EDGAR 10-K Filing

Company CIK: 74925
Filing Year: 2021
Filename: 74925_10-K_2021_0000074925-21-000003.json

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ITEM 1. BUSINESS
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.

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ITEM 1A. RISK FACTORS
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.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

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ITEM 2. PROPERTIES
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

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3: LEGAL PROCEEDINGS
See subsequent events on page 3

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ITEM 4. MINE SAFETY DISCLOSURE
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

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
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.

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ITEM 6. SELECTED FINANCIAL DATA
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) ?

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
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.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The unaudited financial statements of the Company are attached at the end of this document.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
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

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ITEM 9A. CONTROLS AND PROCEDURES

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ITEM 9B. OTHER INFORMATION

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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."

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ITEM 11. EXECUTIVE COMPENSATION
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

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
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)

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See notes to financial statements.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
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

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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.