Us Tungsten 10Q 2014 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________

FORM 10-Q

____________________________

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

For the quarterly period ended February 28, 2014

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 registrant 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

(Registrant’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

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 76,945,421 shares of common stock issued and outstanding as of April 14, 2014.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

PAGE

Item 1. Financial Statements (unaudited)

Balance Sheets

Statements of Operations

Statements of Cash Flows

Notes to Financial Statements (unaudited)

Item 2. Management’s Discussion and Analysis

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4T. Controls and Procedures

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

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

Item 3. Defaults upon Senior Securities

Item 4. Mine Safety Disclosures

Item 5. Other Information

Item 6. Exhibits

Signatures

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)

February 28, 2014

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Balance Sheets

(Expressed in U.S. Dollars)

(Unaudited)


	February 28, 2014	May 31, 2013 (As restated – Note 12)
ASSETS

Current assets
Cash and cash equivalents	$ 27,373	$ 121,849
Prepaid expenses	11,200	12,753
Advance on mineral claims	-	67,000
Total current assets	38,573	201,602

Other assets

Mineral claims (Note 5)	152,980	50,000
Website – net of amortization (Note 4)	2,556	3,556
Total other assets	153,536	53,556


Total assets	$ 194,109	$ 255,158


LIABILITIES & STOCKHOLDERS’ DEFICIT

Current liabilities
Accounts payable and accrued liabilities (Note 6)	$ 32,549	$ 34,846
Other loans (Note 11 )	-	11,641
Due to related party (Note 9)	161,515	109,178
Letter of credit, net of beneficial conversion feature discount of
$nil and $172,967, respectively (Note 10)	530,975	153,033
Total current liabilities	725,039	308,698

Total liabilities	725,039	308,698

Stockholders’ deficit
Common stock $0.001 par value; authorized 2,250,000,000
shares; issued and outstanding: 75,750,000 and 75,750,000, respectively.	75,750	75,750
Additional paid-in capital	1,434,336	1,089,679
Subscription payable	50,000	-
Stock payable	181,938	88,500
Deficit accumulated during the exploration stage	(2,272,954)	(1,307,469)
Total stockholders’ deficit	(530,930)	(53,540)

Total liabilities and stockholders’ deficit	$ 194,109	$ 255,158

The accompanying notes are an integral part of the financial statements.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Statements of Operations

(Expressed in U.S. Dollars)

(Unaudited)


						From Inception
					(January 10, 2007)
	Three months ended		Nine months ended			Through
	February 28,		February 28,			February 28,
	2014	2013	2014	2013		2014


Revenue	$ -	$ -	$ -	$ -		$ -


Expenses

Impairment loss on mineral claim	-	-	-	-		13,512
Legal and accounting	9,902	6,831	27,702	21,768		125,900
General and administrative	17,445	37,129	60,818	46,415		202,879
Management fees	12,500	7,500	243,837	7,500		266,337
Stock based compensation	75,850	486,799	415,175	486,799		1,291,354
Exploration costs	8,500	-	21,155	-		36,212
Amortization	333	111	1,000	111		1,444
Total expenses	124,530	538,370	769,687	562,593		1,937,638

Operating loss	(124,530)	(538,370)	(769,687)	(562,593)		(1,937,638)

Other expenses
Interest expense on letter of credit	(33,522)	(13,495)	(195,798)	(13,495)		(287,566)

Net loss	$ (158,052)	$ (551,865)	$ (965,485)	$ (576,088)		$ (2,225,204)

Basic loss per common share	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.01)

Weighted average number of common shares outstanding
Weighted average number of common shares outstanding	75,750,000	75,750,000	75,750,000	75,750,000

The accompanying notes are an integral part of the financial statements.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Statement of Cash Flows

(Expressed in U.S. Dollars)

(Unaudited)


			From Inception (January 10, 2007)
	Nine months ended February 28,		through
	2014	2013	February 28, 2014

Cash flows from operating activities:
Net loss	$ (965,485)	$ (576,088)	$ (2,225,204)
Adjustments to reconcile net loss to net cash used in operating activities
Amortization	1,000	111	1,444
Amortization of beneficial conversion feature	195,887	13,495	287,655
Stock based compensation	415,175	499,119	1,291,354
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expenses	1,553	8,488	(11,200)
Increase (decrease) in accounts payable and accrued liabilities	(2,297)	(1,095)	27,813
Mineral property expenditures impaired	-	-	13,512
Net cash used in operating activities	(354,167)	(55,970)	(614,625)

Cash flows from investing activities:
Purchase of mineral claims	(35,980)	(50,000)	(166,492)
Advance for claim acquisition	-	(25,000)	(25,000)
Website development cost	-	(4,000)	(4,000)
Net cash used in investing activities	(35,980)	(79,000)	(128,492)

Cash flows from financing activities:
Proceeds from sale of common stock	-	-	27,000
Share subscription	50,000	-	50,000
Contributed capital by related party	-	-	1,000
Payments to other loans	(11,641)	-	-
Repayment of loan from related party	(65,163)	(54,000)	(187,163)
Proceeds from loan from related party	117,500	106,580	348,678
Proceeds from letter of credit	204,975	300,000	530,975
Net cash provided by financing activities	295,671	352,580	770,490

(Decrease) increase in cash and cash equivalents	(94,476)	217,610	27,373
Cash and cash equivalents, beginning of period	121,849	459	-

Cash and cash equivalents, end of period	$ 27,373	$ 218,069	$ 27,373

Non – cash investing and financing activities:
Beneficial conversion feature	$ 5,332	$ -	$ 265,332
Stock payable for interest	$ 17,588	$ -	$ 17,588
Stock payable for acquisition of mineral claim	$ -	$ -	$ 42,000

The accompanying notes are an integral part of the financial statements.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

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 ($2,272,954) as of February 28, 2014 and has working capital deficit of ($683,966) and ($107,096) as at February 28, 2014 and May 31, 2013, 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 February 28, 2014, 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.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 2:

Significant Accounting Policies(continued)

Cash and cash equivalents

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

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.

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.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

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 February 28, 2014 and May 31, 2013. 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

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 2:

Significant Accounting Policies(continued)

Fair value of financial instruments -(continued)

assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

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.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 2:

Significant Accounting Policies(continued)

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.

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 three year estimated economic life of the product.

Asset Retirement Obligation

The Company follows ASC 410, Asset Retirement and Environmental Obligations, which requires that an asset retirement obligation (“ARO”) associated with the retirement of a tangible long-lived asset be recognized as a liability in the period in which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset. The cost of the tangible asset, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the asset. The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. The fair value of the ARO is measured using expected future cash flow, discounted at the Company’s credit-adjusted risk-free interest rate.

Note 3:

Recent accounting pronouncements

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

Note 4:

Website

The Company’s website development costs consist of the following:


	February 28,	May 31,
	2014	2013
Website	$ 4,000	$ 4,000
Less - accumulated amortization	(1,444)	(444)
Net fixed assets	$ 2,556	$ 3,556

Amortization of $1,000 and $111 is included in general and administrative expenses in the statement of operations for the periods ended February 28, 2014 and February 28, 2013, respectively.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 5:

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 has been impaired because the Company could not project any future cash flows or salvage value and the asset was 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:

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);

$15,000 on or before June 18, 2013, (paid);

$20,000 on or before June 18, 2014;

$25,000 on or before June 18, 2015;

$30,000 on or before June 18, 2016;

$35,000 on or before June 18, 2017;

$40,000 on or before June 18, 2018;

$45,000 on or before June 18, 2019;

$50,000 on or before June 18, 2020;

$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.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 5:

Mineral Claim(continued)

On January 31, 2013, the Company entered into an agreement to stake additional claims in Montana. The Company had advanced $25,000 to stake additional mineral claims located in Calvert, Montana and has accrued an additional $2,500 for the completion of the staking of the Browne claims. Should the Company wish to proceed with the future staking of the Greenstone area we will be required to pay to Dykes Geologic $15,000. The Company also has an obligation to issue 100,000 shares as part of the acquisition which has been valued at $42,000 and accrued as stock payable.

On June 6, 2013, the Company filed its geological report on the Property in an 8K.

An additional $4,195 has been paid for claim fees and an additional $27,500 has been paid and accrued for claim staking costs. The value of 100,000 shares at $42,000 is also included in the acquisition costs for the Property. As at February 28, 2014, a total of $152,980 has been paid for the Property

Note 6:

Accounts Payable and Accrued Liabilities

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

Note 7:

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.

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

Issued and outstanding -The total issued and outstanding capital stock is 75,750,000.

On February 8, 2007, 135,000,000 common shares of the Company were subscribed for cash proceeds of $4,500. Out of these 123,000,000 shares were subsequently cancelled during the year ended May 31, 2013. (Note 8)

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 75,750,000 shares of common stock.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 7:

Common Stock(continued)

On February 19, 2013, Company entered into a share cancellation/return to treasury agreement with Matthew Markin, President, wherein Matthew Markin has agreed to the cancellation and return to treasury of 123,000,000 shares of common stock of Company held by Matthew Markin.

On April 4, 2013, the Board of Directors of the Company ratified, approved and adopted a Stock Option Plan for the Company in the amount of 8,000,000 shares with an exercisable period up to 5 years. In the event an optionee ceases to be employed by or to provide services to the Company for reasons other than cause, any Stock Option that is vested and held by such optionee may be exercisable within up to three months after the effective date that his position ceases. No Stock Option granted under the Stock Option Plan is transferable. Any Stock Option held by an optionee at the time of his death may be exercised by his estate within one year of his death or such longer period as the Board of Directors may determine.

On March 1, 2013, the Company granted 240,000 fully vested stock options to directors of the Company at $0.30 per share expiring March 1, 2018.

On May 10, 2013, the Company granted 200,000 fully vested stock options to a director of the Company at $0.30 per share expiring May 10, 2018.

On May 14, 2013, the Company granted 150,000 fully vested stock options to directors of the Company at $0.30 per share expiring May 14, 2018.

On May 23, 2013, the Company granted 2,000,000 fully vested stock options to a director of the Company at $0.30 per share expiring May 23, 2018. (See Note 12)

On May 24, 2013, the Company granted 50,000 fully vested stock options to a director of the Company at $0.30 per share expiring May 24, 2018.

On May 31, 2013, the Company granted 118,022 fully vested stock options to directors of the Company at $0.31 per share expiring May 31, 2018.

On June 1, 2013, the Company granted 500,000 fully vested stock options to a director of the Company at $0.30 per share expiring August 31, 2018.

On August 31, 2013, the Company granted 355,000 fully vested stock options to directors and senior officers of the Company at $0.24 per share expiring August 31, 2018.

On September 24, 2013, the Company granted 80,000 fully vested stock options to an advisor of the Company at $0.30 per share expiring September 24, 2018.

On October 7, 2013, the Company cancelled 500,000 stock options exercisable at $0.30 and 125,000 stock options exercisable at $0.28 pursuant to a settlement agreement with a former director and

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 7:

Common Stock(continued)

officer. The Company also cancelled a total of 113,407 stock options granted under its stock option plan. The Company granted a total of 260,000 fully vested stock options to directors and officers of the Company at $0.30 expiring October 7, 2018.

On November 30, 2013, the Company granted 224,945 fully vested stock options to directors and senior officers of the Company at $0.18 per share expiring November 30, 2018.

On November 22, 2013, the Company resolved to suspend the granting of incentive options to directors and senior officers under the stock option plan and various employment and advisory agreements effective November 30, 2013. All options due on November 30, 2013 were issued except those issuable to Barry Wattenberg which were cancelled.

During the period ended February 28, 2014, a total of 1,485,000 options were granted. The Company recognized stock based consulting expenses totalling $339,325 which was charged to operations. The fair value of each option granted is estimated at the respective grant date using the Black-Scholes Option Model. The following assumptions were made in estimating the fair value:


	Expected volatility		160.36% - 382%
	Expected life		5 years
	Risk-free interest rate		1.05 – 1.62
	Dividend yield		-

At February 28, 2014, the following stock options were outstanding:


Number of	Exercise
Options	Price	Expiry Date
200,000	$0.30	March 01, 2018
200,000	$0.30	May 10, 2018
150,000	$0.30	May 14, 2018
2,000,000	$0.30	May 23, 2018
50,000	$0.30	May 24, 2018
109,011	$0.31	May 31, 2018
280,000	$0.24	August 31, 2018
80,000	$0.30	September 24, 2018
300,000	$0.30	October 7, 2018
224,945	$0.18	November 30, 2018
3,533,956

The exercise price of the stock options granted on November 30, 2013 was set at $0.18 instead of the 10 day trading average of $0.22. The impact of the difference in exercise price on stock based compensation of $279 did not have a material effect on the financial statements.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 7:

Common Stock(continued)

Stock payable –The Company has accrued for various obligations to issue shares.

On January 31, 2013, the Company has an obligation to issue 100,000 shares in accordance with an agreement to stake additional claims in Montana. This obligation to issue shares has been accrued at $42,000 and has been recorded as an exploration advance.

On February 11, 2013, the Company entered into an agreement for consulting services with an unrelated party in an arm’s length transaction. The terms of the agreement is 12 months and requires the issuance of 150,000 restricted common shares after the first three months. The Company has recognized the shares payable under the contract to August 31, 2013 and has accrued $46,500 as stock payable.

On February 8, 2013, the Company recorded the fair value of the beneficial conversion feature of funds received from the line of credit (see note 10), total beneficial conversion feature was recorded to additional paid - in capital in the amount of $160,000.

On February 19, 2013, the Company recorded the fair value of the beneficial conversion feature of funds received from the line of credit (see note 10), total beneficial conversion feature was recorded to additional paid - in capital in the amount of $100,000.

On September 25, 2013, the Company recorded the fair value of the beneficial conversion feature of funds received from the line of credit (see note 10), total beneficial conversion feature was recorded to additional paid - in capital in the amount of $5,332.

On December 31, 2013, the Company has an obligation to issue shares for the interest portion of the line of credit. The Company has accrued interest payable to December 31, 2013 of $17,588 and has accrued stock payable.

On January 2, 2014, the Company entered into a services agreement with a consultant granting the consultant 25,000 common shares and 10,000 common shares at quarter end. This obligation to issue shares has been accrued at $3,850 and has been recorded as a stock based compensation expense.

On January 15, 2014, the Company revised the services agreement with a senior officer. The new agreement calls for the issuance of 300,000 shares for each quarter of service. The obligation to issued shares has been accrued at $48,000 and has been recorded as stock based compensation expense.

On February 1, 2014, the Company entered into a services agreement with a consultant granting the consultant 100,000 restricted common shares. This obligation to issue shares has been accrued at $24,000 and has been recorded as a stock based compensation expense.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 7:

Common Stock(continued)

Share subscription

On January 16, 2014, the Company entered into a private placement agreement with an arm’s length party for up to 2,000,000 units at $0.10 per unit. Each unit is composed of one share and one share purchase warrant exercisable at a price of $0.10 for one year from the date of issuance of the warrant. As at February 28, 2014 the Company has received $50,000 and has recognized the amount as share subscription payable. (See Note 13 – Subsequent Events)

Note 8:

Reclassification: Stock Split Adjustment

Effective February 19, 2013, the President voluntarily cancelled 123,000,000 shares of his outstanding common stock of the Company which were cancelled and returned to the pool of the Company’s authorized and unissued shares of common stock. These cancelled shares were previously recorded in the financials at a total of pre-split 135,000,000. Since the shares under this agreement have been cancelled without the exchange of consideration to reduce number of shares outstanding, the Company considered the change in capital structure from the cancellation agreement in substance a reverse stock split. In accordance with SAB Topic 4-C, the Company recorded the cancellation retroactively as a reduction to the par value of common stock with a corresponding increase to accumulated deficit.

Note 9:

Related Party Transactions

As of February 28, 2014 and May 31, 2013, total advances from a former director and senior officer of the Company were $75,000 and $22,663, respectively and advances from a former director of the Company were $86,515 and $86,515, respectively. The amounts are unsecured, non interest bearing and are due on demand.

As of February 28, 2014 and May 31, 2013, prepaid expenses include prepaid management fees paid to a director and senior officer of $10,000 and $nil, respectively.

On January 15, 2013 and subsequently amended on May 23, 2013, the Company entered into an employment agreement with a director and senior officer. Terms of employment include monthly payments of $5,000, payment of a signing bonus in the amount of $5,000 cash (paid) and the issuance of 1,000,000 stock options at a price of $0.30 exercisable for a period of five years. In addition, the Company will grant 50,000 options at the end of each fiscal quarter at an exercise price fixed at the previous 10 day trading average plus 10%. The Company has recognized a value of $290,000 for the options granted upon agreement date and has accrued a proportionate amount of quarterly options to be valued at $1,143 at May 31, 2013. During the period the Company discovered that an independent association agreement dated May 23, 2013 with the director and senior officer was not considered and the compensation was not recorded in the year ended May 31, 2013. The agreement called for the issuance of 1,000,000 stock options at a price of $0.30 exercisable for a period of five years. The Company has recognized a value of $289,995 for the options granted upon agreement dated and will be filing amended financial statements for the periods affected (see Note 12). As at August 31, 2013, 50,000 options with a value of $10,570 were granted. At November 30, 2013, it was agreed that the obligation to issue quarterly options was cancelled and no options were granted.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 9:

Related Party Transactions

On February 21, 2013 and subsequently amended on May 10, 2013, the Company entered into a director’s association agreement with a new director. Terms of the agreement include the issuance of 200,000 options at a price of $0.30 exercisable for a period of five years and payment of $500 per directors’ meeting attended. In addition, the Company will grant 20,000 options at the end of each fiscal quarter at an exercise price fixed at the previous 10 day trading average plus 10%. The Company has recognized a value of $62,000 for the options granted upon agreement date and has accrued a proportionate amount of quarterly options to be valued at $1,200 at May 31, 2013. On October 7, 2013, the Company amended the director’s association agreement and granted and additional 200,000 options at a price of $0.30 exercisable for a period of five years. On January 15, 2014, the agreement was amended to issue 300,000 common shares for each quarter of service in consideration of the cancellation of the quarterly option grants due to the suspension of the stock option plan. On February 28, 2014, the obligation to issue the shares was accrued at $48,000.

On March 1, 2013 and subsequently amended on May 14, 2013 the Company entered into a director’s advisory agreement with a new director. Terms of the agreement include the issuance of 50,000 stock options at a price of $0.30 exercisable for a period of five years and payment of $500 per directors’ meeting attended. In addition, the Company will grant 50,000 options at the end of each fiscal quarter at an exercise price fixed at the previous 10 day trading average plus 10%. The Company has recognized a value of $15,500 for the options granted upon agreement date and has accrued a proportionate amount of quarterly options to be valued at $971 at May 31, 2013.

On May 14, 2013 the Company entered into a director’s advisory agreement with a new director. Terms of the agreement include the issuance of 100,000 stock options at a price of $0.30 exercisable for a period of five years and payment of $500 per directors’ meeting attended. In addition, the Company will grant 20,000 options at the end of each fiscal quarter at an exercise price fixed at the previous 10 day trading average plus 10%. The Company has recognized a value of $31,000 for the options granted upon agreement date and has accrued a proportionate amount of quarterly options to be valued at $971 at May 31, 2013.

On May 24, 2013 the Company entered into a director’s advisory agreement with a new director. Terms of the agreement include the issuance of 50,000 stock options at a price of $0.30 exercisable for a period of five years and payment of $500 per directors’ meeting attended. In addition, the Company will grant 20,000 options at the end of each fiscal quarter at an exercise price fixed at the previous 10 day trading average plus 10%. The Company has recognized a value of $14,500 for the options granted upon agreement date and has accrued a proportionate amount of quarterly options to be valued at $400 at May 31, 2013.

On March 1, 2013, the Company entered into an employment agreement with a senior officer. Terms of the agreement include the issuance of 200,000 stock options at a price of $0.30 exercisable for a period of five years and payment of $500 per directors’ meeting attended. In addition, the Company will grant 100,000 options at the end of each fiscal quarter at an exercise price fixed at the previous 10 day trading average plus 10%. The Company has recognized a value of $80,000 for the options granted upon agreement date and has accrued a proportionate amount of quarterly options to be valued at $26,000 at May 31, 2013.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 9:

Related Party Transactions(continued)

On June 1, 2013, the Company entered into an employment agreement with a director and senior officer. Terms of the agreement include monthly payments of $15,000, payment of a signing bonus of $100,000, and the issuance of 500,000 stock options at a price of $0.30 exercisable for a period of five years. In addition, the Company will grant 125,000 options at the end of each fiscal quarter at an exercise price fixed at the previous 10 day trading average plus 10%. The Company has recognized a value of $129,997 for the options granted upon agreement date.

On August 31, 2013, the Company granted a total of 405,000 options exercisable at a price of $0.24 for a period of five years to directors and senior officers pursuant to the terms of their respective employment and association agreements. The Company has recognized a value of $85,187 for the options granted. On November 22, 2013, the Company resolved to suspend the quarterly grants of option and a total of 79,011 options previously granted were waived and cancelled.

On September 24, 2013, the Company entered into an employment agreement with a senior officer. Terms of the agreement include the issuance of 80,000 stock options at a price of $0.30 exercisable for a period of five years and payment of $500 per directors’ meeting attended. In addition, the Company will grant 20,000 options at the end of each fiscal quarter at an exercise price fixed at the previous 10 day trading average plus 10%.

The Company has recognized a value of $23,147 for the options granted upon agreement date and has accrued a proportionate amount of quarterly options to be valued at $2,213 at November 30, 2013.

On October 7, 2013, the Company entered into a settlement agreement to terminate an employment agreement with a director and senior officer. Terms of the agreement include cash payments totaling $130,000, settlement of amounts advanced by the director and senior officer, and the cancellation of a total of 625,000 fully vested stock options. A total of $55,000 has been paid under this agreement. On November 30, 2013, both parties agreed to suspend further payments until a future mutually agreed upon date.

On October 7, 2013, the Company granted 300,000 options to a director and officer exercisable at a price of $0.30 for a period of five years as compensation for a settlement agreement.

On November 30, 2013, the Company granted a total of 224,945 options exercisable at a price of $0.18 for a period of five years to directors and senior officers pursuant to the terms of their respective employment and association agreements. The Company has recognized a value of $33,303 for the options granted in the period. The exercise price of the stock options granted on November 30, 2013 was set at $0.18 instead of the 10 day trading average of $0.22. The impact of the difference in exercise price on stock based compensation of $279 did not have a material effect on the financial statements.

On February 28, 2014, the Company recognized a value of $48,000 for the 300,000 common shares granted and payable to a senior officer.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 10:

Line of Credit

On February 2, 2013, the Company entered into an agreement for a $1,000,000 line of credit which is convertible into shares of the Company with an unrelated third party in an arm’s length transaction. The loan is convertible into shares at a price of $0.30 until February 2, 2014 and bears interest of 5% per year. As at February 28, 2014 a total of $21,878 was charged to interest. Upon conversion the Company will issue up to 2,000,000 share purchase warrants to purchase 2,000,000 restricted common shares at $0.80 per shares for a period of three years. The Company and lender have agreed to convert the outstanding balance and interest into shares at the end of the calendar year. The principal has not been converted as on February 28, 2014. On March 24, 2014, the Company issued 195,421 shares at a deemed price of $0.09 in consideration of $17,588 of interest payable.

As at February 28, 2014, the Company has received $530,975. The Company has determined the value associated with the conversion feature in connection with the convertible note payable. The Company has determined the note, with a face value of $530,975, to have a beneficial conversion feature of $26,760. The beneficial conversion feature has been accreted and is being amortized over the life of the note (which is calendar year end December 31 for each year when the advance is received; being the proposed date of conversion). As at February 28, 2014, $265,332 had been amortized and expensed as interest. The beneficial conversion feature is valued under the intrinsic value method.

Note 11:

Other

On February 21, 2013, Company entered in to insurance agreement with a third party. As per agreement the Company needs to pay an annual premium of $17,500.

As a parallel arrangement, Company entered in to a financing arrangement with IPFS Corporation. As per terms of financing agreement the Company paid a cash down payment of $1,493 on signing of the agreement and the balance amount in 11 monthly installments. As of February 28, 2014, $nil is payable to IPFS Corporation.

As of February 28, 2014 and May 31, 2013, the Company had prepaid insurance totaling $- and $12,753, respectively. The prepaid insurance will be expensed on a straight line basis over the remaining life of the insurance policy. During the periods ended February 28, 2014 and 2013, the Company recorded $12,704 and $398 of insurance expenses.

As of February 28, 2014, the prepaid balance of $11,200 was composed of prepaid rent of $1,200 and prepaid management compensation of $10,000. As at May 31, 2013, the prepaid balance was composed of prepaid rent of $12,753.

Note 12:

Restatement

During the six months ended November 30, 2013, the management of the Company discovered and realized that the Independent Association agreement entered into on May 23, 2013 with Barry Wattenberg, appointing him as the Executive of the Company, was not considered and the effect of the compensation agreed upon in the agreement was not recorded during the audit period May 31, 2013 and three month period ended August 31, 2013. The Company has filed an amended 10KA for the year ended May 31, 2013 correcting the errors and filed the financials with corrected numbers. The Company also filed an amended 10QA for the three month period ended August 31, 2013 to correct the errors and filed financials with the corrected numbers.

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 12:

Restatement(cont’d)


Balance Sheet	As Originally	Adjustments	As
As of May 31, 2013	Filed	Increase/(Decrease)	Restated

ASSETS

Current assets
Cash and cash equivalents	$ 121,849	$ -	$ 121,849
Prepaid expenses	12,753	-	12,753
Advance on mineral claims	67,000	-	67,000
Total current assets	201,602	-	201,602

Other assets

Mineral claims (Note 5)	50,000	-	50,000
Website – net of amortization (Note 4)	3,556	-	3,556
Total other assets	53,556	-	53,556

Total assets	$ 255,158	$ -	$ 255,158

LIABILITIES & STOCKHOLDERS’ DEFICIT

Current liabilities
Accounts payable and accrued liabilities (Note 6)	$ 34,846	$ -	$ 34,846
Other loans (Note 12 )	11,641	-	11,641
Due to related party (Note 9)	109,178	-	109,178

Letter of credit, net of beneficial conversion feature discount of $172,967 respectively (Note 10)	153,033	-	153,033
Total current liabilities	308,698	-	308,698

Total liabilities	308,698	-	308,698

Stockholders’ deficit

Common stock $0.001 par value; authorized 2,250,000,000 shares; issued and outstanding: 75,750,000.	75,750	-	75,750
Additional paid-in capital	799,684	289,995	1,089,679
Stock payable	88,500	-	88,500
Deficit accumulated during the exploration stage	(1,017,474)	(289,995)	(1,307,469)

Total stockholders’ deficit	(53,540)	-	(53,540)

Total liabilities and stockholders’ deficit	$ 255,158	$ -	$ 255,158

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 12:

Restatement(cont’d)


Statements of Operations
(Expressed in U.S. Dollars)
For the year ended May 31, 2013

	As Originally	Adjustments	As
	Filed	Increase/(Decrease)	Restated

Revenue	$ -	$ -	$ -

Expenses

Impairment loss on mineral claim	$ -	$ -	$ -
Legal and accounting	31,589	-	31,589
General and administrative	64,166	-	64,166
Management fees	22,500	-	22,500
Stock based compensation	586,184	289,995	876,179
Exploration costs	15,057	-	15,057
Amortization	444	-	444
Total expenses	719,940	289,995	1,009,935

Operating loss	(719,940)	-	(1,009,935)

Other expenses
Interest expense	(91,768)	-	(91,768)

Net loss	$ (811,708)	$ (289,995)	$ (1,101,703)

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 12:

Restatement(cont’d)


Statements of Operations
(Expressed in U.S. Dollars)
From Inception (January 10, 2007) through May 31, 2013

	As Originally	Adjustments	As
	Filed	Increase/(Decrease)	Restated

Revenue	$ -	$ -	$ -

Expenses

Impairment loss on mineral claim	$ 13,512	$ -	$ 13,512
Legal and accounting	98,198	-	98,198
General and administrative	142,061	-	142,061
Management fees	22,500	-	22,500
Stock based compensation	586,184	289,995	876,179
Exploration costs	15,057	-	15,057
Amortization	444	-	444
Total expenses	877,956	289,995	1,167,951

Operating loss	(877,956)	(289,995)	(1,167,951)

Other expenses
Interest expense	(91,768)	-	(91,768)

Net loss	$ (969,724)	$ (289,995)	$ (1,259,719)

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 12:

Restatement(cont’d)


Statement of Cash Flows
For the year ended May 31, 2013
(Audited)
	As Originally	Adjustments	As
	Filed	Increase/(Decrease)	Restated
Cash flows from operating activities:
Net loss	$ (811,708)	$ (289,995)	$ (1,101,703)
Adjustments to reconcile net loss to net cash used in operating activities
Amortization	444	-	444
Amortization of beneficial conversion feature	87,033	-	87,033
Stock based compensation	586,184	289,995	876,179
Changes in operating assets and liabilities:
Increase in prepaid expenses	(12,753)	-	(12,753)
Increase in accounts payable and accrued liabilities	28,969	-	28,969
Net cash used in operating activities	(121,831)	-	(121,831)
Cash flows from investing activities:
Purchase of mineral claims	(50,000)	-	(50,000)
Advance for claim acquisition	(25,000)	-	(25,000)
Website development cost	(4,000)	-	(4,000)
Net cash used in investing activities	(79,000)	-	(79,000)
Cash flows from financing activities:
Bank overdraft	-	-	-
Proceeds from sale of common stock	-	-	-
Contributed capital by related party	-	-	-
Proceeds from other loans	11,641	-	11,641
Repayment of loan from related party	(122,250)	-	(122,250)
Proceeds from loan from related party	106,830	-	106,830
Proceeds from letter of credit	326,000		326,000
Net cash used in financing activities	322,221	-	322,221
(Decrease) increase in cash and cash equivalents	121,390	-	121,390
Cash and cash equivalents, beginning of year	459	-	459
Cash and cash equivalents, end of year	$ 121,849	$ -	$ 121,849
Non – cash investing and financing activities:
Beneficial conversion feature	$ 260,000	$ -	$ 260,000
Stock payable for advance on acquisition of mineral claim	$ 42,000	$ -	$ 42,000

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 12:

Restatement(cont’d)


Statement of Cash Flows
From Inception (January 10, 2007) through May 31, 2013
(Audited)
	As Originally	Adjustments	As
	Filed	Increase/(Decrease)	Restated
Cash flows from operating activities:
Net loss	$ (969,723)	$ (289,995)	$ (1,259,719)
Adjustments to reconcile net loss to net cash used in operating activities
Amortization	444	-	444
Amortization of beneficial conversion feature	91,768	-	91,768
Stock based compensation	586,184	289,995	876,179
Changes in operating assets and liabilities:
Increase in prepaid expenses	(12,753)	-	(12,753)
Increase in accounts payable and accrued liabilities	30,111	-	30,111
Mineral property expenditures written down	13,512	-	13,512
Net cash used in operating activities	(260,458)	-	(260,458)
Cash flows from investing activities:
Purchase of mineral claims	(63,512)	-	(63,512)
Advance for claim acquisition	(25,000)	-	(25,000)
Website development cost	(4,000)	-	(4,000)
Net cash used in investing activities	(92,512)	-	(92,512)
Cash flows from financing activities:
Bank overdraft	-	-	-
Proceeds from sale of common stock	27,000	-	27,000
Contributed capital by related party	1,000	-	1,000
Proceeds from other loans	11,641	-	11,641
Repayment of loan from related party	(122,000)	-	(122,000)
Proceeds from loan from related party	231,178	-	231,178
Proceeds from letter of credit	326,000		326,000
Net cash used in financing activities	474,819	-	474,819
(Decrease) increase in cash and cash equivalents	121,849	-	121,849
Cash and cash equivalents, beginning of year	-	-	-
Cash and cash equivalents, end of year	$ 121,849	$ -	$ 121,849
Non – cash investing and financing activities:
Beneficial conversion feature	$ 260,000	$ -	$ 260,000
Stock payable for advance on acquisition of mineral claim	$ 42,000	$ -	$ 42,000

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 12:

Restatement(cont’d)


Balance Sheet	As Originally	Adjustments	As
As of August 31, 2013	Filed	Increase/(Decrease)	Restated

ASSETS

Current assets
Cash and cash equivalents	$ 89,403	$ -	$ 89,403
Prepaid expenses	9,702	-	9,702
Advance on mineral claims	67,000	-	67,000
Total current assets	166,105	-	166,105

Other assets

Mineral claims (Note 5)	83,480	-	83,480
Website – net of amortization (Note 4)	3,222	-	3,222
Total other assets	86,702	-	86,702
Total assets	$ 252,807	$ -	$ 252,807


LIABILITIES & STOCKHOLDERS’ DEFICIT

Current liabilities
Accounts payable and accrued liabilities (Note 6)	$ 29,510	$ -	$ 29,510
Accrued Management fee due to related party	87,500	-	87,500
Other loans (Note 11)	7,266	-	7,266
Due to related party (Note 9)	109,178	-	109,178
Letter of credit, net of beneficial conversion feature discount of $98,607, respectively (Note 10)	352,393	-	352,393
Total current liabilities	585,847	-	585,847

Total liabilities	585,847	-	585,847

Stockholders’ deficit
Common stock $0.001 par value; authorized 2,250,000,000
shares; issued and outstanding: 75,750,000, respectively.	75,750	-	75,750
Additional paid-in capital	1,004,350	300,512	1,304,862
Stock payable	88,500	-	88,500
Deficit accumulated during the exploration stage	(1,501,640)	(300,512)	(1,802,152)

Total stockholders’ deficit	(333,040)	-	(333,040)

Total liabilities and stockholders’ deficit	$ 252,807	$ -	$ 252,807

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 12:

Restatement(cont’d)


Statements of Operations
(Expressed in U.S. Dollars)
For the three months ended August 31, 2013
	As Originally	Adjustments	As
	Filed	Increase/(Decrease)	Restated
Revenue	$ -	$ -	$ -
Expenses
Impairment loss on mineral claim	$ -	$ -	$ -
Legal and accounting	6,900	-	6,900
General and administrative	19,370	-	19,370
Management fees	161,500	-	161,500
Stock based compensation	204,666	10,517	215,183
Exploration costs	12,655	-	12,655
Amortization	333	-	333
Total expenses	405,424	10,517	415,941
Operating loss	(405,424)	-	(415,941)
Other expenses
Interest expense	(78,742)	-	(78,742)

Net loss	$ (484,166)	$ (10,517)	$ (494,683)


Statements of Operations
(Expressed in U.S. Dollars)
From Inception (January 10, 2007) through August 31, 2013

	As Originally	Adjustments	As
	Filed	Increase/(Decrease)	Restated
Revenue	$ -	$ -	$ -
Expenses
Impairment loss on mineral claim	$ 13,512	$ -	$ 13,512
Legal and accounting	105,098	-	105,098
General and administrative	161,430	-	161,430
Management fees	184,000	-	184,000
Stock based compensation	790,850	300,512	1,091,362
Exploration costs	27,712	-	27,712
Amortization	777	-	777
Total expenses	1,283,379	300,512	1,583,891
Operating loss	(1,283,379)	(300,512)	(1,583,891)
Other expenses
Interest expense	(170,510)	-	(170,510)
Net loss	$ (1,453,889)	$ (300,512)	$(1,754,401)

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 12:

Restatement(cont’d)


Statement of Cash Flows
For the period ended August 31, 2013
	As Originally	Adjustments	As
	Filed	Increase/(Decrease)	Restated
Cash flows from operating activities:
Net loss	$ (484,166)	$ (10,517)	$(494,683)
Adjustments to reconcile net loss to net cash used in operating activities
Amortization	334	-	334
Amortization of beneficial conversion feature	74,360	-	74,360
Stock based compensation	204,666	10,517	215,183
Changes in operating assets and liabilities:
Increase in prepaid expenses	3,051	-	3,051
Increase in accrued management fee due to related party	87,500	-	87,500
Increase in accounts payable and accrued liabilities	(5,336)	-	(5,336)
Net cash used in operating activities	(119,591)	-	(119,591)
Cash flows from investing activities:
Purchase of mineral claims	(33,480)	-	(33,480)
Advance for claim acquisition	-	-	-
Website development cost	-	-	-
Net cash used in investing activities	(33,480)	-	(33,480)
Cash flows from financing activities:
Bank overdraft	-	-	-
Proceeds from sale of common stock	-	-	-
Contributed capital by related party	-	-	-
Payments to other loans	(4,375)	-	(4,375)
Repayment of loan from related party	-	-	-
Proceeds from loan from related party	-	-	-
Proceeds from letter of credit	125,000	-	125,000
Net cash used in financing activities	120,625	-	120,625
(Decrease) increase in cash and cash equivalents	(32,446)	-	(32,446)
Cash and cash equivalents, beginning of year	121,849	-	121,849
Cash and cash equivalents, end of year	$ 89,403	$ -	$89,403
Non – cash investing and financing activities:
Beneficial conversion feature	$ -	$ -	$ -
Stock payable for advance on acquisition of mineral claim	$ -	$ -	$ -

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 12:

Restatement(cont’d)


Statement of Cash Flows
From Inception (January 10, 2007) through August 31, 2013

	As Originally	Adjustments	As
	Filed	Increase/(Decrease)	Restated
Cash flows from operating activities:
Net loss	$ (1,453,889)	$ (300,512)	$(1,754,401)
Adjustments to reconcile net loss to net cash used in operating activities
Impairment loss on mineral claim	13,512	-	13,512
Amortization	778	-	778
Amortization of beneficial conversion feature	161,393	-	161,393
Stock based compensation	790,850	300,512	1,091,362
Changes in operating assets and liabilities:
Increase in prepaid expenses	(9,702)	-	(9,702)
Increase in accrued management fee due to related party	87,500	-	87,500
Increase in accounts payable and accrued liabilities	29,510	-	29,510
Net cash used in operating activities	(380,049)	-	(380,049)
Cash flows from investing activities:
Purchase of mineral claims	(96,992)	-	(96,992)
Advance for claim acquisition	(25,000)	-	(25,000)
Website development cost	(4,000)	-	(4,000)
Net cash used in investing activities	(125,992)	-	(125,992)
Cash flows from financing activities:
Proceeds from sale of common stock	27,000	-	27,000
Contributed capital by related party	1,000	-	1,000
Proceeds to other loans	7,266	-	7,266
Repayment of loan from related party	(122,000)	-	(122,000)
Proceeds from loan from related party	231,178	-	231,178
Proceeds from letter of credit	451,000	-	451,000
Net cash used in financing activities	595,444	-	595,444
(Decrease) increase in cash and cash equivalents	89,403	-	89,403
Cash and cash equivalents, beginning of period	-	-	-
Cash and cash equivalents, end of period	$ 89,403	$ -	$ 89,403
Non – cash investing and financing activities:
Beneficial conversion feature	$ 260,000	$ -	$ 260,000
Stock payable for advance on acquisition of mineral claim	$ 42,000	$ -	$ 42,000

US Tungsten Corp.

(fka Stealth Resources Inc.)

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

(Expressed in U.S. Dollars)

February 28, 2014

Note 13:

Subsequent Events

On March 18, 2014, the Company issued 1,000,000 units at a deemed price of $0.10 per unit for total proceeds of $100,000. Each unit is composed of one common share and one share purchase warrant which entitles the holder to purchase an additional share of the Company at a price of $0.10 for a period of one year.

On March 24, 2014, the Company issued 195,421 shares at a deemed price of $0.09 per share to settle interest payable in the amount of $17,588.

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 nine months ended February 28, 2014.

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 discover. We have an option to acquire three unpatented mineral claims and own a 100% interest in 195 mineral claims located in Calvert, Montana (collectively the “Calvert Property”).

There is no assurance that a commercially viable mineral deposit exists on the Calvert Property. We do not have any current plans to acquire interests in additional mineral properties, although we may consider such acquisitions in the future.

Mineral property exploration is typically conducted in phases. Each phase of exploration work is recommended by a geologist based on the results from the most recent phase of exploration. We have not yet commenced the initial phase of exploration on the Calvert Property. Once we have completed each phase of exploration, we will make a decision as to whether or not we proceed with each successive phase based upon the analysis of the results of that program. Our Board of Directors will make this decision based upon the recommendations of the independent geologist who oversees the program and records the results.

Our plan of operation is to conduct exploration work on the Calvert Property in order to ascertain whether it possesses economic quantities of tungsten. There can be no assurance that an economic mineral deposit exists on the Calvert Property until appropriate exploration work is completed.

Even if we complete our proposed exploration programs on the Calvert Property and we are successful in identifying a mineral deposit, we will have to spend substantial funds on further drilling and engineering studies before we will know if we have a commercially viable mineral deposit.

Plan of Operation

As at February 28, 2014, we had a cash and cash equivalent balance of $27,373, compared to cash and cash equivalent of $121,849 as of May 31, 2013. Our plan of operation for the twelve months is to complete the geologist recommended work on the Calvert Property, consisting of verifying the historical insitu reserves and

a regional exploration program to evaluate the potential for discovering additional reserves along strike. We estimate that the cost of this program will be approximately $100,000.

In addition, we anticipate spending approximately $150,000 on administrative expenses, including fees payable in connection with the filing of our annual and quarterly reports and complying with reporting obligations.

Utilizing the letter of credit, we believe that we have sufficient funds to cover the anticipated administrative expenses and work program over the next 12 months.

However, we anticipate that we will require additional funding to continue to develop and explore the Calvert Property and to cover our administrative expenses. 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.

Our current cash on hand will not be sufficient to acquire any new assets, should we desire to do so, and additional funds will be required to close any possible acquisition. 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 base this expectation, in part, on the fact that very few mineral claims in the exploration stage ultimately develop into producing, profitable mines. Our future financial results are also uncertain due to a number of factors, some of which are outside our control. These factors include the following:

our ability to raise additional funding;

the market price for minerals that may be found on the Calvert Property;

the results of our proposed exploration programs on the Calvert property; and

our ability to find joint venture partners for the development of our property interests

We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern.

Results of Operations

Three and Nine months Ended February 28, 2014 Compared to the Three and Nine months Ended February 28, 2013

We have had no operating revenues since our inception on January 10, 2007 through February 28, 2014, and have incurred operating expenses in the amount of $1,937,638 for the same period. Our activities have been financed from the proceeds of share subscriptions and director loans.

During the three months ended February 28, 2014, we incurred a net loss of $(158,052), compared to a net loss of $(551,865) for the three months ended February 29, 2013. For the nine months ended February 28,

2014, we incurred a net loss of $(965,485), compared to a net loss of $(576,088) for the nine months ended February 29, 2013.

Revenues

We did not generate any revenues during the nine months ended February 28, 2014 or the nine months ended February 28, 2013. We did not generate any revenues during the three months ended February 28, 2014 or the three months ended February 28, 2013.

Expenses

During the three months ended February 28, 2014 and February 28, 2013, our expenses consisted of legal and accounting fees of $9,902 and $6,831, general and administrative expenses of $17,445 and $37,129, management fees of $12,500 and $7,500, exploration costs of $8,500 and $Nil, amortization of $333 and $111, and stock based compensation of $75,850 and $486,799. Other expenses consisted of interest of $33,522 and $13,495 for the three months ended February 28, 2014 and February 28, 2013.

During the nine months ended February 28, 2014 and February 28, 2013, our expenses consisted of legal and accounting fees of $27,702 and $21,768, general and administrative expenses of $60,818 and $46,415, management fees of $243,837 and $7,500, exploration costs of $21,155 and $Nil, depreciation and amortization of $1,000 and $111, and stock based compensation of $415,175 and $486,799. Other expenses consisted of interest of $195,798 and $13,495 for the nine months ended February 28, 2014 and February 28, 2013.

Liquidity and Capital Resources

We had cash and cash equivalent of $27,373 as of February 28, 2014, compared to a cash and cash equivalent position of $121,849 at May 31, 2013. Since inception through to and including February 28, 2014, 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 related parties of $348,678.

Effective February 2, 2013, we entered into a letter of credit with a non-US person wherein they will loan our company up to $1,000,000 by way of periodic advances at our request for a period of one year. The loan amounts will be convertible into shares of common stock of our company at a rate of $0.30 per common share and shall bear annual interest of 5% per annum. As at February 28, 2014 a total of $21,878 was charged to interest. As of the nine months ended February 28, 2014, we had received $530,975 and no stock has been issued.

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.

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 4.

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 and our Chief Financial Officer as of the end of the period covered by this report, our Chief Executive Officer, and our Chief Financial Officer concluded that our disclosure controls and procedures are not 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 theSecurities 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 theSecurities 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 and our Chief Financial 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 not effective as of February 28, 2014.

(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 February 28, 2014 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.

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 February 28, 2014, there were no material changes to the procedures by which security holders may recommend nominees to our board of directors.

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 chief executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of theSarbanes-Oxley Act of 2002

31.2		Certificate of chief financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of theSarbanes-Oxley Act of 2002

32.1		Certificate of chief executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002

32.2		Certificate of chief financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-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 theSecurities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


US TUNGSTEN CORP.
/s/Barry Wattenberg
Barry Wattenberg
Chairman, President, Chief Financial Officer and Director
Date:	April 14, 2014

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

Us Tungsten (USTU) 10-Q2014 Q3 Quarterly report

Content analysis