10-Q: US Antimony Reports Soaring Revenue, DLA Contract Win

United States Antimony Corporation announced a significant revenue surge and a major $245 million contract with the U.S. Defense Logistics Agency, alongside substantial capital raises and strategic acquisitions, despite increased net losses.

Summary

• Revenues for the nine months ended September 30, 2025, increased by 181.8% to $26,227,079, up from $9,307,222 in the prior year.
• Antimony segment revenue grew by 256% to $23,592,695 for the nine months ended September 30, 2025, driven by heightened demand and higher average sales prices.
• Zeolite segment revenue increased by 16% to $2,654,923 for the nine months ended September 30, 2025, with gross profit improving from a loss of $(450,556) to a profit of $275,720.
• The company secured a five-year, sole-source Indefinite Delivery, Indefinite Quantity (IDIQ) contract with the U.S. Defense Logistics Agency (DLA) Strategic Materials, with a maximum value of $245 million, for antimony metal ingots.
• An initial delivery order under the DLA contract for 315,000 pounds of antimony metal ingots, valued at approximately $10 million, was received at the end of September 2025, though no revenue has been recognized from it yet.
• Net loss for the nine months ended September 30, 2025, widened to $(4,052,621) from $(847,485) in the prior year, primarily due to increased operating expenses and significant working capital investments.
• Capital expenditures for the nine months ended September 30, 2025, surged to $16,069,244, up from $223,058 in the prior year, reflecting investments in mining properties and smelting expansion.
• The company raised $38,440,596 in net proceeds from common stock sales in at-the-market offerings and a direct offering, and $4,427,756 from warrant exercises during the nine months ended September 30, 2025.
• Subsequent to the quarter, the company raised approximately $66 million in additional net proceeds from equity offerings and warrant exercises in October 2025.
• The Philipsburg operating lease was terminated early on September 22, 2025, resulting in a non-cash gain of $469,822.
• The company's disclosure controls and procedures were deemed not effective as of September 30, 2025, primarily due to the small size of the accounting staff, with plans underway to strengthen internal controls.

Sentiment

Score: 6

Explanation: While the company reported significantly increased net losses and negative operating cash flow, these are largely attributable to aggressive strategic investments and expansion efforts, including substantial capital expenditures and acquisitions. The securing of a major DLA contract and successful capital raises demonstrate strong future potential and investor confidence, offsetting the current financial losses. The internal control weakness is a concern but is being addressed.

Positives

• Total revenues for the nine months ended September 30, 2025, increased by 181.8% to $26,227,079, demonstrating strong top-line growth.
• Antimony segment revenue grew by 256% to $23,592,695 for the nine months ended September 30, 2025, driven by high demand and increased average sales prices.
• Gross profit for the antimony segment increased by 209% to $7,493,928 for the nine months ended September 30, 2025.
• The Zeolite segment's gross profit significantly improved from a loss of $(450,556) in 2024 to a profit of $275,720 in 2025, due to sales volume growth, higher average sales prices, and reduced maintenance costs.
• Secured a five-year, sole-source IDIQ contract with the U.S. Defense Logistics Agency (DLA) Strategic Materials for antimony metal ingots, with a maximum value of $245 million, through September 2030.
• Received an initial delivery order under the DLA contract for 315,000 pounds of antimony metal ingots, valued at approximately $10 million.
• Successfully raised significant capital, with $38,440,596 in net proceeds from common stock sales and $4,427,756 from warrant exercises during the nine months ended September 30, 2025.
• Subsequent to the quarter, an additional $66 million in gross proceeds was raised from equity offerings and warrant exercises in October 2025, indicating strong investor confidence.
• Total assets increased significantly to $79,882,341 at September 30, 2025, from $34,642,602 at December 31, 2024.
• Total stockholders' equity increased substantially to $71,750,930 at September 30, 2025, from $28,600,673 at December 31, 2024.
• Acquired significant mining claims and properties in Alaska, Ontario (Canada), and Alabama, and surface rights in Montana, to reduce reliance on third-party antimony ore purchases.
• Initiated a $22.4 million expansion of existing smelting operations in Thompson Falls, Montana, with $8 million already paid towards commitments.
• Purchased $19,934,953 of U.S. Treasury Strips in 2025, generating interest yields of approximately 3.7% to 3.9%.
• Increased its line of credit facility from $5 million to $10 million in September 2025, providing additional liquidity, with no outstanding borrowings.
• The Mexican appellate court ruled in favor of the company regarding a 2013 income tax assessment, with no tax due.

Negatives

• Net loss for the nine months ended September 30, 2025, significantly increased to $(4,052,621) from $(847,485) in the prior year.
• Loss from operations for the nine months ended September 30, 2025, worsened to $(4,539,183) from $(1,305,467) in the prior year.
• Net cash used in operating activities was $(6,220,686) for the nine months ended September 30, 2025, a significant shift from net cash provided of $1,042,162 in the prior year.
• Net cash used in investing activities was $(35,995,481) for the nine months ended September 30, 2025, primarily due to purchases of investment securities and capital expenditures.
• Precious metals revenue was negative $(20,539) for the nine months ended September 30, 2025, compared to $404,049 in the prior year.
• The company's disclosure controls and procedures were deemed not effective as of September 30, 2025, indicating material weaknesses in financial reporting oversight.
• Antimony sales volume for the nine months ended September 30, 2025, declined by 13% (152,303 pounds) compared to the prior year, attributed mostly to a workforce shortage that has since been rectified.
• Inventory increased significantly by $7,167,437, primarily due to higher antimony inventory and prepaid expenses for inventory shipments, tying up working capital.

Risks

• The company's properties are in the exploration stage, with no guarantee of mineral resources or reserves until a technical report summary (TRS) is completed.
• Macroeconomic factors, new tariffs, changes in trade policy, or escalating trade tensions could materially adversely impact the business.
• Continued operational losses could negatively affect financial health and ability to fund operations.
• Mineral operations are subject to existing and new government regulations, which could increase costs or restrict activities.
• The ability to obtain additional capital to develop resources is not assured, and a lack of capital could force curtailment of operations or disposal of assets.
• Concentration of customers could lead to significant revenue fluctuations if a major customer reduces purchases.
• Increases in energy costs could negatively impact operational costs and profitability.
• Mineral exploration and development activities are inherently risky and may not be economically viable.
• Mineral estimates, including those prepared by Qualified Persons, are not guarantees of the volume or grade of ore that will ultimately be recovered.
• Insurance coverage for operating risks may be insufficient to cover all potential losses.
• Fluctuations in prices for antimony and precious metals, such as gold and silver, can significantly impact revenue and profitability.
• The mineral exploration industry is highly competitive, which could affect the company's market share and profitability.
• The title and rights in the company's mineral properties may be subject to challenges or disputes.
• Environmental hazards and compliance with environmental regulations could lead to significant costs or liabilities.
• Possible dilution of common stock from additional financing activities could reduce shareholder value.
• Metallurgical and other processing problems could disrupt production and increase costs.
• Unexpected geological formations could hinder mining operations and increase extraction costs.
• Global economic and political conditions can create instability and impact demand for products.
• Staffing in remote locations can be challenging and lead to increased labor costs or operational delays.
• Changes in product costing methodologies could impact reported financial results.
• Inflation on operational costs and profitability could erode margins.
• Competitive technology positions and operating interruptions (e.g., labor disputes, natural disasters, power outages) could disrupt operations.
• Global pandemics, natural disasters, or civil unrest could adversely affect business operations.
• Mexican labor and other issues regarding safety and organized control over properties could impact operations in Mexico.
• The positions and associated outcomes of Mexican and other taxing authorities could result in unexpected tax liabilities.
• Cybersecurity and business disruptions could lead to data breaches, operational downtime, or financial losses.
• Ineffective use of cash and cash equivalents, including proceeds from stock offerings, could hinder strategic initiatives.
• Potential conflicts of interest with management could arise.
• Processing and selling ore from new suppliers and internal sources may not be economically viable.
• Additional risks are associated with non-domestic supply of antimony ore, including shipping disruptions, credibility of information, and product content/quantity/grade discrepancies.
• Held-to-maturity investment securities and recent equity investments are subject to potential devaluation due to market interest rates, credit quality, or market volatility.
• Supply contracts, including the sole-source DLA contract, expose the company to risks such as non-performance, cost increases, market volatility, working capital requirements, operational challenges, and regulatory compliance.

Future Outlook

The company intends to fund its cash requirements with existing cash, cash generated from operations, and capital raised from various investment vehicles. It believes these sources are sufficient for the next twelve months and may use cash to acquire businesses. The company is focused on generating cash flow, growing profitably both organically and through strategic acquisitions and partnerships, and increasing shareholder value. It also anticipates potential future funding from the U.S. Government for facility expansion and mining exploration, though this is not assured. The company continues to review operational and financial results for opportunities to improve cash flow.

Management Comments

• "Our mission is to service our employees, customers, and vendors well and grow our business profitably both organically and through strategic acquisitions and partnerships to increase shareholder value."
• "The Company is focused on generating cash flow to fund its mission."
• "One method of generating cash is through the sale or issuance of common stock, warrants, debt, and other investment vehicles, which the Company has been successful at executing in the past."
• "Management estimates that the Company’s 2025 effective tax rate will be 0% due to the Company’s historical operating losses, tax loss carryforward, and other available evidence related to the Company’s ability to generate taxable income."
• "Management of the Company believes that these material weaknesses [in disclosure controls] are more so due to the small size of the Company’s accounting staff."

Industry Context

The company operates in the critical minerals sector, specifically antimony and zeolite, which are vital for military and industrial applications. The DLA contract highlights the U.S. government's focus on securing domestic supply chains for critical minerals, positioning the company favorably. Its aggressive acquisition of mining claims in North America (Alaska, Canada, Alabama) and expansion of smelting capacity align with broader industry trends towards vertical integration and reducing reliance on foreign sources, particularly from Russia and China, for strategic materials. The strong demand for antimony, reflected in increased average sales prices, indicates a robust market for this critical mineral.

Comparison to Industry Standards

• The company states it is the only U.S. domestic operating, permitted processor of antimony products, giving it a unique competitive advantage in the U.S. market.
• The company claims its smelter in Coahuila, Mexico, is the largest and only current operating smelter for antimony products in Mexico.
• The company believes it is a fully vertically integrated operation (mining, processing, selling antimony products), a claim it states no other companies outside of Russia or China can make.
• The company's BRZ zeolite is regarded as one of the best in the world due to its high cation exchange capacity (approximately 180-220 meq/100 gr), hardness, high clinoptilolite content, absence of clay minerals, and low sodium content.

Corporate Governance

Legal Proceedings

• The Mexican tax authority (SAT) re-opened its assessment of USAMSA's 2013 income tax return in 2019, assessing $16.3 million pesos (approximately $865,000 USD). The company filed an appeal and a lawsuit against SAT.
• In March 2024, Mexico's appellate court ruled in favor of the company, with no assessment due, and instructed the lower court to issue a new ruling. In May 2024, the lower court issued a final ruling in favor of the company but left open the possibility for SAT to re-open the audit. The company has requested a final ruling on whether SAT can re-open this matter.

Stakeholder Impact

• **Shareholders**: Significant dilution from multiple equity offerings and warrant exercises, but also potential for increased value from strategic growth initiatives, DLA contract, and acquisitions. Increased net losses and negative operating cash flow are a concern, but substantial capital raises indicate continued investor support.
• **Employees**: Expansion of smelting operations in Montana and acquisition of a personal residence for management personnel in Thompson Falls suggest growth in employment opportunities. Plans to purchase housing development indicate efforts to support employee needs in remote locations. Internal control weaknesses are being addressed by hiring new staff.
• **Customers**: The DLA contract secures a major, long-term customer for antimony metal ingots. New supply agreements for antimony trioxide indicate expanding customer base and improved supply reliability. Increased production capacity aims to meet heightened demand.
• **Suppliers**: New supply agreements with international suppliers for antimony indicate continued reliance on external sources, but also efforts to diversify and secure supply. The $2.5 million promissory note to a supplier demonstrates a commitment to supporting supplier operations.
• **Creditors**: The increase in the line of credit to $10 million, collateralized by U.S. Treasury Strips, provides additional financial flexibility and security for creditors. Long-term debt remains manageable.

Next Steps

• Continue to explore and develop newly acquired mining claims in Alaska, Ontario (Canada), and Alabama.
• Proceed with the estimated $22.4 million expansion of smelting operations in Thompson Falls, Montana.
• Recognize revenue from the initial $10 million DLA delivery order and subsequent orders under the $245 million IDIQ contract.
• Implement plans to strengthen internal controls, including hiring additional accounting staff, implementing new accounting software, mitigating segregation of duties issues, automating manual processes, and designing entity-level controls.
• Continue to review each segment's operational and financial results to improve cash flow.
• Potentially acquire an existing custom precious metals mill and flotation facility to enhance processing capabilities.
• Potentially purchase an existing housing development in Thompson Falls, Montana, to ensure adequate housing for new employees.
• Continue to seek U.S. Government funding for facility expansion and mining exploration and development.
• Deliver antimony under the new supply agreement with an international supplier and the five-year supply agreement with a new industrial customer for antimony trioxide.

Key Dates

Recommendation

The company is in a high-growth, high-investment phase, marked by significant revenue increases in its core antimony business and a landmark DLA contract. This indicates strong strategic positioning in critical minerals. However, this growth comes at a cost, with substantially increased net losses and a shift to negative operating cash flow, requiring frequent capital raises. While the long-term potential from the DLA contract and strategic acquisitions is considerable, the current financial performance and the disclosed material weakness in internal controls introduce a degree of uncertainty. A 'hold' recommendation is appropriate for investors to monitor the execution of the expansion plans, the effectiveness of internal control improvements, and the conversion of the DLA contract into recognized revenue and sustained profitability before making further investment decisions.

Keywords

Antimony, Zeolite, Mining, Critical Minerals, DLA Contract, SEC Filing, 10-Q, Mineral Exploration, Smelting, Precious Metals, Capital Raise, Montana, Alaska, Canada, Mexico, Industrial Minerals, Flame Retardant, Water Filtration, National Defense Stockpile