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 March 31,
2007
|
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 May
9, 2007, the Registrant had 33,856,461 shares of Common Stock, par value
$.01 per share, outstanding.
USCORP
PART
I – FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
Item
1. Financial Statements
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet as of March 31, 2007 and September 30, 2006
(unaudited)
|
|
|
4
|
|
|
|
|
|
|
Consolidated
Statements of Operations for the Six and Three Months Ended March
31, 2007
and March 31, 2006 and from Inception, May 1989 through March 31,
2007
(unaudited)
|
|
|
5
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows for the Six Months Ended March 31, 2007
and March
31, 2006 and from Inception, May 1989 through March 31, 2007
(unaudited)
|
|
|
6
|
|
|
|
|
|
|
Consolidated
Statements of Changes in Shareholders’ Equity from Inception, May 1989
through March 31, 2007
|
|
|
7 |
|
|
|
|
|
|
Notes
to Consolidated Financial Statements (unaudited)
|
|
|
11 |
|
|
|
|
|
|
Item
2. Management’s Discussion and Analysis or Plan of
Operations
|
|
|
17 |
|
|
|
|
|
|
Item
3. Controls and Procedures
|
|
|
19 |
|
|
|
|
|
|
PART
II –
OTHER INFORMATION
|
|
|
19 |
|
|
|
|
|
|
Item
1 Legal Proceeding
|
|
|
19 |
|
|
|
|
|
|
Item
2 Unregistered Sale of Equity Securities and Use of
Proceeds
|
|
|
19 |
|
|
|
|
|
|
Item
3. Defaults upon Senior Securities
|
|
|
19 |
|
|
|
|
|
|
Item
4. Submission of Matters to a Vote of Security Holders
|
|
|
19 |
|
|
|
|
|
|
Item
5. Other Information
|
|
|
19 |
|
|
|
|
|
|
Item
6. Exhibits
|
|
|
19
|
|
|
|
|
|
|
SIGNATURES
|
|
|
20 |
|
PART
I. FINANCIAL INFORMATION
DONAHUE
ASSOCIATES, LLC
Certified
Public Accountants
27
Beach
Road Suite CO5A
Monmouth
Beach, NJ 07750
Tel.
732-229-7723
May
11,
2007
The
Shareholders
USCorp
We
have
compiled the accompanying consolidated financial statements of USCorp for the
quarters ending March 31, 2007 and March 31, 2006. 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
May 11, 2007
|
|
|
|
USCorp
(an
Exploration Stage Company)
Consolidated
Balance Sheet
As
of March 31, 2007 and September 30, 2006
|
|
|
|
|
|
|
|
31-Mar-07
|
|
30-Sep-06
|
|
ASSETS |
|
Unaudited
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
|
|
$
|
194,574
|
|
$
|
83,573
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
194,574
|
|
|
83,573
|
|
|
|
|
|
|
|
|
|
Other
assets:
|
|
|
|
|
|
|
|
Equipment-
net
|
|
|
7,483
|
|
|
8,240
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
202,057
|
|
$
|
91,813
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable & accrued expenses
|
|
$
|
5,526
|
|
$
|
78,317
|
|
Total
current liabilities
|
|
|
5,526
|
|
|
78,317
|
|
|
|
|
|
|
|
|
|
Note
payable- shareholder (Gold bullion loan)
|
|
|
1,038,734
|
|
|
979,175
|
|
Debenture
payable
|
|
|
273,964
|
|
|
0
|
|
Advances
payable shareholders
|
|
|
18,833
|
|
|
0
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
Series
A preferred stock, one share convertible to eight shares of
common;
|
|
|
|
|
|
|
|
10%
stated dividend, stated value $0.50, 10,000,000 shares
authorized,
|
|
|
|
|
|
|
|
no
shares outstanding
|
|
|
0
|
|
|
0
|
|
Series
B preferred stock, one share convertible to two shares of
common;
|
|
|
|
|
|
|
|
10%
cumulative stated dividend, stated value $0.50, 50,000,000 shares
authorized,
|
|
|
|
|
|
|
|
155,000
shares outstanding
|
|
|
70,165
|
|
|
70,165
|
|
Common
stock- $.01 par value, authorized 800,000,000 shares,
|
|
|
|
|
|
|
|
issued
and outstanding, 33,806,459 shares at September 30, 2006
|
|
|
|
|
|
|
|
and
33,856,459 at March 31, 2007
|
|
|
330,599
|
|
|
330,099
|
|
Additional
paid in capital
|
|
|
7,234,931
|
|
|
7,194,398
|
|
Accumulated
deficit
|
|
|
(8,770,695
|
)
|
|
(8,560,341
|
)
|
Total
shareholders' equity
|
|
|
(1,205,165
|
)
|
|
(1,035,844
|
)
|
|
|
|
|
|
|
|
|
Total
Liabilities & Shareholders' Equity
|
|
$
|
202,057
|
|
$
|
91,813
|
|
See
the notes to the consolidated financial statements.
USCorp
(an
Exploration Stage Company)
Consolidated
Statements of Operations
For
the Six Months and Three Months Ended March 31, 2007 and March 31,
2006
and
from Inception, May 1989 through March 31, 2007
|
|
6
Months
|
|
6
Months
|
|
3
Months
|
|
3
Months
|
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Inception
|
|
|
|
31-Mar-07
|
|
31-Mar-06
|
|
31-Mar-07
|
|
31-Mar-06
|
|
to
Date
|
|
General
and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
($17,500
|
)
|
$
|
136,229
|
|
|
($22,992
|
)
|
$
|
136,229
|
|
$
|
3,234,367
|
|
Administration
|
|
|
154,798
|
|
|
136,934
|
|
|
69,035
|
|
|
136,934
|
|
|
3,879,112
|
|
License
expense
|
|
|
2,500
|
|
|
590
|
|
|
2,234
|
|
|
590
|
|
|
163,059
|
|
Professional
fees
|
|
|
1,000
|
|
|
14,334
|
|
|
(8,864
|
)
|
|
14,334
|
|
|
445,449
|
|
Total
general & administrative expenses
|
|
|
140,798
|
|
|
288,087
|
|
|
39,413
|
|
|
288,087
|
|
|
7,721,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss from operations
|
|
|
(140,798
|
)
|
|
(288,087
|
)
|
|
(39,413
|
)
|
|
(288,087
|
)
|
|
(7,721,987
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(38,524
|
)
|
|
(31,639
|
)
|
|
(24,104
|
)
|
|
(31,639
|
)
|
|
(119,225
|
)
|
Loss
on unhedged underlying
|
|
|
(31,032
|
)
|
|
(110,600
|
)
|
|
14,107
|
|
|
(110,600
|
)
|
|
(316,864
|
)
|
(Loss)
gain on mining claim
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(600,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss before provision for income taxes
|
|
|
(210,354
|
)
|
|
(430,326
|
)
|
|
(49,410
|
)
|
|
(430,326
|
)
|
|
(8,758,076
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss before extraordinary item
|
|
|
(210,354
|
)
|
|
(430,326
|
)
|
|
(49,410
|
)
|
|
(430,326
|
)
|
|
(8,758,076
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extraordinary
item:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
on early extinguishment of debt (net of tax)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(12,619
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
($210,354
|
)
|
|
($430,326
|
)
|
|
($49,410
|
)
|
|
($430,326
|
)
|
|
($8,770,695
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
& fully diluted net loss per common share
|
|
|
($0.01
|
)
|
|
($0.01
|
)
|
$
|
0.00
|
|
|
($0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
& fully diluted
|
|
|
33,831,875
|
|
|
33,704,831
|
|
|
33,856,461
|
|
|
33,904,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
the notes to the consolidated financial statements.
USCorp
(an
Exploration Stage Company)
Consolidated
Statements of Cash Flows
For
the
Six Months Ended March 31, 2007 and March 31, 2006
and
from
Inception, May 1989 through March 31, 2007
|
|
Unaudited
|
|
Unaudited
|
|
Inception
|
|
|
|
31-Mar-07
|
|
31-Mar-06
|
|
to
Date
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net
loss
|
|
|
($210,354
|
)
|
|
($430,326
|
)
|
|
($8,770,695
|
)
|
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
|
|
|
102,150
|
|
|
1,917,520
|
|
Depreciation
expense
|
|
|
2,422
|
|
|
996
|
|
|
8,431
|
|
Interest
expense
|
|
|
28,527
|
|
|
28,596
|
|
|
119,225
|
|
Amortization
of beneficial conversion feature
|
|
|
9,997
|
|
|
0
|
|
|
9,997
|
|
Impairment
expense
|
|
|
0
|
|
|
0
|
|
|
2,449,466
|
|
Loss
on early extinguishment of debt (net of tax)
|
|
|
0
|
|
|
0
|
|
|
12,619
|
|
Loss
on unhedged underlying
|
|
|
31,032
|
|
|
110,600
|
|
|
316,864
|
|
Changes
in other operating assets and liabilities :
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
|
(72,791
|
)
|
|
0
|
|
|
5,526
|
|
Net
cash used by operations
|
|
|
(206,167
|
)
|
|
(187,984
|
)
|
|
(3,331,047
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
|
Purchase
of office equipment
|
|
|
(1,665
|
)
|
|
(1,004
|
)
|
|
(15,914
|
)
|
Net
cash used by investing activities
|
|
|
(1,665
|
)
|
|
(1,004
|
)
|
|
(15,914
|
)
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
644,026
|
|
Issuance
of note payable
|
|
|
300,000
|
|
|
0
|
|
|
300,000
|
|
Advances
received (paid) shareholder
|
|
|
18,833
|
|
|
(135,606
|
)
|
|
18,833
|
|
Capital
contributed by shareholders
|
|
|
0
|
|
|
0
|
|
|
356,743
|
|
Net
cash provided by financing activities
|
|
|
318,833
|
|
|
(135,606
|
)
|
|
3,541,535
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash during the fiscal year
|
|
|
111,001
|
|
|
(324,594
|
)
|
|
194,574
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
balance at beginning of the fiscal year
|
|
|
83,573
|
|
|
627,372
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
balance at March 31st
|
|
$
|
194,574
|
|
$
|
302,778
|
|
$
|
194,574
|
|
|
|
|
|
|
|
|
|
|
|
|
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 consolidated financial statements.
USCorp
(an
Exploration Stage Company)
Consolidated
Statement of Changes in Shareholders’ Equity
From
Inception, May 1989 to March 31, 2007
|
|
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)
Consolidated
Statement of Changes in Shareholders’ Equity
From
Inception, May 1989 to March 31, 2007
(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)
Consolidated
Statement of Changes in Shareholders’ Equity
From
Inception, May 1989 to March 31, 2007
(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)
Consolidated
Statement of Changes in Shareholders’ Equity
From
Inception, May 1989 to March 31, 2007
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial
conversion feature
|
|
|
|
|
|
|
|
|
36,033
|
|
|
|
|
|
36,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
(210,354
|
)
|
|
(210,354
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at March 31, 2007
|
|
|
33,856,459
|
|
$
|
330,599
|
|
$
|
7,234,931
|
|
|
($8,770,695
|
)
|
|
($1,205,165
|
)
|
|
|
|
Please
See the notes to the consolidated financial statements.
USCorp
(an
Exploration Stage Company)
Notes
to
the Financial Statements
For
the
Quarters Ended March 31, 2007 and March 31, 2006
(Unaudited)
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. As a result of the transaction
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 22 Placer and 89 Lode Claims on five properties in
the
Mesquite Mining District of Imperial County, California, which the Company
refers to as the Chocolate Mountain Region Claims and 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.
USCorp
(an
Exploration Stage Company)
Notes
to
the Financial Statements
For
the
Quarters Ended March 31, 2007 and March 31, 2006
(Unaudited)
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 or 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.
USCorp
(an
Exploration Stage Company)
Notes
to
the Financial Statements
For
the
Quarters Ended March 31, 2007 and March 31, 2006
(Unaudited)
Management’s
plans with regard to this matter are as follows:
· Obtain
the necessary approvals and permits to complete exploration and begin test
production on our properties as warranted. Applications have been prepared
and
are being reviewed for submission to and by Federal, State and local
authorities.
· Complete
feasibility studies phase of our operations plans. A draft feasibility and
scoping study has been completed by Management and consultants. Our current
consulting geologists and geophysicists are completing our feasibility studies
on all of USCorp’s and its subsidiaries properties.
· Augment
our mining exploration team with quality and results-oriented people as needed.
Upon adequate funding management intends to hire qualified and experienced
personnel, including additional officers and directors, and mining specialists,
professionals and consulting firms to advise management as needed to handle
and
manage mining operations, acquisitions and development of additional mineral
resource properties.
· Form
additional strategic alliances with consultants, engineers, contractors as
well
as joint venture partners when appropriate, and set up an information and
communication network that allows the alliance to function effectively under
or
with USCorp's management.
· Ramp-up
exploration and test production efforts to meet ongoing and anticipated demand
for gold, silver, uranium and polymetalic ores resulting from our planned
commercial scale production activities.
· Launch
an
investor awareness and public relations campaign including coordinated and
periodic release of information to the public via press releases, company
newsletter and updates to the Company’s web sites.
· Attend
and exhibit at industry and investment trade shows.
· USCorp
plans to begin commercial scale operations on one or more of its properties
as
soon as financing is obtained and the required permits and approvals have been
granted. Due to the nature of the ore bodies of the Company’s current properties
Management believes it will begin commercial scale operations on our Chocolate
Mountain Region claims first and subsequently the Twin Peaks Mine.
· Acquire
additional properties and/or corporations with properties as subsidiaries or
joint venture partners to advance the company's growth and production
plans.
USCorp
(an
Exploration Stage Company)
Notes
to
the Financial Statements
For
the
Quarters Ended March 31, 2007 and March 31, 2006
(Unaudited)
3.
Net
Loss per Share
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-Mar-07
|
|
31-Mar-06
|
|
|
|
|
|
|
|
Net
loss before cumulative preferred dividend
|
|
|
($288,671
|
)
|
|
($430,326
|
)
|
|
|
|
|
|
|
|
|
Cumulative
dividend preferred
|
|
|
(17,092
|
)
|
|
(9,342
|
)
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
($305,763
|
)
|
|
($439,668
|
)
|
|
|
|
|
|
|
|
|
Weighted
average
|
|
|
33,831,875
|
|
|
33,704,831
|
|
|
|
|
|
|
|
|
|
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
on the underlying derivative gold contract has been calculated as
follows.
|
|
31-Mar-07
|
|
31-Mar-06
|
|
|
|
|
|
|
|
Carrying
value of loan
|
|
$
|
721,869
|
|
|
664,729
|
|
|
|
|
|
|
|
|
|
Fair
value of loan
|
|
|
1,038,734
|
|
|
790,625
|
|
|
|
|
|
|
|
|
|
Life
to date loss on unhedged underlying derivative
|
|
|
($316,864
|
)
|
|
($125,896
|
)
|
USCorp
(an
Exploration Stage Company)
Notes
to
the Financial Statements
For
the
Quarters Ended March 31, 2007 and March 31, 2006
(Unaudited)
5.
Equipment
A
summary
of equipment is as follows:
|
|
31-Mar-07
|
|
30-Sep-06
|
|
|
|
|
|
|
|
Office
equipment
|
|
$
|
15,914
|
|
$
|
14,249
|
|
Accumulated
depreciation
|
|
|
(8,431
|
)
|
|
(6,009
|
)
|
|
|
|
|
|
|
|
|
Net
equipment
|
|
$
|
7,483
|
|
$
|
8,240
|
|
6.
Issuances of Common stock
During
the six months ended March 31, 2007, 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:
|
|
|
|
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 March 31, 2007
|
|
|
155,000
|
|
$
|
0.25
|
|
|
1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
USCorp
(an
Exploration Stage Company)
Notes
to
the Financial Statements
For
the
Quarters Ended March 31, 2007 and March 31, 2006
(Unaudited)
8.
Convertible Debenture
During
the six months ended March 31, 2007, the Company issued convertible debentures
with a face value of $300,000. The debentures are convertible into common stock
at $0.125 per share. The debentures have an interest rate of 5% and mature
in
November 2009. As a result of the issuance of the debentures, the Company
allocated $36,033 to stockholders’ equity as a beneficial conversion feature.
The
balance of the convertible debt is as follows:
Convertible
debt payable
|
|
$
|
300,000
|
|
Unallocated
beneficial conversion feature
|
|
|
(26,036
|
)
|
|
|
|
|
|
Net
convertible debt payable
|
|
$
|
273,964
|
|
9.
Income
Tax Provision
Provision
for income taxes is comprised of the following:
|
|
31-Mar-07
|
|
31-Mar-06
|
|
|
|
|
|
|
|
Net
loss before provision for income taxes
|
|
|
($219,115
|
)
|
|
($288,087
|
)
|
|
|
|
|
|
|
|
|
Current
tax expense:
|
|
|
|
|
|
|
|
Federal
|
|
$
|
0
|
|
$
|
0
|
|
State
|
|
|
0
|
|
|
0
|
|
Total
|
|
$
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
Less
deferred tax benefit:
|
|
|
|
|
|
|
|
Timing
differences
|
|
|
(77,211
|
)
|
|
(105,213
|
)
|
Allowance
for recoverability
|
|
|
77,211
|
|
|
105,213
|
|
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
|
|
$
|
77,211
|
|
$
|
105,213
|
|
Allowance
for recoverability
|
|
|
(77,211
|
)
|
|
(105,213
|
)
|
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.
ITEM
2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN 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 Form 10-QSB Quarterly Report.
The
information set forth in Management's Discussion and Analysis of or Plan 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 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 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 Analysisor Plan of Operations discusses the Company's
consolidated financial statements, which have been prepared in accordance with
generally accepted accounting principles. The preparation of these consolidated
financial statements requires management to make estimates and assumptions
that
affect the reported amounts of assets and liabilities at the date of the
consolidated financial statements and the reported amounts of 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 consolidated 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 March 31, 2007 and March 31,
2006:
The
Company has no revenues through the date of this quarterly report.
General
and administrative expenses were $140,798 compared to $288,087 for the same
period a year ago. Consulting costs decreased from $136,229 to $17,982 in the
three months ended March 31, 2007 which is mainly due to reclassification by
the
Company’s bookkeeper and accountant for the quarter.
As
a
result of the change in the price of gold and a decrease in consulting expenses,
the Company experienced a decrease in net loss from operations which was $39,413
for the three months ended March 31, 2007, compared to loss from operations
of
$288,087 for the same period last year.
The
loss
on the unhedged Bullion Loan decreased $79,568 during the second Three months
of
fiscal 2007 compared to the second Three months of fiscal year 2006, as a result
of the decrease in the price of gold compared to the same quarter last year.
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 $31,032 for the second three months
of fiscal year 2007 compared to $110,600 for the second three months of fiscal
year 2006.
Net
loss
for the second three months of fiscal year 2007 was $49,410, or $0.00 per share
compared to a loss of $430,326 second three months, or $0.01 per share for
the
same period last year.
Discussion
of Financial Condition: Liquidity and Capital Resources
At
March
31, 2007 cash on hand was $194,574 as compared with $83,573 at September 30,
2006. During the second three months of fiscal year 2007, the Company used
$140,798 for its operations. The increase in cash on hand is due to the proceeds
from a convertible debenture. The convertible debenture is not payable until
2009.
Total
assets at March 31, 2007 were $202,057 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 $1,205,165 at
March 31, 2007. The decrease in stockholders’ equity was the result of operating
losses of $140,798 for the three months ended March 31, 2007.
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.
This note is 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, on or about
April 1, 2007, July 1, 2007 and October 1, 2007 under the same terms and
conditions as the above Convertible Debenture Note. The Company received the
second installment of $300,000 as announced in our press release of May 2,
2007.
However, management can make no assurance that it will in fact receive
additional financing as a result of this commitment.
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, as amended, 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.
PART
II -
OTHER INFORMATION
Item
1.
Legal Proceedings.
There
have been no material developments in the Company’s legal proceedings during the
period covered by this report.
In
November 2006, the Company issued a Convertible Debenture Note in the principal
face amount of $300,000. The Convertible Debenture Note is due November 30,
2009
and is convertible into 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. In May 2007, the Company issued another Convertible Debenture
Note as the second installment and received an additional $300,000 in proceeds
from the sale
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 the period covered
by this report..
There
were no matters required to be disclosed in a Current Report on Form 8K during
th eperiod covered by this quarterly report that were not so disclosed.
There
were no changes to the procedures by which security holders may recommend
nominees to the Company’s Board of Directors since the Company last disclosed
these procedures.
(a)
Exhibits:
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31.1
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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
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Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002
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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
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Robert
Dultz
Chairman,
Chief Executive Officer and Acting Chief Financial Officer
Dated:
May 15, 2007
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