10-Q: US Antimony Reports Q2 Loss Amidst Revenue Drop

United States Antimony Corporation reported a net loss for the second quarter of 2026, with revenues declining significantly in its primary antimony segment, though its zeolite business showed strong growth.

Summary

• United States Antimony Corporation (USAC) reported a net loss of $11.18 million for the six months ended June 30, 2026, compared to a net income of $728,079 in the prior year period. Revenues for the six months decreased to $14.7 million from $17.5 million.
• The antimony segment experienced a revenue decline of 27% for the six months, primarily due to lower market prices for antimony, which reduced average sales prices by 27%. Pounds of antimony sold remained relatively consistent.
• The zeolite segment showed strong performance, with revenue increasing by 45% for the six months, driven by a 49% increase in tons sold, reflecting expanded sales efforts.
• Operating expenses increased significantly due to higher non-cash share-based compensation and increased salaries and benefits.
• The company received a $12.8 million government grant in Q1 2026 for facility expansion, which was recognized as a reduction of property, plant, and equipment.
• A material weakness in internal control over financial reporting persists, related to insufficient qualified accounting personnel and control design.
• As of June 30, 2026, the company had $41.4 million in cash and cash equivalents and $20.7 million in investments in debt securities.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to significant revenue decline in the core antimony business, substantial operating losses, and a material weakness in internal controls, despite some positive developments like the zeolite segment growth and government grant.

Positives

• Zeolite segment revenue increased by 45% to $2.88 million for the six months ended June 30, 2026, driven by a 49% increase in tons sold.
• The company received $12.8 million in government grant funding in Q1 2026 for facility expansion, which was recognized as a reduction of property, plant, and equipment.
• The company secured a five-year, sole-source contract with the U.S. Defense Logistics Agency (DLA) for antimony metal ingots, with initial shipments recognized in July 2026.
• The company's investment in Larvotto Resources Limited showed an unrealized gain of $6.79 million in the second quarter of 2026.
• Working capital increased to $69.99 million as of June 30, 2026, from $44.56 million at December 31, 2025.
• The company has $41.4 million in cash and cash equivalents and $20.7 million in investments in debt securities as of June 30, 2026.

Negatives

• Net loss for the six months ended June 30, 2026, was $11.18 million, a significant increase from a net income of $728,079 in the prior year.
• Antimony segment revenue decreased by 27% to $11.42 million for the six months ended June 30, 2026, due to lower market prices.
• Antimony gross profit decreased by 78% to $1.17 million for the six months ended June 30, 2026.
• Operating expenses increased by $11.4 million for the six months ended June 30, 2026, primarily due to higher share-based compensation and salaries.
• A material weakness in internal control over financial reporting persists due to insufficient qualified accounting personnel.
• The company reported a net cash used in operating activities of $20.7 million for the six months ended June 30, 2026.
• The company's investment in a joint venture resulted in a loss of $72,640 for the six months ended June 30, 2026.

Risks

• The company's receipt of funds under its Department of War award is subject to milestone achievement and ongoing compliance, with potential delays, reductions, or forfeiture of funding.
• The financing and commercial arrangement with a key antimony supplier exposes the company to credit, operational, and supply chain risks, including potential inability to repay the note or deliver products.
• The company's significant inventory position in Mexico may expose it to operational, inventory valuation, and liquidity risks if materials cannot be processed efficiently or if market prices decline.
• The company's operations are subject to existing and new government regulations, which could have negative consequences.
• The company's ability to obtain additional capital to develop its resources is not assured.
• Fluctuations in the prices for antimony and precious metals could adversely impact financial condition and results of operations.
• The company faces risks related to non-domestic supply of antimony ore, including delays, lower content, higher costs, and processing difficulties.
• The company is subject to cybersecurity and business disruption risks.

Future Outlook

The company intends to fund its cash requirements with existing cash, cash generated from operations, and capital raised from various investment vehicles, believing these sources are sufficient for the next 12 months. Investments will focus on increasing production, decreasing costs, and growing revenue profitably, with potential for acquisitions. Access to capital is not assured and could lead to operational curtailment.

Management Comments

• Management estimates the Company's 2026 effective tax rate to be 0% due to year-to-date pretax loss and cumulative loss position.
• Management does not believe a loss is probable regarding the commercial lawsuit in Mexico, though an adverse outcome remains reasonably possible.
• Management has taken proactive steps to address the material weakness in internal controls by hiring additional personnel and implementing new accounting software.

Industry Context

StockSavvy.ai notes that the antimony market is subject to significant price volatility and geopolitical influences, as highlighted by the company's reliance on foreign suppliers and its DLA contract. The company's diversification into zeolite and its strategic investments in critical mineral exploration align with broader industry trends focused on supply chain security and essential mineral resources.

Comparison to Industry Standards

• The company estimates its market share for antimony oxide products at approximately 4% domestically and less than 1% internationally, indicating a small but potentially competitive position within the U.S. market.
• The company's zeolite product boasts a high cation exchange capacity (CEC) of 180-220 meq/100 gr, which is considered a strong indicator of its effectiveness for applications like plant nutrient availability and soil amendment.
• The company's Fostung tungsten project has an estimated 14.8 million tons of inferred mineral resources, a significant resource base, though it does not establish mineral reserves.
• The company's operational losses in the antimony segment, despite increased sales volume in Q2, suggest challenges in cost management or pricing power compared to industry benchmarks, especially given the 52% drop in average selling price per pound.
• The significant increase in operating expenses, particularly share-based compensation, may be higher than typical for companies of similar size in the mining sector, potentially impacting profitability.

Corporate Governance

Legal Proceedings

• USAMSA is a defendant in a commercial lawsuit seeking approximately $339,000 in damages and $54,390 in VAT. A precautionary attachment order requires restricting approximately $339,000 in a bank account.
• The company has filed a countersuit against the same party in excess of the amounts described to recover amounts previously paid.

Stakeholder Impact

• Shareholders: Potential dilution from future capital raises; impact of operating losses and material weakness on stock price.
• Employees: Increased salaries and benefits, but also potential impact from operational curtailment if capital is not available.
• Suppliers: Continued commercial relationship with a key antimony supplier, supported by a convertible note, but with associated credit and supply chain risks.
• Creditors: The company has long-term debt obligations, but current liquidity appears sufficient for the next 12 months.

Next Steps

• Continue to fund cash requirements with existing cash, cash generated from operations, and capital raised from various investment vehicles.
• Invest in employees, customers, infrastructure, and operations to increase production, decrease costs, and grow revenue profitably.
• Continue to review each segment's operational and financial results for opportunities to improve cash flow.
• Potentially acquire businesses or additional properties.
• Continue to pursue applications for additional U.S. Government funding for facility expansion and critical exploration and development mining.

Key Dates

Recommendation

The company is experiencing significant operational and financial challenges, including a substantial decline in revenue and gross profit in its core antimony business, coupled with a material weakness in internal controls. While the zeolite segment shows promise and a government grant provides some support, the overall trend is negative, and the company's ability to access future capital is uncertain. The persistent operating losses and the ongoing control deficiencies suggest a high level of risk for investors.

Keywords

antimony, zeolite, critical minerals, mining, processing, government grant, DLA contract, equity investment