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 that 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 2017 with 2016.
Balance Sheet Comparisons
Assets:
For the one-year period ended December 31, 2017, compared to the one-year
period ended December 31, 2016, Accounts Receivable decreased by $25,500 (24%)
primarily due to customer payments in 2017.
For the one-year period ended December 31, 2017, compared to the one-year
period ended December 31, 2016 inventory decreased by $357,985 (35%) due to
maintenance work only in 2017 (no gold production) combined with sales of
inventory to fund the operation.
Liabilities:
For the one-year period ended December 31, 2017, compared to the one-year
period ended December 31, 2016 notes payable related parties increased by
$25,350 (14%) mainly due to the return of some gold-quartz material that had
been applied against the shareholders loan in 2016. (See note 4 at the end of
these financial statements)
For the one-year period ended December 31, 2017, compared to the one-year
period ended December 31, 2016 long-term notes decreased by $16,706 (12%)
as a result of scheduled payments with no new loans taken out.
Statement of Operations
Income:
For the one-year period ended December 31, 2017 compared to the one-year period
ended December 31, 2016, revenue decreased by $1,164,956 (86%) primarily due to
no gold production in 2017 compared to 2016 which had production.
Operating Expenses:
For the one-year period ended December 31, 2017, compared to the one-year
period ended December 31, 2016, operating expenses decreased overall by
$119,196 (15%) due to decreased activity and a smaller crew in 2017.
Other Income and Expense:
For the one-year period ended December 31, 2017, compared to the one-year
period ended December 31, 2016 other income increased by $1,311 (29%) and other
expenses did not change significantly.
For the one-year period ended December 31, 2017, compared to the one-year
period ended December 31, 2016, interest expense decreased by $12,285 (31%) due
to lower loan balances in most of 2017.
The company showed a loss of $429,965 in 2017 compared to a profit of $610,160
in 2016. The $1,040,125 (170%) difference was due to maintenance work only in
2017 (no gold production) compared to 2016 which did have gold production. The
basic and diluted loss per share was .03 in 2017 compared to a gain of .04 in
2016. The number of shares used for both calculations was 14,338,855.
(B) Comparisons of 2016 with 2015.
Balance Sheet Comparisons
Assets:
For the one-year period ended December 31, 2016, compared to the one-year
period ended December 31, 2015, cash decreased by $533,706 (99%) primarily
due the use of cash to pay down the Company's debt in 2016.
For the one-year period ended December 31, 2016, compared to the one-year
period ended December 31, 2015 Accounts Receivable increased by $33,892 (47%)
due to increased sales on account in Dec. 2016 compared to 2015.
For the one-year period ended December 31, 2016, compared to the one-year
period ended December 31, 2015 inventory increased by $286,163 (40%) due to
gold production in 2016.
Liabilities:
For the one-year period ended December 31, 2016, compared to the one-year period
ended December 31, 2015 notes payable related parties decreased by $549,116
(76%) due to loan payments made to a shareholder as well as a conversion of
debt to stock for Michael Miller and directors.
For the one-year period ended December 31, 2016, compared to the one-year period
ended December 31, 2015 short-term notes decreased by $495,339 (48%) due to the
payment of a loan.
Statement of Operations
Income:
For the one-year period ended December 31, 2016 compared to the one-year period
ended December 31, 2015,revenue increased by $414,197 (40%) primarily due to
gold production in 2016.
Operating Expenses:
For the one-year period ended December 31, 2016, compared to the one-year
period ended December 31, 2015, operating expenses decreased overall by
$105,938 (12%). Most categories increased due to increased activity, but this
was offset by a decrease in Mine Maintenance and Compliance of $177,101 (74%)
in 2016 compared to 2015.
Other Income and Expense:
For the one-year period ended December 31, 2016, compared to the one-year period
ended December 31, 2015 other expenses and income did not change significantly.
For the one-year period ended December 31, 2016, compared to the one-year
period ended December 31, 2015, interest expense decreased by $20,560 (34%) due
to the pay-down of loans in 2016.
The company showed a profit of $610,160 in 2016 compared to a profit of $76,443
in 2015. The $533,717 (691%) difference was due to increased production in 2016.
The basic and diluted gain per share was .04 in 2016 compared to .006 in 2015.
The number of shares used for the 2016 calculation was 14,338,855 and for 2015
the number of shares outsanding was 13,399,505.