U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2006
Commission file number 0-5186
UraniumCore Company
(Name of small business Issuer)
Delaware 13-2643655
(State or other jurisdiction of (I.R.S. Employerincorporation of organization) Identification No.)
595 Howe Street, Ste. 600, Vancouver, B.C. Canada V6C 2T5
(Address of Principal Executive Offices) (Postal Code)
604-733-1568
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes X No o
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
Class Shares Outstanding at September 30, 2006
Common Stock ($.001 par value) 21,682,154Shares
UraniumCore Company
INDEX
Item 1. Financial Statements
September 30, 2006 and June 30, 2005
For the three months ended September 30, 2006 and 2005
For the three months ended September 30, 2006 and 2005
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Controls and Procedures
Item 1. Legal Proceedings
Item 2. Changes In Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Item 1. Financial Statements.
URANIUMCORE COMPANY
(A Development Stage Company)
| | | September 30, | June 30, |
| | | | 2006 | | | 2006 | |
| ASSETS | | | (Unaudited) | | | | |
| CURRENT ASSETS | | | | | | | |
| Cash | | $ | - | | $ | 6,104 | |
| Accounts receivable | | | - | | | 787 | |
| Inventory | | | - | | | 14,674 | |
| | | | | | | | |
| Total Current Assets | | | - | | | 21,565 | |
| | | | | | | | |
| PROPERTY and EQUIPMENT, net of accumulated | | | | | | | |
| depreciation of $94,349 | | | - | | | 4,819 | |
| | | | | | | | |
| OTHER ASSETS | | | | | | | |
| Capitalized software costs, net of accumulated | | | - | | | 56,998 | |
| amortization of $33,529 | | | | | | | |
| Mineral properties | | | 60,120 | | | - | |
| Other assets | | | | | | 4,972 | |
| | | | | | | | |
| Total Other Assets | | | 60,120 | | | 61,970 | |
| | | | | | | | |
| TOTAL ASSETS | | $ | 60,120 | | $ | $88,354 | |
The accompanying notes are an integral part of these financial statements.
URANIUMCORE COMPANY
(A Development Stage Company)
BALANCE SHEETS
| | | September 30, | June 30, |
| | | | 2006 | | | 2006 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | (Unaudited) | | | | |
| | | | | | | | |
| CURRENT LIABILITIES | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 200,532 | | $ | 55,011 | |
| Notes payable | | | 5,000 | | | 194,352 | |
| | | | | | | | |
| Total Current Liabilities | | | 205,532 | | | 249,363 | |
| | | | | | | | |
| LONG-TERM DEBT | | | | | | | |
| Notes payable-related parties | | | 45,000 | | | 188,700 | |
| | | | | | | | |
| TOTAL LIABILITIES | | | 250,532 | | | 438,063 | |
| | | | | | | | |
| STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | |
| Series C Preferred stock, $0.10 par value; | | | | | | | |
| 200,000 shares authorized, issued and | | | | | | | |
| Outstanding, respectively | | | 20,000 | | | 20,000 | |
| Series E Preferred stock, $0.10 par value; | | | | | | | |
100,000 shares authorized, 33,333 shares issued | | | | | | | |
| and outstanding, respectively | | | 3,333 | | | 3,333 | |
| Series F Preferred stock, $0.10 par value, 400,000 | | | | | | | |
| shares authorized,147,569 and no shares | | | | | | | |
| issued and outstanding, respectively | | | 14,757 | | | - | |
| Common stock, $0.001 par value; 100,000,000 shares | | | | | | | |
| authorized, 21,682,154 (2005 - 166,337) issued and outstanding | | | 21,666 | | | 166 | |
| Additional paid-in capital | | | 27,744,354 | | | 27,195,290 | |
| Less: treasury stock, at cost | | | (62,500 | ) | | (62,500 | ) |
| Accumulated deficit | | | (27,689,410 | ) | | (27,505,998 | ) |
| Deficit accumulated during the development stage | | | (242,412 | ) | | - | |
| | | | | | | | |
| TOTAL STOCKHOLDERS’ EQUITY (DEFCIIT) | | | (242,412 | ) | | (349,709 | ) |
| | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | $ | 60,120 | | $ | 88,354 | |
The accompanying notes are an integral part of these financial statements.
URANIUMCORE COMPANY
(A Development Stage Company)
For the three months ended September 30, 2006 and 2005
| | | | | | | | |
| | | | | | From Development Stage | | |
| | | to September 30, | | September 30, |
| | | 2006 | | | 2006 | | 2005 |
| | | (Unaudited) | | | | | |
| REVENUE | $ | - | | $ | - | $ | 47,925 |
| COST OF SALES | | - | | | - | | 27,843 |
| | | | | | | | |
| Gross margin | | - | | | - | | 20,082 |
| | | | | | | | |
| OPERATING EXPENSES | | | | | | | |
| Marketing, general and administrative | | 59,000 | | | 242,412 | | 33,224 |
| Depreciation | | | | | | | 1,858 |
| Amortization | | | | | | | 4,526 |
| Total Product Development Costs | | 59,000 | | | 242,412 | | 37,602 |
| | | | | | | | 77,211 |
| | | | | | | | |
| Net Loss from Operations | | (59,000 | ) | | (242,412) | | |
| | | | | | | | |
| LOSS FROM DISCONTINUED OPERATIONS | | - | | | - | | (57,129) |
| LOSS ON SALE OF MARKETABLE SECURITIES | | | | | | | (767) |
| | | | | | | | |
| NET LOSS | $ | (59,000 | ) | $ | (242,412) | | (57,896) |
| | | | | | | | |
| Loss per common share, basic and diluted: | | | | | | | |
| Continuing Operations | $ | (0.005 | ) | $ | (0.044) | | |
| Discontinued Operations | | 0.00 | | | 0.00 | | |
| | | | | | | | |
| Total | $ | (0.005 | ) | $ | (0.044) | | |
| | | | | | | | |
| Weighted average number of shares outstanding | | 10,924,246 | | | 5,541,337 | | 49,901,121 |
| | | | | | | | |
The accompanying notes are an integral part of these financial statements.
URANIUMCORE COMPANY
(A Development Stage Company)
For the three months ended September 30, 2006 and 2005
| | | | | | | | |
| | | | | From Development Stage | | | |
| | | | | |
| | | 2006 | | 2006 | | 2005 | |
| | | (Unaudited) | | | | | |
| Cash Flows From Operating Activities | | | | | | | |
| Net loss | $ | (59,000) | $ | (242,412) | $ | (57,896) | |
| Adjustments to reconcile net income | | | | - | | | |
| to net cash used by operating activities: | | | | - | | | |
| Depreciation and amortization | | | | - | | 6,384 | |
| Impairment of software costs | | | | - | | | |
| Issuance of stock and warrants for service | | (52,000) | | | | | |
| Write-off of stock subscription receivable | | | | - | | | |
| and related interest receivable | | | | - | | | |
| Loss on sale of marketable securities | | | | - | | | |
| Changes in working capital: | | | | - | | | |
| Deferred Income | | | | | | 60,000 | |
| Accounts receivable | | | | - | | 787 | |
| Inventory | | | | - | | 10,288 | |
| Interest receivable | | | | - | | | |
| Accounts payable and accrued liabilities | | (7,000) | | 242,412 | | 4,688 | |
| | | | | | | | |
Net cash used by operating activities | | | | - | | 24,231 | |
| | | | | | | | |
| Cash Flows From Investing Activities | | | | - | | | |
| Purchase of property and equipment | | | | - | | | |
| Proceeds from sale of marketable securities | | | | - | | | |
| Additions to capitalized software costs | | | | - | | (25,719) | |
| | | | | | | | |
| Net cash used by investing activities | | | | - | | (25,719) | |
| | | | | | | | |
| Cash Flows From Financing Activities | | | | - | | | |
| Proceeds from notes payable, stockholders | | | | - | | 2,000 | |
| Net proceeds from credit line | | | | - | | (1,101) | |
| Proceeds from sale of common stock | | | | - | | | |
| | | | | | | | |
| Net cash provided by financing activities | | | | - | | 899 | |
| | | | | | | | |
| Net change in cash | | | | - | | (589) | |
| Cash at beginning of year | | | | - | | 6,104 | |
| | | | | | | | |
| Cash at end of year | $ | | $ | - | $ | 5,515 | |
The accompanying notes are an integral part of these financial statements.
URANIUMCORE COMPANY
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the three months ended September 30, 2006 and 2005
(CONTINUED)
| | | | For the three months ended September 30, | | | From Development Stage through September 30, | |
| | | | 2006 | | | 2006 | |
| | | | | | | | |
| Supplemental Disclosures of Cash Flow Information: | | | | | | | |
| Cash paid during the year for interest | | $ | - | | $ | - | |
| Cash paid during the year for income taxes | | $ | - | | $ | - | |
| | | | | | | | |
| Supplemental Noncash Investing and Financing Information: | | | | | | | |
| Forgiveness of accrued interest payable on | | | | | | | |
| related party note | | $ | - | | $ | - | |
| Mineral properties purchased for debt | | $ | 10,120 | | $ | 60,120 | |
The accompanying notes are an integral part of these financial statements.
URANIUMCORE COMPANY
(A Development Stage Company)
SEPTEMBER 30, 2006
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization. Uraniumcore Company (“the Company”)was incorporated under the laws of the State of Delaward on July 3, 1969. On February 17, 2006 the Company changed its name from OCG Technology, Inc. The Company has determined to enter the mineral extraction industry however to date it has no revenues and operations and is classified as adevelopment stage company.
Use of Estimates. In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses in the statements of operations, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Cash and Cash Equivalents. For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Revenue Recognition. Revenue is recognized when the earning process is complete and the risks and rewards of ownership have transferred to the customer, which is generally considered to have occurred upon shipment of the product. Sales of inventoried products are recorded on a gross revenue basis and sales of non-inventoried products are recorded on a net revenue basis.
Accounts receivable. Accounts receivable are stated at the amount management expects to collect. An allowance for doubtful accounts is recorded based on a combination of historical experience, aging analysis and information on specific accounts.
Investment in Available-for-Sale Securities. Investments, consisting of marketable equity securities, are classified as available-for-sale securities and are carried at fair value. Unrealized gains and losses are reported as a separate component of stockholders' equity, net of applicable income taxes. OCG calculates its gains (losses) on the sale of marketable
securities on a first-in, first-out basis. These unrealized gains and losses are presented as other comprehensive income (loss) and as a component of stockholders' deficit.
URANIUMCORE COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Property and Equipment. Property and Equipment is valued at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Property and equipment at June 30, 2005 consisted of the following:
| Machinery and equipment | $ 99,168 |
| Less B accumulated depreciation | (94,349) |
| | $ 4,819 |
Capitalized Software Costs. The Company accounts for the development cost of software intended for sale in accordance with SFAS 86. SFAS 86 requires product development costs to be charged to expense as incurred until technological feasibility is attained. Technological feasibility is attained when the Company's software has completed system testing and has been determined viable for its intended use. Software assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable. The Company wrote off net capitalized software costs aggregating $65,229 in 2005. Capitalized software is amortized using the straight-line method over the estimated five year economic life of the asset. Uraniumcore recorded capitalized software amortization of $13,422 for the year ended June 30,2005.
Impairment of Long-Lived Assets. Uraniumcore accounts for the impairment and disposal of long-lived assets utilizing Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 requires that long-lived assets, such as property and equipment, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of an asset is measured by a
comparison of the carrying amount of an asset to its estimated undiscounted future cash flows expected to be generated. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.
URANIUMCORE COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Income Taxes. The Company applies the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which those temporary differences are expected to be settled or recovered.
Per Share Data. Basic loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the year. Diluted loss per share is the same as basic loss per share because there are no financial instruments whose effect would have been dilutive.
Recently issued accounting pronouncements. The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the results of operations, financial position or cash flow.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has suffered recurring losses from operations and has no revenues. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management's plans in regard to these matters are described below.
The Company has experienced recurring losses from operations and has relied on the sale of its common and preferred stock and borrowings to fund its operations. If necessary, the Company intends to provide additional working capital through the sale of its equity securities. Although in the past the Company has been able to provide working capital through the sale of its equity securities and borrowings, there can be no assurances that it will succeed in its efforts, which creates a doubt about the ability of the company to continue as a going concern.
URANIUMCORE COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
NOTE 3 - NOTES PAYABLE
During the year ended June 30, 2006, the Company extinguished all debts of the prior year by virtue of a reorganization. Subsequent to the reorganization, the Company borrowed $50,000 from a shareholder for purposes of acquiring mineral properties. The loan is repayable over 10 years, and bears interest at 8% annually.
In 2005, the Company had a revolving line of credit that provides for a maximum borrowing amount of $20,000. Interest was paid monthly on the average daily loan balance at the variable interest rate equal to the prime rate plus 3% (8.75% at June 30, 2005). The loan was secured by the personal guaranty of one of the Company’s officers.
In connection with a share exchange agreement, the Company issued a promissory note to a third party in March 2005. The note did not accrue interest, was unsecured, and matured at the earlier of a) the effective date of the registration statement filed with the SEC, or b) December 31, 2005. At June 30, 2005, the balance of the note payable totalled $175,000.
The Company issued a note payable to a stockholder for advances totalling $30,000 in 2005. The note bore interest in the form of warrants to purchase 40,000 shares, on or before July 8, 2008. The note was to mature on July 8, 2007.
The Company issued a demand note payable to a stockholder for advances totalling $8,700 in 2005. The note bore interest in the form of warrants to purchase 11,600 shares, on or before July 8, 2008.
As of June 30, 2005, the Company had a note payable to a stockholder in the amount of $100,000 which was unsecured and bore interest in the form of warrants to purchase 100,000 shares, on or before February 4, 2004, of the Company’s common stock at the purchase price of $0.10 per share. The warrants expired and were not exercised.
As of June 30, 2005 the Company had an unsecured note payable to a stockholder in the amount of $50,000 bearing interest at 4% per annum and convertible into 5,000 shares of Series C Preferred Stock at the rate of $10 per share. The date for payment of the note had been extended through June 2007.
In 2005, certain stockholders forgave $12,414 in interest owing to them under notes payable which was recorded as a contribution to stockholders’ equity.
URANIUMCORE COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
NOTE 4 - INCOME TAXES
At June 30, 2006, the Company had a net operating loss carry forward of approximately $15,500,000 available to reduce its future Federal taxable income, if any, through 2026. The Company recorded a valuation allowance for the entire net operating loss carry forward due to the uncertainty of realizing any related tax benefits.
NOTE 5 STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
On July 12, 1984, the stockholders of the Company approved the creation of a class of 1,000,000 shares of preferred stock, and authorized the Board of Directors to establish and designate the number of shares and relative rights, preferences and limitations of such preferred stock.
Series C Preferred Stock
Series C Preferred Stock (i) is convertible into one hundred shares of common stock for each share of Series C Preferred Stock converted, unless there is an increase in the number of the Company’s authorized shares of common stock; (ii) provides the holders with one hundred votes per share held and the right to vote for any purpose that the holders of the Company’s common stock may vote; (iii) provides dividends that are not cumulative and are equal, on a per share basis, to one hundred times the amount per share distributable to the holders of one share of the common stock, and (iv) in the event of any voluntary or involuntary liquidation, entitles the holders to receive out of the assets of the Company an amount per share equal to one hundred times the amount per share to be distributed to the holders of one share of the common stock.
Series E Preferred Stock
Series E Preferred Stock (i) is non-convertible with the right to vote on the same basis as the holders of the Company’s common stock, (ii) may be redeemed in whole or in part at the option of the Company at a price of $30 per share plus all accrued and unpaid dividends thereon, and (iii) has the right to dividends which are not cumulative and are limited to a fraction, as defined, of all cash dividends declared.
URANIUMCORE COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
NOTE 5 STOCKHOLDERS’ EQUITY (DEFICIT)(Continued)
Series F Preferred Stock
On March 21, 2005 the Company created Series F Preferred Stock, to consist of a maximum of 400,000 shares, par value $.10 per share, of which (1) the shares are convertible into ten thousand (10,000) shares of Common Stock for each share of Series F Preferred Stock converted, provided that there is an increase in the number of the Company's authorized shares of Common Stock to enable conversion; (2) the holders shall have ten thousand (10,000) votes per share held and shall have the right to vote for any purpose that the holders of the Company's Common Stock may vote; (3) dividends shall not be cumulative and shall be distributable out of the aggregate of all cash dividends declared by the Company in any year, such cash dividends, if any, shall be calculated in an amount per share of Series F equal to ten thousand (10,000) times of the amount per share of dividends distributable to the holders of one share of the Common Stock; and (4) in the event of any voluntary or involuntary liquidation, dissolution or other winding up of the affairs of the Company, the holders of the Series F Preferred Stock shall be entitled to receive out of the assets and funds of the Company to be distributed, an amount per share equal to ten thousand (10,000) times of the amount per share to be distributed to the holders of one share of the Common Stock.
During the period, 2,000 Series F Preferred shares were converted to 21,000,000 Common Shares.
Common Stock
During fiscal 2006, the Company completed a 300:1 reverse stock split. The reverse stock split is reflected in the financial statements on a retroactive basis.
During fiscal 2005, 14,402 shares of the Company’s common stock were sold for $43,205 or $3.00 per share plus warrants to purchase 14,402 shares at $6.00 per share. The financial statements include recognition of an additional $215,033 related to these stock transactions, characterized as paid in capital and interest expense. No shares of common stock are reserved for the exercise of the warrants. Exercise of the warrants is contingent upon the stockholders approving an increase in the authorized common stock to at least 100,000,000 shares.
URANIUMCORE COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
NOTE 5 STOCKHOLDERS’ EQUITY (DEFICIT)(Continued)
Common Stock (Continued)
During fiscal 2005, the Company wrote-off a stock subscription receivable from a stockholder totalling $130,000 because it was determined to be uncollectible. In connection with the write-off, the Company cancelled 4,000,000 warrants previously issued to the stockholder.
Warrants
Until it adopted the disclosure provisions of SFAS No. 123, "Accounting for Stock-Based Compensation", which permits entities to continue to apply the provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees", in measuring compensation expense for directors and employees. Under this provision, pro forma net income and pro forma earnings per share disclosures for warrants are made as if the fair-value-based method defined in SFAS No. 123 had been applied. If the Company had elected to recognize compensation cost based on the fair value of the awards at the grant date, net loss would have been the pro forma amounts shown below.
| | Year Ended June 30, | |
| | | 2006 | | 2005 | |
| | | | | | |
| Net loss - as reported | | $ | - | | $ | (662,121 | ) |
| Compensation expense determined | | | | | | | |
| under fair value based method | | | - | | | (114,144 | ) |
| | | | | | | | |
| Net loss - pro forma | | $ | - | | $ | $(776,265 | ) |
| | | | | | | | |
| Basic and diluted income (loss) per share | | | | | | | |
| As reported | | $ | (0.01 | ) | $ | (0.02 | ) |
| Pro forma | | | (0.02 | ) | | (0.03 | ) |
URANIUMCORE COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
NOTE 5 - STOCKHOLDERS’ EQUITY (DEFICIT)(Continued)
Warrants (Continued)
The Black-Scholes model was used to estimate the fair value of the warrants at grant date based on the following assumptions:
| | June 30, 2006 | June 30, 2005 |
| Dividend yield | N/A | 0% |
| Volatility | N/A | 184.35% |
| Weighted-average risk-free interest rate | N/A | 2.53% |
| Weighted-average expected life of options | N/A | 2.0 |
| Estimated fair value per warrant | N/A | $0.03 |
Warrant activity for the years ended June 30, 2006 and 2005 is summarized as follows:
| | | June 30, 2006 | | | | June 30, 2005 | | | |
| | | | Weighted Average | | | | | | | | | Weighted Average | |
| | | | Warrants | | | Exercise Price | | | Warrants | | | Exercise Price | |
| | | | | | | | | | | | | | |
| Beginning Balance | | | 14,816,262 | | $ | 0.00 | | | 14,549,056 | | $ | 0.11 | |
| Warrants granted | | | - | | $ | 0.00 | | | 4,327,206 | | $ | 0.02 | |
| Warrants exercised | | | - | | $ | 0.00 | | | - | | $ | 0.00 | |
| Warrants expired | | | - | | $ | 0.00 | | | (60,000 | ) | $ | 0.15 | |
| Warrants cancelled | | | (14,816,262 | ) | $ | 0.00 | | | (4,000,000 | ) | $ | 0.05 | |
| Outstanding at end of year | | | - | | $ | 0.00 | | | 14,816,262 | | $ | 0.10 | |
The range of exercise prices of the outstanding exercisable warrants are as follows at June 30, 2005.
There are no outstanding warrants at June 30, 2006.
| Number of | Number of | Weighted Average | |
| Exercise | Exercisable | Outstanding | Remaining | |
| Price | | Shares | Shares | | Life in Years | |
| $0.25 | | 2,673,056 | 2,673,056 | | 1.6 | |
| $0.15 | | 2,791,000 | 2,791,000 | | 1.6 | |
| $0.10 | | 100,000 | 100,000 | | 1.6 | |
| $0.05 | | 4,925,000 | 4,925,000 | | 1.6 | |
| $0.02 | | 4,327,206 | 4,327,206 | | 1.2 | |
| | | 14,816,262 | 14,816,262 | | | |
URANIUMCORE COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
NOTE 6 - COMMITMENTS
The Company leased office space under non-cancellable operating leases that expire at various dates in fiscal 2006. The leases included provisions requiring the Company to paya proportionate share of the increase in real estate taxes and operating expenses over base period amounts. Minimum future annual rental payments are as follows:
| | Year Ending |
| | June 30 |
| 2006 | | $ | 68,264 | |
Rent expense was approximately $66,600 for the years presented in the accompanying statements of operations.
NOTE 7 - DISCONTINUED OPERATIONS
The consolidated financial statements as of and for the fiscal year ended June 30, 2005 were restated as discontinued operations as a result of the distribution of the
Company’s assets in a partial liquidating dividend.
On December 31, 2005, the Company consummated a Distribution Agreement with it’s wholly-owned subsidiary PrimeCare Systems, Inc. (PrimeCare)where all of the outstanding
securities of PrimeCare were distributed to the record common and preferred stockholders of the Company.
The Discontinued Operations of PrimeCare are summarized as follows:
| Revenue | | $ | 315,697 | |
| Cost of goods sold | | | 167,694 | |
| | | | | |
| Gross profit | | | 148,003 | |
| | | | | |
| Operating expenses | | | 555,426 | |
| Net loss from operations | | | (407,423 | ) |
| Other Income (Expenses) | | | (254,698 | ) |
| Net loss | | $ | $ (662,121 | ) |
Item 2. Managements Discussion and Analysis or Plan of Operation.
General
The following discussion and analysis should be read in conjunction with the Consolidated Condensed Financial Statements and Notes thereto appearing elsewhere herein. The following discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Company intends that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements include predictions, estimates and other statements that involve a number of risks and uncertainties. While this outlook represents the Company's current judgment on the future direction of the business, such risks and uncertainties could cause actual results to differ materially from any future performance suggested herein.
The Company has experienced recurring losses from operations and has relied on the sale of equity interests in the Company to fund its operations. If necessary, the Company intends to provide additional working capital through the sale of equity interests in the Company. Although, in the past, the Company has been able to provide working capital through the sale of equity interests in the Company, there can be no assurances that the Company will succeed in its efforts, which creates a doubt about its ability to continue as a going concern.
The Company has disposed of its business through a dividend distribution and intends to commence operations in the Uranium Mining Industry. Our plan is to explore this property to determine whether the property contains minable reserves of uranium.
Total expenditures over the next 12 months are therefore expected to be $650,000. Over the next 24 months we anticipate spending a total of $1,300,000. We will not be able to proceed with our exploration program, or meet our administrative expense requirements, without additional financing. We currently do not have a specific plan of how we will obtain such funding, however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We may also seek to obtain short-term loans from our director, although no such arrangement has been made.
At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future equity financing. Due to these factors, raise substantial doubt that the Company will be able to continue as a going concern. To the extent management’s plans are unsuccessful in circumventing the going concern uncertainty; the Company will cease all operations and no longer continue as a going concern.
In addition, we anticipate spending $10,000 on professional fees and $10,000 on other administrative expenses.
Item 3. Controls and Procedures.
An evaluation was carried out under the supervision and with the participation of the Company's management, including the President/Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures. Based on that evaluation, the President/CFO have concluded that as of the end of the period covered by this report, the Company's disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and timely reported as provided in the Securities and Exchange Commission rules and forms. The Company periodically reviews the design and effectiveness of our internal controls over financial reporting, including compliance with various laws and regulations that apply to the Company's operations. The Company makes modifications to improve the design and effectiveness of its internal control structure, and may take other corrective action, if the Company's reviews identify deficiencies or weaknesses in its controls. No changes occurred during the quarter ended December 31, 2005 in the Company's internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 1. Legal proceedings.
None.
Item 2. Changes In Securities.
During the nine months ended September 30, 2005, no shares of the Company's Stock were sold and no warrants to purchase shares were issued.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K
(a) 31.1 Certification pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley act of 2002
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002
(b) Reports on Form 8-K
None.
Pursuant to the requirements of Sections 13 or 15(d) the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DATED: November 16, 2006 & #160;
UraniumCore Company
By: Robert Lunde
President
Exhibit 31.1
302 CERTIFICATION -SMALL BUSINEES CERTIFICATION OF PRESIDENT
I, Robert Lunde President of the Registrant, UraniumCore Company hereby certify that:
1) I have reviewed this quarterly Form 10-QSB for the periods ending September 30, 2006 of UraniumCore Company
2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report;
4) I am solely responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d- 15(f)) for the Registrant and I have:
a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting procedures;
c) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and
d) disclosed in this quarterly report any change in the Registrant’s internal control over financial reporting that occurred during the period ending March 31, 2006 that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5) I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
Date: November 16, 2006
By: Robert Lunde
Robert Lunde
President
Chief Financial Officer
Exhibit 32.1
CERTIFICATION OF PRESIDENT/CHIEF EXECUTIVE OFFICER
Pursuant to section 906 of the Sarbanes-Oxkly Act of 2002 (18 U.S.C. ss. 1350), the undersigned, Robert Lunde, President and Chief Executive Officer, of UraniumCore Company a Delaware corporation, (the "Company"), does hereby certify, to his knowledge, that :
The Quarterly Report on Form 10-QSB for the period ended September 30, 2006, of the Company (the "Report") fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and the information contained in the report fairly presents, in all material respects, the financial condition and result of operations of the Company.
By: Robert Lunde
Robert Lunde
President
Chief Financial Officer
November 16, 2006
