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EX-32.1 - CEO AND CFO SOX 906 CERTIFICATE - US TUNGSTEN CORP.exhibit321.htm
EX-31.1 - CEO AND CFO SOX 302 CERTIFICATE - US TUNGSTEN CORP.exhibit311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________


FORM 10-Q

____________________________


x

QUARTERLY REPORT PURSUANT SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended November 30, 2012


¨

TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _______________ to _______________


Commission File # 333-151702


US TUNGSTEN CORP.

(Exact name of small business issuer as specified in its charter)


Nevada

(State or other jurisdiction of incorporation or organization)


77-0721432

(IRS Employer Identification Number)


871 Coronado Centre Drive, Suite 200, Henderson, NV  89052

(Address of principal executive offices)


(702) 940-2323

(Issuer’s telephone number)


Indicate by check mark whether the registrant(1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 day.

x  Yes    ¨ No


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   x  Yes    ¨ No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

x


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

x Yes    ¨ No





Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. The issuer had 198,750,000 shares of common stock issued and outstanding as of January 15, 2013.





TABLE OF CONTENTS


PART I.     FINANCIAL INFORMATION

PAGE

Item 1.  Financial Statements (unaudited)

1


Balance Sheets

2


Statements of Operations

3


Statements of Shareholder Deficit

4


Statements of Cash Flows

5


Notes to Financial Statements (unaudited)

6

Item 2.  Management’s Discussion and Analysis

13


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

16


Item 4T.  Controls and Procedures

16


PART II.     OTHER INFORMATION


Item 1.  Legal Proceedings

16


Item 1A. Risk Factors

17


Item 2.  Unregistered Sale of Equity Securities and Use of Proceeds

17

Item 3.   Defaults upon Senior Securities

17

Item 4. Mine Safety disclosure

17

Item 5.   Other Information

17

Item 6.   Exhibits

18

Signatures

18





PART I – FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS















US Tungsten Corp.

(formerly Stealth Resources Inc.)

(An Exploration Stage Company)

Financial Statements

(Expressed in U.S. Dollars)

November 30, 2012




1






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Balance Sheets

(Expressed in U.S. Dollars)

(unaudited)


 

November 30,

2012

 

May 31,

2012

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$                1,147

 

$                   459

Total current assets

1,147

 

459

 

 

 

 

Other assets

 

 

 

 

 

 

 

Mineral claims (Note 4)

50,000

 

-

Website development cost

7,350

 

-

          Total other assets

57,350

 

-

 

 

 

 

 

 

 

 

Total assets

$              58,497

 

$                  459

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

Current liabilities

 

 

 

Accounts payable and accrued liabilities (Note 5)

$                7,302

 

$               5,877

Due to related party (Note 7)

205,434

 

124,598

 

 

 

 

Total current liabilities

212,736

 

130,475

 

 

 

 

Total liabilities

212,736

 

130,475

 

 

 

 

Stockholders’ deficit

 

 

 

Common stock $0.001 par value; authorized 2,250,000,000

 

 

 

  shares; issued and outstanding: 198,750,000 and 198,750,000, respectively.

198,750

 

198,750

Additional paid-in capital

-

 

-

Deficit accumulated during the exploration stage

 (352,989)

 

 (328,766)

 

 

 

 

Total stockholders’ deficit

(154,239)

 

(130,016)

 

 

 

 

Total liabilities and stockholders’ deficit

$              58,497

 

$                  459

 

 

 

 


The accompanying notes are an integral part of the financial statements

 



2






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Statements of Operations

(Expressed in U.S. Dollars)

(unaudited)



 

 

Three months ended November 30, 2012

 

Three months ended November 30, 2011

 

Six months ended November 30, 2012

 

Six months ended November 30, 2011

 

From Inception (January 10, 2007) through November 30, 2012

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$                  --

 

$                  --

 

$                  --

 

$                  --

 

$                  --

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment loss on mineral claim

-

 

-

 

-

 

-

 

13,512

Legal and accounting

 

3,400

 

3,500

 

14,937

 

9,500

 

81,546

General and administrative

2,274

 

17,168

 

9,286

 

19,657

 

87,181

Total expenses

 

5,674

 

20,668

 

24,223

 

29,157

 

182,239

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(5,674)

 

(20,668)

 

(24,223)

 

(29,157)

 

(182,239)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$       (5,674)

 

$       (20,668)

 

$       (24,223)

 

$       (29,157)

 

$     (182,239)

 

 

 

 

 

 

 

 

 

 

 

Basic loss per common share

 

$           (0.00)

 

$           (0.00)

 

$           (0.00)

 

$           (0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

198,750,000

198,750,000

198,750,000

198,750,000

 




The accompanying notes are an integral part of the financial statements



3






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Statement of Stockholders’ Equity/ (Deficit)

From Inception (January 10, 2007) through November 30, 2012

(Expressed in U.S. Dollars)

(unaudited)


 

 

Number of shares issued

 

Common Stock

 

Additional paid in capital

 

Deficit accumulated during the exploration stage

 

Total stockholders’ equity/(deficit)

 

 

 

 

 

 

 

 

 

 

 

Balance at  January 10, 2007

 

--

 

$          --

 

$           --

 

$             --

 

$            --

 

 

 

 

 

 

 

 

 

 

 

Common  stock for cash ($.001 per share)

 

135,000,000

 

135,000

 

--

 

(130,500)

 

4,500

 

 

 

 

 

 

 

 

 

 

 

Common  stock for cash ($.004 per share)

 

37,500,000

 

37,500

 

-

 

(32,500)

 

5,000

 

 

 

 

 

 

 

 

 

 

 

Common  stock for cash ($.02 per share)

 

26,250,000

 

26,250

 

-

 

(8,750)

 

17,500

 

 

 

 

 

 

 

 

 

 

 

Contributed capital

 

--

 

--

 

-

 

1,000

 

1,000

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

--

 

--

 

--

 

(3,542)

 

(3,542)

 

 

 

 

 

 

 

 

 

 

 

Balance at  May 31, 2007

 

198,750,000

 

      198,750

 

    -

 

   (174,292)

 

      24,458

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

--

 

--

 

--

 

(13,324)

 

(13,324)

 

 

 

 

 

 

 

 

 

 

 

Balance at May 31, 2008

 

198,750,000

 

      198,750

 

    -

 

     (187,616)

 

       11,134

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

--

 

--

 

--

 

(40,446)

 

(40,446)

 

 

 

 

 

 

 

 

 

 

 

Balance at May 31, 2009

 

198,750,000

 

      198,750

 

    -

 

     (228,062)

 

       (29,312)

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

--

 

--

 

--

 

(26,974)

 

(26,974)

 

 

 

 

 

 

 

 

 

 

 

Balance at  May 31, 2010

 

198,750,000

 

      198,750

 

-

 

$     (255,036)

 

$       (56,286)

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

--

 

--

 

--

 

(35,483)

 

(35,483)

 

 

 

 

 

 

 

 

 

 

 

Balance at May 31, 2011

 

198,750,000

 

198,750

 

-

 

$     (290,519)

 

$       (91,769)

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

--

 

--

 

--

 

(38,247)

 

(38,247)

 

 

 

 

 

 

 

 

 

 

 

Balance at May 31, 2012

 

198,750,000

 

$     198,750

 

   -

 

$     (328,766)

 

$      (130,016)

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

--

 

--

 

--

 

(24,223)

 

(24,223)

 

 

 

 

 

 

 

 

 

 

 

Balance at November 30, 2012

 

198,750,000

 

$     198,750

 

$                -

 

$     (352,989)

 

$      (154,239)


On July 19, 2012, the directors and majority shareholder approved a resolution to forward split the shares on a 1:30 basis, to be effective August 9, 2012.  The number of shares has been retroactively restated to reflect the forward split.



The accompanying notes are an integral part of the financial statements



4






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Statements of Cash Flows

(Expressed in U.S. Dollars)

(unaudited)


 

Six months  ended

November 30, 2012

Six months  ended

November 30, 2011

From Inception (January 10, 2007) through November 30, 2012

 

 

 

 

Cash flows from operating activities:

 

 

 

Net loss

$        (24,223)

$        (29,157)

$               (182,239)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

Increase in accrued liabilities

1,425

2,290

7,302

   Mineral property expenditures written down

-

-

13,512

 

 

 

 

   Net cash used in operating activities

(22,798)

(26,867)

(161,425)

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of mineral claims

(50,000)

-

(63,512)

Website development cost

(7,350)

 

(7,350)

 

 

 

 

    Net cash used in investing activities

(57,350)

-

(70,862)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

Bank overdraft

-

(13)

-

Proceeds from sale of common stock

-

-

27,000

Contributed capital by related party

-

-

1,000

Due to related party

80,836

26,944

205,434

 

 

 

 

   Net cash used in financing activities

80,836

26,931

233,434

 

 

 

 

 

 

 

 

(Decrease) increase in cash and cash equivalents

688

64

1,147

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

459

 

-

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

$             1,147

$                  64

$                           1,147

 

 

 

 


The accompanying notes are an integral part of the financial statements



5






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to unaudited Financial Statements

(Expressed in U.S. Dollars)

November 30, 2012


Note 1:

Business and History


The Company was incorporated in the State of Nevada on January 10, 2007.  The Company is an Exploration Stage Company as defined by Guide 7 of the Securities Exchange Commission’s Industry Guide and FASB ASC 915 “Development Stage Entities”.  The Company has begun investigating prospective tungsten opportunities.   On July 19, 2012, the Company approved a name change to US Tungsten Corp. to better reflect its business direction.


The Company is devoting all of its present efforts to securing and establishing new business and its planned principal operations have not commenced.  Accordingly, no revenue has been derived during the organization period. The Company has experienced recurring losses and has an accumulated deficit of ($182,239) as of November 30, 2012 and ($158,016) as of May 31, 2012 and has working capital deficit of $211,589 and $130,016 as at November 30, 2012 and May 31, 2012 respectively.


Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management intends to raise additional funding in the form of equity financing from the sale of common stock and/or obtain short-term loans from the directors of the Company. However, if the Company is unable to raise additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures.


At November 30, 2012, the Company was not engaged in a business and had suffered losses from exploration stage activities to date. Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. Accordingly, the Company must rely on its president to perform essential functions with minimal compensation until a business operation can be commenced. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence.


Note 2:

Significant Accounting Policies


The following is a summary of significant accounting policies used in the preparation of these financial statements.


Basis of presentation


The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to exploration stage enterprises, and are expressed in U.S. dollars.  The Company’s fiscal year end is May 31.


Cash and cash equivalents


Cash and cash equivalents include highly liquid investments with original maturities of three months or less.




6






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to unaudited Financial Statements

(Expressed in U.S. Dollars)

November 30, 2012



Note 2:

Significant Accounting Policies – (continued)


Mineral property costs


The Company has been in the exploration stage since its formation on January 10, 2007 and has not yet realized any revenues from its planned operations.  It is primarily engaged in the acquisition and exploration of mining properties.  In accordance with FASB ASC 932 “Extractive Activities–Oil and Gas”, costs incurred to purchase or acquire a property (whether proved or unproved reserves) shall be capitalized when incurred. This includes acquisition costs associated with mineral claims. When a property reaches the production stage, the related capitalized costs will be amortized, using the units of production method on the basis of periodic estimates of ore reserves, currently no property has reached the production stage. When the Company has capitalized mineral properties, these properties will be periodically assessed for impairment of value and any diminution in value.


Although the Company has taken steps to verify title to mineral properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, these procedures do not guarantee the Company’s title.  Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.


Financial instruments


The carrying value of cash and accrued liabilities approximates their fair value because of the short maturity of these instruments.  The Company’s operations are in Canada and virtually all of its assets and liabilities are giving rise to significant exposure to market risks from changes in foreign currency rates.  The Company’s financial risk is the risk that arises from fluctuations in foreign exchange rates and the degree of volatility of these rates.  Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.


Environmental expenditures


The operations of the Company have been, and may in the future, be affected from time to time, in varying degrees, by changes in environmental regulations, including those for future reclamation and site restoration costs.  Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable.  The Company’s policy is to meet or, if possible, surpass standards set by relevant legislation, by application of technically proven and economically feasible measures.


Impairment of Long-Lived Assets


The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35-17, if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-10 through 15-5, Impairment or Disposal of Long-Lived Assets.




7






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to unaudited Financial Statements

(Expressed in U.S. Dollars)

November 30, 2012



Note 2:

Significant Accounting Policies – (continued)


Income taxes


Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with FASB ASC 740 “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes.  Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry-forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not.


Stock-based compensation


The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards.  This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. 


The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.


Fair value of financial instruments


Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of November 30, 2012 and May 31, 2012. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.


Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market.  Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.




8






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to unaudited Financial Statements

(Expressed in U.S. Dollars)

November 30, 2012



Note 2:

Significant Accounting Policies – (continued)


Fair value of financial instruments - (continued)


Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.


Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.


Basic and diluted net loss per share


The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.


Use of estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 these estimates.


Concentrations of credit risk


The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and accounts payable.  The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.


Risks and uncertainties


The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.




9






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to unaudited Financial Statements

(Expressed in U.S. Dollars)

November 30, 2012



Note 2:

Significant Accounting Policies – (continued)


Website Development Costs


Costs incurred in developing and maintaining a website are charged to expense when incurred for the planning, content population, and administration or maintenance of the website. All development costs for the application, infrastructure, and graphics development are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized costs are amortized using the straight-line basis over a five year estimated economic life of the product.


Note 3:

Recent accounting pronouncements


The Company has evaluated the recent accounting pronouncements through ASU 2012-08 and believes that none of them will have a material effect on the company’s financial statements.


Note 4:

Mineral Claim


Pursuant to a mineral property purchase agreement dated February 26, 2007, the Company acquired a 100% undivided right, title and interest in a mineral claim, located in the Alberni Mining Division of British Columbia, Canada for a cash payment of $5,129 and delivery of a geological report.  The Company has paid an additional $6,098 for a geological report and $2,285 in Mineral right renewal fees.  Mineral property acquisition costs are capitalized when incurred. When a property reaches the production stage, the related capitalized costs will be amortized, using the units of production method on the basis of periodic estimates of ore reserves, currently no property has reached the production stage. When the Company has capitalized mineral properties, these properties will be periodically assessed for impairment of value and any diminution in value.  During the year ended May 31, 2011, the Company evaluated the mineral claim and determined that the asset have been impaired  because the Company could not project any future cash flows or salvage value and the asset were not recoverable.  Consequently, the Company has recorded an impairment loss for the full amount of $13,512 for the year ended May 31, 2011.


Pursuant to a mineral property assignment agreement dated August 21, 2012, the Company acquired an option to acquire a 100% interest in 3 mineral claims in Calvert, Montana, subject to a 2% Net Value Royalty.  Consideration for the property was as follows:




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US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to unaudited Financial Statements

(Expressed in U.S. Dollars)

November 30, 2012



Note 4:

Mineral Claim (continued)


Cash payments totalling $1,000,000 payable as follows:


-

$5,000 upon the execution of an assignment agreement, (paid);

-

$5,000 on or before October 1, 2012, (paid);

-

$20,000 on or before August 21, 2013;

-

$25,000 on or before August 21, 2014;

-

$30,000 on or before August 21, 2015;

-

$35,000 on or before August 21, 2016;

-

$40,000 on or before August 21, 2017;

-

$45,000 on or before August 21, 2018;

-

$50,000 on or before August 21, 2019

-

$50,000 every year until $1,000,000 is paid.


The Company has the right to purchase up to 1.8% of the Net Value Royalty for $1,500,000.


On October 9, 2012 the “Company” completed the registration and acquisition of 195 newly staked mineral claims located in Calvert, Montana.  The claims were registered on behalf of the Company with the U.S. Department of the Interior, Bureau of Land Management, at a cost of $12,285.  The claims span approximately 3,900 acres and are contiguous with the three claims that constitute the Company’s recently optioned Calvert Property.  The newly acquired claims will form part of the Calvert Property for the purposes of that Option Agreement and will be subject to a 2% net smelter royalty.


Note 5:

Accounts Payable and Accrued Liabilities


Accounts payable and accrued liabilities are non-interest bearing, unsecured and have settlement dates within one year.




11






US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to unaudited Financial Statements

(Expressed in U.S. Dollars)

November 30, 2012


Note 6:

Common Stock


On July 19, 2012, the directors and majority shareholder passed a resolution to forward split the Company’s shares on a 1:30 basis, to be effective August 9, 2012.  The number of shares has been retroactively restated to reflect the forward split.


a.

Authorized - The total authorized capital is 2,250,000,000 common shares with a par value of $0.001.


b.

Issued and outstanding - The total issued and outstanding capital stock is 198,750,000.  


On February 8, 2007, 135,000,000 common shares of the Company were subscribed for cash proceeds of $4,500.


On February 21, 2007, 37,500,000 common shares of the Company were subscribed for cash proceeds of $5,000.


On March 19, 2007, 26,250,000 common shares of the Company were subscribed for cash proceeds of $17,500.


As of March 19, 2007, the Company received a total of $27,000 for 198,750,000 shares of common stock.


At November 30, 2012, there were no outstanding stock options or warrants.


Note 7:

Related Party Transactions


As of November 30, 2012 and May 31, 2012, total advances from a director of the Company were $118,919 and $38,083, respectively and advances from a former director of the Company were $nil and $86,515, respectively.  The amounts are unsecured, non interest bearing and are due on demand.  


Note 8:

Subsequent Events


Mr. Barry Wattenberg was appointed as a director and Treasurer of the Company, effective January 8th, 2013.





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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-looking statements


This quarterly report on Form 10-Q contains "forward-looking statements" relating to our company which represent our current expectations or beliefs, including statements concerning our operations, performance, financial condition and growth.  For this purpose, any statement contained in this quarterly report on Form 10-Q that are not statements of historical fact are forward-looking statements.  Without limiting the generality of the foregoing, words such as "may", "anticipation", "intend", "could", "estimate", or "continue" or the negative or other comparable terminology are intended to identify forward-looking statements.  These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel and variability of quarterly results, our ability to continue our growth strategy and competition, certain of which are beyond our control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements.


The following discussion and analysis should be read in conjunction with the information set forth in our interim unaudited financial statements for the six months ended November 30, 2012.


Overview


We are an exploration stage company engaged in the acquisition and exploration of mineral properties with a view to exploiting any mineral deposits we discovered.  We previously owned a 100% interest in one mineral claim known as the Monkey claim, which was located approximately 40 kilometers west of Campbell River, British Columbia, Canada.  We had anticipated carrying out an exploration program on the property consisting of soil geochemical sampling and geologic mapping at an estimated cost of $34,020.   However, we were unable to obtain necessary financing to carry out such program and, due to a lack of funding and an evaluation of the project, we recorded an impairment provision of $13,512, representing the full amount expended to May 31, 2011.  


We entered into an Assignment Agreement dated August 21, 2012 with Mr. John M. Pulos whereby we acquired from Mr. Pulos an option to acquire an undivided 100% right, title and interest in and to certain mineral claims known as the Calvert Property, located in Calvert, Montana (the “Calvert Property”). The Assignment Agreement assigns to us an option to acquire the Calvert Property held by Mr. Pulos pursuant to a Letter of Intent (“LOI”) dated June 18, 2012 with Messrs Paul and Ted Antonioli (the “Optionors”).  We paid $5,000 to Mr. Pulos in consideration of the assignment.  


In order to exercise the option to acquire the Calvert Property, we must make aggregate payments of $1,000,000 to the Optionors as follows:


·

$5,000 on execution of the LOI (paid by Mr. Pulos)

·

$5,000 by October 1, 2012 (paid)

·

$15,000 by June 18, 2013

·

$20,000 by June 18, 2014

·

$25,000 by June 18, 2015

·

$30,000 by June 18, 2016

·

$35,000 by June 18, 2017

·

$40,000 by June 18, 2018

·

$45,000 by June 18, 2019



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·

$50,000 by June 18, 2020

·

Not less than $50,000 per year thereafter until $1,000,000 is paid.  


The Calvert Property will be subject to 2% net smelter returns royalty payable to the Optionors provided that we may repurchase 1.8% of the royalty by paying to the Optionors $1,500,000 within nine months after the start of commercial production on the Calvert Property.  The Calvert Property consists of three unpatented mineral claims spanning 60 acres.


On July 19, 2012, the Board of Directors and majority shareholder approved a forward split of our shares on a 1:30 basis, increasing our authorized share capital from 75,000,000 shares of common stock at a par value of $0.001 to 2,250,000,000 shares of common stock at a par value of $0.001.  A change of name to US Tungsten Corp. was also approved, the purpose of which was to better reflect the direction of our company.  The name change and forward split were filed with the Nevada Secretary of State with an effective date of August 9, 2012.


Plan of Operation


As at November 30, 2012, we had a cash and cash equivalent balance of $1,147.  Our plan of operation for the twelve months is to explore and develop our Calvert Property located in Calvert, Montana.  


Over the next twelve months, we anticipate spending approximately $15,000 on administrative expenses, including fees payable in connection with the filing of our annual and quarterly reports and complying with reporting obligations, together with an additional $15,000 in property option payments.


We do not have sufficient funds to cover the anticipated administrative expenses or to cover the property option payments so we will require additional funding.  We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or from director loans. We do not have any arrangements in place for any future equity financing or loans.


If we are not successful in raising additional financing, we anticipate that we will not be able to carry out due diligence and acquire the Calvert Property.   


Our current cash on hand will not be sufficient to acquire the Calvert Property so additional funds will be required in order to complete the acquisition and develop the Calvert Property.  As a reporting company we will need to maintain our periodic filings with the appropriate regulatory authorities and will incur legal and accounting costs.  If no other such opportunities are available and we cannot raise additional capital to sustain minimum operations, we may be forced to discontinue business.  We do not have any specific alternative business opportunities in mind and have not planned for any such contingency.


Based on the nature of our business, we anticipate incurring operating losses in the foreseeable future. We have not attained profitable operations and are dependent upon obtaining financing to purchase and develop the Calvert Property.  For these reasons, our auditors believe that there is substantial doubt that we will be able to continue as a going concern.



14







Results of Operations


Six months Ended November 30, 2012 Compared to the Six months Ended November 30, 2011


We have had no operating revenues since our inception on January 10, 2007 through November 30, 2012, and have incurred operating expenses in the amount of $182,239 for the same period.  Our activities have been financed from the proceeds of share subscriptions and director loans.


During the three months ended November 30, 2012, we incurred a net loss of $(5,674), compared to a net loss of $(20,668) for the three months ended November 30, 2011. For the six months ended November 30, 2012, we incurred a net loss of $(24,223), compared to a net loss of $(29,157) for the six months ended November 30, 2011.  


Revenues


We did not generate any revenues during the six months ended November 30, 2012 or the six months ended November 30, 2011.


Expenses


During the three months ended November 30, 2012 and November 30, 2011, legal and accounting fees were $3,400 and $3,500, respectively, and general and administrative expenses were $2,274 and $17,168, respectively.  During the six months ended November 30, 2012 and November 30, 2011, legal and accounting fees were $14,937 and $9,500, respectively, and general and administrative expenses were $9,286 and $19,657, respectively.


Net Loss


We incurred net losses from operations of $24,223 and $29,157 for the six months ended November 30, 2012 and November 30, 2011, respectively.


Liquidity and Capital Resources


We had cash and cash equivalent of $1,147 as of November 30, 2012, compared to a cash and cash equivalent position of $459 at May 31, 2011.  Since inception through to and including November 30, 2012, we have raised $27,000 through private placements of our common shares and we have received contributed capital by related parties of $1,000 and advances from a related party of $205,434.


We expect to run at a loss for at least the next twelve months. We have no agreements for additional financing and cannot provide any assurance that additional funding will be available to finance our operations on acceptable terms in order to enable us to complete our plan of operations.  There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing.  If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of our mineral claims and our venture will fail.


Material Events and Uncertainties


Our operating results are difficult to forecast. Our prospects should be evaluated in light of the risks, expenses and difficulties commonly encountered by comparable exploration stage companies.




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There can be no assurance that we will successfully address such risks, expenses and difficulties.


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.


ITEM 4T.

CONTROLS AND PROCEDURES


(a)  

Evaluation of disclosure controls and procedures


Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our management, with participation of our Chief Executive Officer, Chief Operating Officer, and our Chief Accounting Officer as of the end of the period covered by this report, our Chief Executive Officer, Chief Operating Officer, and our Chief Accounting Officer concluded that our disclosure controls and procedures have been effective in ensuring that material information relating to us, is made known to the certifying officers by others within our company during the period covered by this report.


As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.


(b)  

Management’s Report on Internal Control Over Financial Reporting


Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) under the Securities Exchange Act of 1934.  Under the supervision and with the participation of our Chief Executive Officer, our Chief Operating Officer and our Chief Accounting Officer, we conducted an evaluation of the effectiveness of our control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  Based on our evaluation under the framework, management has concluded that our internal control over financial reporting was effective as of November 30, 2012.


(c)  

Changes in Internal Control over Financial Reporting


There have not been any changes in our internal controls or in other factors that occurred during our first fiscal quarter ended November 30, 2012 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.



PART II – OTHER INFORMATION


ITEM 1.

LEGAL PROCEEDINGS


We are not currently a party to any legal proceedings. Our address for service of process in Nevada is 871 Coronado Centre Drive, Suite 200, Henderson, Nevada, 89052.



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ITEM 1A.

RISK FACTORS


We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.


ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


We did not make any sales of equity securities during the quarter.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES


We have no senior securities outstanding.


ITEM 4.

MINE SAFETY DISCLOSURES


Not applicable.


ITEM 5.

OTHER INFORMATION


During the quarter ended November 30, 2012, there were no material changes to the procedures by which security holders may recommend nominees to our board of directors.




17






ITEM 6.

EXHIBITS 

EXHIBIT INDEX


Number

Exhibit Description

 

 

3.1

Articles of Incorporation (1)

 

 

3.2

Bylaws (1)

 

 

10.1

Mineral property agreement dated February 26, 2007 (1)

 

 

14.1

Code of Ethics (2)

 

 

31.1

Certificate of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

32.1

Certificate of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.

 

101.INS

XBRL Instance Document

 

101.SCH

XBRL Taxonomy Extension Schema Document

 

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

 

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

 

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

 

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document


(1)

Filed as an exhibit to our registration statement on Form S-1 filed June 17, 2008 and incorporated herein by this reference


(2)

Filed as an exhibit to our annual report on Form 10-K filed August 25, 2011 and incorporated herein by this reference.


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


STEALTH RESOURCES INC.



/s/ Matthew Markin

Matthew Markin

President, Chief Executive Officer, Secretary, Treasurer,

Principal Accounting Officer, Principal Financial Officer and Director


Dated:   January 15, 2013



18