UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-QSB
|
x |
Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act
of 1934 for the quarterly period ended December 31,
2006
|
or
|
o |
Transition
Report pursuant to Section 13 or 15(d) of the Securities
Exchange
Act of 1934 for the transition period from __________ to
____________
|
Commission
File Number 000-19061
USCORP
(Exact
name of registrant as specified in its charter)
Nevada
|
|
87-0403330
|
(State
or other jurisdiction of
|
|
(I.R.S.
Employer
|
incorporation
or organization)
|
|
Identification
No.)
|
4535
W.
SAHARA AVE., SUITE 204
Las
Vegas, NV 89102
(Address
of principal executive offices)
(702)
933-4034
(Registrant’s
telephone number, including area code)
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
x
NO
o
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Securities Exchange Act of 1934) YES o NO x
As
of
February 14, 2007, the Registrant had 33,806,461 shares of Common Stock,
par value $.01 per share, outstanding.
USCORP
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PART
I -- FINANCIAL INFORMATION
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Item
1. Financial Statements
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Consolidated
Balance Sheet as of December 31, 2006 and December 31, 2005
(unaudited)
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4
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Consolidated
Statements of Operations for the Three Months & Quarter Ended December
31, 2006 and December 31, 2005 and from Inception, May 1989 through
June
30, 2006 (unaudited)
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5
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Consolidated
Statements of Cash Flows for the Three Months Ended December 31,
2006 and
December 31, 2005 and from Inception, May 1989 through June 30, 2006
(unaudited)
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|
6
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Consolidated
Statements of Changes in Shareholders’ Equity from Inception, May 1989
through December 31, 2006
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7
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Notes
to Consolidated Financial Statements (unaudited)
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11
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Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
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16
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Item
3. Controls and Procedures
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18
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PART
II -- OTHER INFORMATION
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Item
6. Exhibits
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19
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SIGNATURES
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20
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DONAHUE
ASSOCIATES, LLC
Certified
Public Accountants
27
Beach Road Suite CO5A
Monmouth
Beach, NJ 07750
Tel.
732-229-7723
February
14, 2007
The
Shareholders
USCorp
We
have
compiled the accompanying financial statements of USCorp for the quarters ending
December 31, 2006 and December 31, 2005. These financial statements have been
prepared in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public
Accountants.
A
compilation is limited to presenting in the form of financial statement
information that is the representation of management. Our compilation in
accordance with reviewing standards generally accepted by the Public Company
Accounting Oversight Board in the United States of America. We have not audited
or reviewed any of the projections, assumptions, or estimates used in compiling
the projected financial statements and, accordingly, do not express an opinion
or any form of assurance on them.
/s/:
Donahue Associates LLC
Monmouth
Beach, NJ
February
14, 2007
USCorp.
(an
Exploration Stage Company)
Balance
Sheet
As
of December 31, 2006 and September 30, 2006
|
|
Unaudited
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|
31-Dec-06
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30-Sep-06
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|
ASSETS
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|
Current
assets:
|
|
|
|
|
|
Cash
|
|
$
|
303,432
|
|
$
|
83,573
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
303,432
|
|
|
83,573
|
|
|
|
|
|
|
|
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Other
assets:
|
|
|
|
|
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Equipment-
net
|
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7,044
|
|
|
8,240
|
|
|
|
|
|
|
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|
Total
assets
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|
$
|
310,476
|
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$
|
91,813
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LIABILITIES
AND SHAREHOLDERS' EQUITY
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Current
liabilities:
|
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Accounts
payable & accrued expenses
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|
$
|
81,576
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|
$
|
78,317
|
|
Total
current liabilities
|
|
|
81,576
|
|
|
78,317
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|
|
|
|
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Note
payable- shareholder
|
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|
1,038,734
|
|
|
979,175
|
|
Note
payable
|
|
|
300,000
|
|
|
0
|
|
Advances
payable shareholders
|
|
|
11,789
|
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|
0
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Shareholders'
equity:
|
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Series
A preferred stock, one share convertible to eight shares of
common;
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10%
stated dividend, stated value $0.50, 10,000,000 shares
authorized,
|
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|
no
shares outstanding
|
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0
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0
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Series
B preferred stock, one share convertible to two shares of
common;
|
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10%
cumulative stated dividend, stated value $0.50, 50,000,000 shares
authorized,
|
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155,000
shares outstanding
|
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70,165
|
|
|
70,165
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|
Common
stock- $.01 par value, authorized 800,000,000 shares,
|
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issued
and outstanding, 33,806,459 shares at September 30, 2006
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and
33,856,459 at December 31, 2006
|
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330,599
|
|
|
330,099
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Additional
paid in capital
|
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|
7,198,898
|
|
|
7,194,398
|
|
Accumulated
deficit
|
|
|
(8,721,285
|
)
|
|
(8,560,341
|
)
|
Total
shareholders' equity
|
|
|
(1,191,788
|
)
|
|
(1,035,844
|
)
|
|
|
|
|
|
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|
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Total
Liabilities & Shareholders' Equity
|
|
$
|
310,476
|
|
$
|
91,813
|
|
See
the notes to the financial statements.
USCorp.
(an
Exploration Stage Company)
Statements
of Operations
For
the Quarters Ended December 31, 2006 and December 31, 2005
and
from Inception, May 1989 through December 31, 2006
|
|
Unaudited
|
|
Unaudited
|
|
Inception
|
|
|
|
31-Dec-06
|
|
31-Dec-05
|
|
to
Date
|
|
General
and administrative expenses:
|
|
|
|
|
|
|
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Consulting
|
|
$
|
5,492
|
|
$
|
89,862
|
|
$
|
3,257,359
|
|
Administration
|
|
|
85,763
|
|
|
28,064
|
|
|
3,810,077
|
|
License
expense
|
|
|
266
|
|
|
0
|
|
|
160,825
|
|
Professional
fees
|
|
|
9,864
|
|
|
10,450
|
|
|
454,313
|
|
Total
general & administrative expenses
|
|
|
101,385
|
|
|
128,376
|
|
|
7,682,574
|
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|
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Net
loss from operations
|
|
|
(101,385
|
)
|
|
(128,376
|
)
|
|
(7,682,574
|
)
|
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Other
income (expenses):
|
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|
|
|
|
|
|
|
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|
Interest
expense
|
|
|
(14,420
|
)
|
|
(16,735
|
)
|
|
(95,121
|
)
|
Loss
on unhedged underlying
|
|
|
(45,139
|
)
|
|
(39,529
|
)
|
|
(330,971
|
)
|
(Loss)
gain on mining claim
|
|
|
0
|
|
|
0
|
|
|
(600,000
|
)
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|
|
|
|
|
|
|
|
|
|
|
Net
loss before provision for income taxes
|
|
|
(160,944
|
)
|
|
(184,640
|
)
|
|
(8,708,666
|
)
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|
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|
|
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|
Provision
for income taxes
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss before extraordinary item
|
|
|
(160,944
|
)
|
|
(184,640
|
)
|
|
(8,708,666
|
)
|
|
|
|
|
|
|
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Extraordinary
item:
|
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|
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|
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|
Loss
on early extinguishment of debt (net of tax)
|
|
|
0
|
|
|
0
|
|
|
(12,619
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
($160,944
|
)
|
|
($184,640
|
)
|
|
($8,721,285
|
)
|
|
|
|
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|
|
|
|
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|
|
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|
|
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|
Basic
& fully diluted net loss per common share
|
|
|
($0.01
|
)
|
|
($0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
& fully diluted
|
|
|
33,807,560
|
|
|
33,508,174
|
|
|
|
|
See
the notes to the financial statements.
USCorp.
(an
Exploration Stage Company)
Statements
of Cash Flows
For
the Quarters Ended December 31, 2006 and December 31, 2005
and
from Inception, May 1989 through December 31, 2006
|
|
Unaudited
|
|
Unaudited
|
|
Inception
|
|
|
|
31-Dec-06
|
|
31-Dec-05
|
|
to
Date
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net
loss
|
|
|
($160,944
|
)
|
|
($184,640
|
)
|
|
($8,721,285
|
)
|
Adjustments
to reconcile net income items
|
|
|
|
|
|
|
|
|
|
|
not
requiring the use of cash:
|
|
|
|
|
|
|
|
|
|
|
Loss
on sale of mining claim
|
|
|
0
|
|
|
0
|
|
|
600,000
|
|
Consulting
fees
|
|
|
5,000
|
|
|
75,150
|
|
|
1,917,520
|
|
Depreciation
expense
|
|
|
1,196
|
|
|
373
|
|
|
7,205
|
|
Interest
expense
|
|
|
14,420
|
|
|
16,735
|
|
|
95,121
|
|
Impairment
expense
|
|
|
0
|
|
|
0
|
|
|
2,449,466
|
|
Loss
on early extinguishment of debt (net of tax)
|
|
|
0
|
|
|
0
|
|
|
12,619
|
|
Loss
on unhedged underlying
|
|
|
45,139
|
|
|
39,529
|
|
|
330,971
|
|
Changes
in other operating assets and liabilities :
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
|
3,259
|
|
|
(750
|
)
|
|
81,576
|
|
Net
cash used by operations
|
|
|
(91,930
|
)
|
|
(53,603
|
)
|
|
(3,226,807
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
|
Purchase
of office equipment
|
|
|
0
|
|
|
(1,004
|
)
|
|
(14,249
|
)
|
Net
cash used by investing activities
|
|
|
0
|
|
|
(1,004
|
)
|
|
(14,249
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
|
0
|
|
|
0
|
|
|
2,151,768
|
|
Issuance
of preferred stock
|
|
|
0
|
|
|
0
|
|
|
70,165
|
|
Issuance
of gold bullion note
|
|
|
0
|
|
|
0
|
|
|
654,023
|
|
Issuance
of note payable
|
|
|
300,000
|
|
|
0
|
|
|
300,000
|
|
Advances
received (paid) shareholder
|
|
|
11,789
|
|
|
(69,485
|
)
|
|
11,789
|
|
Capital
contributed by shareholders
|
|
|
0
|
|
|
0
|
|
|
356,743
|
|
Net
cash provided by financing activities
|
|
|
311,789
|
|
|
(69,485
|
)
|
|
3,544,488
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash during the fiscal year
|
|
|
219,859
|
|
|
(124,092
|
)
|
|
303,432
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
balance at beginning of the fiscal year
|
|
|
83,573
|
|
|
627,372
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
balance at December 31st
|
|
$
|
303,432
|
|
$
|
503,280
|
|
$
|
303,432
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
Interest
paid during the fiscal year
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
Income
taxes paid during the fiscal year
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
See
the notes to the financial statements.
USCorp.
(an
Exploration Stage Company)
Statement
of Changes in Shareholders Equity
From
Inception, May 1989 to December 31, 2006
|
|
Common
|
|
Common
|
|
Paid
in
|
|
Accumulated
|
|
|
|
Stock
|
|
|
|
Shares
|
|
Par
Value
|
|
Capital
|
|
Deficit
|
|
Total
|
|
Price
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inception
|
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
|
84,688
|
|
|
847
|
|
|
1,185,153
|
|
|
|
|
|
1,186,000
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income fiscal 1990
|
|
|
|
|
|
|
|
|
|
|
|
520,000
|
|
|
520,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1990-unaudited
|
|
|
84,688
|
|
|
847
|
|
|
1,185,153
|
|
|
520,000
|
|
|
1,706,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income fiscal 1991
|
|
|
|
|
|
|
|
|
|
|
|
1,108,000
|
|
|
1,108,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1991-unaudited
|
|
|
84,688
|
|
|
847
|
|
|
1,185,153
|
|
|
1,628,000
|
|
|
2,814,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
|
472
|
|
|
5
|
|
|
32,411
|
|
|
|
|
|
32,416
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income fiscal 1992
|
|
|
|
|
|
|
|
|
|
|
|
466,000
|
|
|
466,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1992-unaudited
|
|
|
85,160
|
|
|
852
|
|
|
1,217,564
|
|
|
2,094,000
|
|
|
3,312,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss fiscal 1993
|
|
|
|
|
|
|
|
|
|
|
|
(3,116,767
|
)
|
|
(3,116,767
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1993-unaudited
|
|
|
85,160
|
|
|
852
|
|
|
1,217,564
|
|
|
(1,022,767
|
)
|
|
195,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss fiscal 1994
|
|
|
|
|
|
|
|
|
|
|
|
(63,388
|
)
|
|
(63,388
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1994-unaudited
|
|
|
85,160
|
|
|
852
|
|
|
1,217,564
|
|
|
(1,086,155
|
)
|
|
132,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income fiscal 1995
|
|
|
|
|
|
|
|
|
|
|
|
(132,261
|
)
|
|
(132,261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1995-unaudited
|
|
|
85,160
|
|
|
852
|
|
|
1,217,564
|
|
|
(1,218,416
|
)
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss fiscal 1996
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1996-unaudited
|
|
|
85,160
|
|
|
852
|
|
|
1,217,564
|
|
|
(1,218,416
|
)
|
|
0
|
|
|
|
|
USCorp.
(an
Exploration Stage Company)
Statement
of Changes in Shareholders Equity
From
Inception, May 1989 to December 31, 2006
(Continued)
|
|
Common
|
|
Common
|
|
Paid
in
|
|
Accumulated
|
|
|
|
Stock
|
|
|
|
Shares
|
|
Par
Value
|
|
Capital
|
|
Deficit
|
|
Total
|
|
Price
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for mining claim
|
|
|
150,000
|
|
|
1,500
|
|
|
598,500
|
|
|
|
|
|
600,000
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
|
50,000
|
|
|
500
|
|
|
59,874
|
|
|
|
|
|
60,374
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for services
|
|
|
14,878
|
|
|
149
|
|
|
29,608
|
|
|
|
|
|
29,757
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss fiscal 1997
|
|
|
|
|
|
|
|
|
|
|
|
(90,131
|
)
|
|
(90,131
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1997-unaudited
|
|
|
300,038
|
|
|
3,001
|
|
|
1,905,546
|
|
|
(1,308,547
|
)
|
|
600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
contributed by shareholder
|
|
|
|
|
|
|
|
|
58,668
|
|
|
|
|
|
58,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss fiscal 1998
|
|
|
|
|
|
|
|
|
|
|
|
(58,668
|
)
|
|
(58,668
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1998-unaudited
|
|
|
300,038
|
|
|
3,001
|
|
|
1,964,214
|
|
|
(1,367,215
|
)
|
|
600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
contributed by shareholder
|
|
|
|
|
|
|
|
|
28,654
|
|
|
|
|
|
28,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income fiscal 1999
|
|
|
|
|
|
|
|
|
|
|
|
(26,705
|
)
|
|
(26,705
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 1999-unaudited
|
|
|
300,038
|
|
|
3,001
|
|
|
1,992,868
|
|
|
(1,393,920
|
)
|
|
601,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
contributed by shareholder
|
|
|
|
|
|
|
|
|
22,750
|
|
|
|
|
|
22,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss fiscal 2000
|
|
|
|
|
|
|
|
|
|
|
|
(624,699
|
)
|
|
(624,699
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2000-unaudited
|
|
|
300,038
|
|
|
3,001
|
|
|
2,015,618
|
|
|
(2,018,619
|
)
|
|
0
|
|
|
|
|
USCorp.
(an
Exploration Stage Company)
Statement
of Changes in Shareholders Equity
From
Inception, May 1989 to December 31, 2006
(Continued)
|
|
Common
|
|
Common
|
|
Paid
in
|
|
Accumulated
|
|
|
|
Stock
|
|
|
|
Shares
|
|
Par
Value
|
|
Capital
|
|
Deficit
|
|
Total
|
|
Price
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
|
103,535
|
|
|
1,035
|
|
|
611,943
|
|
|
|
|
|
612,978
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock for compensation
|
|
|
50,000
|
|
|
500
|
|
|
19,571
|
|
|
|
|
|
20,071
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
contributed by shareholder
|
|
|
|
|
|
|
|
|
21,719
|
|
|
|
|
|
21,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss fiscal 2001
|
|
|
|
|
|
|
|
|
|
|
|
(654,768
|
)
|
|
(654,768
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2001-unaudited
|
|
|
453,573
|
|
|
4,536
|
|
|
2,668,851
|
|
|
(2,673,387
|
)
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock to purchase mining claim
|
|
|
24,200,000
|
|
|
242,000
|
|
|
2,207,466
|
|
|
|
|
|
2,449,466
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
shares to employees
|
|
|
267,500
|
|
|
2,675
|
|
|
(2,675
|
)
|
|
|
|
|
0
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
contributed by shareholders
|
|
|
|
|
|
|
|
|
143,480
|
|
|
|
|
|
143,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the fiscal year
|
|
|
|
|
|
|
|
|
|
|
|
(2,591,671
|
)
|
|
(2,591,671
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2002-unaudited
|
|
|
24,921,073
|
|
|
249,211
|
|
|
5,017,122
|
|
|
(5,265,058
|
)
|
|
1,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock for services
|
|
|
872,000
|
|
|
8,720
|
|
|
264,064
|
|
|
|
|
|
272,784
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial
conversion feature
|
|
|
|
|
|
|
|
|
3,767
|
|
|
|
|
|
3,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
contributed by shareholders
|
|
|
|
|
|
|
|
|
81,472
|
|
|
|
|
|
81,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the fiscal year
|
|
|
|
|
|
|
|
|
|
|
|
(865,287
|
)
|
|
(865,287
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2003
|
|
|
25,793,073
|
|
|
257,931
|
|
|
5,366,425
|
|
|
(6,130,345
|
)
|
|
(505,989
|
)
|
|
|
|
USCorp.
(an
Exploration Stage Company)
Statement
of Changes in Shareholders Equity
From
Inception, May 1989 to December 31, 2006
(Continued)
|
|
Common
|
|
Common
|
|
Paid
in
|
|
Accumulated
|
|
|
|
Stock
|
|
|
|
Shares
|
|
Par
Value
|
|
Capital
|
|
Deficit
|
|
Total
|
|
Price
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
|
550,000
|
|
|
5,500
|
|
|
206,500
|
|
|
|
|
|
212,000
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock to pay bills
|
|
|
1,069,945
|
|
|
10,699
|
|
|
460,077
|
|
|
|
|
|
470,776
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock for services
|
|
|
2,118,441
|
|
|
21,184
|
|
|
652,714
|
|
|
|
|
|
673,898
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the fiscal year
|
|
|
|
|
|
|
|
|
|
|
|
(964,108
|
)
|
|
(964,108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2004
|
|
|
29,531,459
|
|
$
|
295,314
|
|
$
|
6,685,716
|
|
|
($7,094,453
|
)
|
|
($113,423
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
|
150,000
|
|
|
1,500
|
|
|
46,500
|
|
|
|
|
|
48,000
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock for services
|
|
|
2,840,000
|
|
|
28,400
|
|
|
331,600
|
|
|
|
|
|
360,000
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock to pay debt
|
|
|
400,000
|
|
|
4,000
|
|
|
50,000
|
|
|
|
|
|
54,000
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of warrants
|
|
|
|
|
|
|
|
|
1,817
|
|
|
|
|
|
1,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the fiscal year
|
|
|
|
|
|
|
|
|
|
|
|
(628,337
|
)
|
|
(628,337
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2005
|
|
|
32,921,459
|
|
|
329,214
|
|
|
7,115,633
|
|
|
(7,722,790
|
)
|
|
(277,943
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock for services
|
|
|
885,000
|
|
|
885
|
|
|
78,765
|
|
|
|
|
|
79,650
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
(837,551
|
)
|
|
(837,551
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2006
|
|
|
33,806,459
|
|
|
330,099
|
|
|
7,194,398
|
|
|
(8,560,341
|
)
|
|
(1,035,844
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock for services
|
|
|
50,000
|
|
|
500
|
|
|
4,500
|
|
|
|
|
|
5,000
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
(160,944
|
)
|
|
(160,944
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2006
|
|
|
33,856,459
|
|
$
|
330,599
|
|
$
|
7,198,898
|
|
|
($8,721,285
|
)
|
|
($1,191,788
|
)
|
|
|
|
*-
Price adjusted for splits.
Please
see the notes to the financial statements.
USCorp.
(an
Exploration Stage Company)
Notes
to the Financial Statements
For
the Quarters Ended December 31, 2006 and December 31,
2005
1. |
Organization
of the Company and Significant Accounting
Principles
|
USCorp
(the “Company”) is a publicly held corporation formed in May 1989 in the state
of Nevada as The Movie Greats Network, Inc. In August 1992, the Company changed
its name to The Program Entertainment Group, Inc. In August 1997 the Company
changed its name to Santa Maria Resources, Inc. In September 2000 the Company
changed its name to Fantasticon, Inc. and in January 2002 the Company changed
its name to USCorp.
In
April
2002 the Company acquired US Metals, Inc. (“USMetals”), a Nevada corporation, by
issuing 24,200,000 shares of common stock. US Metals became a wholly owned
subsidiary of the Company.
The
Company, through its wholly owned subsidiary, USMetals, owns 141 Lode Mining
Claims in the Eureka Mining District of Yavapai County, Arizona, called the
Twin
Peaks Mine; and through its wholly owned subsidiary Southwest Resource
Development, Inc., owns 8 Lode and 21 Placer Claims in the Mesquite Mining
District of Imperial County, California, which the Company refers to as the
Chocolate Mountain Region Claims and
64
Lode Claims the Company refers to as the Picacho Salton Claims.
The
Company has no business operations to date.
Use
of Estimates-
The
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make reasonable estimates and
assumptions that affect the reported amounts of the assets and liabilities
and
disclosure of contingent assets and liabilities and the reported amounts of
revenues and expenses at the date of the financial statements and for the period
they include. Actual results may differ from these estimates.
Cash
and interest bearing deposits-
For the
purpose of calculating changes in cash flows, cash includes all cash balances
and highly liquid short-term investments with an original maturity of three
months or less.
Long
Lived Assets-
The
Company reviews for the impairment of long-lived assets whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not
be recoverable. An impairment loss would be recognized when estimated future
cash flows expected to result from the use of the asset and its eventual
disposition is less than its carrying amount.
Shareholder
Loans Payable- The
Company applies Emerging Issues Task Force (EITF) No. 98-5, Accounting
for Convertible Debt Issued with Beneficial Conversion
Features.
EITF
No.98-5 requires that a beneficial conversion feature be recognized upon the
issuance of the debt with a favorable conversion feature, and the resultant
debt
discount be amortized to interest expense during the period from the date of
issuance to the date the securities become convertible.
Property
and Equipment-
Property
and equipment are stated at cost. Depreciation expense is computed using the
straight-line method over the estimated useful life of the asset, which is
estimated at three years.
Income
taxes- The
Company accounts for income taxes in accordance with the Statement of Accounting
Standards No. 109 (SFAS No. 109), "Accounting
for Income Taxes".
SFAS
No. 109 requires an asset and liability approach to financial accounting and
reporting for income taxes. Deferred income tax assets and liabilities are
computed annually for differences between financial statement and income tax
bases of assets and liabilities that will result in taxable income or deductible
expenses in the future based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable income.
Valuation allowances are established when necessary to reduce deferred tax
assets and liabilities to the amount expected to be realized. Income tax expense
is the tax payable or refundable for the period adjusted for the change during
the period in deferred tax assets and liabilities.
Mineral
Properties-
The
Company uses the successful efforts method of accounting for mineral properties.
Costs incurred to acquire mineral interest in properties, to drill and equip
exploratory sites within the claims groups are capitalized. Costs to conduct
exploration and assay work that does not find proved reserves, geological and
geophysical costs and costs of carrying and retaining unproved sites are
expensed. Potential mineral properties are periodically assessed for impairment
of value and a loss will be recognized at the time of impairment.
Revenue
Recognition-
Mineral
sales will result from undivided interests held by the Company in mineral
properties. Sales of minerals will be recognized when delivered to be picked
up
by the purchaser. Mineral sales from marketing activities will result from
sales
by the Company of minerals produced by the Company (or affiliated entities)
and
will be recognized when delivered to purchasers. Mining revenues generated
from
the Company’s day rate contracts, included in mine services revenue, will be
recognized as services are performed or delivered.
Exploration
Stage Company-
The
Company has had no operations or revenues since its inception and therefore
qualifies for treatment as an Exploration Stage company as per Statement of
Financial Accounting Standards (SFAS) No. 7. As per SFAS No.7, financial
transactions are accounted for as per generally accepted accounted principles.
Costs incurred during the development stage are accumulated in “losses
accumulated during the exploration stage” and are reported in the Stockholders’
Equity section of the balance sheet.
The
accompanying financial statements have been presented in accordance with
generally accepted accounting principals, which assume the continuity of the
Company as a going concern. However, the Company has incurred significant losses
since its inception and has no business operations and continues to rely on
the
issuance of shares to raise capital to fund its business operations.
Management’s
plans with regard to this matter are as follows:
-
Raise
capital to complete the company’s mining plan of operations.
-
Complete exploration and drilling on claims of the Twin Peaks Mine and Chocolate
Mountain Region Claims.
-
Complete testing operations on all properties.
-
Complete reports and feasibility studies on the Twin Peaks Mine and Chocolate
Mountain Region Claims.
-
Bring
the Twin Peaks Mine and Chocolate Mountain Region Claims to full-scale
commercial mining.
-
Obtain
a credit facility based in part on the value of its proven reserves when
necessary and if appropriate given market conditions.
The
Company applies SFAS No. 128, “Earnings
per Share” to
calculate loss per share. In accordance with SFAS No. 128, basic net loss per
share has been computed based on the weighted average of common shares
outstanding during the years, adjusted for the financial instruments outstanding
that are convertible into common stock during the years. The effects of the
preferred warrants convertible into shares of common stock, however, have been
excluded from the calculation of loss per share because their inclusion would
be
anti-dilutive.
Loss
per
share has been calculated as follows:
|
|
31-Dec-06
|
|
31-Dec-05
|
|
|
|
|
|
|
|
Net
loss before cumulative preferred dividend
|
|
|
($160,944
|
)
|
|
($184,640
|
)
|
|
|
|
|
|
|
|
|
Cumulative
dividend preferred
|
|
|
(15,182
|
)
|
|
(7,432
|
)
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
($176,126
|
)
|
|
($192,072
|
)
|
|
|
|
|
|
|
|
|
Weighted
average
|
|
|
33,807,560
|
|
|
33,508,714
|
|
|
|
|
|
|
|
|
|
Basic
& fully diluted net loss per common share
|
|
|
($0.01
|
)
|
|
($0.01
|
)
|
4. |
Gold
Bullion Promissory Note
|
In
September 2005, the Company issued a promissory note to a shareholder and
received proceeds of $635,663. The note requires the Company to pay the
shareholder 1,634 ounces of Gold Bullion (.999 pure) in September 2007. The
loss
from issuance through December 31, 2006 on the underlying derivative gold
contract has been calculated as follows.
Carrying
value of loan
|
|
$
|
707,763
|
|
|
|
|
|
|
Fair
value of loan
|
|
|
1,038,734
|
|
|
|
|
|
|
Life
to date loss on unhedged underlying derivative
|
|
|
($330,971
|
)
|
A
summary
of equipment is as follows:
|
|
31-Dec-06
|
|
30-Sep-06
|
|
|
|
|
|
|
|
Office
equipment
|
|
$
|
14,249
|
|
$
|
14,249
|
|
Accumulated
depreciation
|
|
|
(7,205
|
)
|
|
(6,009
|
)
|
|
|
|
|
|
|
|
|
Net
equipment
|
|
$
|
7,044
|
|
$
|
8,240
|
|
6. |
Issuances
of Common stock
|
During
the quarter ended December 31, 2006, the Company issued 50,000 shares of stock
to legal consultants for services rendered.
7. |
Preferred
Stock Warrants Outstanding
|
The
following is a summary of preferred stock warrants outstanding at December
31,
2006.
|
|
|
|
Wgtd
Avg
|
|
Wgtd
Years
|
|
|
|
Amount
|
|
Exercise
Price
|
|
to
Maturity
|
|
|
|
|
|
|
|
|
|
Outstanding
at September 30, 2004
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
155,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at September 30, 2005
|
|
|
155,000
|
|
$
|
0.50
|
|
|
2.29
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at September 30, 2006
|
|
|
155,000
|
|
$
|
0.50
|
|
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at December 31, 2006
|
|
|
155,000
|
|
$
|
0.25
|
|
|
1.04
|
|
Provision
for income taxes is comprised of the
following:
|
|
|
31-Dec-06
|
|
31-Dec-05
|
|
|
|
|
|
|
|
Net
loss before provision for income taxes
|
|
|
($101,385
|
)
|
|
($128,376
|
)
|
|
|
|
|
|
|
|
|
Current
tax expense:
|
|
|
|
|
|
|
|
Federal
|
|
$
|
0
|
|
$
|
0
|
|
State
|
|
|
0
|
|
|
0
|
|
Total
|
|
$
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
Less
deferred tax benefit:
|
|
|
|
|
|
|
|
Timing
differences
|
|
|
(2,356,251
|
)
|
|
(2,163,316
|
)
|
Allowance
for recoverability
|
|
|
2,356,251
|
|
|
2,163,316
|
|
Provision
for income taxes
|
|
$
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
A
reconciliation of provision for income taxes at the statutory rate
to
provision
|
|
|
|
|
|
|
|
for
income taxes at the Company's effective tax rate is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory
U.S. federal rate
|
|
|
34
|
%
|
|
34
|
%
|
Statutory
state and local income tax
|
|
|
10
|
%
|
|
10
|
%
|
Less
allowance for tax recoverability
|
|
|
-44
|
%
|
|
-44
|
%
|
Effective
rate
|
|
|
0
|
%
|
|
0
|
%
|
|
|
|
|
|
|
|
|
Deferred
income taxes are comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timing
differences
|
|
$
|
2,356,251
|
|
$
|
2,163,316
|
|
Allowance
for recoverability
|
|
|
(2,356,251
|
)
|
|
(2,163,316
|
)
|
Deferred
tax benefit
|
|
$
|
0
|
|
$
|
0
|
|
Note:
The deferred tax benefits arising from the timing differences begin
to
expire in fiscal year
|
2010
and may not be recoverable upon the purchase of the Company under
current
IRS statutes.
|
11. |
Convertible
Debenture
|
The
Company received the proceeds from a Convertible Debenture Note in the amount
of
$300,000. The Convertible Debenture Note is for $300,000 due November 30, 2009.
Convertible to common stock at $0.125 per share anytime within the three year
term. The interest rate is 5% of the unpaid principal, payable annually in
arrears. The first interest payment of $15,000 is due in November 30,
2007.
ITEM
2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
You
should read the following discussion and analysis in conjunction with the
Consolidated Financial Statements and Notes thereto, and the other financial
data appearing elsewhere in this Report.
The
information set forth in Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A") contains certain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934,
as
amended, and the Private Securities Litigation Reform Act of 1995, including,
among others (i) expected changes in the Company's revenues and profitability,
(ii) prospective business opportunities and (iii) the Company's strategy for
financing its business. Forward-looking statements are statements other than
historical information or statements of current condition. Some forward-looking
statements may be identified by use of terms such as "believes", "anticipates",
"intends" or "expects". These forward-looking statements relate to the plans,
objectives and expectations of the Company for future operations. Although
the
Company believes that its expectations with respect to the forward-looking
statements are based upon reasonable assumptions within the bounds of its
knowledge of its business and operations, in light of the risks and
uncertainties inherent in all future projections, the inclusion of
forward-looking statements in this report should not be regarded as a
representation by the Company or any other person that the objectives or plans
of the Company will be achieved.
The
Company's revenues and results of operations could differ materially from those
projected in the forward-looking statements as a result of numerous factors,
including, but not limited to, the following: (i) changes in external
competitive market factors, (ii) termination of certain operating agreements
or
inability to enter into additional operating agreements, (iii) inability to
satisfy anticipated working capital or other cash requirements, (iv) changes
in
or developments under domestic or foreign laws, regulations, governmental
requirements or in the mining industry, (v) changes in the Company's business
strategy or an inability to execute its strategy due to unanticipated changes
in
the market, (vi) various competitive factors that may prevent the Company from
competing successfully in the marketplace, and (ix) the Company's lack of
liquidity and its ability to raise additional capital. In light of these risks
and uncertainties, there can be no assurance that actual results, performance
or
achievements of the Company will not differ materially from any future results,
performance or achievements expressed or implied by such forward-looking
statements. The foregoing review of important factors should not be construed
as
exhaustive. The Company undertakes no obligation to release publicly the results
of any future revisions it may make to forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence
of
unanticipated events.
Significant
Accounting Policies and Estimates
Management's
Discussion and Analysis of Financial Condition and Results of Operations
discusses the Company's consolidated financial statements, which have been
prepared in accordance with generally accepted accounting principles. The
preparation of these financial statements requires management to make estimates
and assumptions that 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. On an on-going basis, management evaluates
its estimates and judgments, including those related to reserves and intangible
assets. Management bases its estimates and judgments on historical
experiences and on various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. The most significant
accounting estimates inherent in the preparation of the Company's financial
statements include estimates as to the appropriate carrying value of certain
assets which are not readily apparent from other sources, primarily allowance
for the cost of the Mineral Properties based on the successful efforts method
of
accounting. These accounting policies are described at relevant sections
in this discussion and analysis and in the notes to the consolidated financial
statements included in our Annual Report on Form l0-KSB for the fiscal year
ended September 30, 2006.
Results
of Operations
Comparison
of operating results for the three months ended December 31, 2006 and December
31, 2005:
The
Company has no revenues through the date of this report.
General
and administrative expenses were $97,385 compared to $128,376 for the same
period a year ago. Consulting costs decreased from $89,862 to $1,492 in the
three months ended December 31, 2006 which is mainly due to reclassification
by
the Company’s bookkeeper and accountant for the quarter. General administration
costs increased $57,699 in the three months ended December 31, 2006 to $85,762
due to reclassification by the Company’s bookkeeper and accountant for the
quarter.
As
a
result of general and administrative costs, the Company experienced a loss
from
operations of $97,385 for the three months ended December 31, 2006, compared
to
loss from operations of $128,376 for the same period last year.
Interest
expense decreased $2,315 during the first Three months of fiscal 2006 compared
to the first Three months of fiscal year 2005 as a result of the Gold Bullion
Loan borrowed at the end of September 2005. The loan is payable in gold bullion
at the prevailing rate price and is not hedged. The Company’s loss on the
unhedged loan is $45,139 for the first Three months of fiscal year 2007.
Net
loss
for the first Three months of fiscal year 2007 was $156,944, or $0.01 per share
compared to a loss of $184,640 first three months, or $0.01 per share for the
same period last year.
Comparison
of operating results for the three months ended December 31, 2006 and December
31, 2005:
General
and administrative expenses were $97,385 for Q1 2007 compared to $128,376 for
the same period a year ago. The decrease in consulting fees was the main reason
for the significant decrease. The Company did not issue stock to consultants
this quarter.
Interest
expense was $14,420 during the first Three months of fiscal 2007 compared to
$16,735 for the first Three months of fiscal year 2006. The Gold Bullion Loan
borrowed at the end of September 2005 is the reason for the decrease in interest
expense. The loan is payable in gold bullion at the prevailing rate price and
is
not hedged. Because of the increase in gold bullion prices during Q1 2007,
the
Company experienced a loss on the unhedged loan of $45,139.
Net
loss
for the first Three months of fiscal year 2007 was $156,944, or $0.01 per share
compared to a loss of $184,640 first three months, or $0.01 per share for the
same period last year.
Discussion
of Financial Condition: Liquidity and Capital Resources
At
December 31, 2006 cash on hand was $303,432 as compared with $83,573 at
September 30, 2006. During the first Three months of fiscal year 2007, the
Company used $97,385 for its operations.
At
December 31, 2006, the Company had working capital of $303,432 compared to
a
working capital of $83,573 at September 30, 2006. The increase is due to the
proceeds from a convertible debenture. The convertible debenture is not payable
until 2010.
Total
assets at December 31, 2006 were $310,476 as compared to $91,813 at September
30, 2006. The increase is due to the proceeds from a convertible
debenture.
The
Company's total stockholders' equity decreased to a deficit of $1,191,788 at
December 31, 2006. The decrease in stockholders’ equity was the result of
operating losses of $156,944 for the three months ended December 31,
2006.
Convertible
Debenture
The
Company received the proceeds from a Convertible Debenture Note in the amount
of
$300,000. The Convertible Debenture Note is for $300,000 due November 30, 2009.
Convertible to common stock at $0.125 per share anytime within the three year
term. The interest rate is 5% of the unpaid principal, payable annually in
arrears. The first interest payment of $15,000 is due in November 30,
2007.
The
Company has received a written commitment for an additional $900,000, at the
rate of $300,000 at the end of the next three calendar quarters, March 31,
2007,
June 30, 2007 and September 30, 2007 under the same terms and conditions as
the
above Convertible Debenture Note. However, management can make no assurance
that
it will in fact be able to consummate this transaction.
Under
the
supervision and with the participation of the Company's management, including
the Chief Executive Officer and Chief Financial Officer, the Company has
evaluated the effectiveness of the design and operation of its disclosure
controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the
Exchange Act) as of the end of the period covered by this quarterly report.
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that, as of the end of the period covered by this quarterly
report, the Company's disclosure controls and procedures are effective to ensure
that information required to be disclosed in the reports that the Company files
or submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported, within the time periods specified in the Securities
and
Exchange Commission's rules and forms.
There
has
been no change in the Company's internal control over financial reporting during
the most recent fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.
Item
1.
Legal Proceedings.
On
December 22, 2006, a Mr. Glenn E. Martin filed suit against the Company in
the
Arizona Justice Court, Pima county (Case No. C20066833) alleging that the
Company failed to pay him wages and expenses pursuant to certain labor laws
dating back to March, 2004. Mr. Martin is seeking damages in the amount of
$149,000 plus interest and attorney’s fees. On January 23, 2007, the Company
filed a notice of removal of action to have Mr. Martin’s claim moved from state
to federal court and such motion was granted. The Company believes that there
is
no merit to Mr. Martin’s claim and plans to defend this suit vigorously.
In
November 2006, the Company issued a Convertible Debenture in the principal
face
amount of $300,000. The Convertible Debenture is due November 30, 2009 and
is
convertible in to common stock at the rate of $0.125 per share anytime within
the three year term. The interest rate is 5% of the unpaid principal, payable
annually in arrears. The first interest payment of $15,000 is due in November
30, 2007.
The
Company claimed an exemption from the registration requirements of the
Securities Act of 1933, as amended (the “Act”) for the private placement of
these securities pursuant to Section 4(2) of the Act and/or Rule 506 of
Regulation D promulgated thereunder since, among other things, the transaction
did not involve a public offering, the Investor was an “accredited investor”
and/or qualified institutional buyers, the Investor had access to information
about the Company and its investment, the Investor took the securities for
investment and not resale, and we took appropriate measures to restrict the
transfer of the securities.
Item
3.
Defaults Upon Senior Securities.
None.
There
were no matters requiring a vote of security holders during this
period.
None.
(a)
Exhibits:
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|
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31.1
|
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
302 of
the Sarbanes-Oxley Act of 2002
|
|
|
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32.1
|
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
USCORP
By:
/s/ ROBERT DULTZ
Robert
Dultz
Chairman,
Chief Executive Officer and Acting Chief Financial Officer
Dated:
February 16, 2007