UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended February 29, 2008
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number 000-50101
USA Uranium Corp.
(Exact name of small business issuer as specified in its charter)
Nevada 91-2135425
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
800-2300 West Sahara Avenue, Las Vegas, Nv.
(Address of principal executive officer)
702-664-0039
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 67,598,736
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
USA Uranium Corp
Formerly Trilliant, Inc.
(An Exploration Stage Company)
Unaudited Balance Sheets
February 29, May 31,
2008 2007
----------- -----------
(Audited)
ASSETS
Current Assets
Cash and Cash Equivalents $ 2,059 $ 19,097
Accounts Receivable 59 --
Inventory 20,848 --
Prepaid Expenses 13,333 20,922
----------- -----------
Total Current Assets 36,299 40,019
----------- -----------
Fixed Assets
Unpatented Mining Claims 1,464,281 1,464,281
Property and Equipment, net 3,982 4,044
----------- -----------
Total Fixed Assets 1,468,263 1,468,325
----------- -----------
Other Assets
Joint Venture Assets 2,560,000 --
Due from Lifespan 94,470 60,000
Patent, net 6,999 7,749
----------- -----------
Total Other Assets 2,661,469 67,749
----------- -----------
Total Assets $ 4,166,031 $ 1,576,093
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 151,493 $ 53,093
Current Portion-Unpatented Mining Claims 90,608 154,461
Accounts Payable - Stockholder -- 28,553
Note Payable - stockholder -- 18,150
Accrued Interest - Stockholder & Mining Claim notes 62,825 2,471
Accrued Royalties 3 9
Accrued Warranty 131 129
----------- -----------
Total Current Liabilities 305,060 256,866
----------- -----------
Note Payable-Unpatented Mining Claims 796,829 796,829
----------- -----------
Total Liabilities 1,101,889 1,053,695
----------- -----------
Stockholders' Equity
Common Stock, authorized 100,000,000 shares, par value $0.001,
issued and outstanding on February 29, 2008 and May 31, 2007
is 67,598,736 and 60,400,000 respectively 67,599 60,400
Additional Paid-in Capital 4,024,620 192,699
Subscriptions (Receivable)/Cash Receipts -- 692,042
Minority Interest in Joint Venture 640,000
Prepaid Expense - Stock Related (228,750) --
Accumulated Deficit during Exploration Stage (1,439,327) (422,743)
----------- -----------
Total Stockholders' Equity 3,064,142 522,398
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,166,031 $ 1,576,093
=========== ===========
The accompanying notes are an integral part of these statements
2
USA Uranium Corp
Formerly Trilliant, Inc.
(An Exploration Stage Company)
Unaudited Statements of Operations
Nine Months Three Months June 20, 2001
Ended February 29 & 28, Ended February 29 & 28, (Inception) to
------------------------------ ------------------------------ February 29,
2008 2007 2008 2007 2008
------------ ------------ ------------ ------------ ------------
Sales - Net $ 179 $ 627 $ 60 $ 328 $ 13,414
Cost of Goods Sold 75 463 28 268 6,527
------------ ------------ ------------ ------------ ------------
Gross Profit 104 164 32 60 6,887
Operating Expenses
Depreciation and Amortization 1,386 742 462 247 6,533
General and Administrative 366,553 32,914 55,235 12,311 783,801
Consulting 328,890 -- 268,724 -- 328,890
Exploration and Development 148,886 -- 13,800 -- 148,886
Investor Relations 108,635 -- 30,434 -- 108,635
------------ ------------ ------------ ------------ ------------
Total Expenses 954,350 33,656 368,655 12,558 1,376,745
------------ ------------ ------------ ------------ ------------
(Loss) from Operations (954,246) (33,492) (368,623) (12,498) (1,369,858)
Other Income (Loss)
Miscellaneous Income -- 21 -- 21 50
Miscellaneous Expense -- -- -- -- (203)
Interest Expense (62,338) (1,447) (21,930) (454) (69,245)
Bad Debts -- -- -- -- (71)
------------ ------------ ------------ ------------ ------------
Total Other Income (Loss) (62,338) (1,426) (21,930) (433) (69,469)
------------ ------------ ------------ ------------ ------------
Net Income $ (1,016,584) $ (34,918) $ (390,553) $ (12,931) $ (1,439,327)
============ ============ ============ ============ ============
Basic and Diluted(Loss) per Share $ (0.02) $ (0.00) $ (0.01) $ (0.00)
------------ ------------ ------------ ------------
Weighted Average Number of Shares 65,138,241 60,400,000 65,138,241 60,400,000
------------ ------------ ------------ ------------
The accompanying notes are an integral part of these statements
3
USA Uranium Corp
Formerly Trilliant, Inc.
(An Exploration Stage Company)
Unaudited Statement of Stockholders' Equity
(Inception 20-Jun-2001 to 29-Feb-2008
Prepaid
Price Common Stock Stock Expense
Per ------------------- Paid in Subscriptions Stock
Share Shares Amount Capital (Receivable) Related
----- ------ ------ ------- ------------ -------
BALANCE, JUNE 20, 2001 (INCEPTION) -- $ -- $ -- $ -- $ --
Common Stock Issued to Founders
for September 2001 $0.000 28,000,000 28,000 (26,101) -- --
Common Stock Issued for Cash
December 2001, net of $2,500
issue costs $0.002 12,000,000 12,000 15,500 -- --
Net (Loss)
----------- ------- ---------- --------- ---------
BALANCE, MAY 31, 2002 40,000,000 40,000 (10,601) -- --
Net (Loss)
----------- ------- ---------- --------- ---------
BALANCE, MAY 31, 2003 40,000,000 40,000 (10,601) -- --
Common Stock Issued for Cash
November 2003 $0.005 20,000,000 20,000 80,000 -- --
Net (Loss)
----------- ------- ---------- --------- ---------
BALANCE, MAY 31, 2004 60,000,000 60,000 69,399 -- --
Forgiveness of debt -
Contributed Capital 96,700 -- --
Net (Loss)
----------- ------- ---------- --------- ---------
BALANCE, MAY 31, 2005 60,000,000 60,000 166,099 -- --
Common Stock Issued for Cash
February, 2006 $0.025 400,000 400 9,600 -- --
Forgiveness of debt -
Contributed Capital 17,000 -- --
Net (Loss)
----------- ------- ---------- --------- ---------
BALANCE, MAY 31, 2006 60,400,000 60,400 192,699 -- --
Prepaid Subscriptions of Cash,
May, 2007 -- -- -- 232,042 --
Prepaid Subscriptions of
acquisition of mining claims,
May, 2007 -- -- -- 460,000 --
Net (Loss)
----------- ------- ---------- --------- ---------
BALANCE, MAY 31, 2007 60,400,000 60,400 192,699 692,042 --
Common Stock Issued for Prepaid
Subscriptions, July, 2007 $ 0.50 464,082 464 231,578 (232,042) --
Common Stock Issued for Prepaid
Subscriptions, July, 2007 $ 1.15 400,000 400 459,600 (460,000) --
Common Stock Issued for Cash
July, 2007 $ 0.70 550,000 550 384,450 -- --
Common Stock Issued for Commissions
July, 2007 $ 0.70 55,000 55 38,445 -- --
Offering Costs -- -- (55,300) -- --
Common Stock Issued for Conversion
of Debt, July, 2007 $ 0.50 95,154 95 47,482 -- --
Common Stock Issued for Cash
September 2007 $ 0.40 322,000 322 128,478 -- --
Prepaid Subscriptions of Cash
Sept, 2007 -- -- -- -- 25,000 --
(Deficit)
Minority Accumulated
Interest During
In Joint Exploration Total
Ventures Stage Equity
-------- ----- ------
BALANCE, JUNE 20, 2001 (INCEPTION) $ -- $ -- $ --
Common Stock Issued to Founders
for September 2001 -- -- 1,899
Common Stock Issued for Cash
December 2001, net of $2,500
issue costs -- -- 27,500
Net (Loss) (77,629) (77,629)
-------- ----------- -----------
BALANCE, MAY 31, 2002 -- (77,629) (48,230)
Net (Loss) (86,067) (86,067)
-------- ----------- -----------
BALANCE, MAY 31, 2003 -- (163,696) (134,297)
Common Stock Issued for Cash
November 2003 -- -- 100,000
Net (Loss) (52,252) (52,252)
-------- ----------- -----------
BALANCE, MAY 31, 2004 -- (215,948) (86,549)
Forgiveness of debt -
Contributed Capital -- -- 96,700
Net (Loss) (41,108) (41,108)
-------- ----------- -----------
BALANCE, MAY 31, 2005 -- (257,056) (30,957)
Common Stock Issued for Cash
February, 2006 -- -- 10,000
Forgiveness of debt -
Contributed Capital -- -- 17,000
Net (Loss) (40,567) (40,567)
-------- ----------- -----------
BALANCE, MAY 31, 2006 -- (297,623) (44,524)
Prepaid Subscriptions of Cash,
May, 2007 -- -- 232,042
Prepaid Subscriptions of
acquisition of mining claims,
May, 2007 -- -- 460,000
Net (Loss) (125,120) (125,120)
-------- ----------- -----------
BALANCE, MAY 31, 2007 -- (422,743) 522,398
Common Stock Issued for Prepaid
Subscriptions, July, 2007 -- -- --
Common Stock Issued for Prepaid
Subscriptions, July, 2007 -- -- --
Common Stock Issued for Cash
July, 2007 -- -- 385,000
Common Stock Issued for Commissions
July, 2007 -- -- 38,500
Offering Costs -- -- (55,300)
Common Stock Issued for Conversion
of Debt, July, 2007 -- -- 47,577
Common Stock Issued for Cash
September 2007 -- -- 128,800
Prepaid Subscriptions of Cash
Sept, 2007 -- -- 25,000
4
USA Uranium Corp
Formerly Trilliant, Inc.
(An Exploration Stage Company)
Unaudited Statement of Stockholders' Equity
(Inception 20-Jun-2001 to 29-Feb-2008
Prepaid
Price Common Stock Stock Expense
Per ------------------- Paid in Subscriptions Stock
Share Shares Amount Capital (Receivable) Related
----- ------ ------ ------- ------------ -------
Common Stock Issued for Mining Claims
In Joint Venture, September 2007 $ 0.48 4,000,000 4,000 1,916,000 -- --
Minority Interest in Joint Venture
September 2007 -- -- -- -- -- --
Common Shares Issued for Prepaid
Consulting, November 2007 $ 0.61 750,000 750 456,750 -- (457,500)
Common Stock Issued for Cash
December, 2007 $ 0.36 562,500 563 224,438 (25,000) --
Amortization of Prepaid Consulting -- -- -- -- -- 228,750
Net (Loss)
----------- ------- ---------- --------- ---------
BALANCE, FEBRUARY 29, 2008 67,598,736 $67,599 $4,024,620 $ -- $(228,750)
=========== ======= ========== ========= =========
(Deficit)
Minority Accumulated
Interest During
In Joint Exploration Total
Ventures Stage Equity
-------- ----- ------
Common Stock Issued for Mining Claims
In Joint Venture, September 2007 -- -- 1,920,000
Minority Interest in Joint Venture
September 2007 640,000 --
Common Shares Issued for Prepaid
Consulting, November 2007 -- -- --
Common Stock Issued for Cash
December, 2007 -- -- 200,001
Amortization of Prepaid Consulting -- -- 228,750
Net (Loss) (1,016,584) (1,016,584)
-------- ----------- -----------
BALANCE, FEBRUARY 29, 2008 $640,000 $(1,439,327) $ 2,424,142
======== =========== ===========
On September 19,2005 the Company executed a 10:1 forward stock split which has
been retroactively applied to these statements.
On December 28, 2006 the Company executed a 4:1 forward stock split which has
been retroactively applied to these statements.
The accompanying notes are an integral part of these statements
5
USA Uranium Corp
Formerly Trilliant, Inc.
(An Exploration Stage Company)
Unaudited Statements of Cash Flows
Nine Months Three Months June 20, 2001
Ended February 29 & 28, Ended February 29 & 28, (Inception) to
--------------------------- --------------------------- February 29,
2008 2007 2008 2007 2008
----------- ----------- ----------- ----------- -----------
Operating Activities
Net Loss $(1,016,584) $ (34,918) $ (390,553) $ (12,931) $(1,439,327)
Adjustments to reconcile Net Loss
Depreciation and Amortization 1,386 742 924 247 6,533
Stock Issued for Service and Conversion of Debt 86,077 -- -- -- 86,077
Contributed Capital -- -- -- -- 58,400
Changes in Operating Assets and Liabilities
(Increase)/Decrease in Accounts Receivable (59) 6,080 (59) (169) (59)
(Increase)/Decrease in Inventory (20,848) 512 28 291 (20,848)
(Increase)/Decrease in Prepaid Expenses 7,589 -- 10,000 -- (13,333)
Increase/(Decrease) in Accounts Payable 69,847 11,381 31,351 3,148 151,493
Increase/(Decrease) in Accrued Liabilities 42,200 1,360 21,691 468 62,959
----------- ----------- ----------- ----------- -----------
Net Cash (Used) by Operating Activities (830,392) (14,843) (326,618) (8,946) (1,108,105)
----------- ----------- ----------- ----------- -----------
Investment Activities
Acquisition of Unpatented Mining Claims -- -- -- -- (1,004,281)
Investment in Patent -- -- -- -- (12,699)
Advances to Lifespan (34,470) -- (35,850) -- (94,470)
Purchase of Equipment (574) -- (1,036) -- (4,815)
----------- ----------- ----------- ----------- -----------
Net Cash (Used) by Investment Activities (35,044) -- (36,886) -- (1,116,265)
----------- ----------- ----------- ----------- -----------
Financing Activities
Loans / (Repayments) (63,853) 15,900 -- 10,000 --
Prepaid Consulting - Stock Related 228,750 -- 228,750 -- 228,750
Notes Payable - Mining Properties -- -- -- -- 887,437
Proceeds from the Sale of Stock 683,501 -- -- -- 1,110,242
----------- ----------- ----------- ----------- -----------
Net Cash Provided by Financing Activities 848,398 15,900 228,750 10,000 2,226,429
----------- ----------- ----------- ----------- -----------
Net Increase / (Decrease) in Cash (17,038) 1,057 (134,754) 1,054 2,059
Cash, Beginning of Period 19,097 54 136,812 57 --
----------- ----------- ----------- ----------- -----------
Cash, End of Period $ 2,059 $ 1,111 $ 2,058 $ 1,111 $ 2,059
=========== =========== =========== =========== ===========
Cash Paid For:
Interest $ 62,338 $ -- $ -- $ -- $ 62,338
----------- ----------- ----------- ----------- -----------
Income Taxes $ -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------- -----------
Non-cash Activities:
Joint Ventures Assets $ 2,560,000 $ -- $ 2,560,000 $ -- $ 3,020,000
----------- ----------- ----------- ----------- -----------
Stock Issued for Service and Conversion of Debt $ 86,077 $ -- $ -- $ -- $ 47,577
----------- ----------- ----------- ----------- -----------
Stock Issued for Prepaid Consulting $ 457,500 $ -- $ 457,500 $ -- $ 457,500
----------- ----------- ----------- ----------- -----------
Stock Issued to Acquire Mining Properties $ 460,000 $ -- $ -- $ -- $ 460,000
----------- ----------- ----------- ----------- -----------
Stock Issued to Founders $ -- $ -- $ -- $ -- $ 1,866
----------- ----------- ----------- ----------- -----------
Contributed Capital $ -- $ -- $ -- $ -- $ 58,400
----------- ----------- ----------- ----------- -----------
The accompanying notes are an integral part of these statements
6
USA Uranium Corp.
Formerly Trilliant, Inc.
(An Exploration Stage Company)
Notes to Unaudited Financial Statements
(February 29, 2008 and May 31, 2007)
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
NATURE OF BUSINESS
USA Uranium Corp. (the Company) was incorporated in the state of Nevada on June
20, 2001 as E and S Holdings, Inc. and subsequently changed its name to
Trilliant, Inc on December 21, 2006 and finally to USA Uranium Corp. effective
May 15, 2007.
As of May, 2007, the Company is primarily engaged in uranium mining. It also
continues its previous operations in the development and marketing a specialized
locking pliers for the plumbing and welding industries for which it holds the
patent.
The Company is an Exploration Stage Company.
BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with U.S. generally accepted accounting principles. The Company
operates on a May 31 fiscal year end.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash and short term deposits with original
maturities of three months or less when purchased. As of February 29, 2008, cash
and cash equivalents consists of cash and cash in trust.
7
ACCOUNTS RECEIVABLE
The Company grants credit to its customers in the ordinary course of business.
The Company provides for an allowance for uncollectible receivables based on
prior experience. The allowance was $0.00 at February 29, 2008 and May 31, 2007.
INVENTORIES
Inventories which consist of specialized locking pliers are recorded at the
lower of cost (first-in, first-out) or market.
ADVERTISING AND MARKETING COSTS
Advertising and marketing costs incurred in the normal course of operations are
expensed accordingly. Advertising and marketing costs incurred for the years
ended February 29, 2008 and May 31, 2007 were $3,404 and $514 respectively.
PROPERTY AND EQUIPMENT
Property and equipment consists is recorded at cost. The equipment is being
depreciated on a straight-line basis over their estimated lives of five years.
Following is a summary of property and equipment February 29, 2008 and May 31,
2007:
31-Jan-2008 31-May-2007
----------- -----------
Furniture and Equipment $ 4,815 $ 4,241
Less: Accumulated Depreciation (833) (197)
------- -------
Property and Equipment, Net $ 3,982 $ 4,044
======= =======
AMORTIZATION OF PATENTS
The Company held an option to purchase the patent pending rights to its
proprietary product, locking pliers. The Company exercised its option to acquire
the patent for its locking pliers product in March 2002 for $12,699. The patent
is being amortized over its remaining legal life, beginning in the first quarter
of fiscal 2002. The agreement also provides for payment of 5% of the gross
consideration received for the use and licensing of the patent.
Amortization for the next five years is as follows:
2008 2009 2010 2011 2012 Thereafter
---- ---- ---- ---- ---- ----------
$1,000 $1,000 $1,000 $1,000 $1,000 $1,999
8
CONCENTRATIONS OF RISK
The Company' bank accounts are deposited in insured institution. The funds are
insured up to $100,000. At February 29, 2008 the company's bank deposits did not
exceed the insured amounts. At times the cash in bank periodically exceeds
federally insured limits for a short period of time.
All mining properties are located in one state.
Purchase of inventory are from one supplier.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE
The Company computes net income (loss) per share in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "EARNINGS PER SHARE". SFAS No.
128 requires presentation of both basic and diluted earnings per share (EPS) on
the face of the income statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted EPS gives
effect to all dilutive potential common shares outstanding during the period
using the treasury stock method and convertible preferred stock using the
if-converted method. In computing Diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive.
The numerators and denominators used in the computations of basic and diluted
EPS are presented in the following table:
February 29, May 31,
2008 2007
----------- -----------
NUMERATORS FOR BASIC AND DILUTED EPS
Net income/(loss) to common shareholders $(1,016,584) $ (34,918)
DENOMINATORS FOR BASIC EPS
Weighted average of shares outstanding 65,138,241 60,400,000
BASIC EARNINGS/(LOSS) PER SHARE $ (0.02) $ (0.00)
MINERAL PROPERTY COSTS
The Company is in the exploration stage and has not yet realized any revenues
from its planned operations. It is primarily engaged in the acquisition and
exploration of mining properties. Mineral property acquisition costs are
capitalized. Exploration and Development costs are expensed as incurred. When it
has been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs incurred to
develop such property, are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve. If
mineral properties are subsequently abandoned or impaired, any capitalized costs
will be charged to operations.
9
LONG-LIVED ASSETS
In accordance with SFAS No. 144, "ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF
LONG-LIVED ASSETS", the carrying value of intangible assets and other long-lived
assets is reviewed on a regular basis for the existence of facts or
circumstances that may suggest impairment. The Company recognizes impairment
when the sum of the expected undiscounted future cash flows is less than the
carrying amount of the asset. Impairment losses, if any, are measured as the
excess of the carrying amount of the asset over its estimated fair value.
ACQUISITIONS BY COMMON STOCK
When common stock is issued as part or all of the acquisition price the Company
records the purchase price at fair value using the market value of the stock on
the effective day of purchase.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of business.
However, at February 29, 2008 the Company has an accumulated loss of $1,439,327
during its exploration stage. This raises substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from this uncertainty.
MANAGEMENTS PLAN
Management continues to seek funding from its shareholders and other qualified
investors to pursue its exploration and development programs. These funds may be
raised through equity financing, debt financing, or other sources, which may
result in further dilution in the equity ownership of our shares. There is still
no assurance that the Company will be able to maintain operations at a level
sufficient for an investor to obtain a return on his investment. Further, the
Company may continue to be unprofitable. The Company needs to raise additional
funds in the immediate future in order to proceed with its exploration program.
NOTE 4. INCOME TAXES
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issue that created timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax assets in
10
future years. Due to the uncertainty as to the utilization of net operating loss
carry forwards, an evaluation allowance has been made to the extent of any tax
benefit that net operating losses may generate. No provision for income taxes
has been recorded due to the net operating loss carry forward of $422,743 as of
May 31, 2007, that will be offset against further taxable income. No tax benefit
has been reported in the financial statements.
Deferred tax assets and the valuation account as of May 31, 2007 and 2006 are as
follows:
2007 2006
--------- ---------
Deferred Tax Assets:
Net operating loss carryforwards $ 422,743 $ 297,623
Valuation Allowance (422,743) (297,623)
--------- ---------
Net Deferred Tax Asset $ -- $ --
========= =========
The components of income tax expense are as follows:
2007 2006
--------- ---------
Current Federal Tax $ -- $ --
Current State Tax -- --
Change in NOL Benefit 42,540 13,793
Change in Allowance (42,540) (13,793)
--------- ---------
Net Income Tax Expense $ -- $ --
========= =========
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. These losses are
as follows:
Expiration
Year of Loss Date
May 31, Amount May 31,
------- ------ -------
2002 $ 77,629 2022
2003 86,067 2023
2004 52,252 2024
2005 41,108 2025
2006 40,567 2026
2007 125,120 2027
---------
Total NOL carry-forward $ 422,743
=========
11
NOTE 5. STOCKHOLDERS' EQUITY
COMMON STOCK
The Company is authorized to issue 100,000,000 common shares with a par value of
$0.001 per share.
On September 19, 2005 and December 28, 2006 the Company executed a 10:1 and a
4:1 forward stock split respectively that have been retroactively applied to
these statements. These splits have the impact of reducing the price per share
paid by predecessor shareholders.
During September 2001 the Company issued 28,000,000 post-split common shares to
the founders for $1,899.
During December 2001 the Company issued 12,000,000 post-split common shares for
$27,500 net of $2,500 issue costs.
During November 2003 the Company issued 20,000,000 post-split common shares for
$100,000 cash in a private placement.
The company recorded $96,700 contributed capital for the forgiveness of the same
amount of debt.
During February 2006 the Company issued 400,000 common shares for $10,000 in a
private placement.
During May 2007 the Company received $232,042 for the purchase of 464,082 common
shares issued in July and mining claims valued at $460,000 for the purchase of
400,000 common shares issued in July.
During July 2007 the Company issued 550,000 common shares for $385,000 cash;
55,000 common shares for $38,500 commissions; and 95,154 common shares for
conversion of $47,482 debt.
During September 2007 the Company issued 322,000 common shares for $128,000 cash
and received $25,000 subscription deposit.
During September 2007 the Company issued 4,000,000 common shares valued at
$1,920,000 with a minority interest of $640,000 to obtain a 75% interest in a
Joint Venture with Lifespan Inc. to develop certain mining properties.
During November 2007 the Company issued 750,000 common shares valued at $457,500
for prepaid consulting.
12
During December 2007 the Company issued 562,500 common shares valued at $225,000
for $200,000 cash and the $25,000 prepaid subscriptions received in September.
NOTE 6. RELATED PARTY ACTIVITIES
RENT
The Company rents office space from one of its shareholders on a month-to-month
basis. Rent expense for the period ended February 29, 2008 and the year ended
May 31, 2007 is $1,690 and $7,500 respectively.
ACCOUNTS PAYABLE AND NOTES PAYABLE - STOCKHOLDER
A stockholder has provided the Company operating capital unsecured demand basis
and amounts reported as Accounts Payable - Stockholder and Notes Payable -
Stockholder. The May 31, 2007 balances of these two accounts were $28,553 and
$18,150 respectively. Both amounts were forgiven during the period ended
February 29, 2008 and recorded as contributed capital.
NOTE 7. PRODUCT WARRANTIES
The Company sells its products to customers together with limited repair or
replacement warranties. The warranty liability for the period ended February 29,
2008 and the year ended May 31, 2007 is $131 and $128 respectively.
NOTE 8. PURCHASE OF MINING CLAIMS
On May 23, 2007, the Company entered into three purchase agreements for
unpatented lode mining claims in the state of Utah. Recorded value of claims are
as follows:
Wayne San Juan Emery
County, UT County, UT County, UT Total
Adjusted Value 118 Claims 63 Claims 36 Claims 217 Claims
-------------- ---------- --------- --------- ----------
Common Shares Issued 200,000 100,000 100,000 400,000
Valued at $1.15 per share $ 230,000 $ 115,000 $ 115,000 $ 460,000
Original Cash Price 1,000,000 250,000 50,000 1,300,000
---------- ---------- ---------- ----------
Subtotal 1,230,000 365,000 165,000 1,760,000
Discount and Adjustments (258,756) (36,882) (82) (295,720)
---------- ---------- ---------- ----------
----------
Current Value $ 971,244 $ 328,118 $ 164,918 $1,464,280
========== ========== ========== ==========
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NOTE 9. NOTES PAYABLE - UNPATENTED MINING CLAIMS
Long-term debt consists of the following:
February 29, May 31,
2008 2007
--------- ---------
Note due May 23, 2001, semi-annual payments
of varing amounts, 10% per-annum, secured by
118 mining claims $ 694,215 $ 718,067
Note due May 23, 2001, semi-annual payments
of varing amounts, 10% per-annum, secured by
63 mining claims 173,223 198,223
Note due May 23, 2001, semi-annual payments
of varing amounts, 10% per-annum, secured by
36 mining claims 20,000 35,000
--------- ---------
Total $ 887,438 $ 951,290
Less: Current portion (90,608) (154,461)
--------- ---------
Net Long-Term Debt $ 796,830 $ 796,829
========= =========
NOTE 10. CONTINGENT LIABILITY
The purchase of the previously listed mining claims included a requirement that
the Company incur exploration and development costs of at least $500,000 during
the next five years on the as part of the purchase agreement.
NOTE 11. PURCHASE OF INTEREST IN JOINT VENTURE
On September 7, 2007 the Company entered into a Joint Venture Agreement with
Lifespan Inc. to explore, develop with the purpose to eventually mine within an
area of approximately 2,200 square miles consisting of 111 unpatented lode
mining claims in San Juan County, Utah held by Lifespan Inc. The Company issued
4,000,000 common shares valued at $1,920,000 with a minority interest of
$640,000 for a 75% interest in the Join Venture and will be the sole Manager.
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NOTE 12. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent Statement of Financial Accounting
Standards (SFAS) SFAS 155-160 and their effect on the Company.
STATEMENT NO. 155 - ACCOUNTING FOR CERTAIN HYBRID FINANCIAL INSTRUMENTS
In February 2006, the FASB issued SFAS No. 155, ACCOUNTING FOR CERTAIN HYBRID
FINANCIAL INSTRUMENTS, which amends SFAS No. 133, ACCOUNTING FOR DERIVATIVES
INSTRUMENTS AND HEDGING ACTIVITIES and SFAS No. 140, ACCOUNTING FOR TRANSFERS
AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENT OF LIABILITIES. SFAS No.
155 amends SFAS No. 133 to narrow the scope exception for interest-only and
principal-only strips on debt instruments to include only such strips
representing rights to receive a specified portion of the contractual interest
or principle cash flows. SFAS No. 155 also amends SFAS No. 140 to allow
qualifying special-purpose entities to hold a passive derivative financial
instrument pertaining to beneficial interests that itself is a derivative
instrument.
STATEMENT NO. 156 - ACCOUNTING FOR SERVICING OF FINANCIAL ASSETS
In March 2006, the FASB issued SFAS No. 156, ACCOUNTING FOR SERVICING OF
FINANCIAL ASSETS, which provides an approach to simplify efforts to obtain
hedge-like (offset) accounting. This Statement amends FASB Statement No. 140,
ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS
OF LIABILITIES, with respect to the accounting for separately recognized
servicing assets and servicing liabilities. The Statement (1) requires an entity
to recognize a servicing asset or servicing liability each time it undertakes an
obligation to service a financial asset by entering into a servicing contract in
certain situations; (2) requires that a separately recognized servicing asset or
servicing liability be initially measured at fair value, if practicable; (3)
permits an entity to choose either the amortization method or the fair value
method for subsequent measurement for each class of separately recognized
servicing assets or servicing liabilities; (4) permits at initial adoption a
one-time reclassification of available-for-sale securities to trading securities
by an entity with recognized servicing rights, provided the securities
reclassified offset the entity's exposure to changes in the fair value of the
servicing assets or liabilities; and (5) requires separate presentation of
servicing assets and servicing liabilities subsequently measured at fair value
in the balance sheet and additional disclosures for all separately recognized
servicing assets and servicing liabilities. SFAS No. 156 is effective for all
separately recognized servicing assets and liabilities as of the beginning of an
entity's fiscal year that begins after September 15, 2006, with earlier adoption
permitted in certain circumstances. The Statement also describes the manner in
which it should be initially applied.
STATEMENT NO. 157 - FAIR VALUE MEASUREMENTS
In September 2006, the FASB issued SFAS No. 157, FAIR VALUE MEASUREMENTS, to
clarify how to measure fair value and to expand disclosures about fair value
measurements. The expanded disclosures include the extent to which companies
measure assets and liabilities at fair value, the information used to measure
fair value, and the effect of fair value on earnings and is applicable whenever
15
other standards require (or permit) assets and liabilities to be measured at
fair value. SFAS 157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007 and interim periods within those fiscal
years.
STATEMENT NO. 158 - EMPLOYERS' ACCOUNTING FOR DEFINED BENEFIT PENSION AND OTHER
POSTRETIREMENT PLANS--AN AMENDMENT OF FASB STATEMENTS NO. 87, 88, 106, AND
132(R)
In September 2006, the FASB issued SFAS No. 158, EMPLOYERS' ACCOUNTING FOR
DEFINED BENEFIT PENSION AND OTHER POSTRETIREMENT PLANS--AN AMENDMENT OF FASB
STATEMENTS NO. 87, 88, 106, AND 132(R). To improve financial reporting by
requiring an employer to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This Statement also improves financial
reporting by requiring an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited
exceptions.
STATEMENT NO. 159 - THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL
LIABILITIES--INCLUDING AN AMENDMENT OF FASB STATEMENT NO. 115
In February 2007, the FASB issued SFAS No. 159, THE FAIR VALUE OPTION FOR
FINANCIAL ASSETS AND FINANCIAL LIABILITIES--INCLUDING AN AMENDMENT OF FASB
STATEMENT NO. 115. This Statement permits entities to choose to measure many
financial instruments and certain other items at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This Statement is expected to expand the use of fair value
measurement, which is consistent with the Board's long-term measurement
objectives for accounting for financial instruments.
STATEMENT NO. 141 (REVISED 2007) - BUSINESS COMBINATIONS
In December 2007, the FASB revised SFAS No. 141, BUSINESS COMBINATIONS. This
revision changes the way the minority interest in a company is measured,
recorded and reported in the parent companies financial statements to the end
that a statement user can better evaluate the nature and financial effects of
the business combination.
STATEMENT NO. 160 - NONCONTROLLING INTERESTS IN CONSOLIDATED FINANCIAL
STATEMENTS--AN AMENDMENT OF ARB NO. 51
In December 2007, the FASB issued SFAS No. 160, NONCONTROLLING INTERESTS IN
CONSOLIDATED FINANCIAL STATEMENTS--AN AMENDMENT OF ARB NO. 51. A noncontrolling
interest, sometimes called a minority interest, is the portion of equity in a
subsidiary not attributable, directly or indirectly, to a parent. The objective
of this Statement is to improve the relevance, comparability, and transparency
of the financial information that a reporting entity provides in its
consolidated financial statements related to the noncontrolling or minority
interest.
The adoption of these new Statements is not expected to have a material effect
on the Company's current financial position, results or operations, or cash
flows.
* * * * * * * *
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
USA Uranium Corp. was incorporated as E and S Holdings, Inc. on June 20, 2001
under the laws of the State of Nevada. The Company filed an amendment to its
articles of incorporation changing its name to Trilliant, Inc. in December 2006,
and to USA Uranium Corp. in May 2007. The Company has not been involved in any
bankruptcy, receivership or similar proceedings, nor has it been a party to any
merger, consolidation or purchase or sale of a significant amount of assets not
in the ordinary course of business.
USA Uranium Corp. (USA Uranium) is an exploration stage company that has
received no revenues during the three-month period ending February 29, 2008. USA
Uranium has received no significant revenues since its inception. As of February
29, 2008, USA Uranium has cash assets of $2,059 and total assets of $4,166,031
and accounts receivable of $59. The inventory of the company is $20,848.
From its inception in June, 2001 until 2006 the Company was engaged in the
development, marketing and sales of a locking pliers tool which is being
marketed as the "Portable Pipe Vise". During 2006, the Company determined that
it wished to change the primary focus of its business operations to the mineral
exploration business with a focus on diamonds. During early 2007, the Company
changed the focus of its business operations to the exploration for economic
reserves of uranium in the United States, concentrating in the State of Utah and
the "Four Corners" area, where the states of Utah, Arizona, Colorado and New
Mexico intersect.
The shares of USA Uranium are currently listed on the OTC Bulletin Board, under
the symbol USAU.
Over the past three months, USA Uranium has sustained operating losses in the
amount of $328,623. As of February 29, 2008, USA Uranium has total current
liabilities of $305,060.
There are no off balance sheet arrangements involving USA Uranium at this time.
ITEM 3 - CONTROLS AND PROCEDURES
The management of USA Uranium recognizes its responsibility for establishing and
maintaining adequate internal controls over financial reporting for USA Uranium.
Due to the small size of USA Uranium, the company's Chief Executive Officer and
Chief Operating Officer is aware of all matters pertaining to the operations of
USA Uranium, Corp. and has reviewed all aspects of the financial information
included in the company's financial reporting. At the present time, management
is of the opinion that the company's internal controls over financial reporting
for the past fiscal year are adequate. However, management has identified a
material weakness in its procedures in that the small size of management causes
a lack of segregation of duties and limits management's ability to recognize
potential inadequacies of the internal controls over the financial reporting.
17
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
To the best of its knowledge, management of USA Uranium is not aware of any
legal proceedings in which USA Uranium is currently involved.
ITEM 2 - CHANGES IN SECURITY
There are no changes in security since the last annual statement for the year
ending May 31, 2007.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
There are no defaults upon any senior securities.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
a) The Company had received the resignations of Mr. Edward Barth and Mr. Eugene
Swearengen as Officers and Directors of the Company effective April 1st, 2008.
The Board accepted the resignations at that time. Mr. Gary Campbell was
appointed Chief Executive Officer and Chief Financial Officer on April 2nd, 2008
to replace Mr. Barth.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
A. The following are filed as Exhibits to this quarter of the report. The
numbers refer to the exhibit table of Item 601 of regulation S-K: Reference is
hereby made to the exhibits contained in the registration statement (Form SB-2)
filed by E & S Holdings, Inc.
Exhibit 31 - Rule 13a-14(a)/15d-14(a) - Certification
Exhibit 32 - Section 1350 - Certification
B. Reports on Form 8-K - None
18
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
USA URANIUM CORP.
Date: April 20th, 2008 By: /s/ Gary A. Campbell
---------------------------------------------
Gary A. Campbell, Principal Financial Officer
Date: April 20th, 2008 By: /s/ Gary Campbell
---------------------------------------------
Gary Campbell, Principal Executive Officer
19