12 Aug US Tungsten Corp (SERS) – added to watchlist
On Friday, August 10, 2012, I added US Tungsten Corp (SERS) to our watchlist for a future paid promotion.
The previous day on August 9th, SERS did a 30:1 forward split drawing my attention to the ticker. Upon reviewing the filings I found enough value information to convince me that US Tungsten Corp will probably become the focus of a big paid promotion in the future.
US Tungsten Corp (SERS) went public as a developmental mining company called Stealth Resources Inc.
Stealth Resources Inc was incorporated in Nevada on January 10, 2007.
Stealth Resources Inc filed an S-1 to go public on June 17, 2008.
The attorney used to help take the shell public was William MacDonald of MacDonald Tuskey in Vancouver. William MacDonald has been linked to dozens of pump&dump shells in the past (most recently LEXG) and was very closely connected to William Scott Marshall.
The sole officer/director of the Stealth Resources Inc shell was Tyrone McClay. According to S-1 filing, Tyrone McClay had never had "any professional training or technical credentials in the exploration, development and operation of mines". So we have a CEO with no experience in mining planted at the head of the Stealth Resources Inc shell.
Tyrone McClay issued himself 4,500,000 shares for $4,500 ($.001/share).
To help the Stealth Resources Inc shell get public trading status they need to have a business plan. A mining company can't have a business plan without having access to a mining claim so on February 26, 2007, Tyrone signed an agreement with his relative, Kyle McClay to have access to a mining claim that was in Kyle McClay's name. Access to the mining claim cost Stealth Resources Inc $6,000 Canadian. Upon delivery of a geological report, Stealth Resources Inc was required to pay another $6,000 Canadian. I won't bother going into more detail about the claim because the claim had never been explored and there was no intent to ever explore or mine the claim. It only existed to get the shell public trading status.
The Seed Shareholders
Prior to going public, on February 21, 2007, Tyrone McClay sold 1,250,000 shares to 5 private investors to raise $5,000 ($.004/share).
Also prior to going pubic, on March 19, 2007, Tyrone McClay sold 875,000 shares to 25 private investors to raise $17,500 ($.02/share).
|Cheng Wing Kit||50,000|
That gave Stealth Resources Inc a total of 6,625,000 outstanding shares and a total of $10,665 after paying for the claim and the geological report.
Change in Control
As is common with shells that are set up just to go public, the shell will eventually go through a change in control. The change in control is an extremely useful step when it comes to getting a forward split approved by FINRA. The forward split is obviously done to increase the holdings of the insiders so that they can make more money by selling their stock.
Usually the change in control will be delayed until all of the cash is used up. Stealth Resources Inc followed that pattern to a tee.
The 10Q for the period ending February 28, 2011 showed that Stealth Resources Inc was down to just $38 cash. Time to enact the change of control.
On April 12, 2011, the change of control took place. Tyrone McClay sold his 4,500,000 shares to Matthew Markin for $9,900.
Prior to taking control of Stealth Resources Inc, Matthew Markin was the CEO of American Lithium Minerals, Inc (AMLM).
Similarly to the way Markin took over control of Stealth Resources Inc, Markin bought control of American Lithium Minerals Inc (then known as Nugget Resources Inc) from Peter Sorel on July 29, 2008 by purchasing his 5,000,000 shares for $12,500.
Like Stealth Resources Inc, Nugget Resources Inc had just run out of cash and was still all insider owned. Nugget Resources Inc had 10,500,000 shares outstanding at the time of the purchase.
Nugget Resources Inc purchased their worthless mining claim to help them go public for just $4,000.
After taking control of Nugget Resources Inc, Markin gave himself an additional 1,500,000 shares for $1,500 ($.001/share) raising his total to 6,000,000 shares.
That $1,500 kept the shell afloat for a few more months then on March 20, 2009, Markin executed a 4:1 forward split to go along with the name change to American Lithium Minerals Inc (AMLM).
Shortly after the forward split cleared, AMLM went on a wild ride from around $.35/share to over $3.00/share before crashing back down. AMLM now trades at $.03/share.
Setting SERS up for a future promotion?
Stealth Resources Inc has followed a similar pattern to what AMLM followed after Markin took over only with Stealth Resources Inc Markin has been loaning the shell money to pay for operations without giving himself any shares yet in exchange for the cash.
According to the recently filed 10K, the SERS shell owes $124,598. $38.083 of that is owed to Matthew Markin and $86,515 owed to Tyrone McClay.
On July 19, 2012, the company (Matthew Markin) approved an authorized share count from 75,000,000 to 2,250,000,000, a name change to US Tungsten Corp, and a 30:1 forward split.
On August 9, 2012 the name change and forward split were executed. The outstanding share count is now 198,750,000.
Matthew Markin owns 135,000,000 shares
The other 63,750,000 shares are owned by the seed shareholders and are free trading.
Those seed shareholders paid a grand total of $22,500 for those shares. Those shares are currently worth $12,750,000 at the $.20/share market price.
The 5 main seed shareholders now have 7,500,000 shares each costing them only $1,250 each. If they can dump those shares at an average of $1.00/share they will pull in a nice cool $7,500,000 each. Plenty of reason for a high priced paid promotion.
SERS a repeat of AMLM?
US Tungsten Corp definitely looks like a repeat of American Lithium Minerals Inc.
The big question is will Matthew Markin be able to work similar magic on SERS to what he did with AMLM? AMLM had a much smaller outstanding share count and less seed shares needing to be dumped.
Before we see any paid promotions, the forward split shares will have to clear and SERS will probably receive a symbol change. For now keep US Tungsten Corp on your radars.