SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
American Uranium, Inc.
(Exact Name of Small Business Issuer as Specified in Its Charter)
New Jersey N/A
- ---------------------- ------------------------------------
(State of Incorporation) (Issuer's I.R.S.
Employer I.D. Number)
133 Richmond Street, West
Suite # 311
Toronto, Ontario, Canada M5H 2L3
- ---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(416) 203-2525
--------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value per share
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ITEM 1. DESCRIPTION OF BUSINESS
Introduction
American Uranium is engaged in the identification, acquisition,
exploration, development and extraction of minerals primarily focused on uranium
and vanadium claims located in the United States.
American Uranium was organized under the laws of the State of New
Jersey on October 22, 1991 under the name PRS Sub III, Inc. and changed its name
to American Uranium Inc. in 1998. American Uranium was originally formed as a
subsidiary of People Ridesharing Systems, Inc., a company which filed for
reorganization under Chapter 11 of the Bankruptcy Act. As a result of an order
of the United States Bankruptcy Court in May 1996 relating to the bankruptcy of
People Ridesharing, the common stock ownership in American Uranium was issued
10% to the creditors and 5% to the stockholders of People Ridesharing and 85% to
an investor.
American Uranium has its executive offices or facilities at 133
Richmond Street, West, Suite # 311, Toronto, Ontario, Canada M5H 2L3. Its
telephone number is (416) 203-2525. American Uranium was formerly named Zencrest
Holdings Corp. Inc.
Overall Business Methodology
Identify and Acquire Uranium and Vanadium Properties
American Uranium has entered into an agreement with a mineral
exploration company, Platoro West LLC that owns a database of geological
exploration information on approximately 1,500 properties, the majority of which
are located in the United States. The database was acquired by Platoro as part
of the liquidation of certain mining subsidiaries of a major multinational
chemical company that was previously engaged in mineral exploration. The
database was compiled during the 1960's and 1970's, and it is believed to
contain exploration results and feasibility studies that still have valuable,
useful information. The agreement provides for Platoro to identify eight to ten
advanced stage properties with proven reserves in the United States for American
Uranium to stake or otherwise acquire if interested. American Uranium views this
database as a substantial competitive advantage in the identification of high
quality mineral properties with significant potential for full development.
American Uranium's initial plans are to acquire claims for five to ten
uranium and vanadium properties. During the initial stages of operations, it
intends to update exploration results and feasibility studies for the most
promising properties and begin the permitting process on the properties that are
determined to be the most feasible for the extraction of minerals.
Update of Past Exploration Results and Feasibility Studies on Staked Claims
Once American Uranium has identified properties and acquired ownership
of the claims, it will contract with external geological and environmental
consultants to update the exploration results, feasibility studies and
environmental reports to determine if the properties can be permitted for
full-scale mining. Each property will be studied to determine the production
price that will support positive cash flow and that would be attractive to
develop using modern mining methods or to joint venture develop with a major
mineral producer. Claims that are not feasible to permit are not renewed with
the applicable federal and state authorities.
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Obtain Permits for Properties Identified as Feasible to Mine
American Uranium must undergo an extensive permitting process prior to
extracting minerals from feasible properties. Operating and environmental
permits will be obtained from the applicable regulatory bodies utilizing
technical applications filed by American Uranium. American Uranium has
identified external mining consultants to assist with preparing and filing
permits to all applicable regulatory authorities in the United States. American
Uranium draws upon the significant mining experience of its principal
shareholders, officers and directors to ensure the best resources are allocated
to permitting and proper procedures are followed.
Develop Mining Facilities and Extract Ore from Permitted Properties
American Uranium will use three approaches to mine permitted
properties: (i) develop the facilities to extract and partially refine the ore
and contract for later-stage refining with third-party refiners, (ii) enter a
joint venture agreement with a major mineral producer to extract and refine the
ore - American Uranium will receive a percentage of the revenues from the sale
of refined ore, or (iii) sell the permitted property to a major mineral
producer. American Uranium will require significant capital to manage and
operate fully functional mines without the assistance of a major mineral
producer and does not view this as the preferred option.
Mineral Ore Orientation
Recent acquisitions of uranium properties or junior uranium mining and
exploration companies by some major mineral producers has resulted in American
Uranium focusing on these particular minerals.
Uranium
Uranium, formally known as Uranium Oxide (U3O8), is obtained from
uranium concentrate commonly referred to as "yellowcake". Uranium is used almost
solely to fuel nuclear reactors and is typically sold under long-term contracts.
American Uranium believes the price for yellowcake has the potential to
strengthen over the next decade for a number of reasons: (i) demand for uranium
will increase during the next decade as numerous new nuclear reactors are built
and brought on-line and (ii) world production supplies approximately 55 percent
of annual consumption with the remainder supplied from inventory draw-downs --
current stockpiles are estimated to contain only one year of reserves.
Uranium exploration and mining took hold in the 1950's and 1960's as
demand for weapons grade nuclear material and nuclear power began. These decades
are depicted as a "uranium rush" as numerous mines and processing mills were
developed or built in the major uranium producing countries across the world.
The demand for uranium continued into the 1970's and uranium prices peaked at
$43 per pound in 1979. The uranium price increases continued to drive production
increases as new mines were developed throughout the 1970's. Stockpiles were set
aside to meet expected future demand for uranium. With the Three Mile Island
disaster, the OPEC oil crisis and consequent stabilization in demand for energy,
and later the Chernobyl disaster, interest in nuclear power dramatically
declined. Stockpiles continued to build-up during the early and mid-1980's as
production decreases did not match demand decreases. Since the mid-1980's,
uranium supplies have been plentiful and demand has increased only slowly.
Numerous mines and processing facilities have been shut-down over the last 15
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years. Uranium prices reached a low in 1994 at $7 per pound. Since that time
(and for the factors indicated above), uranium prices have began to rise.
Uranium ore is mined using one of three methods: (i) traditional
open-pit mining for shallow deposits, (ii) traditional underground mining for
deep deposits, and (iii) in-situ leaching for specific sandstone-hosted
deposits. Traditional mining methods use labor and capital equipment to extract
ore from the ground. The in-situ leaching process uses oxygen that is added to
native ground water to react with uranium. Traditional mining methods are
capital intensive, difficult to obtain environmental permits for, and take
longer to bring on stream. The in-situ leaching process can be started quickly,
is considered environmentally benign, and has lower operating costs. Heap
leaching, a second leaching method, can be used with traditional mining methods
to reduce the handling of heavy ore. Heap leaching uses chemicals that are
distributed through piles (heaps) of ore on the surface. The chemicals react
with the uranium in the ore, the solution is captured, and the uranium is
recovered from the chemicals. American Uranium is primarily focused on obtaining
claims for properties where leaching extraction methods can be used.
Vanadium
Vanadium is a metal which is usually recovered as a by-product from
uranium fuel or non-fuel mineral deposits and initially processed to a stable
oxide, vanadium pentoxide (V2O5). Most of the vanadium produced is then
converted to a vanadium/iron alloy, ferrovanadium, for use as an alloying
addition to steel. The economics of vanadium supply are largely dependent on the
exploitation of minerals which have a low vanadium content, such as uranium, and
there are very few mines that produce vanadium as the sole or main product.
Vanadium is also recovered from ashes, residue and spent catalysts. The main
single reason for the industrial use of vanadium is that the addition of a small
proportion to irons and steels promotes grain refinement and precipitation
hardening. This allows for the production of high-strength, low alloy steels.
The iron and steel industry accounts for about 90 percent of total consumption
of vanadium.
As with most commodities, the price of vanadium is dependent on the
supply of the metal as well as the demand for its end products. The price of
vanadium pentoxide, which is typically quoted in United States dollars per
pound, peaked in the late 1980's at approximately $11 per pound. American
Uranium believes that the price peak was driven by demand for iron and steel
from all major industrialized nations at the peak of the economic boom in the
1980's and prior to the global recession of the 1990's. American Uranium
believes the price will remain stable over the next decade as the supply of
vanadium will keep pace with the demand for iron and steel.
Graysill Property, San Juan and Dolores Counties, Colorado
American Uranium acquired through staking a total of 24 unpatented lode
mining claims in Sections 19, 20, 29 and 30 in Township 40 North, Range 9 West
in San Juan and Dolores Counties, Colorado immediately southeast of Bolam Pass.
The claims are located at an elevation of 11,000 feet above mean sea level and
are accessible by a dirt road that is maintained during the summer months by the
United States Forest Service. The property, which is referred to as the Graysill
Property encompasses the historic Graysill Mine, a past producer of vanadium and
uranium ore. The production history of the Graysill Mine is poorly documented,
but it is known to have produced vanadium and byproduct uranium during an
approximately twenty year period after World War II. Before the mine ceased
production, approximately 32,000 tons of ore were mined with a reported grade of
2.41% vanadium pentoxide and 0.09% uranium oxide. In 1989, representatives of
the United States, Department of the Interior, Bureau of Mines Division,
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examined a number of abandoned mines in the San Juan National Forest, one of
which was the Graysill Mine. Subsequently, in 1992 the Bureau of Mines produced
a Mineral Land Assessment Open File Report titled "Mineral Appraisal of San Juan
National Forest, Colorado". Most of the information relating to the Graysill
Mine and the geology and mineralization of the general area within which the
Graysill Property is located was obtained from this Open File Report unless
stated otherwise.
The property is underlain by a gently dipping assemblage of Paleozoic
and Mesozoic sedimentary rocks within which vanadium and uranium occurs in many
of the rock units in a stratabound manner, exhibiting little or no apparent
relationship to regional structural trends. Although vanadium and uranium
occurrences are ubiquitous and are known to exist in over 20 distinctly
different sedimentary units in the vicinity of the property of American Uranium,
the Pennsylvanian-Permian Rico Formation and the Upper Jurassic Entrada
Sandstone are the only formations which have been mined previously for vanadium
and uranium. Most of the past production has come from the Entrada Sandstone.
Historically, there have been a number of uraniferous vanadium deposits
developed in the Entrada Sandstone along a sinuous trend extending in a
north-south direction for over 100 miles. This trend coincides with a major
structural feature representing a transitional zone between the Colorado Plateau
and the Southern Rocky Mountain physiographic provinces.
During the past 50 years, the general region within which American
Uranium's property is located has been subjected to several periods of extensive
exploration. The major programs were carried out by Vanadium Corporation of
America during the late 1940s and early 1950s and by Atlas Corporation in the
late 1970s. Although the collective efforts of these companies resulted in the
discovery and definition of significant, high grade vanadium reserves containing
a high incidence of uranium, a major decline in the market for these commodities
in the early 1980s eliminated all interest in the area.
Concurrent with the height of exploration, uranium mining in the
project area was initiated on a small scale in the 1940s and peaked in the late
1950s. Sporadic production of vanadium and uranium continued into the 1970s.
Incomplete production records from the Graysill Mine, the largest producer in
the area, indicate that a total of 32,000 tons yielding approximately 52,000
pounds of uranium oxide and in excess of 1.5 million pounds of vanadium
pentoxide were produced before the mine ceased operations because of low
vanadium and uranium prices. Based on an analyses of the results of the drilling
completed by Vanadium Corporation of America, Platoro West, LLC calculated a
geological resource of 400,000 tons averaging 2.5% vanadium pentoxide. This ore
body also contains large uranium resources with an expected grade of 0.80%, the
reported grade at the Graysill Mine. This equates to an in ground resource of 20
million pounds of vanadium pentoxide and 640,000 pounds of uranium oxide.
American Uranium, through Platoro West, LLC, is in the process of
negotiating with Atlas Corporation to acquire all of the data relating to the
exploration they carried out in the Graysill area during the 1970s. American
Uranium does not believe this will be a material expense. This information would
enable American Uranium to recalculate the vanadium and uranium reserves on the
property and would be invaluable in designing further exploration work in the
Graysill area.
Based on the results of the previous exploration on the property
coupled with the widespread distribution of vanadium and uranium within the
Entrada Sandstone in the Graysill area, it is highly likely that a significant
increase in the vanadium and uranium reserves can be attained with further
exploration on the property.
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Consulting Agreement with Platoro West LLC
On August 26, 1998 American Uranium commenced operations by entering
into an agreement with Platoro West LLC for it to conduct mineral exploration
activities. The agreement calls for Platoro to identify and stake eight to ten
good, marketable, mineral properties on behalf of American Uranium. These
properties are to be advanced stage properties with proven resources located in
the United States. American Uranium pays Platoro the sum of $5,000 per month for
an initial agreement period of twenty-four months plus out of pocket expenses,
including wages, travel and field expenses. American Uranium is also responsible
for all filing fees for the claims identified by Platoro. In addition, American
Uranium will issue four hundred thousand shares of common stock to Platoro as
soon as public trading of American Uranium's common stock commences. As of
December 31, 1998 American Uranium has successfully acquired through staking one
property which was identified by Platoro pursuant to this agreement.
Government Regulation
American Uranium will be subject to regulation by numerous federal and
state governmental authorities. The most significant will be the Federal
Environmental Protection Agency, the Bureau of Land Management and comparable
state agencies. American Uranium expects that the regulation will cause it
significant expense in its operations, considerable time to meet and assure
compliance and the exposure to possible fines if it fails to meet the law or
regulation. Even if it employs others for extraction, milling and production,
American Uranium may bear some of these costs and/or liabilities. To date,
American Uranium has not been required to spend anything on compliance with
environmental laws because it is not operating any mining assets.
Competition
American Uranium competes with numerous junior mining and exploration
companies to identify and acquire claims with strong development potential and
to engage the foremost geological and environmental experts to assist with
exploration, feasibility studies and obtaining permits. American Uranium
believes that its contract with Platoro West, LLC to identify claims from a
large database of explored properties gives it a competitive advantage over many
other junior mining and exploration companies. Furthermore, the experience and
contacts of the officers and directors of American Uranium lend credibility and
attract attention when contracting third party experts.
Employees
American Uranium had one employee as of May 1, 1999. American Uranium
expects to hire consultants and independent contractors during the early stages
of implementing its business plan.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward Looking Statements
When used in this Form 10 and in future filings by American Uranium
with the Securities and Exchange Commission, the words or phrases "will likely
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result," "management expects," or "American Uranium expects," "will continue,"
"is anticipated," "estimated" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance
on any such forward-looking statements, each of which speak only as of the date
made. These statements are subject to risks and uncertainties, some of which are
described below. Actual results may differ materially from historical earnings
and those presently anticipated or projected. American Uranium has no obligation
to publicly release the result of any revisions which may be made to any
forward-looking statements to reflect anticipated events or circumstances
occurring after the date of such statements.
Selected Financial Data
Because American Uranium is a development stage company, selected
financial date would not be meaningful. Reference is made to the financial
statements of American Uranium included elsewhere in the document.
Fiscal Year 1997
American Uranium is a development stage company. Prior to August 1997,
it was an inactive subsidiary of People Ridesharing Systems, Inc. Except for the
initial recapitalization activity in 1997 as a result of the agreements among
creditors, stockholders and investors pursued in the context of the People
Ridesharing bankruptcy action, American Uranium did not conduct any activities
in the fiscal year ending December 31, 1997.
Fiscal Year 1998
American Uranium did not conduct any business during 1998 that resulted
in revenues. All of its activities during 1998 were devoted to establishing a
business plan and conducting limited financing activities to obtain initial
working capital.
During 1998, American Uranium incurred general and administrative
expenses of $91,937. These expenses were principally the costs associated with,
consulting fees, lease expenses, professional fees and salary of the president
of the company. The largest single amount was the cost of locating and staking
the Graysill Property and expenses associated with its mineral assets which
aggregated $53,039. The total expenses, offset by $616 of interest, resulted in
a loss for the fiscal year ended December 31, 1998 of $91,321. Funding of these
expenses was from working capital.
Liquidity and Capital Requirements
The working capital of American Uranium at December 31, 1998 was
$16,860. The working capital requirements of American Uranium has been funded by
the sale of securities. During 1998, American Uranium sold 6,540,000 shares of
common stock for an aggregate of $170,000. In January 1999, American Uranium
sold an additional 18,000 shares of common stock for an aggregate of $18,000.
The proceeds of these sales were used for initial developmental activities.
American Uranium will require additional financing to continue to
develop its business plan and to begin its implementation. Management believes
this amount will be substantial. American Uranium currently has no sources of
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financing, including bank or private lending sources, or equity capital sources.
No assurance can be given that American Uranium will be able to develop sources
of financing in the future.
To implement the staking, evaluation, development and extraction
aspects of its business plan, American Uranium will need substantial additional
funding. Because these requirements are in the more distant future, management
has not yet begun to develop methods of financing. Management expects that it
will use equity, debt and other arrangements, such as joint ventures, to fund
these stages of its business plan.
Year 2000
Overview
American Uranium has evaluated the potential impact of the situation
commonly referred to as the "Year 2000 Issue". Y2K concerns the inability of
information systems, primarily computer software programs, to properly recognize
and process date sensitive information relating to the year 2000 and beyond.
Many of the world's computer systems currently record years in a two-digit
format. These computer systems will be unable to property interpret dates beyond
the year 1999, which could lead to business disruptions in the U.S. and
internationally. The potential costs and uncertainties associated with Y2K will
depend on a number of factors, including software, hardware and the nature of
the industry in which a company operates.
Accounting Systems and Production Equipment
Because American Uranium has begun operations during the later part of
1998, management believes that the computer programs it purchases are Y2K
compliant. At this time, management believes that it does not have any assets
with embedded computer chips or programs. Mining data that American Uranium has
acquired or may purchase in the future is not subject to Y2K failure because it
is generally pure data without reference to aging or time change. Therefore
management does not expect to experience any Y2K failures.
Other Entity Compliance
American Uranium does not engage in electronic data interchange with
any other entity. Therefore, management believes it does not have any Y2K
exposure directly from other entities and their failure to be Y2K compliant.
Tangently, however, the failure of other entities to be Y2K compliant may cause
American Uranium issues, none of which are yet apparent to management.
Contingency Planning
Management does not have a contingency plan for its computer systems
because it believes they are Y2K compliant or there is no material risk.
Management does not have a contingency plan in the event a critical service,
supplier or customer will not be Y2K compliant. Management does not expect that
their failure will have a material impact because American Uranium is in the
development stage and uses few services, has few suppliers and has no customers.
If critical services such as utilities, communications or banking are affected,
operations of American Uranium will be disrupted.
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Cost of Year 2000 Compliance
American Uranium has not spent any amount on Y2K compliance. It does
not expect to have to spend any material amount on Y2K compliance in the future.
Item 3. DESCRIPTION OF PROPERTY
Executive Offices
The executive office is located at 133 Richmond Street, West, Suite #
311, Toronto, Ontario, Canada M5H 2L3 and its telephone number is (416)
203-2525.
American Uranium believes that its current office is adequate to meet
its needs until it becomes more fully operational.
Mining Property
See the description of the Graysill Property, San Juan and Dolores
Counties, Colorado in Item 1. Business.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of May 1, 1999 based on
information obtained from the persons named below. With respect to the
beneficial ownership of shares of the common stock of American Uranium by (1)
each person known to be the owner of more than 5% of the outstanding shares of
common stock, (2) each director and (3) all executive officers and directors as
a group.
Percent of
Number of Shares of Ownership of
Common Stock Common Stock
Name of Beneficial Owner Beneficially* Owned Outstanding
- ---------------------------- --------------------- ------------
G. Ken Webb . . . . . . . . . . 2,000,000(1)(2) 22.1%
C.T. Yeh . . . . . . . . . . . - 0 - - 0 -
Stewart A. Jackson . . . . . . 2,000,000(1)(3) 22.1%
Uranium Strategies, Inc. . . . 2,000,000(4) 22.1%
Robert Landau . . . . . . . . . 1,800,000(5) 19.9%
David Roff . . . . . . . . . . 1,800,000(5) 19.9%
Thomas Skimming . . . . . . . . 2,880,000(6) 31.8%
Directors and officers as a
group (3 persons) . . . . . . 2,000,000(7) 22.1%
- -------------------------------
* Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
issuable upon the exercise of options or warrants currently exercisable,
or exercisable or convertible within 60 days, are deemed outstanding for
computing the percentage ownership of the person holding such options or
warrants but are not deemed outstanding for computing the percentage
ownership of any other person.
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(1) The address for each of Messrs. Webb and Jackson is care-of American
Uranium at 133 Richmond Street, West, Third Floor, Toronto, Ontario, Canada
M5H 2L3.
(2) Mr. Webb is the chief executive officer, a director and a principal
shareholder of Uranium Strategies, Inc., and consequently has beneficial
ownership of the shares of common stock of American Uranium owned by
Uranium Strategies. Mr. Webb disclaims beneficial ownership as to 1,480,000
shares of common stock of American Uranium held by Uranium Strategies.
(3) Mr. Jackson is the Secretary and a director of Uranium Strategies and
consequently has beneficial ownership of the shares of common stock of
American Uranium owned by Uranium Strategies. Mr. Jackson disclaims
beneficial ownership as to all the shares of common stock of American
Uranium held by Uranium Strategies.
(4) The address for Uranium Strategies, Inc. is 3550 Skyline View Drive, Reno,
Nevada 89509.
(5) The address for each of Messrs. Landau and Roff is 133 Richmond Street,
West, Suite # 401, Toronto, Ontario, Canada M5H 2L3.
(6) The address for Thomas Skimming is 11 Camelot Court, Toronto, Ontario,
Canada M3B 2N4.
(7) See Notes 2 and 3 above.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The current directors and officers of American Uranium are as follows:
Name Age Position
- ------------------ ------- -----------------------------------
G. Ken Webb 59 President, Chief Executive Officer,
Director (Chairman of the Board)
C.T. Yeh 60 Secretary, Director
Steward A. Jackson 59 Director
Mr. G. Ken Webb, has been the President, Chief Executive Officer and a
director of American Uranium since 1997. Mr. Webb has over twenty years of
experience in the Canadian junior mining business. Mr. Webb has been involved
predominantly within the corporate finance area of the gold mining industry.
From April 1996 to June 1997, Mr. Webb conducted investor relations for Central
Asia Goldfields, from November 1994 to February 1996, he was a consultant to
Webcon Equipment and from June 1991 to September 1994, he was a consultant to
Entre Capital. Mr. Webb holds a law degree from Cambridge University, England.
He is originally from South Africa, where he completed his undergraduate studies
at the University of Natal, Pietermaritzburg. In a matter relating to a 1981
transaction involving receipt of bonus shares, Mr. Webb's registration was
suspended in 1988 as an officer of a stock brokerage firm by the Ontario
Securities Commission for eighteen months, but was subsequently reinstated.
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Mr. C.T. Yeh, has been the Secretary and a director of American Uranium
since 1997. Mr. Yeh has over 25 years of experience with mining companies and
financial services companies. From 1996 to 1997, Mr. Yeh was President of YCN
Group, L.L.C., a joint venture partner with Yang Cheng (Group) Co., Ltd., a
Macau based company wholly owned by the Municipality of Guangzhou, China. From
1992 to 1996, Mr. Yeh was Managing Director of Ridgewood Partners Ltd., an
investment banking company. From 1988 to 1992, Mr. Yeh was a Director of Elders
Resources Finance Inc., a merchant bank providing capital to the junior mining
companies. From 1979 to 1986, Mr. Yeh was Director and Financial Planner of
Inspiration Resources; from 1974 to 1979, was a Senior Process Economics
Engineer at Kennecott Copper; from 1969 to 1974, was a Metallurgist at Foote
Minerals Company; and from 1966 to 1969, Mr. Yeh was a Research Metallurgist at
Calumet & Hecla Company. Mr. Yeh holds a Bachelor of Science degree in
Metallurgical Engineering from Cheung Kung University, and Master of Science
degree in Metallurgical Engineering from Michigan Technological University, and
an M.B.A. with Honors from the University of Delaware. Mr. Yeh holds several
U.S. Patents in Metallurgy and has written several research papers for the
American Institute of Metallurgical Engineers and the American Ceramic Society.
Mr. Yeh is a Director of Link Mineral Ventures Ltd., a publicly traded company.
Dr. Stewart A. Jackson, has been the director of American Uranium since
1997. Dr. Jackson is an experienced geologist with 37 years of experience in
exploration and development of both base and precious metal deposits. Dr.
Jackson was responsible for the discovery and development of several major
mineral discoveries, including the Red Dog multi-billion dollar zinc deposit in
northwestern Alaska for Cominco Resources, Inc. Dr. Jackson was responsible for
the raising of over $50 million for several publicly traded companies, including
for Crown Resource Corp. founded by him in 1981. Since 1987 Dr. Jackson has been
an independent consulting geologist for several private and public companies.
Dr. Jackson earned a Bachelors of Science Degree majoring in Geology from the
University of Western Ontario and a Masters of Science majoring in Stratigraphy
and Mineral Deposit and a Doctorate from the University of Toronto.
Messrs. Webb, Yeh and Jackson, officers and directors of American Uranium
may be deemed to be "promoters".
Board Meetings and Committees
During the fiscal year ended December 31, 1998, the board of directors
met on six occasions and took written action on six occasions. All the members
of the board of directors attended the meeting. The written actions were by
unanimous consent. The board of directors has established no committees.
Directors serve for a term of one year after election or until their earlier
resignation or their successor is elected or appointed and qualified.
ITEM 6. EXECUTIVE COMPENSATION
Management Employment Agreements and Compensation
American Uranium currently pays a monthly salary of $2,500 to Mr. Webb,
the president. This salary commenced May 1998. American Uranium does not pay any
of its other officers any salary. American Uranium does not provide any other
benefits to its officers. American Uranium does not have any written agreements
with any of its officers and directors. Each of the officers and directors may
engage in other businesses, either individually or through partnerships or
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corporations in which they have an interest, hold an office or serve on boards
of directors. All of the officers and directors may have other business
interests to which they devote their time.
Other Key Advisors and Consultants
American Uranium has access to several outside professional firms which
can counsel it and provide important advice in its development stage. The terms
of engagement of these firms will be determined from time to time as their
services are required. See ITEM 1. Business for a description of the consulting
agreement with Platoro West, LLC.
Remuneration of the Board of Directors
Directors currently do not receive any compensation, but will receive
compensation for their services as determined in the future by the board of
directors. All directors are reimbursed for any expense incurred in attending
meetings of the board of directors.
Keyman Life Insurance
American Uranium does not own life insurance covering the death of any
officer, director or key employee.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 8. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The authorized capital stock consists of 100,000,000 shares of common
stock, $0.001 par value. There are 9,058,261 shares of Common Stock issued and
outstanding. There are no options, warrants, stock appreciation rights, or other
rights similar in nature outstanding which obligate American Uranium to issue
any additional common stock.
Common Stock
The holders of common stock are entitled to one vote per share on all
matters submitted to a vote of the shareholders of American Uranium. In
addition, such holders are entitled to receive ratably such dividends, if any,
as may be declared from time to time by the board of directors out of funds
legally available therefor. In the event of the dissolution, liquidation or
winding-up, the holders of common stock are entitled to share ratably in all
assets remaining after payment of all liabilities of American Uranium and
subject to the prior distribution rights of any preferred stock that may be
outstanding at that time. The holders of common stock do not have cumulative
voting rights or preemptive or other rights to acquire or subscribe for
additional, unissued or treasury shares, which means that the holders of more
than 50% of such outstanding shares, voting at an election of directors can
elect all the directors on the board of directors if they so choose and, in such
event, the holders of the remaining shares will not be able to elect any of the
directors. All outstanding shares of common stock are, and when issued, the
shares of common stock offered hereby, are fully paid and non-assessable.
12
<PAGE>
Stock Transfer Agent
The stock transfer agent for the common stock is Olde Monmouth Stock
Transfer Co., Inc., 77 Memorial Parkway, 2nd Floor, Atlantic Highlands, New
Jersey 07716, telephone (732) 872-2727.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER STOCKHOLDER MATTERS
Market Information
The common stock of American Uranium is not traded on any stock
exchange, any NASDAQ Stock Market medium or the "pink sheets". Consequently,
there is no public market for the common stock and no market price data to
report. American Uranium intends to obtain inclusion on the OTC Bulletin Board
in the future, but there can be no assurance that the common stock will be
included in the trading medium. Even if inclusion in the OTC Bulletin Board is
achieved, there is no assurance that the common stock will be actively traded.
Therefore, there can be no assurance that there will be liquidity in the common
stock.
Currently, there are 9,040,261 shares of common stock outstanding.
Except as noted below, all of these shares may be sold without restriction
because they have been held either longer than two years or issued in offerings
under Rule 504, Regulation D. 2,000,000 shares of common stock are held by
Uranium Strategies, Inc. which is controlled by Mr. G. Ken Webb. These shares of
common stock are subject to restrictions on public resales as "control shares".
Certain other shares of common stock may also be considered "control shares"
depending on factual circumstances at the time of sale. American Uranium
currently does not have outstanding any warrants or options.
Holders
As of May 1, 1999, there were 696 holders of record of the common
stock.
Dividend Policy
American Uranium has never declared or paid cash dividends on its common
stock and anticipates that all future earnings (for the near future) will be
retained for working capital and business expansion. The payment of any future
dividends will be at the sole discretion of the board of directors and will
depend upon, among other things, future earnings, capital requirements, the
company financial condition and general business conditions. Therefore, there
can be no assurance that any dividends on the common stock will be paid in the
future.
ITEM 2. LEGAL PROCEEDINGS
None.
13
<PAGE>
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Samuel Klein and Company, certified public accountants were engaged by
American Uranium on November 5, 1998 as the independent accountants. Prior to
this engagement, American Uranium did not engage any independent accountants to
review its financial statements because it was either inactive or in
reorganization. American Uranium is unaware of any disagreements or other issues
which are required to be disclosed by the rules and regulations applicable to
this Form 10.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
During September 1998, American Uranium directly sold an aggregate of
6,500,000 shares of common stock to three individuals in a private offering
pursuant to Rule 506 of Regulation D. The offering price was $.02 per share. The
total proceeds of the offering was $130,000. The proceeds were used for general
working capital purposes.
Under Rule 504, forming part of Regulation D, on December 18, 1998,
American Uranium sold 40,000 shares of common stock to two investors. The
purchase price per share was $1.00, for aggregate consideration of $40,000.
These securities were sold by American Uranium directly to the investors. The
proceeds were used for general working capital purposes.
Under Rule 504, forming part of Regulation D, on January 14, 1999,
American Uranium sold 18,000 shares of common stock to one investor. The price
per share was $ 1.00 for aggregate consideration of $18,000. These securities
were sold by American Uranium directly to the investors. The proceeds were used
for general working capital purposes.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 14A:3-5 of the Business Corporation Act of the State of New
Jersey provides for the indemnification of officers and directors under certain
circumstances against expenses and liabilities incurred as a result of a claim
against them as corporate agents and requires New Jersey corporations to
indemnify their officers and directors against expenses incurred in legal
proceedings because of their being or having been an officer or a director, if
the corporate agent is successful in his defense on the merits or otherwise in a
proceeding against him.
Insofar as indemnification for liabilities arising under the federal
securities laws may be permitted to directors, officers and controlling persons
of American Uranium pursuant to the corporate law of New Jersey or otherwise,
American Uranium has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy and is,
therefore unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by American Uranium of expenses
incurred by a director, officer or controlling person in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being offered or sold,
American Uranium will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Federal Securities laws, and will be governed by the final
adjudication of such case.
14
<PAGE>
American Uranium does not have any directors or officers liability
insurance.
PART F/S
The financial statements of American Uranium are included in this report
beginning on page F-1.
PART III
ITEM 1. INDEX TO EXHIBITS
(a) Exhibits
3.1* Certificate of Incorporation of the Registrant
3.2* By-laws of the Registrant
4.1* Form of Common Stock Certificate of Registrant
10.1* Consulting Agreement with Platoro West, LLC
<PAGE>
27.1* Financial Data Schedule
99.1* Risk Factors
* Filed herewith.
<PAGE>
FINANCIAL STATEMENTS
OF
AMERICAN URANIUM, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
CONTENTS
PAGE
Independent Auditor's Report.................................................F-2
Financial statements:
Balance sheets............................................................F-3
Statements of operations..................................................F-4
Statements of stockholders' equity........................................F-5
Statements of cash flows..................................................F-6
Notes to financial statements.............................................F-7
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of American Uranium, Inc.
We have audited the accompanying balance sheets of American Uranium, Inc.
(formerly Zencrest Holdings Corp., Inc.) as of December 31, 1998 and 1997, and
the related statements of operations, stockholders' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of American Uranium, Inc. as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
SAMUEL KLEIN AND COMPANY
Newark, New Jersey
March 23, 1999
F-2
<PAGE>
AMERICAN URANIUM, INC.
BALANCE SHEETS
December 31,
1998 1997
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $ 24,446 $ -
Prepaid expenses 5,208 -
------------- ---------------
Total Current Assets 29,654 -
Mineral Resource Assets 61,819 -
------------- ---------------
Total Assets $ 91,473 $ -
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 12,794 $ -
----------- ---------------
Total Current Liabilities 12,794 -
------------ ----------------
Total Liabilities 12,794 -
------------ ----------------
Stockholders' Equity:
Common stock, $.001 par value,
100,000,000 shares authorized,
9,040,261 and 2,500,261 shares
issued and outstanding at December
31, 1998 and 1997 9,040 2,500
Additional paid-in-capital 170,960 7,500
Accumulated deficit (101,321) (10,000)
---------- ---------
Total Stockholders' Equity 78,679 -
---------- ----------
Total Liabilities and Stockholders' Equity $ 91,473 $ -
=========== ===========
- --------------------
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
AMERICAN URANIUM, INC.
STATEMENTS OF OPERATIONS
For the Years Ended
December 31,
1998 1997
---- ----
Revenues $ - $ -
Cost of Revenues - -
---------- ---------
Gross Profit - -
Other Costs:
General and administrative expenses 91,937 -
---------- ---------
Total Other Costs 91,937 -
Other Income and Expense:
Interest income 616 -
---------- ----------
Net Loss before Benefit from Income
Taxes (91,321) -
Benefit from Income Taxes - -
------------ -----------
Net Loss $ (91,321) $ -
=========== ===========
- --------------------
The accompanying notes are an integral part of these financial statements.
F4
<PAGE>
AMERICAN URANIUM, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
Common Stock
$.001 Par Value
----------------------------
Common Additional Total
Number Stock Paid-In- Accumulated Stockholders'
of Shares Amount Capital Deficit Equity
----------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Balances, January 1, 1997 2,500,261 $2,500 $ 7,500 $(10,000) $ -
Net Loss for the Year Ended
December 31, 1997 - - - - -
------------ ------------- ------------- ---------- ----------
Balances, December 31, 1997 2,500,261 2,500 7,500 (10,000) -
Issuance of Common Shares 6,540,000 6,540 163,460 - 170,000
Net Loss for the Year Ended
December 31, 1998 - - - (91,321) (91,321)
----------- ------------- ------------- --------- ----------
Balances, December 31, 1998 $9,040,261 $9,040 $170,960 $(101,321) $ 78,679
=========== ============ ============= ========== ==========
</TABLE>
- --------------------
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
AMERICAN URANIUM, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended
December 31,
1998 1997
---- ----
Cash Flows from Operating Activities:
Net loss $(91,321) $ -
Adjustments to reconcile net loss to
net cash used in operating activities:
Increase in prepaid expenses (5,208) -
Increase in accounts payable and
accrued expenses 12,794 -
-------- ----------
Net Cash Used in Operating
Activities (83,735) -
-------- ----------
Cash Flows from Investing Activities:
Increase in Mineral Resource Assets (61,819) -
---------- ------------
Net cash used in investing
activities (61,819) -
---------- ------------
Cash Flows from Financing Activities:
Proceeds from the issuance of common
stock 170,000 -
--------- ------------
Net Cash provided by financing
activities 170,000 -
--------- ------------
Net Increase in Cash and Cash Equivalents 24,446 -
Cash and Cash Equivalents, beginning of year - -
--------- ------------
Cash and Cash Equivalents, end of year $ 24,446 $ -
========= ============
- --------------------
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
AMERICAN URANIUM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
American Uranium, Inc. (formerly Zencrest Holdings Corp., Inc.) (the "Company")
was formed in 1991 as a subsidiary of People Ridesharing Systems, Inc. ("PRS") a
company that filed for reorganization under Chapter 11 of the Bankruptcy Act. As
a result of an arrangement with the Bankruptcy Court and PRS, ownership in the
Company was to be provided to the creditors and stockholders of PRS who received
ten percent and five percent, respectively, of the outstanding stock of the
Company upon the sale of the Company and in contemplation of a merger. In
addition, the Company sold eighty-five percent of the Company's stock to
nonaffiliated parties.
On August 26, 1998 the Company commenced operations by entering into an
agreement with Platoro West, LLC ("Platoro") concerning mineral exploration
activities. The Company's operations will be in the identification, acquisition,
exploration, development and extraction of minerals, primarily focusing on
uranium and vanadium claims located in the United States.
Inventory
Inventory will be valued at cost as computed under the last-in, first-out (LIFO)
method which normally is lower than market. For the type of inventory the
Company intends to maintain, no segregation among raw materials, work in process
and finished goods will be practicable.
Mineral Resource Assets
Mineral resource assets include costs associated with mineral interest in
properties and related equipment and facilities and other facilities required
for purposes of extraction.
Property, Plant and Equipment
Property, plant and equipment will include support equipment and will be
amortized over the estimated useful life of the assets.
Revenue Recognition
Revenue will be recognized upon shipment of the mined minerals.
Use of Management's Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
F-7
<PAGE>
AMERICAN URANIUM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
The Company follows Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under
this method, deferred tax liabilities and assets are determined based on the
difference between the financial statement carrying amounts and tax bases of
assets and liabilities using enacted tax rates in effect in the years in which
the differences are expected to reverse. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized.
Impairment of Long-Lived Assets
The Company adopted Statement of Financial Accounting Standards No. 121 (SFAS
121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of". SFAS 121 requires that if facts and circumstances
indicate that the cost of fixed assets or other assets may be impaired, an
evaluation of recoverability would be performed by comparing the estimated
future undiscounted pre-tax cash flows associated with the asset to the asset's
carrying value to determine if a write-down to market value or discounted
pre-tax cash flow value would be required.
Comprehensive Income
For the year ended December 31, 1998, the Company adopted SFAS No. 130,
Reporting Comprehensive Income ("SFAS 130"). This statement establishes rules
for the reporting of comprehensive income and its components which require that
certain items such as foreign currency translation adjustments, unrealized gains
and losses on certain investments in debt and equity securities, minimum pension
liability adjustments and unearned compensation expense related to stock
issuances to employees be presented as separate components of stockholders'
equity. The adoption of SFAS 130 had no impact on total stockholder's equity for
either of the years presented in these financial statements.
2. COMMON STOCK
The Company was incorporated on October 22, 1991 in the State of New Jersey and
has authority to issue, pursuant to an amendment to the Company's certificate of
incorporation on July 25, 1997, 100,000,000 $.001 par value shares of Common
Stock. As a result of an arrangement with the Bankruptcy Court and PRS, entered
into on April 30, 1996, ownership in the Company was to be provided to the
creditors and stockholders of PRS who received 10 percent and 5 percent,
respectively, of the outstanding common stock of the Company upon the sale of
the Company and in contemplation of a merger, resulting in 10,000,000 shares of
common stock outstanding.
On March 23, 1998, the Company effected a 1 for 4 reverse split of the
outstanding common stock resulting in a reduction of the issued and outstanding
shares from 10,000,000 to 2,500,261 which included the issuance of 261
fractional shares. All outstanding share information has been retroactively
restated to give effect for the 1 for 4 reverse stock split.
F-8
<PAGE>
AMERICAN URANIUM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
2. COMMON STOCK (Continued)
During September 1998, the Company issued private placement offerings to three
individuals who were instrumental in identifying worthy business opportunities.
The private placement offering totaled 6,500,000 shares of the Company's common
stock at a price of $.02 per share. Total proceeds of the private placement
offerings were $130,000.
On December 18, 1998, the Company completed the sale of two private placement
offerings and received $40,000 for which the Company issued 40,000 shares of its
common stock during January 1999. For financial statement presentation, the
40,000 shares have been treated as issued and outstanding at December 31, 1998.
On January 14, 1999 the Company completed the sale of one additional private
placement offering and issued 18,000 shares of its common stock, which resulted
in total proceeds to the Company of $18,000.
3. COMMITMENTS AND CONTINGENCIES
On August 26, 1998 the Company commenced operations by entering into an
agreement with Platoro, already defined in Note 1, concerning mineral
exploration activities. The Company's operations will be in the identification,
acquisition, exploration, development and extraction of minerals, primarily
focusing on uranium and vanadium claims located in the United States. The
agreement with Platoro calls for Platoro to identify and stake eight (8) to ten
(10) good, marketable, mineral properties on behalf of the Company.. These
properties are to be advanced stage properties with proven resources located in
the United States. The Company in return agrees to pay the sum of $5,000 per
month for an initial agreement period of twenty-four (24) months plus out of
pocket expenses, including wages, travel and field expenses. The Company is also
responsible for all filing fees for the claims acquired by Platoro. In addition,
the Company will issue four hundred thousand (400,000) shares of common stock to
Platoro as soon as trading of the Company's common stock commences. As of
December 31, 1998 the Company has successfully acquired through staking one
property which was identified by Platoro pursuant to this agreement.
F-9
<PAGE>
AMERICAN URANIUM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
4. MINING PROPERTIES
Graysill Property, San Juan and Dolores Counties, Colorado
The Company acquired through staking a total of 24 unpatented lode mining claims
in Sections 19, 20, 29 and 30 in Township 40 North, Range 9 West in Dolores and
San Juan Counties, Colorado immediately southeast of Bolam Pass. The claims were
located on September 29, 1998 and the Company is required to make a payment of
$1 per claim by August 11th of each year on an ongoing basis in order to
preserve title to the property. The claims are located at an elevation of 11,000
feet above mean sea level and are accessible by a dirt road that is maintained
during the summer months by the United States Forest Service. The property,
which is referred to as the Graysill Property encompasses the historic Graysill
Mine, a past producer of vanadium and uranium ore. The production history of the
Graysill Mine is poorly documented, but it is known to have produced vanadium
and byproduct uranium during an approximately twenty year period after World War
II. Before the mine ceased production, approximately 32,000 tons of ore were
mined with a reported grade of 2.41% vanadium pentoxide and 0.09% uranium oxide.
In 1989, representatives of the United States, Department of the Interior,
Bureau of Mines Division, examined a number of abandoned mines in the San Juan
National Forest, one of which was the Graysill Mine. Subsequently, in 1992 the
Bureau of Mines produced a Mineral Land Assessment Open File Report titled
"Mineral Appraisal of San Juan National Forest, Colorado". Most of the
information relating to the Graysill Mine and the geology and mineralization of
the general area within which the Graysill Property is located was obtained from
this Open File Report unless stated otherwise.
The Graysill Property of American Uranium Inc. is underlain by a gently dipping
assemblage of Paleozoic and Mesozoic sedimentary rocks within which vanadium and
uranium occurs in many of the rock units in a stratabound manner exhibiting
little or no apparent relationship to regional structural trends. Although
vanadium and uranium occurrences are ubiquitous and are known to exist in over
20 distinctly different sedimentary units, the Uranium line property, the
Pennsylvanian Permian Rico Formation and the Upper Jurassic Entrada Sandstone
are the only formations which have been mined previously for vanadium and
uranium. Most of the past production has come from the Entrada Sandstone.
Historically, there have been a number of uraniferous vanadium deposits
developed in the Entrada Sandstone along a sinuous trend extending in a
north-south direction for over 100 miles. This trend coincides with a major
structural feature representing a transitional zone between the Colorado Plateau
and the Southern Rocky Mountain physiographic provinces.
During the past 50 years, the general region within which the Company's property
is located has been subjected to several periods of extensive exploration. The
major programs were carried out by Vanadium Corporation of America during the
late 1940's and early 1950's and by Atlas Corporation in the late 1970's.
Although the collective efforts of these companies resulted in the discovery and
definition of significant, high grade vanadium reserves containing a high
incidence of uranium, a major decline in the market for these commodities in the
early 1980's eliminated all interest in the area.
F-10
<PAGE>
AMERICAN URANIUM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(Continued)
4. MINING PROPERTIES (Continued)
Graysill Property, San Juan and Dolores Counties, Colorado (Continued)
Concurrent with the height of exploration, uranium mining in the project area
was initiated on a small scale in the 1940's and peaked in the late 1950's.
Sporadic production of vanadium and uranium continued into the 1970's. Based on
reported grades, the total production from the 32,000 tons of ore extracted from
the Graysill Mine amounted to approximately 52,000 pounds of uranium oxide and
in excess of 1,500,000 pounds of vanadium pentoxide before the mine ceased
operations presumably because of low vanadium and uranium prices. Recently,
Platoro West, LLC of Durango, Colorado acquired a map which was prepared by
Vanadium Corporation of America in 1950 at a scale of 1 inch to 500 feet. The
map outlines the location of a large number of exploration holes that were
drilled by Vanadium Corporation of America and details the average grade and
thickness of vanadium mineralization that was encountered in each hole. Based on
this information, and assuming continuity of the mineralization between drill
holes and a reasonable distance beyond drill holes, Platoro West, LLC calculated
a geological resource of 400,000 tons averaging 2.5% vanadium pentoxide.
Although the uranium content is not shown on the map, it is the assumption of
Platoro West, LLC that a large resource of absorbed uranium is associated with
the vanadium mineralization since the drilling appears to have been designed to
extend the zone of vanadium and uranium mineralization at the Graysill Mine.
This equates to an inground resource of 20,000,000 pounds of Vanadium Pentoxide
and possibly 6,400,000 pounds of uranium oxide, providing the uranium grades at
the Graysill Mine accurately reflect the uranium content in the Graysill
vanadium deposit.
American Uranium, Inc., through Platoro West, LLC is in the process of
negotiating with Atlas Corporation to acquire all of the data relating to the
exploration they carried out in the Graysill area during the 1970's. This
information would enable American Uranium to recalculate the vanadium and
uranium reserves and would be invaluable in designing further exploration work
on the Graysill Property.
Based on the results of the previous exploration on the property, coupled with
the widespread distribution of vanadium and uranium within the Entrada Sandstone
in the Graysill area, management believes that it is highly likely that a
significant increase in the vanadium and uranium reserves can be attained with
further exploration on the property.
5. YEAR 2000 ISSUES
The year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
2000 dates is processed. In addition, similar problems may arise in some systems
which use certain dates in 1999 to represent something other than a date. The
effects of the Year 2000 Issue may be experienced before, on, or after January
1, 2000, and, if not addressed, the impact on operations and financial reporting
may range from minor errors to significant systems failure which could affect an
entity's ability to conduct normal business operations. It is not possible to be
certain that all aspects of the Year 2000 Issue affecting the Company, including
those related to the efforts of customers, suppliers, or third parties, will be
fully resolved.
F-11
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 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 on the 10th day of May, 1999.
AMERICAN URANIUM, INC.
/s/ G. Ken Webb
---------------------
G. Ken Webb
President and
Chief Executive Officer
F-12
<PAGE>
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
PRS SUB III INC.
To: The Secretary of State
State of New Jersey
The undersigned, of the age of eighteen years or over, for the
purpose of forming a corporation pursuant to the provisions of Title 14A,
Corporations, General, of the New Jersey Statutes, does hereby execute the
following Certificate of Incorporation.
(1) The name of the corporation is
PRS SUB III INC.
(2) The purpose or purposes for which the corporation is organized
are: To do any lawful act or thing for which corporations may be organized
pursuant to the provisions of Title 14A, Corporations, General, of the New
Jersey Statutes.
(3) The aggregate number of shares which the corporation shall
have the authority to issue is 10 Million shares each of which shall have $.001
par value.
(4) The address of the corporation's initial registered office is
150 West State Street, Trenton, New Jersey 08608.
<PAGE>
The name of the corporation's initial registered agent at such
address is The Prentice-Hall Corporation System, New Jersey, Inc.
(5) The number of directors constituting the initial board of
directors shall be one and the name and address is as follows:
NAME ADDRESS
John Frohling Gateway 1
Suite 100
Newark, New Jersey 07102
(6) The name and address of the Incorporator is as follows:
NAME ADDRESS
Merridith E. Cramer 830 Bear Tavern Road
West Trenton, New Jersey 08628
IN WITNESS WHEREOF, the undersigned of the above named
corporation, has hereunto signed this Certificate of Incorporation this
twenty-second day of October, 1991.
/s/ Merridith E. Cramer
-------------------------
Merridith E. Cramer
Incorporator
<PAGE>
New Jersey Department of State
Department of Commercial Recording
Certificate of Amendment to the
Certificate of Incorporation
(For Use by Domestic Profit Corporations)
"Federal Employer Identification No."
Pursuant to the provisions of Section 14A:9-(4) and Section 14A:9-4(3),
corporations, General of the New Jersey Statutes, the undersigned
corporation executes the following Certificate of Amendment to its
Certificate of Incorporation:
1. The name of the corporation is PRS SUB III, INC.
2. The following amendment to the Certificate of Incorporation was approved
by the directors and thereafter duly adopted by the shareholders of the
corporation on the 18 day of July, 1997:
Resolved, that Article 3 of the Certificate of Incorporation be amended to
read as follows:
The aggregate number of shares which the corporation shall have the
authority to issue is: 100,000,000 par value $.001.
3. The number of shares outstanding at the time of the adoption of the
amendment was 1000. The total number of shares entitled to vote thereon
was 1000.
If the shares of any class or series of shares are entitled to vote thereon
as a class, set forth below the designation and number if outstanding
shares entitled to vote thereon of each such class or series. (Omit if not
applicable).
4. The number of shares voting for and against such amendment is as follows:
(If the shares of any class or series are entitled to vote as a class, set
forth the number of shares of each such class and series voting for and
against the amendment, respectively).
Number of Shares Voting Number of Shares Voting
for Amendment Against Amendment
------------------------- ------------------------
1000 0
5. If the amendment provides for an exchange, reclassification or
cancellation of issued shares, set forth a statement of the manner in
which the same shall be effected. (Omit if not applicable).
6. Other provisions: (Omit if not applicable).
PRS SUB III, INC.
--------------------
(Corporate Name)
By: /S John B. Frohling
--------------------------
John B. M. Frohling, President
(Type Name and Title)
Dated this 21st day of July, 1997
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
Pursuant to the provisions of N.J.S.A. 14A:9-2(4) and 14A:9-4(3),
Corporations, General of New Jersey Statutes, the undersigned corporation
executes the following Certificate of Amendment to its Certificate of
Incorporation.
1. The name of the Corporation is PRS SUB III, INC.
2. The following amendment to the Certificate of Incorporation was
approved by the directors and thereafter duly adopted by the
shareholders of the Corporation on the 9th day of October, 1997.
RESOLVED, that Article One of the Certificate of Incorporation be
amended to read as follows:
The name of the Corporation is Zencrest Holdings Corp., Inc.
3. The number of shares outstanding at the time of the adoption of
the amendment was 10,000,000. The total number of shares entitled
to vote thereupon was 10,000,000, par value of $.001.
4. The number of shares voting for and against such amendment is as
follows:
Number of share Votes Number of share Votes
for Amendment Against Amendment
10,000 -0-
5. Other provisions: NONE
Dated: October 9, 1998
PRS SUB II, INC.
By: /S John B. Frohling
--------------------------
John B. M. Frohling, President
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
Pursuant to the provisions of the N.J.S.A. 14A:9-2(4) and 14A:9-4(3)
Corporations, General of the New Jersey Statutes, the undersigned corporation
executes the following Certificate of Amendment of its Certificate of
Incorporation.
1. The name of the Corporation is : Zencrest Holdings, Corp., Inc.
2. The following amendment to the Certificate of Incorporation was approved
by the directors and thereafter duly adopted by the shareholders of the
Corporation on the 13th day of July, 1998.
RESOLVED, that Article One of the Certificate of Incorporation be amended
to read as follows:
The Name of the Corporation is American Uranium, Inc.
3. The number of shares outstanding at the time of the adoption of the
amendment was 2,500,000. The total number of shares entitled to vote
thereupon was 2,500,000, par value of $.001.
4. The number of shares voting for and against such amendment is as follows:
Number of share Votes for Amendment 2,000,000
Number of share Votes against Amendment -0-
Number of share Votes which abstained 500,000
5. Other provisions: NONE
Dated: August 24, 1998
Zencrest Holdings, Corp., Inc.
By: s/ G. Ken Webb
--------------------------------
G. Ken Webb, President
<PAGE>
Exhibit 3.2
BY-LAWS
OF
AMERICAN URANIUM INC.
(A New Jersey Corporation)
------------
ARTICLE I
SHAREHOLDERS
1. CERTIFICATES REPRESENTING SHARES. Certificates representing shares shall set
forth thereon prescribed by Section 14A:7-11, and, where applicable, by Sections
14A:5-21 and 14A:12-5, of the New Jersey Business Corporation Act and by any
other applicable provision of law and shall be signed by the Chairman or
Vice-Chairman of the Board of Directors, if any, or by the President or
Vice-President and may be counter signed by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant treasurer and may be sealed with the
corporate seal or a facsimile thereof. Any or all other signatures upon a
certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of its issue.
The corporation may issue a new certificate for shares in place of any
certificate theretofore issued by it, alleged to have been lost or destroyed,
and the Board of Directors may require the owner of any lost or destroyed
certificate, or his legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such certificate
or the issuance of any such new certificate.
2. FRACTIONAL SHARE INTERESTS. Unless otherwise provided in its certificate of
incorporation, the corporation may, but shall not be obliged to, issue fractions
of a share and certificates therefor. By action of the Board, the corporation
may, in lieu of issuing fractional shares, pay cash equal to the value of such
fractional share or issue scrip in registered or bearer form which shall entitle
the holder to receive a certificate for a full share upon the surrender of such
scrip aggregating a full share. A certificate for a fractional share shall
entitle the holder to exercise voting rights, to receive dividends thereon, and
to participate in any distribution of assets of the corporation in the event of
liquidation, but scrip shall not entitle the holder to exercise such voting
rights, receive dividends or participate in any such distribution of assets
unless such scrip shall so provide. All scrip shall be issued subject to the
condition that it shall become void if not exchanged for certificates
representing full shares before a specified date.
3. SHARE TRANSFERS. Upon compliance with provisions restricting the
transferability of shares, if any, transfers of shares of the corporation shall
be made only on the share record of the corporation by the registered holder
<PAGE>
thereof, or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the corporation or with a transfer
agent or a registrar, if any, and on surrender of the certificate or
certificates for such shares properly endorsed and the payment of all taxes due
thereon, if any.
4. RECORD DATE FOR SHAREHOLDERS. The Board of Directors may fix, in advance, a
date as the record date for determining the shareholders with regard to any
corporate action or event and, in particular, for determining the shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof; to give a written consent to any action without a meeting;
or to receive payment of any dividend or allotment of any right. Any such record
date shall in no case be more than sixty days prior to the shareholders' meeting
or other corporate action or event to which it relates. Any such record date for
a shareholders' meeting shall not be less than ten days before the date of the
meeting. Any such record date to determine shareholders entitled to give a
written consent shall not be more than sixty days before the date fixed for
tabulation of the consents or, if no date has been fixed for tabulation, more
than sixty days before the last day on which consents received may be counted.
If no such record date is fixed, the record date for a shareholders' meeting
shall be the close of business on the day next preceding the day on which notice
is given, or, if no notice is given, the day next preceding the day on which the
meeting is held; and the record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the resolution of
the Board of Directors relating thereto is adopted. When a determination of
shareholders of record for a shareholders' meeting has been made as provided in
this section, such determination shall apply to any adjournment thereof, unless
the Board of Directors fixes a new record date under this section for the
adjourned meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the right to notice of
a meeting of shareholders or a waiver thereof or to participate or vote thereat
or to consent or dissent in writing in lieu of a meeting, as the case may be,
the term "share" or "shares" or "shareholder" or "shareholders" refers to an
outstanding share or shares and to a holder or holders of record of outstanding
shares when the corporation is authorized to issue only one class of shares, and
said reference is also intended to include any outstanding share or shares and
any holder or holders of record of outstanding shares of any class upon which or
upon whom the Certificate of Incorporation confers such rights where there are
two or more classes or series of shares or upon which or upon whom the New
Jersey Business Corporation Act confers such rights notwithstanding that the
Certificate of Incorporation may provide for more than one class or series of
shares, one or more of which are limited or denied such rights thereunder.
6. SHAREHOLDER MEETINGS.
TIME. The annual meeting shall be held at the time fixed, from the time to
time, by the directors, provided that the first annual meeting shall be held on
a date within thirteen months after the organization of the corporation, and
each successive annual meeting shall be held on a date within thirteen months
after the date of the preceding annual meeting. If, for any reason, the
directors shall fail to fix the time for an annual meeting, such meeting shall
be held at noon on the first Tuesday in November. A special meeting shall be
held on the date fixed by the directors.
PLACE. Annual meetings and special meetings shall be held at such place,
within or without the State of New Jersey, as the directors may, from time to
time, fix. Whenever the directors shall fail to fix such place, the meeting
shall be held at the registered office of the corporation in the State of New
Jersey.
<PAGE>
CALL. Annual meetings may be called by the directors or by the President or
by any officer instructed by the directors to call the meeting. Special meetings
may be called in like manner.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written notice of every
meeting shall be given, stating the time, place and purpose or purposes of the
meeting. If any action is proposed to be taken which would, if taken, entitle
shareholders to dissent and to receive payment for their shares, the notice
shall include a statement of that purpose and to that effect. The notice of
every meeting shall be given, personally or by mail, and, except as otherwise
provided by the New Jersey Business Corporation Act, not less than ten days or
more than sixty days before the date of the meeting, unless the lapse of the
prescribed period of time shall have been waived before or after the taking of
any action, to each shareholder at his record address or at such other address
which he may have furnished by request in writing to the Secretary of the
corporation. Notice by mail shall be deemed to be given when deposited, with
postage thereon prepaid, in a post office or official depository under the
exclusive care and custody of the United States Post Office Department. When a
meeting is adjourned to another time or place, it shall not be necessary to give
notice of the adjourned meeting if the time and place to which the meeting is
adjourned are announced at the meeting at which the adjournment is taken and at
the adjourned meeting only such business is transacted as might have been
transacted at the original meeting. However, if after the adjournment the
directors fix a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given to each shareholder on the new record date.
Notice of a meeting need not be given to any shareholder who submits a
signed waiver of notice before or after the meeting. The attendance of a
shareholder at a meeting without protesting prior to the conclusion of the
meeting the lack of notice of such meeting shall constitute a waiver of notice
of him.
VOTING LIST. The officer or agent having charge of the stock transfer
books for shares of the corporation shall make and certify a complete list of
the shareholders entitled to vote at shareholders' meeting or any adjournment
thereof. Any such list may consist of cards arranged alphabetically or any
equipment which permits the visual display of the information required by the
provisions of Section 14A:5-8 of the New Jersey Business Corporation Act. Such
list shall be arranged alphabetically within each class, series, if any, or
group of shareholders maintained by the corporation for convenience of
reference, with the address of, and the number of shares held by, each
shareholder; be produced (or available by means of a visual display) at the time
and place of the meeting; be subject to the inspection of any shareholder for
reasonable periods during the meeting; and be prima facie evidence as to who are
the shareholders entitled to examine such list or to vote at such meeting.
CONDUCT OF MEETING. Meetings of the shareholders shall be presided over by
one of the following officers in the order of seniority and if present and
acting - the chairman of the Board, if any, the Vice Chairman of the Board, if
any, the President, a Vice President, or, if none of the foregoing is in office
and present and acting, by a chairman to be chosen by the shareholders. The
Secretary of the corporation, or in his absence, an Assistant Secretary, shall
act as secretary of every meeting, but if neither the Secretary nor an Assistant
Secretary is present the Chairman of the meeting shall appoint a secretary of
the meeting.
PROXY REPRESENTATION. Every shareholder may authorize another person or
persons to act for him by proxy in all matters in which a shareholder is
entitled to participate, whether by waiving notice of or the lapse of the
prescribed period of time before any meeting, voting or participating at a
<PAGE>
meeting, or expressing consent without a meeting. Every proxy must be signed by
the shareholder or his agent, except that a proxy may be given by a shareholder
or his agent by telegram or cable or by any means of electronic communication
which results in a writing. No proxy shall be valid for more than eleven months
unless a longer time is expressly provided therein. Unless it is irrevocable as
provided in subsection 14A:5-19(c) of the New Jersey Business Corporation Act a
proxy shall be revocable at will. The grant of a later proxy revokes any earlier
proxy unless the earlier proxy is irrevocable. A proxy shall not be revoked by
the death or incapacity of the shareholder, but the proxy shall continue to be
in force until revoked by the personal representative or guardian of the
shareholder. The presence at any meeting of any shareholder who has given a
proxy does not revoke the proxy unless the shareholder files written notice of
the revocation with the Secretary of the meeting prior to the voting of a proxy
or votes the shares subject to the proxy by written ballot. A person named in a
proxy as the attorney or agent of a shareholder may, if the proxy so provides,
substitute another person to act in his place, including any other person named
as an attorney or agent in the same proxy. The substitution shall not be
effective until an instrument effecting it is filed with the Secretary of the
corporation.
INSPECTORS - APPOINTMENT. The directors, in advance of any meeting, or of
the tabulation of written consents of shareholders without a meeting may, but
need not, appoint one or more inspectors to act at the meeting or any
adjournment thereof or to tabulate such consents and make a written report
thereof. If an inspector or inspectors to act at any meeting of shareholders are
not so appointed by the directors or shall fail to qualify, if appointed, the
person presiding at the shareholders' meeting may, and on the request of any
shareholder entitled to vote thereat, shall, make such appointment. In case any
person appointed as inspector fails to appear or act, the vacancy may be filled
by appointment made by the directors in advance of the meeting, or at the
meeting by the person presiding at the meeting. Each inspector appointed, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspector with strict impartiality and
according to the best of his ability. No person shall be elected a director in
an election for which he has served as an inspector. The inspectors, if any,
shall determine the number of shares outstanding and the voting power of each,
the shares represented at the meeting, the existence of a quorum, the validity
and effect of proxies, and shall receive votes or consents, hear and determine
all challenges and questions arising in connection with the right to vote, count
and tabulate all votes or consents, determine the result, and do such acts as
are proper to conduct the election or vote with fairness to all shareholders. If
there are three or more inspectors, the act of a majority shall govern. On
request of the person presiding at the meeting or any shareholder entitled to
vote thereat, the inspectors shall make a report in writing of any challenge,
question or matter determined by them. Any report made by them shall be prima
facie evidence of the facts therein stated, and such report shall be filed with
the minutes of the meeting.
QUORUM. Except for meetings ordered by the Superior court to be called and
held pursuant to Sections 14A:5-2 and 14A:5-3 of the New Jersey Business
Corporation Act, the holders of the shares entitled to cast at least a majority
of the votes at the meeting shall constitute a quorum at the meeting of
shareholders for the transaction of business.
The shareholders present may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum. Less than a quorum may adjourn.
VOTING. Each share shall entitle the holder thereof to one vote. In the
election of directors, a plurality of the votes shall elect, and no election
need be by ballot unless a shareholder demands the same before the voting
<PAGE>
begins. Any other action shall be authorized by a majority of the votes cast
except where the New Jersey Business Corporation Act prescribes a different
proportion of votes.
7. SHAREHOLDER ACTION WITHOUT MEETINGS. Subject to any limitations prescribed by
the provisions of Section 14A:5-6 of the New Jersey Business Corporation Act and
upon compliance with said provisions, any action required or permitted to be
taken at a meeting of shareholders by the provisions of said Act or by the
Certificate of Incorporation or these By-Laws may be taken without a meeting if
all of the shareholders entitled to vote thereon consent thereto in writing and
(except for the annual election of directors) may also be taken by less than all
of the shareholders who would have been entitled to cast the minimum number of
votes which would be necessary to authorize any such action at a meeting at
which all shareholders entitled to vote thereon were present and voting.
Whenever any action is taken pursuant to the foregoing provisions, the written
consents of the shareholders consenting thereto or the written report of the
inspectors appointed to tabulate such consents shall be filed with the minutes
of proceedings of shareholders.
ARTICLE II
GOVERNING BOARD
1. FUNCTIONS, DEFINITIONS AND COMPENSATION. The business and affairs of the
corporation shall be managed and conducted by or under the direction of a
governing body, which is herein referred to as the "Board of Directors" or
`directors" notwithstanding that the members thereof may otherwise bear the
titles of trustees, managers, or governors or any other designated title. The
word "director" or "directors" likewise herein refers to a member or to members
of the governing board notwithstanding the designation of a different official
title or titles. The use of the phrase "entire board" herein refers to the total
number of directors which the corporation would have if there were no vacancies.
The Board of Directors, by the affirmative vote of a majority of directors in
office and irrespective of any personal interest of any of them, shall have
authority to establish reasonable compensation of directors for services to the
corporation as directors, officers or otherwise.
2. QUALIFICATIONS AND NUMBER. Each director shall be at least eighteen years of
age. A director need not be a shareholder, a citizen of the United States, or a
resident of the State of New Jersey. The number of directors of the corporation
shall be not less than three(3) nor more than seven(7). The directors shall have
power from time to time, in the interim between annual and special meetings of
the shareholders, to increase or decrease their number within the minimum and
maximum number hereinbefore prescribed.
3. ELECTION AND TERM. The first Board of Directors shall hold office until the
first annual meeting of shareholders and until their successors have been
elected and qualified. Thereafter, directors who are elected at an annual
meeting of shareholders, and directors who are elected in the interim to fill
vacancies and newly created directorships, shall hold office until the next
succeeding annual meeting of shareholders and until their successors have been
elected and qualified. In the interim between annual meetings of shareholders or
of special meetings of shareholders called for the election of directors, newly
created directorships and any existing vacancies in the Board of Directors,
including vacancies resulting from the removal of director for cause or without
cause, may be filled by the affirmative vote of the remaining directors,
<PAGE>
although less than a quorum exists or by the sole remaining director. A director
may resign by written notice to the corporation. The resignation shall be
effective upon receipt thereof by the corporation or at such subsequent time as
shall be specified in the notice of resignation. When one or more directors
shall resign from the Board of Directors effective at a future date, a majority
of the directors then in office, including those who have so resigned, shall
have power to fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations shall become effective.
4. REMOVAL OF DIRECTORS. One or more or all of the directors of the corporation
may be removed for cause or without cause by the shareholders. The Board of
Directors shall have the power to remove directors for cause and to suspend
directors pending a final determination that cause exists for removal.
5. MEETINGS.
TIME. Meetings shall be held at such time as the Board shall fix, except
that the first meeting of a newly elected Board shall be held as soon after its
election as the directors may conveniently assemble.
PLACE. Meetings shall be held at such place within or without the State of
New Jersey as shall be fixed by the Board.
CALL. No call shall be required for regular meetings for which the time
and place have been fixed. Special meetings may be called by or at the direction
of the Chairman of the Board, if any, of the President, or of a majority of the
directors in office.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required for
regular meetings for which the time and place have been fixed. Written, oral or
any other mode of notice of the time and place shall be given for special
meetings in sufficient time for the convenient assembly of the directors
thereat. The notice of any meetings need not specify the business to be
transacted at, or the purpose of , the meeting. Any requirement of furnishing a
notice shall be waived by any director who signs a waiver of notice before or
after the meeting, or who attends the meeting without protesting, prior to the
conclusion of the meeting, the lack of notice to him. Notice of an adjourned
meeting need not be given if the time and place are fixed at the meeting
adjourning, and if the period of adjournment does not exceed ten days in any one
adjournment.
QUORUM AND ACTION. Each director shall have one vote at meetings of the
Board of Directors. The participation of directors with a majority of the votes
of the entire Board shall constitute a quorum for the transaction of business.
Any action approved by a majority of the votes of directors present at a meeting
at which a quorum is present shall be the act of the Board of Directors unless
the New Jersey Business Corporation Act requires a greater proportion. Where
appropriate communication facilities are reasonably available, any or all
directors shall have the right to participate in all or any part of a meeting of
the Board of Directors or a committee of the Board of Directors by means of
conference telephone or any means of communication by which all persons in the
meeting are able to hear each other.
CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if present,
shall preside at all meetings. Otherwise, the President, if present, or any
other director chosen by the Board, shall preside.
<PAGE>
6. COMMITTEES. The Board of Directors, by resolution adopted by a majority of
the entire Board of Directors, may appoint from among its members one or more
directors to constitute an Executive Committee and one or more other committees,
each of which , to the extent provided in the resolution appointing it, shall
have and may exercise all of the authority of the Board of Directors with the
exception of any authority the delegation of which is prohibited by Section
14A:6-9 of the New Jersey Business Corporation Act. Actions taken at a meeting
of any such committee shall be reported to the Board of Directors at its next
meeting following such committee meeting; except that, when the meeting of the
Board is held within two days after the committee meeting, such report shall, if
not made at the first meeting, be made to the Board at its second meeting
following such committee meeting. Each director of a committee shall have one
vote at meetings of that committee. The participation of directors with the
majority of the votes of a committee shall constitute a quorum of that committee
for the transaction of business. Any action approved by a majority of the votes
of directors of a committee present at a meeting of that committee at which a
quorum is present shall be the act of the committee unless the New Jersey
Business Corporation Act requires a greater proportion.
7. WRITTEN CONSENT. Any action required or permitted to be taken pursuant to
authorization voted at a meeting of the Board of Directors or any committee
thereof may be taken without a meeting, if, prior or subsequent to the action,
all members of the Board of Directors or of such committee, as the case may be,
consent thereto in writing and such written consents are filed with the minutes
of the proceedings of the Board of Directors or committee. Such consent shall
have the same effect as an unanimous vote of the Board of Directors or committee
for all purposes and may be stated as such in any certificate or other document
filed with the Secretary of State of the State of New Jersey.
ARTICLE III
OFFICERS
The directors shall elect a President, a Secretary, and a Treasurer, and
may elect a Chairman of the Board, a Vice-Chairman of the Board, one or more
Vice-Presidents, Assistant Vice-Presidents, Assistant Secretaries, and Assistant
Treasurers, and such other officers and agents as they shall determine. The
President may but need not be a director. Any two or more offices may be held by
the same person but no officer shall execute, acknowledge, or verify any
instrument in more than one capacity if such instrument is required by law to be
executed, acknowledged, or verified by two or more officers.
Unless otherwise provided in the resolution of election, each officer
shall hold office until the meeting of the board of Directors following the next
annual meeting of shareholders and until his successor has been elected and
qualified.
Officers shall have the powers and duties defined in the resolutions
appointing them.
The Board of Directors may remove any officer for cause or without cause.
An officer may resign by written notice to the corporation. The resignation
shall be effective upon receipt thereof by the corporation or at such subsequent
time as shall be specified in the notice of resignation.
DUTIES AND AUTHORITY OF PRESIDENT. The president shall be chief executive
officer of the Corporation. Subject only to the authority of the Board, he shall
have general charge and supervision over, and responsibility for, the business
<PAGE>
and affairs of the Corporation. Unless otherwise directed by the Board, all
other officers shall be subject to the authority and supervision of the
president. The president may enter into and execute in the name of the
Corporation contracts or other instruments in the regular course of business or
contracts or other instruments not in the regular course of business which are
authorized, either generally or specifically, by the Board. He shall have the
general powers and duties of management usually vested in the office of
president of a corporation.
DUTIES AND AUTHORITY OF VICE PRESIDENT. The vice president shall perform
such duties and have such authority as from time to time may be delegated to him
by the president or by the Board. In the absence of the president or in the
event of his death, inability, or refusal to act, the vice president shall
perform the duties and be vested with the authority of the president.
DUTIES AND AUTHORITY OF TREASURER. The treasurer shall have the custody of
the funds and securities of the Corporation and shall keep or cause to be kept
regular books of account for the Corporation. The treasurer shall perform such
other duties and possess such other powers as are incident to that office or as
shall be assigned by the president or the Board.
DUTIES AND AUTHORITY OF SECRETARY. The secretary shall cause notices of
all meetings to be served as prescribed in these by-laws and shall keep or cause
to be kept the minutes of all meetings of the shareholders and the Board. The
secretary shall have charge of the seal of the Corporation. The secretary shall
perform such other duties and possess such other powers as are incident to that
office or as are assigned by the president of the Board.
ARTICLE IV
REGISTERED OFFICE, BOOKS AND RECORDS
The address of the initial registered office of the corporation in the
State of New Jersey, and the name of the initial registered agent at said
address, are set forth in the original Certificate of Incorporation of the
corporation
The corporation shall keep books and records of account and minutes of the
proceedings of its shareholders, Board of Directors, and the Executive Committee
and other committee or committees, if any. Such books, records and minutes may
be kept within or outside the State of New Jersey. The corporation shall keep at
its principal office, or at the office of its transfer agent, or at its
registered office, a record or records containing the names and addresses of all
shareholders, the number, class, and series of shares held by each and the dates
when they respectively became the owners of record thereof. Any of the foregoing
books, minutes, or records may be in written form or in any other form capable
of being converted into readable form within a reasonable time.
ARTICLE V
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors shall
prescribe.
<PAGE>
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BY-LAWS
On and after the date upon which the first Board of Directors shall have
adopted the initial corporate By-Laws, which shall be deemed to have been
adopted by the shareholders for the purposes of the New Jersey Corporation Act,
the power to make, alter, and repeal the By-Laws of the corporation may be
exercised by the directors or the shareholders; provided, that any By-Laws made
by the Board of Directors may be altered or repealed, and new By-Laws made, by
the shareholders.
Dated May 3, 1999
<PAGE>
Exhibit 4.1
Form of Common Stock Certificate
Incorporated under the Laws of the
State of New Jersey
Number Shares
American Uranium, Inc.
100,000,000 Shares, Par Value $.001
Common Stock
This is to certify that _____________ is the owner of ____________
fully paid and non-assessable shares of the above Corporation, transferable only
on the books of the Corporation, by the holder hereof in person or by duly
authorized attorney upon surrender of their certificate properly endorsed.
Witness, the seal of the corporation and the signatures of its
duly authorized officers.
_________________,Secretary [SEAL] ____________________, President
<PAGE>
EXHIBIT 10.1
Platoro West, LLC
P.O. Box 12650
Prescott, AZ 86304
Tel. (520) 541-9250
August 17, 1998
Mr. Ken Webb, President
Zencrest Holdings Inc.
105 Spring Garden Avenue
Toronto, Ontario
Canada M2N 3G4
Dear Ken,
This letter, when acknowledged by your signature below, will serve as a
letter of intent between Platoro West, LLC and Zencrest Holdings Inc. concerning
mineral exploration activities. Platoro agrees to identify and stake 8 to 10
good, marketable, uranium properties for Zencrest, or its successors, during the
initial term of the agreement. These properties will be advanced stage
properties with proven resources and will be in the United States. In
consideration of the foregoing, Zencrest agrees to the following:
1. Zencrest will pay $5,000.00 per month for an initial agreement period
of twenty four months.
2. The agreement will be renewable by mutual consent for successive yearly
terms.
3. Zencrest will pay direct travel and field expenses including day wages
for field assistance as well as mileage at the allowed U.S. Internal Revenue
Service rate.
4. Zencrest will pay all filing fees for any claims acquired on its
behalf.
5. Zencrest will pay $1,500.00 per month for a full time employee to staff
the data warehouse of Platoro's associated company, Wolfranium Resource
Corporation.
6. Zencrest will provide Platoro with a 0.5% NSR on any properties which
are vended to another company whereby Zencrest's resulting participation in the
claims is less than 35%.
7. Zencrest will pay Platoro or its associates four hundred thousand free
trading shares of Zencrest Holdings Inc. as soon as the company is up and
trading. Furthermore, one hundred thousand shares of Zencrest Holdings Inc. of
the 1,600,000 control block will be held for Platoro or its associates in
Uranium Strategies Inc. The initial start of Zencrest will have less than ten
million common shares issued and the Platoro holdings will represent slightly
more than five percent of the total issued stock in Zencrest Holdings Inc.
<PAGE>
8. Zencrest will maintain all acquired properties in good standing and
will return them to Platoro under any of the following circumstances:
(a) Insolvency of Zencrest.
(b) If the claims are no longer of interest to Zencrest.
(c) If the claims are not actively explored, developed, or
joint-ventured within 36 months following the date of acquisition of the claims.
If these terms are acceptable to Zencrest Holdings Inc., please indicate
your acceptance of the above by signing in the space below.
AGREED TO THIS ___26___ DAY OF __AUGUST_____,1998:
/s/ William M. Sheriff /s/ Ken Webb
- ------------------------- --------------------
William M. Sheriff Ken Webb
Vice President Exploration President
Platoro West, LLC Zencrest Holdings Inc.
<PAGE>
EXHIBIT 99.1
RISK FACTORS
Dated May 1, 1999
You should consider the following risks, as well as those described in
any other public filing by American Uranium or in any investor document
distributed by American Uranium, before an investment is made in the company.
The risks below are not the only possible risks. Additional ones may also impair
the business operations of American Uranium. If any one or more of these risks
happen, the business, results of operations or financial condition will be
impaired. There may be a concomitant adverse effect on the value of the
securities of American Uranium and you may lose part or all of your investment.
American Uranium is in the development stage and has no history of operations on
which to base investment decisions about it.
American Uranium is in the development stage. Although incorporated in
1991, it has not engaged in any substantive operations to date, most of its
activities being related to formation, initial capitalization and the
acquisition of one potential mining property. Businesses which are starting up
or in their initial stages of development present substantial business and
financial risks and suffer significant losses from which they may not recover.
American Uranium will face all of the challenges of a new business enterprise,
including but not limited to, engaging the services of qualified support
personnel and consultants, establishing budgets, implementing appropriate
financial controls and internal operating policies and procedures. Because the
company is new, there is little history on which to judge the financial
condition or potential success of American Uranium.
American Uranium has limited capital and will need additional financing to
implement its business plan.
American Uranium currently has limited operating capital. It will
require substantial amounts of additional capital to continue its business and
to develop its business as intended.
American has never paid any dividends and does to intend to do so in the future.
American Uranium has neither paid or declared any dividends, nor, by
reason of its present financial status and its contemplated financial
requirements, does it anticipate paying any dividends in the foreseeable future.
The future payment of dividends on the common stock, if any, rests within the
sole discretion of the board of directors. Any determination to pay dividends in
the future will depend on, among other things, the earnings, capital
requirements and financial condition of American Uranium.
<PAGE>
American Uranium has no operating history as a mining company; therefore it is
dependant on others for the implementation of its business plan in the early
stages.
American Uranium has no operating history as a mining, prospecting or
assaying company. To initially locate and obtain mining properties, it is
relying on an outside consultant. American Uranium also will rely on other
consultants and independent contractors in its development stages to implement
its business plan. These stages will include staking, evaluation, permitting or
licensing and assessment activities. No assurance can be given that current and
future employed persons will have the experience and skills to successfully
execute the proposed business plan in the context of the enterprise.
The business of mining has many inherent risks of operations which may prevent
ultimate success.
The business of mineral exploration, development and production
involves significant risks. It depends on, amongst other things, successful
location of minable reserves and skillful management. Mineral deposits and ore
grades may vary substantially, rendering what was initially believed a
profitable deposit of little or no value. Profitable mining of ore bodies can be
affected by unforeseen changes in operating circumstances, ore reserves and
technical issues. Substantial investment is often required before viable
deposits are located and brought into production. Mining is subject to a number
of hazards including rock falls, subsidence, cave-ins, flooding and other
weather conditions. Insurance for some or all of these hazards may be too
expensive or not available. Production can also be affected by unanticipated
changes in permitting requirements, environmental factors, change in law, work
interruptions, operating circumstances, unexpected changes in the quality or
quantity of reserves, unstable or unexpected ground conditions and technical
issues. Therefore, American Uranium may have to bear unforeseen and
extraordinary expenses. No assurance can be given that American Uranium will
have the financial resources or insurance in the event of these or other hazards
befall it.
American Uranium will rely on dated geological reports that it believes are
public information to locate potential mining properties which may be inaccurate
or being used by others.
American Uranium plans to rely on publicly available geological reports
and databases to locate potential mining stakes or leases. If these reports and
databases prove to be protected by trade secret laws and the like, it may incur
liability. Because the reports are typically several decades old, there is no
sure method of verifying the care and manner used to prepare them without
further verification by American Uranium and its agents. Verification is
expected to be costly. Decisions made without adequate checking could result in
significant unrecoverable expenses. No assurance can be given that other persons
are not using the same or similar reports and databases resulting in others
identifying and staking claims prior to American Uranium taking similar action.
American Uranium will rely on others to perform extractive services, with all
the inherent risks of employing others for important functions.
The business plan anticipates that American Uranium will identify,
stake, evaluate and permit potential mining sites and the extractive, milling
and production will be contracted to others in one or all of these fields.
American Uranium will rely on consultants and independent contractors to be
<PAGE>
available and to work in the appropriate manner to realize the value of the
natural resources. No assurance can be given that American Uranium will be able
to locate contractors with which it will work, within acceptable fee
arrangements and that these entities will extract the full value of the
resources. American Uranium may also be at risk for any violations of law and
permits of the persons it uses to conduct the extractive, milling and production
tasks.
American Uranium will depend on its current officers to carry it through the
development stages, and their loss would have a severe impact on its future.
Because of their many years of experience in the mining fields,
American Uranium is dependent upon the continuing services of its president and
other officers. The loss of services of any key individuals will have a negative
impact. There also is the risk that their unique services might not be
replaceable at fees that American Uranium can afford. Without the services of
the existing management team, the growth, progress, and overall success of
American Uranium may be adversely affected.
Regulatory compliance is complex and the failure to meet all the various
requirements could result in fines or other limitations on the proposed business
of American Uranium.
American Uranium will be subject to regulation by numerous Federal and
state governmental authorities, but most importantly, by the Federal
Environmental Protection Agency, the Bureau of Land Management, and comparable
state agencies. The failure or delay in obtaining regulatory approvals or
licenses will adversely affect American Uranium's ability to extract and to
market ores and processed products. These failures also will affect the ability
of American Uranium to generate mining revenues. Although American Uranium does
not anticipate problems satisfying any of the regulations involved in its
business, American Uranium cannot foresee the possibility of new regulations
which could adversely affect its business.
The current management has voting control over the common stock; therefore they
can determine the direction of American Uranium.
The current officers, directors and principal shareholders own a
majority of the outstanding common stock. The shareholders of American Uranium
do not have the right of cumulative voting for the election of directors.
Accordingly, the existing principal shareholders are and will continue to be
able to elect all of the directors of American Uranium and control its affairs.
The majority of the outstanding shares of common stock may be traded without
registration; hence there may be market overhang resulting in an illiquid
market.
Most of the shares of common stock have been issued for periods longer
than two year and other shares of common stock have been issued under exemptions
that afforded them the status of free trading shares. Most of these shares were
purchased for very small per share amounts. As a result, most of the shares may
be sold by the holders in the public market if and when it develops. Some shares
are held by officers, directors and other affiliates which may be sold only
subject to volume and timing limitations. The amount of shares that can be sold
may have an impact on the market by causing it to be illiquid for fear of market
makers having to buy large amounts of these securities from long time holders
and related parties.
<PAGE>
Business issues resulting from the Year 2000 problem may have an impact on some
business systems of American Uranium.
Because American Uranium is commencing operations in the business
environment where the issues resulting from Year 2000 non-compliance have been
discussed and are being addressed, it does not expect that there will be any
adverse consequence to it. To the extent that vendors of services and date
sensitive data are not compliant, American Uranium will be impacted, but it does
not expect the effect to be material. American Uranium does not have any
information systems of its own that are not Year 2000 compliant.
<PAGE>
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