U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 5(d) OF THE SECURITIES ACT OF 1934:
For the Quarterly Period ended December 31, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE
ACT For
the transition period from ______________________ to ______________________
Commission File number 0-26037
AMERICAN URANIUM, INC.
(Exact Name of small business issuer as specified in its charter)
State of Incorporation: New Jersey IRS Employer Identification Number: N/A
133 Richmond Street, West
Suite # 311
Toronto, Ontario
Canada
M5H-2L3
(Address of principal executive offices)
(416) 203-0010
(Issuer's telephone number)
Check whether the issuer: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
YES X NO ____
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
Outstanding at
Class June 30, 1999
Common Stock, $.001 par value 9,058,261
Transitional Small Business Development Format: YES____ NO X
<PAGE>
American Uranium, Inc.
PART I. FINANCIAL INFORMATION Page No.
Financial Statements:
Balance Sheets as at June 30, 1998
and June 30, 1999 3
Statement of Operations for the Three
Months of June 30, 1998 and June 30, 1999 4
Cash Flow from Operating Activities for Six
Months June 30, 1999 5
Notes to Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION 9
Item 6 - Exhibits and Reports on Form 8-K
2
<PAGE>
<TABLE>
<CAPTION>
AMERICAN URANIUM, INC.
BALANCE SHEETS
AS AT Jun 30 98 Jun 30 99
Q2 1998 Q2 1999
------------ ------------
ASSETS
<S> <C> <C>
Current Assets:
Cash and Cash equivalents 35,000 76
Prepaid Expenses 0 1,856
------------ ------------
Total Current Assets 35,000 1,932
------------ ------------
Mineral Resource Assets 0 61,819
Furniture and Fixture - net 0 661
Total Assets 35,000 64,412
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses 75,000 4,780
------------ ------------
Total Current Liabilities 75,000 4,780
Total Liabilities 75,000 4,780
------------ ------------
Stockholders Equity
Common stock, $.001 par value, 100,000,000 2,500 9,040
shares authorized, 9,040,261 and 9,022,261
shares issued and outstanding at September
30, 1999 and 1998
Additional paid-in-capital 7,500 188,960
Accumulated deficit (50,000) (138,368)
------------ ------------
Total Stockholders Equity (40,000) 59,632
Total Liabilities and Stockholders' Equity 35,000 64,412
============ ============
</TABLE>
3
<PAGE>
AMERICAN URANIUM, INC.
STATEMENT OF OPERATIONS
Three Three
Months Months
June 30, June 30,
1998 1999
Revenues - -
Cost of Revenues - -
Gross Profit - -
------------------------
Other Costs
General and administrative expenses - 2,353
Total other costs
Other Income and Expenses
Interest Income 0 0
FX Gain (Loss) 0 0
------------------------
Net Loss before Benefit from Income Taxes 0 (2,353)
------------------------
Benefit from taxes
Net Loss 0 (2,353)
========================
4
<PAGE>
American Uranium, Inc.
Statement of cash flow
Six
Months
ended Jun
30, 1999
Cash Flows from Operating Activities:
Net loss (37,048)
Adjustments to reconcile net loss to net
used in operating activities:
Depreciation and amortization
Change in prepaid expenses 3,352
Change in accounts payable and
accrued expenses (8,013)
----------
Net Cash Used in Operating Activities (41,709)
Cash Flows from Investing Activities:
Purchases of fixed assets (661)
Increase in Mineral Resource Assets -
----------
Net cash used in investing activities (661)
Cash Flows from Financing Activities:
Proceeds from the issuance of common stock 18,000
----------
Net Cash provided by financing activities 18,000
Net Increase in Cash and Cash Equivalents (24,370)
Cash and Cash Equivalents, beginning of year 24,446
==========
Cash and Cash Equivalents, end of year 76
==========
5
<PAGE>
AMERICAN URANIUM
NOTES TO FINANCIAL STATEMENTS
1. 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 of 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 PlatoroWest, LLC ("Platoro") concerning mineral exploration
activities. The Company's operations will be in the identification, acquisition,
exploration, development ands 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.
6
<PAGE>
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 mineral.
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.
AMERICAN URANIUM
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. 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 statement 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 related 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
indicated 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.
7
<PAGE>
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 separated 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.
8
<PAGE>
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
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 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.
Second Quarter 1999
American Uranium did not conduct any business during the second quarter
of 1999 that resulted in any revenues. All activities in the first quarter were
devoted to conducting limited financing activities to obtain working capital and
obtaining a quotation for the stock on the Nasdaq Bulletin Board.
Liquidity and Capital Requirements
The working capital of American Uranium at June 30, 1999 was $1,932.
The working capital requirements of American Uranium has been funded by the sale
of securities and loans from shareholders. During the second quarter of 1999,
American Uranium sold no shares of common stock and did not borrow funds.
9
<PAGE>
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
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.
10
<PAGE>
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.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K: None
Exhibits
Exhibit No. Exhibit
(27.1) Financial Date Schedule
Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN URANIUM, INC.
Date: November 12, 1999 By: /s/ Glen Akselrod
----------------------
Glen Akselrod
President and
Chief Financial Officer (Principal
Financial and Accounting Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 76
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1932
<PP&E> 62480
<DEPRECIATION> 0
<TOTAL-ASSETS> 64412
<CURRENT-LIABILITIES> 4780
<BONDS> 0
0
0
<COMMON> 9040
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 64412
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (2353)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> (2353)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2353)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
