional value for
specimen and gem-stone material which is substantially greater
than spot price. Jewelry inventory is recorded at labor plus
gold cost.
No value is recorded on the balance sheet for timber. The
company owns 470 acres of prime forested timberland. No value is
recorded on the balance sheet for the Company owned water-
rights. Reduced value is recorded on the balance sheet for
buildings, equipment and land. No value is recorded on the
balance sheet for marketable aggregate and decorative stone
currently stockpiled. No value is recorded on the balance sheet
for goodwill. Fixed assets are recorded at historic cost less
depreciation.
(A) Comparisons of 2018 with 2019.
Balance Sheet Comparisons
Assets:
For the one-year period ended December 31, 2019, compared to the
one-year period ended December 31, 2018, cash increased by
$1,137 (34%) due to cash flow variations. Accounts receivable
decreased by $10,651 (16%).
For the one-year period ended December 31, 2019, compared to the
one-year period ended December 31, 2018 inventory decreased by
$123,638 (29%) due to changes in mining objectives in 2019 and
sales of inventory to fund operations.
For the one-year period ended December 31, 2019, compared to the
one-year period ended December 31, 2018 equipment increased by
$3,450 due to the purchase of a pump.
Liabilities:
For the one-year period ended December 31, 2019, compared to the
one-year period ended December 31, 2018 accounts payable
increased by $68,159 as the company relied on credit to finance
the operation.
For the one-year period ended December 31, 2019, compared to the
one-year period ended December 31, 2018 notes due related
parties increased by $18,439 (7%) due to a combination of
additional loans and interest expense.
For the one-year period ended December 31, 2019, compared to the
one-year period ended December 31, 2018 long-term notes
decreased by $9,231 (8%) as a result of scheduled payments with
no new loans taken out.
Statement of Operations
Income:
For the one-year period ended December 31, 2019 compared to the
one-year period ended December 31, 2018, revenue increased by
$23,716 (11%) primarily due to increased gold sales in 2019.
Operating Expenses:
For the one-year period ended December 31, 2019, compared to the
one-year period ended December 31, 2018, operating expenses
decreased overall by $90,608 (17%) due to reduced operations in
2019.
Other Income and Expense:
For the one-year period ended December 31, 2019, compared to the
one-year period ended December 31, 2018 other income decreased
by $1,795 (39%) due to less rent collected on a company house.
For the one-year period ended December 31, 2019, compared to the
one-year period ended December 31, 2018 other expenses decreased
by $16,274 (50%)primarily due to a reconciliation of the stock
account that was needed due to a discrepancy accumulated by
years of rounding.(par value $0.033)
The company showed a loss of $230,933 in 2019 compared to a loss
of $359,936 in 2018. The $128,803 (36%) difference is primarily
due to lower operating costs in 2019 as the result of reduced
operations compared to 2018. The basic and diluted loss per
share was (.016) in 2019 compared to (.025) in 2018. The number
of shares used for the 2019 calculation was 14,390,631 and the
number of shares for the 2018 calculation was 14,342,097.
(A) Comparisons of 2018 with 2017.
Balance Sheet Comparisons
Assets:
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017, cash decreased by
$3,690 (53%) due to cash flow variations. Accounts receivable
decreased by $12,742 (16%) as a customer paid off his account.
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017 inventory decreased by
$222,899 (34%) due to changes in mining objectives in 2018 and
sales of inventory to fund operations.
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017 equipment decreased by
$291,155 as the result of write-offs of fully depreciated
equipment. This is offset by corresponding decrease in
accumulated depreciation with a net change of $596 as reflected
on the statement of cash flows.
Liabilities:
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017 accounts payable
increased by $77,533 as the company relied on credit to finance
the operation.
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017 notes due related
parties increased by $28,590 (12%) due to a combination of
additional loans and interest expense.
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017 long-term notes
decreased by $17,420 (14%) as a result of scheduled payments
with no new loans taken out.
Statement of Operations
Income:
For the one-year period ended December 31, 2018 compared to the
one-year period ended December 31, 2017, revenue decreased by
$82,642 (29%) primarily due to decreased gold sales in 2018.
Operating Expenses:
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017, operating expenses
decreased overall by $150,515 (22%) due to reduced operations in
2018.
Other Income and Expense:
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017 other income decreased
by $1,266 (22%) due to less rent collected on a company house.
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017 other expenses increased
by $4,709 (14%)primarily due to a reconciliation of the stock
account that was needed due to a discrepancy accumulated by
years of rounding.(par value $0.033)
For the one-year period ended December 31, 2018, compared to the
one-year period ended December 31, 2017, interest expense did
not change significantly.
The company showed a loss of $359,736 in 2018 compared to a loss
of $429,965 in 2017. The $70,229 (16%) difference is primarily
due to lower operating costs in 2018 as the result of reduced
operations compared to 2017. The basic and diluted loss per
share was (.025) in 2018 compared to (.03) in 2017. The number
of shares used for the 2018 calculation was 14,342,097 and the
number of shares for the 2017 calculation was 14,338,855.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
From time to time the Original Sixteen to One Mine, Inc. (the
Company), will make written and oral forward-looking statements
about matters that involve risks and uncertainties that could
cause actual results to differ materially from projected
results. Important factors that could cause actual results to
differ materially include, among others:
- Fluctuations in the market prices of gold
- General domestic and international economic and political
conditions
- Unexpected geological conditions or rock stability conditions
resulting in cave-ins, flooding, rock-bursts or rock slides
- Difficulties associated with managing complex operations in
remote areas
- Unanticipated milling and other processing problems
- The speculative nature of mineral exploration
- Environmental risks
- Changes in laws and government regulations, including those
relating to taxes and the environment
- The availability and timing of receipt of necessary
governmental permits and approval relating to operations,
expansion of operations, and financing of operations
- Fluctuations in interest rates and other adverse financial
market conditions
- Other unanticipated difficulties in obtaining necessary
financing with specifications or expectations
- Labor relations
- Accidents
- Unusual weather or operating conditions
- Force majeure events
- Other risk factors described from time to time in the Original
Sixteen to One Mine, Inc., filings with the Securities and
Exchange Commission
Many of these factors are beyond the Company's ability to
control or predict. Investors are cautioned not to place undue
reliance on forward-looking statements. The Company disclaims
any intent or obligation to update its forward-looking
statements, whether as a result of receiving new information,
the occurrence of future events or otherwise.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The unaudited financial statements of the Company are attached
at the end of this document.
ITEM 9: CONTROLS AND PROCEDURES
Security procedures include multiple levels of gold custody,
from the mine to sales. Inventory control procedures were set up
by an SEC certified auditing firm and continue to be followed.
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Officers and Directors
The following table sets forth the Officers and Directors of the
Company. The directors listed below will serve until the next
annual shareholders meeting to be held on August 31, 2019. All
of the officers of the Company serve at the pleasure of the
Board of Directors.
Name Age Position Officer Since Director Since
Michael M.
Miller 77 President 1983 1977
& Director
Hugh Daniel
O'Neill 77 Secretary 2016 2002
& Director
Robert Beso 68 Treasurer 2016 2016
& Director
Michael M. Miller-Director, President and CEO
As President and Chief Executive Officer, Mr. Miller is
responsible for the day-to-day operations of the Company. In
1975, Mr. Miller became the sole proprietor of Morning Glory
Gold Mines. Prior to that, he was self-employed in Santa Barbara
County, California from 1965 to 1974. Mr. Miller served as a
trustee and President of the Sierra County Board of Education
(1979 to 1983 trustee) (President in 1983). In 1991 he was
appointed a member of the Sierra County Planning Commission
(Chairman in 1992, 1993, 1999 and 2000) until 2001. Mr. Miller
is licensed as a California Class A general engineering
contractor. He was a member of the American Institute of Mining
Engineers. In 1965, Mr. Miller received a B.A. from the
University of California at Santa Barbara in combined Social
Sciences-Economics. He was born in Sacramento, California.
Hugh Daniel O'Neill III ~ Director, Secretary
Mr. O'Neill was born April 21, 1942 at a naval base in Virginia.
He was raised in seventeen states over a fourteen-year period,
settling in Nevada City, California. He attended the University
of San Francisco, where he created Odd Bodkins in 1961. The San
Francisco Chronicle syndicated Odd Bodkins in 1963 making Mr.
O'Neill the youngest cartoonist ever hired by a national
syndicate. It was published in 350 newspapers. At its peak
readership was 50 million daily. Dan is an historian, an
accomplished journalist and a former War Correspondent.
Robert Beso ~ Director, Treasurer
Robert John Besso was born in Sacramento. Just out of high
school, he drew draft # 32 but joined the US Army 101st Airborne
Division where he was assigned to tanks. Once in Vietnam he was
promoted to Sargent at age 19 and took POINT for nine months. In
1971 he was decorated with two bronze stars (combat infantry
badges): oak leaf cluster and V for valor. He earned Soldier of
the Month and was the personal body guard for Officer Coast. He
declined the offer to continue his military career at West Point
and almost died from malaria. He returned to California
attending American River College and El Camino College.
Robert decided to cut hair which he has done for thirty-eight
years. He has continued to serve our country with 25 years
working with Alcoholics Anonymous, Jail and Prison inmates, Boys
Ranch and Teen Substance addiction groups. He has and continues
to take "point" to protect the things that he values. "Like
farmers and ranchers, the miners have value. The Sixteen to One
is a reality and will work to reduce the ignorance about
mining."
ITEM 11: EXECUTIVE COMPENSATION
Name/
Principal Annual
Position Year Salary Bonus Compensation Securities
--------- ------ ------ ----- ------------ ----------
Michael Miller/ 2018 $ 60,000 0 0 0
President & CEO 2017 $ 60,000 0 0 0
2016 $ 60,000 0 0 0
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners and Management
Title of Name and Address Amount and Nature Percent
Class of Beneficial Owner of Beneficial Owner of Class
------- ------------------- ------------------- --------
Common Michael M. Miller 2,123,597 15%
Officer and Director
P.O. Box 941
Alleghany, CA 95910
Common M. Blair Hull 1,962,822 14%
Hull Trading Co.
401 So. LaSalle, Ste. 505
Chicago, IL 60605
Common Kathy N. Hull 1,490,250 10%
11 Sierra Ave.
Piedmont, CA 94611
Common Charles I. Brown
Family Partnership LTD 833,668 6%
29922 N 133rd Lane
Peoria, CO 85383
Common Hugh Daniel O'Neill 143,077 1%
Director - Secretary
227 Prospect St.
Nevada City, CA 95959
Common Robert Beso 7,500 .1%
Director - Treasurer
PO Box 909
Alleghany, CA 95910
Common All Officers & Directors 2,274,174 16%
(as a group)
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See notes to financial statements.
ITEM 14: PRINCIPLE ACCOUNTING FEES AND SERVICES
Due to monetary constraints, the Company has not hired a SEC
certified CPA firm for several years. Most accounting functions
are performed by the Company in-house with the exception of the
depreciation schedule and tax returns which are handled by
outside CPA firms.
PART IV
ITEM 15: UNAUDITED FINANCIAL STATEMENTS
In the opinion of management, the financial statements contain
all adjustments (consisting only of normal recurring accruals)
necessary to present fairly the Company's financial position at
December 31, 2019 and December 31, 2018, the results of
operations and cash flows for the twelve-month periods ended
December 30, 2017, 2018 and 2019. The unaudited financial
statements have been prepared in accordance with Generally
Accepted Accounting Principles.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ORIGINAL SIXTEEN TO ONE MINE, INC.
Registrant
By:
Michael M. Miller
President and Director
Date April 18, 2020
?
Original Sixteen to One Mine, Inc.
Condensed Balance Sheet
December 31, 2019 & December 31, 2018
ASSETS
2019 2018
Current Assets
Cash $ 4,433 $ 3,296
Accounts receivable 56,525 67,175
Inventory (see Note 1) 305,691 429,329
Other current assets - -
------- -------
Total current assets 366,649 499,800
------- -------
Mining Property
Real estate and property rights
net of depletion of $524,145 230,401 230,401
Mineral property 47,976 47,976
------- -------
Total Mining Property (see Note 2) 278,377 278,377
------- -------
Fixed Assets at Cost
Equipment 597,602 594,152
Buildings 209,487 209,487
Vehicles 168,925 168,925
--------- ---------
Total fixed assets at cost 976,014 972,564
--------- ---------
Less accumulated depreciation (927,961) (909,387)
----------- -----------
Net fixed assets 48,053 63,177
----------- -----------
Other Assets
Bonds and misc. deposits 14,869 21,460
--------- -------
Total Assets $ 707,948 $ 862,814
========== ==========
?
Original sixteen to One Mine, Inc.
Condensed Balance Sheet Continued
LIABILITIES & STOCKHOLDERS' EQUITY
2019 2018
Current Liabilities
Accounts payable
& accrued expenses (see Note 3) $ 1,342,718 1,274,559
Due to related party (see Note 4) 247,911 229,472
Notes payable Short-term (see Note 6) 538,558 538,558
--------- -------
Total Current Liabilities 2,129,187 2,042,589
-------- -------
Long Term Liabilities
Notes payable due
after one year (see Note 7) 101,092 110,323
-------- -------
Total Liabilities 2,230,279 2,152,912
---------- ---------
Stockholders' Equity
Capital stock, par value $.033:
30,000,000 shares authorized:
14,390,631 issued and outstanding
as of Dec. 31, 2019 & 14,342,097
as of Dec. 31, 2018(see Note 8) 474,891 473,289
Additional paid-in capital 2,221,290 2,222,892
(Accumulated deficit) Retained earnings (4,218,512) (3,986,279)
------------ -----------
Total Stockholders' Equity (1,522,331) (1,290,098)
------------ -----------
Total Liabilities and
Stockholders' Equity $ 707,948 $862,814
============ ============
?
Original Sixteen to One Mine, Inc.
Statement of Operations
2019 2018 2017
Revenues:
Gold & jewelry sales 228,286 156,570 191,212
Other Income - 48,000 96,000
--------- -------- -------
-
Total Revenues 228,286 204,570 287,212
Operating expenses:
Salaries and wages 60,000 60,000 60,000
Contract Labor 163,855 239,601 272,095
Utilities 85,829 87,178 82,855
Taxes - property & payroll 18,028 17,584 18,093
Insurance 5,275 4,755 5,541
Supplies 17,560 20,608 29,335
Small equipment & repairs 9,981 9,240 26,404
Drayage 15,993 20,610 14,750
Corporate expense 11,767 9,317 11,419
Legal and compliance 15,652 13,577 17,908
Mine Maintenance 14,111 22,024 115,135
Depreciation & amortization 18,573 25,371 26,175
Other expenses 7,811 5,178 5,848
-------- -------- --------
Total operating expenses 444,435 535,043 685,558
Profit (Loss) from operations (216,149) (330,473) (398,346)
Other Income & (Expense):
Other Income 2,800 4,595 5,861
Interest Expense (15,277) (27,594) (27,609)
Other expense (1,507) (5,464) (740)
--------- -------- ---------
Total Other Income (Expense) (13,984) (28,463) (22,488)
Profit (Loss) before taxes (230,133) (358,936) (420,834)
Provision for income taxes 800 800 9,131
Net (loss) income $ (230,933)(359,736) (429,965)
========== ========== =========
Basic and diluted gain (loss) per
share $(.016) $(.025) $(.03)
Shares used in the calculation of
net(loss) income per share 14,390,631 14,342,097 14,338,855
========== ========= =========
?
Original Sixteen to One Mine, Inc.
Statement of Cash Flow
For the Years Ended December 31,
2019 2018 2017
Cash Flows From Operating Activities:
Net profit (loss) $ (230,933) (359,736) (429,965)
Operating activities:
Depreciation and amortization 18,573 25,371 26,175
Decrease(Increase)
in accounts receivable 29,501 12,742 25,501
Decrease(Increase) in inventory 123,638 222,899 357,985
(Decrease) Increase in
accounts payable accrued expenses 66,859 77,533 9,106
(Decrease) Increase in
related party loans (411) 28,590 25,349
(Decrease) Increase in
short-term notes - 1,282 2,585
-------- ------- ---------
Net cash (used) provided by
operating activities 7,227 8,681 16,736
Cash Flows From Investing Activities:
Sale (Purchase) of Real Estate - - -
Write-off (Purchase) of fixed assets (3,450) 596 -
Decrease (Increase)
Bonds Misc. deposits 6,591 - -
--------- -------- --------
Net cash (used) provided by
investing activities - 596 -
Cash Flows From Financing Activities
Increase (Decrease) notes payable (9,231) (17,420) (16,706)
Proceeds from sale of common stock - 4,453 -
Paid in Capital from Shareholders - - -
-------- -------- --------
Net cash provided (used) by
financing activities (9,231 ) (12,967)
(16,706)
(Decrease)increase in cash 1,137 (3,690) 180
Cash, beginning of period 3,296 6,986 6,956
------ ------- --------
Cash, end of period $ 4,433 3,296 7,136
========= ========= ========
?
NOTES TO THE FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business: Original Sixteen to One Mine, Inc. (the
Company) was incorporated in 1911 and is actively involved in
operating a gold mine in Alleghany, California. In accordance
with directive from the Securities and Exchange Commission
(SEC)and Industry Guide 7, reference for all intent and purposes
to the Company's employees as miners, its properties as mines or
its operation as mining does not diminish the fact that the
Company has no proven reserves and is in the "exploration state"
as defined in Guide 7(a)(4)(iii).
Inventory: Inventory consists of gold bullion, specimens and
jewelry. Gold bullion and specimens are quoted at the market
price for gold bullion. Jewelry is quoted at the market price
for the gold content plus labor cost. Inventory is accounted for
using the Average Cost method due to the limitations of the
Company's accounting software. Valuation adjustments to account
for changes in the price of gold are made quarterly.
Fixed Assets: Fixed assets are stated at historical cost.
Depreciation is calculated using straight-line and accelerated
methods over the following useful lives: Vehicles 3 to 5 years,
Equipment 5 to 7 years, Buildings 18 to 31.5 years.
Depletion Policy: Because of the geological formation in the
Alleghany Mining District, estimates of ore reserves cannot be
calculated. Accordingly, a cost per unit depletion factor cannot
be determined. Should estimates of ore reserves become
available, the units of production method of depletion will be
used. Until such time, no depletion deduction will be recorded.
Revenue Recognition: As it is mined, gold is recorded in
inventory and revenue is recognized using quoted market prices
for gold. For income tax purposes revenues are not recognized
until the gold is sold.
Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions. These
estimates and assumptions affect the reported amounts of assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
?
2. PROPERTY
The company's original property is carried at the 1924 value of
$628,662 and has been fully amortized through depletion charges
of $524,145. Other properties included in the "real estate and
property rights" category are a lot purchased in 1984 for
$1,000, Surface rights purchased at the townsite auction in 1996
for $76,574 and $48,310 for the Sphoon Mine which is patented
property included with the purchase of the Gold Crown Mine in
2005. The category "mineral property" includes the Plumbago Mine
which was exchanged for 50,000 shares of restricted stock in
1999.
3. ACCOUNTS PAYABLE & ACCRUED EXPENSES
Accounts payable and accrued expenses was $1,342,718 at December
31, 2019. This balance includes $804,852 in accrued wages owed
to Michael Miller. Mr. Miller's salary has been mostly accrued
(not paid) for over ten years and is secured with real estate.
4. NOTES PAYABLE RELATED PARTIES
Notes payable related parties at December 31, 2019 of $247,911
consists of a loan from a shareholder in the amount of $203,458
secured by gold and $35,425 owed to Michael Miller.
5. RELATED PARTY TRANSACTIONS
None
6. NOTES PAYABLE SHORT-TERM
Notes payable short-term of $538,558 at December 31, 2018
consists of a $500,000 interest-free line of credit as well as
accrued interest on a previous loan. There is no specific due
date on these loans which are convertible to stock at $1.00 per
share.
7. NOTES PAYABLE
Notes payable due after one-year totaling $101,092 consists of
the balance remaining on the mortgage for the Gold Crown Mine of
$97,236 as well as $3,855 remaining on a note secured in 2014
for the purchase of a vehicle.
8. STOCK
Capital authorized: 30,000,000 non-assessable shares of common
stock, par value $.033. Issued and outstanding: 14,390,631
shares of common stock. With approx. 3 Million of the total
restricted. Restricted common stock cannot be sold within two
years of the issuance date. After the required holding period,
the shareholder can take steps to remove the indicated
restriction.
10
