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 June 30, 2008
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 200
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
August10, 2008, the Registrant had 60,612,630 shares of Common Stock, par
value $.01 per share, and 5,000,000 shares of Class B Common Stock, par value
$.001 outstanding.
USCORP
TABLE
OF
CONTENTS
PART
I – FINANCIAL INFORMATION
|
|
|
|
|
|
Item
1. Financial Statements
|
|
3
|
|
|
|
Consolidated
Balance Sheet as of June 30, 2008 and September 30, 2007
(unaudited)
|
|
3
|
|
|
|
Consolidated
Statements of Operations for the Six and Three Months Ended June
30, 2008
and June 30, 2007 and from Inception, May 1989 through June 30, 2008
(unaudited)
|
|
4
|
|
|
|
Consolidated
Statements of Cash Flows for the Six Months Ended June 30, 2008 and
June
30, 2007 and from Inception, May 1989 through June 30, 2008
(unaudited)
|
|
5
|
|
|
|
Consolidated
Statements of Changes in Shareholders’ Equity from Inception, May 1989
through June 30, 2008
|
|
6
|
|
|
|
Notes
to Consolidated Financial Statements (unaudited)
|
|
11
|
|
|
|
Item
2. Management’s Discussion and Analysis or Plan of
Operations
|
|
16
|
|
|
|
Item
3. Controls and Procedures
|
|
18
|
|
|
|
PART
II – OTHER INFORMATION
|
|
|
|
|
|
Item
1 Legal Proceeding
|
|
18
|
|
|
|
Item
2 Unregistered Sale of Equity Securities and Use of
Proceeds
|
|
18
|
|
|
|
Item
3. Defaults upon Senior Securities
|
|
18
|
|
|
|
Item
4. Submission of Matters to a Vote of Security Holders
|
|
19
|
|
|
|
Item
5. Other Information
|
|
19
|
|
|
|
Item
6. Exhibits
|
|
19
|
|
|
|
SIGNATURES
|
|
19
|
PART
I. FINANCIAL INFORMATION
USCorp
(an
Exploration Stage Company)
Balance
Sheet
As
of June 30, 2008 and September 30, 2007
|
|
30-Jun-08
|
|
30-Sep-07
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
740,014
|
|
$
|
1,541,001
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
$
|
740,014
|
|
$
|
1,541,001
|
|
|
|
|
|
|
|
|
|
Other
assets:
|
|
|
|
|
|
|
|
Equipment-
net
|
|
|
2,642
|
|
|
5,431
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
742,656
|
|
$
|
1,546,432
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable & accrued expenses
|
|
$
|
300,169
|
|
$
|
2,410,918
|
|
Subscriptions
payable
|
|
|
0
|
|
|
569,323
|
|
Total
current liabilities
|
|
$
|
300,169
|
|
$
|
2,980,241
|
|
|
|
|
|
|
|
|
|
Gold
bullion loan
|
|
|
1,524,113
|
|
|
1,205,484
|
|
Convertible
debenture payable
|
|
|
65,111
|
|
|
639,770
|
|
Advances
payable to shareholder
|
|
|
0
|
|
|
205,263
|
|
|
|
|
|
|
|
|
|
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 at September 30, 2007 and
141,687
at June 30, 2008
|
|
|
63,498
|
|
|
70,165
|
|
Common
stock B- $.001 par value, authorized 250,000,000 shares, issued and
outstanding, 5,000,000 shares at March 31, 2008 and 5,000,000 at
September
30, 2007, non-voting
|
|
|
5,000
|
|
|
5,000
|
|
Common
stock A- $.01 par value, authorized 550,000,000 shares, issued and
outstanding, 33,856,462 shares at September 30, 2007 and 60,612,630
at
June 30, 2008
|
|
$
|
606,126
|
|
$
|
338,564
|
|
Additional
paid in capital
|
|
|
11,364,136
|
|
|
7,839,031
|
|
Accumulated
deficit - exploration stage
|
|
|
(13,185,497
|
)
|
|
(11,737,086
|
)
|
Total
shareholders' deficit
|
|
|
(1,215,235
|
)
|
|
(3,559,491
|
)
|
|
|
|
|
|
|
|
|
Total
Liabilities & Shareholders' Deficit
|
|
$
|
742,656
|
|
$
|
1,546,432
|
|
See
the notes to the consolidated financial statements.
USCorp
(an
Exploration Stage Company)
Statements
of Operations
For
the Nine and Three Months Ended June 30, 2008 and June 30,
2007
and
from Inception, May 1989 through June 30, 2008
|
|
9 Months
|
|
9 Months
|
|
3 Months
|
|
3 Months
|
|
Inception
|
|
|
|
30-Jun-08
|
|
30-Jun-07
|
|
30-Jun-08
|
|
30-Jun-07
|
|
to Date
|
|
General
and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
$
|
282,148
|
|
$
|
50,148
|
|
$
|
167,341
|
|
$
|
50,148
|
|
$
|
5,970,484
|
|
Administration
|
|
|
520,382
|
|
|
193,696
|
|
|
247,071
|
|
|
56,398
|
|
|
4,576,801
|
|
License
expense
|
|
|
0
|
|
|
2,500
|
|
|
0
|
|
|
0
|
|
|
190,684
|
|
Professional
fees
|
|
|
21,399
|
|
|
18,666
|
|
|
(19,890
|
)
|
|
17,666
|
|
|
514,726
|
|
Total
general & administrative expenses
|
|
|
823,929
|
|
|
265,010
|
|
|
394,522
|
|
|
124,212
|
|
|
11,252,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss from operations
|
|
$
|
(823,929
|
)
|
$
|
(265,010
|
)
|
$
|
(394,522
|
)
|
$
|
(124,212
|
)
|
$
|
(11,252,695
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
5,133
|
|
|
0
|
|
|
5,133
|
|
|
0
|
|
|
5,133
|
|
Interest
expense
|
|
|
(353,931
|
)
|
|
(58,547
|
)
|
|
(110,902
|
)
|
|
(20,023
|
)
|
|
(607,320
|
)
|
Gain
(loss) on un-hedged derivative
|
|
|
(275,684
|
)
|
|
(40,952
|
)
|
|
15,488
|
|
|
(9,920
|
)
|
|
(730,615
|
)
|
Loss
on mining claim
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(600,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss before provision for income taxes
|
|
$
|
(1,448,411
|
)
|
$
|
(364,509
|
)
|
$
|
(484,803
|
)
|
$
|
(154,155
|
)
|
$
|
(13,185,497
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(1,448,411
|
)
|
$
|
(364,509
|
)
|
$
|
(484,803
|
)
|
$
|
(154,155
|
)
|
$
|
(13,185,497
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
& fully diluted net loss per common share
|
|
$
|
(0.03
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
& fully diluted
|
|
|
51,698,065
|
|
|
38,840,102
|
|
|
53,843,311
|
|
|
38,856,461
|
|
|
|
|
See
the notes to the consolidated financial statements.
USCorp
(an
Exploration Stage Company)
Statements
of Cash Flows
For
the Nine Months Ended June 30, 2008 and June 30, 2007
and
from Inception, May 1989 through June 30, 2008
|
|
30-Jun-08
|
|
30-Jun-07
|
|
Inception
to
Date
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(1,448,411
|
)
|
$
|
(364,509
|
)
|
$
|
(13,185,497
|
)
|
Adjustments
to reconcile net income items not requiring the use of
cash:
|
|
|
|
|
|
|
|
|
|
|
Loss
on sale of mining claim
|
|
|
0
|
|
|
0
|
|
|
600,000
|
|
Consulting
fees
|
|
|
157,232
|
|
|
5,000
|
|
|
2,079,752
|
|
Depreciation
expense
|
|
|
2,789
|
|
|
3,494
|
|
|
13,272
|
|
Interest
expense
|
|
|
353,931
|
|
|
58,547
|
|
|
607,320
|
|
Shares
issued for mining claim
|
|
|
0
|
|
|
0
|
|
|
2,449,465
|
|
Loss
on un-hedged underlying derivative
|
|
|
275,684
|
|
|
40,952
|
|
|
730,615
|
|
Changes
in other operating assets and liabilities :
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
|
(70,749
|
)
|
|
(69,116
|
)
|
|
2,340,169
|
|
Net
cash used by operations
|
|
$
|
(729,524
|
)
|
$
|
(325,632
|
)
|
$
|
(4,364,904
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
|
Purchase
of office equipment
|
|
$
|
0
|
|
$
|
(1,665
|
)
|
$
|
(15,914
|
)
|
Net
cash used by investing activities
|
|
|
0
|
|
|
(1,665
|
)
|
|
(15,914
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
$
|
133,800
|
|
$
|
0
|
|
$
|
2,285,568
|
|
Issuance
of preferred stock
|
|
|
0
|
|
|
0
|
|
|
70,165
|
|
Issuance
of gold bullion note
|
|
|
0
|
|
|
0
|
|
|
648,282
|
|
Subscriptions
received
|
|
|
0
|
|
|
0
|
|
|
569,323
|
|
Issuance
of convertible notes
|
|
|
0
|
|
|
600,000
|
|
|
1,200,000
|
|
Advances
received from (repaid to) shareholder
|
|
|
(205,263
|
)
|
|
56,282
|
|
|
(9,249
|
)
|
Capital
contributed by shareholder
|
|
|
0
|
|
|
0
|
|
|
356,743
|
|
Net
cash provided by financing activities
|
|
|
(71,463
|
)
|
|
656,282
|
|
|
5,120,832
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash during the period
|
|
$
|
(800,987
|
)
|
$
|
328,985
|
|
$
|
740,014
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
balance at beginning of the fiscal year
|
|
|
1,541,001
|
|
|
83,573
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
balance at March 31st
|
|
$
|
740,014
|
|
$
|
412,558
|
|
$
|
740,014
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
Statement
of Changes in Shareholders Equity
From
Inception, May 1989 to June 30, 2008
|
|
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 June 30, 2008
(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 June 30, 2008
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 June 30, 2008
(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
|
|
|
2,118,444
|
|
|
21,184
|
|
|
652,714
|
|
|
|
|
|
673,898
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the fiscal year
|
|
|
|
|
|
|
|
|
|
|
|
(964,108
|
)
|
|
(964,108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2004
|
|
|
29,531,462
|
|
$
|
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
|
|
|
32,921,462
|
|
$
|
329,214
|
|
$
|
7,115,633
|
|
$
|
(7,722,790
|
)
|
$
|
(277,943
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock for services
|
|
|
885,000
|
|
|
8,850
|
|
|
70,800
|
|
|
|
|
|
79,650
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
(837,551
|
)
|
|
(837,551
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2006
|
|
|
33,806,462
|
|
$
|
338,064
|
|
$
|
7,186,433
|
|
$
|
(8,560,341
|
)
|
$
|
(1,035,844
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock for services
|
|
|
50,000
|
|
|
500
|
|
|
4,500
|
|
|
|
|
|
5,000
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial
conversion feature
|
|
|
|
|
|
|
|
|
648,098
|
|
|
|
|
|
648,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the fiscal year
|
|
|
|
|
|
|
|
|
|
|
|
(3,176,745
|
)
|
|
(3,176,745
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2007
|
|
|
33,856,462
|
|
|
338,564
|
|
|
7,839,031
|
|
|
(11,737,086
|
)
|
|
(3,559,491
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
(625,135
|
)
|
|
(625,135
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2007
|
|
|
33,856,462
|
|
$
|
338,564
|
|
$
|
7,839,031
|
|
$
|
(12,362,221
|
)
|
$
|
(4,184,626
|
)
|
|
|
|
USCorp
(an
Exploration Stage Company)
Statement
of Changes in Shareholders Equity
From
Inception, May 1989 to June 30, 2008
(Continued)
|
|
Common
|
|
Common
|
|
Paid
in
|
|
Accumulated
|
|
|
|
Stock
|
|
|
|
Shares
|
|
Par
Value
|
|
Capital
|
|
Deficit
|
|
Total
|
|
Price
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
|
12,181,329
|
|
|
121,814
|
|
|
566,954
|
|
|
|
|
|
688,768
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
stock for services
|
|
|
7,348,214
|
|
|
73,482
|
|
|
2,123,750
|
|
|
|
|
|
2,197,232
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
of debentures
|
|
|
7,200,000
|
|
|
72,000
|
|
|
828,000
|
|
|
|
|
|
900,000
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
of preferred stock
|
|
|
26,625
|
|
|
266
|
|
|
6,401
|
|
|
|
|
|
6,667
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the fiscal period
|
|
|
|
|
|
|
|
|
|
|
|
(1,448,411
|
)
|
|
(1,448,411
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September March 31, 2008
|
|
|
60,612,630
|
|
$
|
606,126
|
|
$
|
11,364,136
|
|
$
|
(13,185,497
|
)
|
$
|
(1,215,235
|
)
|
|
|
|
*-
Price adjusted for splits.
See
the notes to the consolidated financial statements.
USCorp
(an
Exploration Stage Company)
Notes
to the Consolidated Financial Statements
For
the Nine Months Ended June 30, 2008 and June 30, 2007
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. 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 owns the mineral rights to 141 Lode Mining Claims in the Eureka Mining
District of Yavapai County, Arizona, called the Twin Peaks Project; and owns
the
mineral rights to 22 Placer and 84 Lode Claims on five properties in the
Mesquite Mining District of Imperial County, California, which the Company
collectively refers to as the Picacho Salton Project.
The
Company has no business operations to date and has defined itself as an
“exploration stage” company.
Exploration
Stage Company
-
the
Company has no operations or revenues 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 “accumulated deficit- exploration stage” and are
reported in the Stockholders’ Equity section of the balance sheet.
Consolidation-
the
accompanying consolidated financial statements include the accounts of the
company and its wholly owned subsidiary. All significant inter-company balances
have been eliminated.
Use
of Estimates
-
The
preparation of the consolidated 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.
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
-
Costs
incurred to acquire mineral interest in properties, to drill and equip
exploratory sites within the claims groups are expensed as the company is still
in the development stage. Costs to conduct exploration and assay work are
expensed as incurred.
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.
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
financing and the issuance of shares and warrants to raise capital to fund
its
business operations.
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. An application for drilling on Twin
Peaks Project has been approved by the Bureau of Land Management. Additional
applications are being prepared for the Twin Peaks Project and the Picacho
Salton Project and are being reviewed for submission to Federal, State and
local
authorities.
*
USCorp
plans to begin commercial scale operations on one or more of its properties
as
soon as 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 Picacho Salton Project. Then
Management plans to begin commercial scale operations on the Twin Peaks
Project.
*
Continue exploration and ramp up permitting process to meet ongoing and
anticipated demand for gold, silver, uranium, aggregate, decorative rock and
polymetalic ores resulting from our planned commercial scale production
activities.
*
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
mining operations, acquisitions and development of existing and future mineral
resource properties.
*
Put
together a strategic alliance of 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
USCorp's management.
*
In
calendar 2008 Management has launched 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
*
Acquire
additional properties and/or corporations with properties as subsidiaries to
advance the company's growth plans.
*
During
fiscal 2008 management has rearranged our finances for better return and insured
coverage. We will continue to review these arrangements and make adjustments
to
them as necessary.
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 and common stock warrants and the debentures 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:
|
|
9 Months
|
|
9 Months
|
|
3 Months
|
|
3 Months
|
|
|
|
30-Jun-08
|
|
30-Jun-07
|
|
30-Jun-08
|
|
30-Jun-07
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss before cumulative preferred dividend
|
|
$
|
(1,448,411
|
)
|
$
|
(364,509
|
)
|
$
|
(484,803
|
)
|
$
|
(154,155
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
dividend preferred
|
|
|
(28,211
|
)
|
|
(19,025
|
)
|
|
(5,318
|
)
|
|
(4,718
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(1,476,622
|
)
|
$
|
(383,534
|
)
|
$
|
(821,730
|
)
|
$
|
(158,873
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average
|
|
|
51,698,065
|
|
|
38,840,102
|
|
|
53,843,311
|
|
|
33,856,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
& fully diluted net loss per common share
|
|
$
|
(0.03
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
0.00
|
|
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 2009. The
loss
on the underlying derivative gold contract has been calculated as
follows.
Carrying
value of loan
|
|
$
|
793,499
|
|
|
|
|
|
|
Fair
value of loan
|
|
|
1,524,114
|
|
|
|
|
|
|
Life
to date loss on un-hedged underlying derivative
|
|
$
|
(730,615
|
)
|
5.
Equipment
A
summary
of equipment is as follows:
|
|
30-Jun-08
|
|
30-Sep-07
|
|
|
|
|
|
|
|
Office
equipment
|
|
$
|
15,914
|
|
$
|
15,914
|
|
Accumulated
depreciation
|
|
|
(13,272
|
)
|
|
(10,483
|
)
|
|
|
|
|
|
|
|
|
Net
equipment
|
|
$
|
2,642
|
|
$
|
5,431
|
|
6.
Stock
Warrants Outstanding
The
following is a summary of common stock warrants outstanding at June 30,
2008:
|
|
|
|
Wgtd Avg
|
|
Wgtd Years
|
|
|
|
Amount
|
|
Exercise Price
|
|
to Maturity
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2007
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issues
|
|
|
4,136,666
|
|
|
|
|
|
|
|
Exercises
|
|
|
0
|
|
|
|
|
|
|
|
Expires
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at June 30, 2008
|
|
|
4,136,666
|
|
$
|
0.40
|
|
|
1.26
|
|
The
warrants to purchase preferred stock expired in October 2007
.
7.
Convertible Debenture
During
the fiscal year ended September 30, 2007, the Company issued convertible
debentures with a face value of $1,200,000. The debentures are convertible
into
common stock at $0.125 per share. The debentures have an interest rate of 5%
and
mature in December 2009 to September 2010. As a result of the issuance of the
debentures, the Company allocated $648,098 to stockholders’ equity as a result
of the favorable conversion feature of the debentures. The Company is amortizing
the beneficial conversion feature to interest expense over the life of the
debenture.
In
October 2007 and June 2008, the holder of the debentures converted $900,000
of
the debentures to 7,200,000 shares of common stock.
8.
Common Stock Transactions
During
the nine months ended June 30, 2008, the Company issued 7,348,214 shares of
common stock to consultants for services rendered.
During
the nine months ended June 30, 2008, the holder of the debentures converted
$900,000 of the debentures to 7,200,000 shares of common stock.
During
the nine months ended June 30, 2008, the holder of the preferred stock converted
$6,667 of preferred to 26,625 shares of common stock.
During
the nine months ended June 30, 2008, the Company issued 12,181,329 shares of
common stock in a private offering and received net proceeds of $688,768, of
which $569,823 was received in the last quarter of 2007 as
subscriptions.
9.
Income
Tax Provision
Provision
for income taxes is comprised of the following:
|
|
|
|
|
|
|
|
30-Jun-08
|
|
30-Jun-07
|
|
|
|
|
|
|
|
Net
loss before provision for income taxes
|
|
$
|
(1,448,411
|
)
|
$
|
(364,509
|
)
|
|
|
|
|
|
|
|
|
Current
tax expense:
|
|
|
|
|
|
|
|
Federal
|
|
$
|
0
|
|
$
|
0
|
|
State
|
|
|
0
|
|
|
0
|
|
Total
|
|
$
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
Less
deferred tax benefit:
|
|
|
|
|
|
|
|
Timing
differences
|
|
|
(899,783
|
)
|
|
(380,595
|
)
|
Allowance
for recoverability
|
|
|
899,783
|
|
|
380,595
|
|
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
|
|
$
|
899,783
|
|
$
|
380,595
|
|
Allowance
for recoverability
|
|
|
(899,783
|
)
|
|
(380,595
|
)
|
Deferred
tax benefit
|
|
$
|
0
|
|
$
|
0
|
|
Note:
The
deferred tax benefits arising from the timing differences begin to expire in
fiscal year
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 Analysis or 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, 2007.
Results
of Operations
Comparison
of operating results for the three months ended June 30, 2008 and June 30,
2007:
The
Company has no revenues through the date of this quarterly report.
General
and administrative expenses were $394,522 compared to $124,212 for the same
period a year ago. Consulting costs changed from $50,148 in the three months
ended June 30, 2007 to $167,341 for the period covered by this report which
is
mainly due to the company’s public relations efforts to inform the public
regarding our projects; geological work done on our properties and additional
compliance and reporting consulting services. Professional Fees were $17,666
for
the three month period ending June 30, 2007 and ($19,890) for the period of
this
report. The difference is due to the revision of a billing error and subsequent
classification error regarding legal fees in the amount of $39,328.
As
a
result of the change in the price of gold and an increase in consulting and
administrative expenses, the Company experienced an increase in its loss from
operations which was $484,803 for the three months ended June 30, 2008, compared
to loss from operations of $154,155 for the same period last year.
The
loss
on the unhedged Bullion Loan decreased from $9,920 to a gain of 15,488 during
the third three months of fiscal 2008 compared to the third three months of
fiscal year 2007, 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.
Net
loss
for the third three months of fiscal year 2008 was $484.803 or $0.03 per share
compared to a loss of $154,155 third three months, or $0.01 per share for the
same period last year.
Discussion
of Financial Condition: Liquidity and Capital Resources
At
June
30, 2008 cash on hand was $412,558 as compared with $83,573 at September 30,
2007. During the third three months of fiscal year 2007, the Company used
$154,155 for its operations. The increase in cash on hand is due to the proceeds
from. The remaining convertible debenture is not payable until September
2010.
Total
assets at June 30, 2008 were $742,686 as compared to $1,546,432 at September
30,
2007. The decrease is due to the ongoing exploration activities on the Company’s
Twin Peaks Project and Picacho Salton Project properties.
The
Company's total shareholders' deficit decreased to a deficit of $1,215,235
at
June 30, 2008 from $3,559,491 at September 30, 2007. The decrease in
shareholders’ deficit was the result of financing activities and changes in the
price of gold during the nine months ended June 30, 2008.
Convertible
Debenture
During
the fiscal year ended September 30, 2007, the Company issued convertible
debentures with a face value of $1,200,000. The debentures are convertible
into
common stock at $0.125 per share. As of the date of this report three of the
debentures with a total face amount of $900,000 have been converted to 7,200,000
restricted shares at the rate of $0.125 per share. The remaining $300,000
convertible debenture has an interest rate of 5% and matures in September 2010.
ITEM
3.
CONTROLS AND PROCEDURES
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.
Item
2.
Unregistered Sales of Equity Securities and Use of Proceeds.
During
the fiscal year ended September 30, 2007, the Company issued convertible
debentures with a face value of $1,200,000. The debentures are convertible
into
common stock at $0.125 per share. As of the date of this report three of the
debentures with a total face amount of $900,000 have been converted to 7,200,000
restricted shares at the rate of $0.125 per share. The remaining $300,000
convertible debenture has an interest rate of 5% and matures in September 2010.
During
the nine months ended June 30, 2008, the Company issued 7,348,214 shares of
common stock to consultants for services rendered.
During
the nine months ended June 30, 2008, the holder of the preferred stock converted
$6,667 of preferred to 26,625 shares of common stock.
During
the nine months ended June 30, 2008, the Company issued 12,181,329 shares of
common stock in a private offering and received net proceeds of $688,768, of
which $569,823 was received in the last quarter of 2007 as
subscriptions.
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.
Item
4.
Submission of Matters to a Vote of Security Holders.
There
were no matters requiring a vote of security holders during the period covered
by this report.
Item
5.
Other Information.
There
were no matters required to be disclosed in a Current Report on Form 8K during
the period 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.
ITEM
6.
EXHIBITS
(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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SIGNATURES
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.
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USCORP
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By:
/s/ ROBERT DULTZ
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Robert
Dultz
Chairman,
Chief Executive Officer and Acting Chief Financial Officer
Dated:
August 18, 2008
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