10-Q 1 form10q.htm QUARTERLY REPORT FOR THE PERIOD ENDED JANUARY 31, 2011 Uniontown Energy Inc.: Form 10Q - Filed by newsfilecorp.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2011 or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to __________________

Commission File Number 000-52560

UNIONTOWN ENERGY INC.
(Exact name of registrant as specified in its charter)

Nevada 98-0441419
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
   
314 – 837 West Hastings Street, Vancouver, British Columbia, Canada V6C 3N6
(Address of principal executive offices) (Zip Code)

604.684.6142
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed 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 days.

[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).

[ ] YES [ ] NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small 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 Exchange Act.

[X] YES [ ] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

[ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
214,500,000 common shares issued and outstanding as of March 17, 2011.

1


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

2


UNIONTOWN ENERGY INC.
(An Exploration Stage Company)

FINANCIAL STATEMENTS

January 31, 2011



UNIONTOWN ENERGY INC.
(An Exploration Stage Company)
 
BALANCE SHEETS
(Unaudited)

    January 31,     October 31,  
    2011     2010  
             
ASSETS            
             
Current            
       Cash $  157   $  2,648  
       Prepaid expenses   -     251  
          2,899  
             
Equipment   632     734  
             
  $  789   $  3,633  
             
             
LIABILITIES            
             
Current            
       Accounts payable and accrued liabilities $  38,666   $  14,480  
       Note payable   253,166     249,540  
       Due to related party   -     1,835  
    291,832     265,855  
             
Convertible debt   338,406     330,449  
             
    630,238     596,304  
             
STOCKHOLDERS’ DEFICIT            
             
Common stock            
     Authorized:
     27,000,000,000 common shares with a par value of $0.001 and
     20,000,000 preferred shares with $0.001 par value
 

   

 
             
     Issued and outstanding:
     214,500,000 common shares (October 31, 2010 - 214,500,000)
 
61,000
   
61,000
 
Deficit accumulated during the exploration stage   (690,449 )   (653,671 )
             
    (629,449 )   (592,671 )
             
  $  789   $  3,633  

Subsequent events (Note 2)

The accompanying notes are an integral part of these financial statements

F-2



UNIONTOWN ENERGY INC.
(An Exploration Stage Company)
 
STATEMENTS OF OPERATIONS
(Unaudited)

                November  
    Three Months     Three Months     22, 2004  
    ended     ended     (Inception) to  
    January 31,     January 31,     January 31,  
    2011     2010     2011  
                   
EXPENSES                  
       Amortization $  102   $  226   $  4,368  
       Consulting fees   6,000     -     140,223  
       Foreign exchange loss   7,789     5,495     60,335  
       Impairment of oil and gas property   -     -     202,603  
       Interest and bank charges   3,803     3,176     24,463  
       Office and general   11,086     7,130     58,907  
       Professional fees   7,500     13,537     173,344  
       Management fees   498     -     26,206  
                   
NET LOSS $  36,778   $ 29,564   $  690,449  
                   
                   
LOSS PER SHARE - BASIC AND DILUTED $  (0.00 ) $  (0.00 )      
                   
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING – BASIC AND DILUTED
 
214,500,000
   
214,500,000
   
 

The accompanying notes are an integral part of these financial statements

F-3



UNIONTOWN ENERGY INC.
(An Exploration Stage Company)
 
STATEMENTS OF CASH FLOWS
(Unaudited)

                November 22,  
    Three months     Three months     2004  
    Ended     Ended     (Inception) to  
    January 31,     January 31,     January 31,  
    2011     2010     2011  
                   
                   
Cash Flows from Operating Activities                  
       Net loss $  (36,778 ) $  (29,564 ) $  (690,449 )
       Adjustment for items not affecting cash:                  
                 Amortization   102     226     4,368  
                 Foreign exchange loss   7,780     5,841     61,996  
                 Accrued interest on convertible debt   3,803     1,891     24,463  
                 Impairment of oil and gas property   -     -     202,603  
       Change in non-cash working capital items:                  
                   Prepaid expenses   251     -     -  
                   Accounts payable and accrued liabilities   24,186     3,061     38,666  
                   Due to related party   (1,835 )   -     -  
Net cash used in operations   (2,491 )   (18,545 )   (358,353 )
                   
Cash Flows from Investing Activities                  
       Oil and gas property   -     -     (247,402 )
       Purchase of equipment   -     -     (5,000 )
Net cash used in investing activities   -     -     (252,402 )
                   
Cash Flows from Financing Activities                  
       Capital stock issued   -     -     61,000  
       Due to related party   -     -     253,546  
       Proceeds from convertible long term debt   -     20,000     296,366  
Net cash provided by financing activities   -     20,000     610,912  
                   
Increase (Decrease) In Cash   (2,491 )   1,455     157  
                   
Cash, Beginning   2,648     1,002     -  
                   
Cash, Ending $  157   $  2,457   $  157  
                   
Supplementary Cash Flow Information                  
       Cash paid for:                  
                   Interest $  -   $  -   $  -  
                   Income taxes $  -   $  -   $  -  

The accompanying notes are an integral part of these financial statements

F-4



NOTE 1 – BASIS OF PRESENTATION

Unaudited Interim Financial Statements

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles (“US GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission. They may not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended October 31, 2010 included in the Company’s Form 10K filed with the Securities and Exchange Commission. The unaudited interim financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting primarily of normal recurring adjustments, have been made. Operating results for the three months ended January 31, 2011 are not necessarily indicative of the results that may be expected for the year ending October 31, 2011.

NOTE 2 – SUBSEQUENT EVENTS

a)

Effective November 15, 2010, the Company entered into a purchase agreement to purchase a coal seam natural gas property called the Uniontown Project located in Bourbon County, Kansas for a total of $125,000. This agreement terminated on February 10, 2011 as the transaction did not closed before the stipulated date.

   
b)

Effective February 8, 2011, the Company executed a split of its authorized, issued and outstanding common stock on a three new for one old basis. As a result, the Company’s authorized common stock increased from 9,000,000,000 to 27,000,000,000 and the Company’s issued and outstanding common stock increased from 71,500,000 to 214,500,000, all with a par value of $0.001. The company’s preferred stock remained unchanged.

   
c)

On February 16, 2011, the Company entered into a Letter of Intent (“LOI”) with a third party, AD Consult and Invest SA regarding the Company’s intent to acquire 7,000 acres of land in the Heath area of Montana. The terms of the acquisition are still being negotiated and the definitive agreement has not been signed.

   

Management has evaluated subsequent events to the financial statement filing date of March 17, 2011.

F-5


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.

As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean Uniontown Energy Inc., unless otherwise indicated. We have no subsidiaries.

Corporate Overview

We were incorporated in the State of Nevada on November 22, 2004, under the name “Lodge Bay Oil & Gas Corp.” On April 24, 2008, we changed our name to “Intelbahn Inc.” We effected this name change by merging with our wholly owned subsidiary, named “Intelbahn Inc.”, a Nevada corporation that we formed specifically for this purpose. We changed the name of our company to better reflect the direction and business of our company.

On December 29, 2010, we filed articles of merger with the Nevada Secretary of State to change of the name of our company to “Uniontown Energy Inc.”, to be effected by way of a merger with our wholly owned subsidiary, “Uniontown Energy Inc.”, which was formed solely for the purpose of the change of name. The change of name became effective on December 31, 2010 with the Nevada Secretary of State and the Over-the-Counter Bulletin Board.

Also on December 29, 2010, we filed a certificate of change with the Nevada Secretary of State to give effect to a forward stock split of our authorized and issued and outstanding shares on a 2 new for 1 old basis. The change became effective on December 31, 2010 and our authorized capital increased from 4,500,000,000 to 9,000,000,000 shares of common stock, par value $0.001. Our preferred shares remain unchanged.

On February 3, 2011, we filed a certificate of change with the Nevada Secretary of State to give effect to a forward stock split of our authorized and issued and outstanding shares on a 3 new for 1 old basis. The change became effective on February 8, 2011 and our authorized capital increased from 9,000,000,000 to 27,000,000,000 shares of common stock, par value $0.001. Our preferred shares remain unchanged.

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In connection with the change of name and forward stock split our trading symbol was changed to “UTOG” and our CUSIP number was changed to 909089 203.

From inception to July 9, 2008, we were involved in the exploration of oil and gas properties. From July 9, 2008 to October 31, 2009, we were in the business of developing, marketing, selling, installing and maintaining next-generation biometrically-enhanced security hardware and software for identification, authentication and authorization controls in small, medium and large business environments.

Since October 31, 2009, management has been analyzing the various alternatives available to our company to ensure our survival and to preserve our shareholder’s investment in our common shares. This analysis has included sourcing additional forms of financing to continue our business as is, or mergers and/or acquisitions. At this stage in our operations, we believe either course is acceptable, as our operations have not been profitable and our future prospects for our business are not good without further financing.

Our Current Business

We are a company with no operations.

As of the date hereof, we have not been successful in our development, marketing, sales, installation and maintenance of next generation biometrically-enhanced security hardware and software for identification, authentication and authorization controls efforts. Historically, we have been able to raise a limited amount of capital through private placements of our equity stock, but we are uncertain about our continued ability to raise funds privately. We have not entered into any formal written agreements for a business combination or opportunity. If any such agreement is reached, we intend to disclose such an agreement by filing a current report on Form 8-K with the Securities and Exchange Commission.

Our management has been analyzing the various alternatives available to our company to ensure our survival and to preserve our shareholder's investment in our common shares. This analysis has included sourcing additional forms of financing to continue our business as is, or mergers and/or acquisitions. At this stage in our operations, we believe either course is acceptable, as our operations have not been profitable and our future prospects for our business are not good without further financing.

We are focusing our preliminary merger/acquisition activities on potential business opportunities with established business entities for the merger of a target business with our company or the acquisition of various mineral or oil and gas assets. In certain instances, a target business may wish to become a subsidiary of our company or may wish to contribute assets to our company rather than merge. We anticipate that any new acquisition or business opportunities by our company will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail.

In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer be in control of our company and our existing business will close down. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors.

We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes that there are numerous firms in various industries seeking the perceived benefits of being a publicly registered corporation. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

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We may seek a business opportunity with entities who have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

At this stage, we can provide no assurance that we will be able to locate compatible business opportunities, what additional financing we will require to complete a combination or merger with another business opportunity or whether the opportunity's operations will be profitable.

If we are unable to secure adequate capital to continue our business or alternatively, complete a merger or acquisition, our shareholders will lose some or all of their investment and our business will likely fail.

Our principal office is located at 314 – 837 West Hastings Street, Vancouver, BC V6C 3N6. We neither rent nor own any properties. We utilize the office space and equipment of our management at no cost. We believe that this space is sufficient to meet our present needs and do not anticipate any difficulty in securing alternative or additional space, as needed, on terms acceptable to us.

Plan of Operation

You should read the following discussion of our financial condition and results of operations together with our reviewed but unaudited financial statements and the notes to those reviewed but unaudited financial statements included elsewhere in this filing prepared in accordance with accounting principles generally accepted in the United States. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those anticipated in these forward-looking statements.

Anticipated Cash Requirements

For the next 12 months we plan to expend a total of approximately $94,500 in searching for and acquiring a suitable business:

Expenses   Cost  
General and administrative expenses $  40,000  
Management and administrative costs $  22,500  
Legal Fees $  12,000  
Auditor Fees $  20,000  
Lease $  Nil  
Total Expenses $  94,500  

Results of Operations

Three months ended January 31, 2011 compared to three months ended January 31, 2010.

    Three months     Three months  
    ended     ended  
    January 31, 2011     January 31, 2010  
Revenue $  Nil   $  Nil  
Operating Expenses $  36,778   $  29,564  
Net Income (Loss) $  (36,778 ) $  (29,564 )

Expenses

Our operating expenses for the three month periods ended January 31, 2011 and January 31, 2010 are outlined in the table below:

5



    Three months     Three months  
    ended     ended  
    January 31,     January 31,  
    2011     2010  
Amortization $  102   $  226  
Consulting fees $  6,000   $  Nil  
Foreign exchange loss $  7,789   $  5,495  
Impairment of oil and gas property $  Nil   $  Nil  
Interest and bank charges $  3,803   $  3,176  
Office and general $  11,086   $  7,130  
Professional fees $  7,500   $  13,537  
Management fees $  498   $  Nil  
Net Loss $  36,778   $  29,564  

Operating expenses for the three months ended January 31, 2011 increased by 19.6% as compared to the comparative period in January 31, 2010 primarily as a result of an increase in consulting fees and office and general expenses.

Revenue

We have not had any revenues from operations since inception (November 22, 2004). We do not anticipate that we will earn any revenues from operations unless and until we acquire and operate a profitable business. This might never happen and we can offer no assurance that even if we acquire a business that we will ever be profitable.

Liquidity and Capital Resources

Working Capital

                Percentage  
    As at     As at     Increase/  
    January 31, 2011     October 31, 2010     (Decrease)  
Current Assets $ 157   $ 2,899     (95)%  
Current Liabilities $  291,832   $  265,855     9.7%  
Working Capital $  (291,675 ) $  (262,956 )   10.9%  

Cash Flows

    Three months     Three months  
    Ended     Ended  
    January 31,     January 31,  
    2011     2010  
Net cash used in operations $  (2,491 $ (18,545 )
Net cash used in investing activities $  Nil   $ Nil  
Net cash provided by financing activities $  Nil   $  20,000  
Increase (decrease) in cash $  (2,491 $ 1,455  

Our net cash used by operating activities for the three months ended January 31, 2011 was $2,491 compared with $18,545 for the three months ended January 31, 2010. Our management believes that we will need additional funding in order to meet our operating expenses.

6


Future Financings

To date, we have secured funding through a $505,000 line of credit. Over the next three months, we may require additional funds in order to secure a suitable business opportunity.

These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we will continue to be unprofitable.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock, when and if we trade at a later date, could decline due to any of these risks, and you may lose all or part of your investment.

Risks Related to our Company

We have had negative cash flows from operations and if we are not able to obtain further financing, our business operations may fail.

We had cash in the amount of $157 as of January 31, 2011. We anticipate that we may require additional financing while we are seeking a suitable business opportunity or business combination. Further, we anticipate that we will not have sufficient capital to fund our ongoing operations for the next 12 months. We may be required to raise additional financing for a particular business combination or business opportunity. We would likely secure any additional financing necessary through loans from related or third parties.

There can be no assurance that, if required, any such financing will be available upon terms and conditions acceptable to us, if at all. Our inability to obtain additional financing in a sufficient amount when needed and upon terms and conditions acceptable to us could have a materially adverse effect upon our company. We will require further funds to finance the development of any business opportunity that we acquire. There can be no assurance that such funds will be available or available on terms satisfactory to us. If additional funds are raised by issuing equity securities, further dilution to existing or future shareholders is likely to result. If adequate funds are not available on acceptable terms when needed, we may be required to delay, scale back or eliminate the development of any business opportunity that we acquire. Inadequate funding could also impair our ability to compete in the marketplace, which may result in the dissolution of our company.

7


A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because our operations have been primarily financed through the sale of equity securities and we may raise funds in the future through the sale of additional equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.

We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.

We have a limited operating history on which to base an evaluation of our business and prospects. Our prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies seeking to acquire or establish a new business opportunity. Some of these risks and uncertainties relate to our ability to identify, secure and complete an acquisition of a suitable business opportunity.

We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. In addition, our operating results are dependent to a large degree upon factors outside of our control. There are no assurances that we will be successful in addressing these risks, and failure to do so may adversely affect our business.

It is unlikely that we will generate any or significant revenues while we seek a suitable business opportunity. Our short and long-term prospects depend upon our ability to select and secure a suitable business opportunity. In order for us to make a profit, we will need to successfully acquire a new business opportunity in order to generate revenues in an amount sufficient to cover any and all future costs and expenses in connection with any such business opportunity. Even if we become profitable, we may not sustain or increase our profits on a quarterly or annual basis in the future.

We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until we complete a business combination or acquire a business opportunity. This may result in our company incurring a net operating loss which will increase continuously until we complete a business combination or acquire a business opportunity that can generate revenues that result in a net profit to us. There is no assurance that we will identify a suitable business opportunity or complete a business combination.

We may be unsuccessful at identifying, acquiring and operating suitable business opportunities and if we are unable to find, acquire or operate a suitable opportunity for our company, we may never achieve profitable operations.

We may not be able to find the right business opportunity for our company to become engaged in or we may not succeed in becoming engaged in the business opportunity we choose because we may not act fast enough or have enough money or other attributes to attract the new business opportunity. Before we begin to have any significant operations, we will have to become involved in a viable business opportunity. In addition, in order to be profitable, we will have to, among other things, hire consultants and employees, develop products and/or services, market our products/services, ensure supply and develop a customer base. There is no assurance that we will be able to identify, negotiate, acquire and develop a business opportunity and we may never be profitable.

We have a history of losses and have a deficit, which raises substantial doubt about our ability to continue as a going concern.

We have not generated any revenues since our inception and we will continue to incur operating expenses without revenues until we are in commercial deployment. Our net loss from November 22, 2004 (date of inception) to January 31, 2011 was $690,449. We had cash of $157 as of January 31, 2011. We currently do not have any operations and we have no income. We estimate our average monthly operating expenses to be approximately $7,875 each month. We cannot provide assurances that we will be able to successfully explore and develop our business. These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory paragraph to our independent auditors’ report on our audited financial statements for the year ended October 31, 2010. If we are unable to continue as a going concern, investors will likely lose all of their investments in our company.

8


Risks Associated with Our Common Stock

Our common stock is illiquid and shareholders may be unable to sell their shares.

There is currently no market for our common stock and we can provide no assurance to investors that a market will develop. If a market for our common stock does not develop, our shareholders may not be able to re-sell the shares of our common stock that they have purchased and they may lose all of their investment. Public announcements regarding our company, changes in government regulations, conditions in our market segment or changes in earnings estimates by analysts may cause the price of our common shares to fluctuate substantially. These fluctuations may adversely affect the trading price of our common shares.

Trading on the OTC Bulletin Board may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTC Bulletin Board service of the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board is not a stock exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like the American Stock Exchange. Accordingly, our shareholders may have difficulty reselling any of their shares.

Our stock is a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations and FINRA's sales practice requirements, which may limit a stockholder's ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock.

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In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

ITEM 3. QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 4 CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended January 31, 2011 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4. [REMOVED AND RESERVED]

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Description
No.  
(3) Articles of Incorporation and Bylaws
3.1

Articles of Incorporation (incorporated by reference to our Registration Statement on Form SB-2 filed on March 6, 2006).

3.2

Bylaws (incorporated by reference to our Registration Statement on Form SB-2 filed on March 6, 2006).

3.3

Articles of Merger filed with the Nevada Secretary of State on April 9, 2008 effective April 23, 2008 (incorporated by reference to our Current Report on Form 8-K filed on May 2, 2008).

3.4

Certificate of Change filed with the Nevada Secretary of State on April 9, 2008 effective April 23, 2008 (incorporated by reference to our Current Report on Form 8-K filed on May 2, 2008).

3.5

Certificate of Change filed with the Nevada Secretary of State on June 4, 2008 effective June 12, 2008 (incorporated by reference to our Quarterly Report on Form 10-QSB filed on June 16, 2008).

3.6

Articles of Merger filed with the Nevada Secretary of State on December 29, 2010 (incorporated by reference to our Current Report on Form 8-K filed on January 4, 2011).

3.7

Certificate of Change filed with the Nevada Secretary of State on December 29, 2010 (incorporated by reference to our Current Report on Form 8-K filed on January 4, 2011).

3.8

Certificate of Change filed with the Nevada Secretary of State on February 3, 2011 (incorporated by reference to our Current Report on Form 8-K filed on February 8, 2011).

(10)

Material Contracts

10.1

Term Loan Agreement with Gruppo Trimark Management Corp., dated May 28, 2008 (incorporated by reference to our Current Report on Form 8-K filed on June 2, 2008).

10.2

Amending Agreement with Gruppon Trimark Management Corp. dated March 15, 2010 (incorporated by referenced to our Quarterly Report on Form 10-Q filed on September 14, 2010).

(31)

Rule 13a-14(a) / 15d-14(a) Certifications

31.1*

Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer.

(32)

Section 1350 Certifications

32.1*

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer.

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  UNIONTOWN ENERGY INC.
   
   
Date: March 17, 2011 /s/ Terry Fields
  Terry Fields
  President, Chief Executive Officer, Chief Financial
  Officer, Secretary, Treasurer and Director
  (Principal Executive Officer, Principal Financial Officer
  and Principal Accounting Officer)

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