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 June 30, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ________________

Commission file number: 333-143969

ALLIED AMERICAN STEEL CORP.

(Exact name of registrant as specified in its charter)

Nevada		20-8600068
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

600 Grant Street, Suite 660

Pittsburgh, PA 15219

(Address of principal executive offices)

(412) 223-2663

(Registrant’s telephone number, including area code)

(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.

Yes x 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 x 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 ¨		Smaller reporting company x
(Do not check if a smaller reporting company)

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

Yes ¨ No x

As of August 14, 2012, there were 101,668,351 shares of the issuer’s common stock, par value $0.001, outstanding.

ALLIED AMERICAN STEEL CORP.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2012

TABLE OF CONTENTS

		PAGE

	PART I - FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17

Item 4.	Controls and Procedures	18

	PART II - OTHER INFORMATION	19

Item 1.	Legal Proceedings	19

Item 1A.	Risk Factors	19

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 3.	Defaults Upon Senior Securities	19

Item 4.	Mine Safety Disclosures	20

Item 5.	Other Information	20

Item 6.	Exhibits	20

	SIGNATURES	21

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K for the fiscal year ended December 31, 2011 filed with the SEC on April 16, 2012. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

TABLE OF CONTENTS

	PAGE

Condensed Balance Sheets as of June 30, 2012 (unaudited) and December 31, 2011	4

Condensed Statements of Operations for the three and six month periods ended June 30, 2012 and 2011 (unaudited) and for the period from March 7, 2007 (inception) to June 30, 2012 (unaudited)	5

Condensed Statements of Cash Flows for the six month periods ended June 30, 2012 and 2011 (unaudited) and for the period from March 7, 2007 (inception) to June 30, 2012 (unaudited)	6

Notes to the Unaudited Condensed Financial Statements (unaudited)	7

ALLIED AMERICAN STEEL CORP

(An Exploration Stage Company)

Unaudited Interim Condensed Balance Sheets

	June 30, 2012			December 31, 2011 (1)

ASSETS

Current assets:
Cash and cash equivalents	$	81,678		$	225,036
Prepaid expenses		1,875			10,499
Total current assets		83,553			235,535

Total Assets	$	83,553		$	235,535

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts payable and accrued expenses	$	54,896		$	28,893
Accrued officer vacation pay		2,625			-
Accrued payroll taxes		163			-
Advances from related parties		-			-
Total current liabilities		57,684			28,893

STOCKHOLDERS' EQUITY (DEFICIT)

Preferred stock; $.001 par value, 50,000,000 shares authorized, zero shares issued and outstanding		-			-
Common stock; $.001 par value, 900,000,000 shares authorized; 101,668,351 and 101,543,351 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively		101,668			101,543
Additional paid-in-capital		1,216,278			1,216,278
Accumulated (deficit) during the exploration stage		(1,292,077	)		(1,111,304	)
Stock issuable		-			125
Total stockholders' equity (deficit)		25,869			206,642

Total Liabilities and Stockholders' Equity (Deficit)	$	83,553		$	235,535

(1) Derived from audited financial statements.

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

ALLIED AMERICAN STEEL CORP

(An Exploration Stage Company)

Unaudited Interim Condensed Statements of Operations

													March 7, 2007
	For the three			For the three			For the six			For the six			(date of inception)
	months ended			months ended			months ended			months ended			through
	June 30, 2012			June 30, 2011			June 30, 2012			June 30, 2011			June 30, 2012

Revenues	$	-		$	-		$	-		$	-		$	-

Operating expenses
Impairment of option for mineral rights		-			125,626			-			125,626			125,626
General administrative		52,161			149,996			128,510			151,230			683,222
General administrative - related-party		-			-			-			-			49,875
Stock compensation bonus		-			-			-			212,000			212,000
Exploration costs		-			-			-			-			87,742
Officer payroll		25,375			24,096			48,125			31,500			123,375
Payroll tax expense		1,940			1,865			4,138			2,726			10,237
Total operating expenses		79,476			301,583			180,773			523,082			1,292,077

Provision for income taxes		-			-			-			-			-

Net loss	$	(79,476	)	$	(301,583	)	$	(180,773	)	$	(523,082	)	$	(1,292,077	)

Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Basic and diluted weighted average common shares outstanding		101,668,351			137,059,095			101,623,021			185,296,562

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

ALLIED AMERICAN STEEL CORP

(An Exploration Stage Company)

Unaudited Interim Condensed Statements of Cash Flows

							March 7, 2007
	For the six			For the six			(date of inception)
	months ended			months ended			through
	June 30, 2012			June 30, 2011			June 30, 2012

Operating activities:
Net loss	$	(180,773	)	$	(523,082	)	$	(1,292,077	)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment of option for mineral rights acquired with stock		-			125,626			125,626
Stock issued for services		-			225,596			383,999
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expense		8,624			(10,702	)		(1,875	)
(Increase) decrease in prepaid officer salary and expense		-			-			-
Expenses paid on company behalf by related parties		-			-			17,240

Increase in accrued officer vacation pay		2,625			1,750			2,625

Increase in accrued payroll taxes		163			108			163
Increase in accounts payable and accrued expenses		26,003			47,627			54,896
Net cash (used in) operating activities		(143,358	)		(133,077	)		(709,403	)

Financing activities:
Proceeds from issuance of units of common stock and warrants		-			669,885			669,885
Net proceeds from issuance of common stock		-			-			66,950
Advances from related parties		-			2,325			57,059
Payments to related parties		-			(128	)		(2,813	)
Net cash provided by financing activities		-			672,082			791,081

Net change in cash		(143,358	)		539,005			81,678
Cash, beginning of period		225,036			17			-
Cash, ending of period	$	81,678		$	539,022		$	81,678

Non cash financing activities:
Related party debt forgiven	$	-		$	71,486		$	71,486

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

ALLIED AMERICAN STEEL CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

June 30, 2012

Note 1. Nature of Business and Summary of Significant Accounting Policies

The summary of significant accounting policies is presented to assist in the understanding of the financial statements. The financial statements and notes are representations of management. These accounting policies conform to generally accepted accounting principles in the United States of America (“U.S. GAAP”) and have been consistently applied in the preparation of the financial statements.

In the opinion of management, the accompanying balance sheets and related interim statements of operations and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with U.S. GAAP for Allied American Steel Corp. (the “Company”). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.

Interim results are not necessarily indicative of results for a full year. The information included in these Notes should be read in conjunction with information included in the Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission on April 16, 2012.

Nature of business and organization

The Company’s principal business objective is as an exploration company focused on the discovery and production of significant iron ore resources and the titanium dioxide resources often associated with iron deposits. Prior to entering into the Assignment Agreement on May 27, 2011 (see Note 4), we were a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended). We believe that as a result of such Assignment Agreement we have ceased to be a shell company. The Company’s planned principal operations have commenced, but there has been no significant revenue therefrom, operations have been limited to general administrative operations and exploration, and, as a result, the Company is considered an exploration stage company as defined by ASC Topic 915 and SEC Industry Guide 7.

Revenue recognition

The Company has no revenues to date from its operations. Once revenues are generated, management will establish a revenue recognition policy.

Mineral Properties

The Company accounts for its mining activities in accordance with FASB ASC 930 “Extractive Activities – Mining.” The Company capitalizes the costs to acquire mineral properties. Exploration costs are expensed as incurred and include geological and geophysical work on areas without identified reserves, together with drilling and other related costs. Capitalization of mine development costs that meet the definition of an asset begins once all operating permits have been secured, mineralization is classified as proven and probable reserves and a final feasibility study has been completed. Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, and the removal of overburden to initially expose an ore body at open pit surface mines. All capitalized costs are amortized using the units-of-production method over the estimated life of the ore body based on recoverable quantities to be mined from proven and probable reserves. Interest expense allocable to the cost of developing mining properties and to construct new facilities is capitalized until assets are ready for their intended use. The Company had no mine development costs at June 30, 2012.

ALLIED AMERICAN STEEL CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

June 30, 2012

Mining facilities and equipment are recorded at cost. Expenditures for facilities and equipment relating to new assets or improvements are capitalized if they extend useful lives or extend functionality. Fixed plant and machinery are amortized using the units-of-production method over the estimated life of the ore body based on recoverable quantities to be produced from estimated proven and probable mineral reserves. Repairs and maintenance costs are charged to expense as incurred, except when these repairs extend the life or functionality of the asset. In these instances, that portion of the expenditure is capitalized and amortized over the period benefited. Depreciation, depletion and amortization is allocated to product inventory cost and then included as a component of operating expense as inventory is sold. As of June 30, 2012, the Company had no facilities and equipment.

As of June 30, 2012, the Company had not established any proven or probable reserves.

Estimates

The preparation of these financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company is subject to uncertainty of future events, economic, environmental and political factors and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, accounting estimates used in the preparation of the Company’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Changes are made in estimates as circumstances warrant. Such changes in estimates and refinement of estimation methodologies are reflected in the statements.

Impairment of Long-lived Assets

The carrying value of intangible assets and other long-lived assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. Impairment on interests in mineral reserves are evaluated by considering criteria such as estimates of future cash flows that are directly associated with the asset, future extractive activity plans for the properties, and the results of geographic and geologic data related to the properties. As of December 31, 2011, the Company had fully impaired its interest in mineral rights.

Basic and diluted net loss per share

The Company computes net loss per share in accordance with FASB ASC 260, “Earnings per Share,” which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period.

Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive. Shares associated with stock warrants are not included because their inclusion would be antidilutive (i.e., reduce the net loss per share).

At June 30, 2012, the Company had outstanding potentially dilutive shares of 893,176.

Recent Accounting Pronouncements

The Company has analyzed all recent accounting pronouncements and believes that none will have a material impact on the financial statements.

ALLIED AMERICAN STEEL CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

June 30, 2012

Note 2. Going Concern

The Company’s financial statements are prepared using U.S. GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred a net operating loss of $1,292,077 from inception through June 30, 2012. The Company’s planned principal operations have commenced, but there has been no significant revenue. Operations have been limited to general administrative operations and exploration, and the Company remains in the exploration stages, raising substantial doubt about the Company’s ability to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 3. Prepaid Expense

At June 30, 2012, the Company’s prepaid expenses consisted of $1,875 of directors and officers insurance.

Note 4. Option to Purchase Mineral Interests

We do not own any property. We had an option to acquire certain mineral rights.

On May 27, 2011, the Company entered into an Assignment and Sale Agreement (the “Assignment Agreement”) with North American Iron Ore, Inc., a Nevis corporation (“North American”), which became a related party on May 27, 2011, and Canamara Energy Corporation, a British Columbia corporation (“Canamara”). The Assignment Agreement provides the Company with an option to acquire up to a 60% undivided interest in certain mineral claims (the “Mineral Claims” or the “Property”) located in Lyonne Township, Roberval County in the Province of Quebec (the “Lake Touladi Property”), free and clear of all claims, liens, charges and encumbrances, save and except for those set forth in the Assignment Agreement, including a 2.5% royalty held by the underlying owner (the “Option”). The Mineral Claims presently represent 48 contiguous claims totaling approximately 2,741 hectares.

To exercise the Option assigned to the Company in the Assignment Agreement, the Company was required to incur expenditures on the Property in the amount of CDN $1,548,346 (approximately US$1,599,000 based on the conversion rate in effect as of June 1, 2011) on or before May 7, 2012. On May 7, 2012 the Company determined not to exercise the Option under the Assignment Agreement. This determination was made on the basis of work performed on the Lake Touladi Property, review of diligence materials and internal discussions with members of our Advisory Board. The Company does not believe the Lake Touladi Property to be a viable resource mine as significant portions of the iron and some of the titanium resources located on the Lake Touladi Property are locked in silicate materials where economic recovery is unlikely. Further, the Company believes that the Lake Touladi Property contains substantially lower grades of titanium compared to similar mining projects in the area. The Company is actively seeking to locate alternate mining opportunities.

As of June 30, 2012, the Company incurred $87,742 of exploration costs on the property on which such Mineral Claims are located.

ALLIED AMERICAN STEEL CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

June 30, 2012

Under the Assignment Agreement, the Company issued 15,075,175 shares of its restricted common stock. The stock value was based on ASC 505-50-30-6, which evaluates the fair value of the equity instruments issued versus the fair value of goods or services received in share-based payment transactions with nonemployees, whichever is more reliably measurable. The Company determined that the fair value of the equity instruments issued were reliably measurable, and the Company valued the 15,075,175 shares at $0.00833 per share (rounded) for a total of $125,626 based on the per share value of a March 2011 stock transaction which was recorded on the Over-the-Counter Bulletin Board.

The Company evaluated the Assignment Agreement for impairment based on ASC 360-10-35-21 as a result of the Company’s current-period operating loss, history of operating losses, combined with the difficulty of accurately and reliably estimating future cash flows directly associated with the Property, given the stage of development of the Property. As a result, for the year ending December 31, 2011, the Company fully impaired the value of the Assignment Agreement in the amount of $125,626.

Summary

Mineral interests consisted of the following:

	June 30,
	2012		2011
Option on mineral rights	$	-	$	125,626
Impairment charge		-		(125,626	)
Total	$	-	$	-

Note 5. Commitments and Contingencies

The Company is subject to certain commitments and contingencies related to the Assignment Agreement that is described in Note 4.

Note 6. Stockholders’ Equity and Warrants

The Company’s articles of incorporation provide for the authorization of 50,000,000 shares of preferred stock and 900,000,000 shares of common stock with par values of $0.001. Common stock holders have all the rights and obligations that normally pertain to stockholders of Nevada corporations. The Company has not issued any shares of preferred stock. As of June 30, 2012 and December 31, 2011, the Company had 101,668,351 and 101,543,351 shares of common stock issued and outstanding, respectively. On April 27, 2011, the Company authorized an 18:1 forward split in the form of a dividend of its issued and outstanding common stock which became effective on May 19, 2011. The dividend shares were issued on June 1, 2011. These unaudited condensed financial statements and notes retroactively reflect the forward split.

ALLIED AMERICAN STEEL CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

June 30, 2012

Warrants

In April 2011, the Company entered into a Securities Purchase Agreement with North American, for the sale of 133,282 units of securities of the Company at $0.75 per unit, for aggregate gross proceeds of $99,962. Each unit consisted of the following: (1) one share of common stock; (2) one warrant, entitling the holder to purchase one share of common stock of the Company at an exercise price of $0.90 per share during a period of three years from issuance. No warrants have been exercised as of June 30, 2012.

The Company calculated the fair value of these warrants to be $700 using the Black Scholes model. The Company used the following assumptions: stock price of $0.0083, an exercise price of $0.90, expected term of 36 months, volatility of 220.54%, and discount rate of 1.280%. The fair value of the warrants is treated as offering costs and it would be a debit and credit entry to additional paid in capital resulting in a null effect in net equity.

In June 2011, The Company entered into a Securities Purchase Agreement with North American, for the sale of 759,894 units of securities of the Company at $0.75 per unit, for aggregate gross proceeds of $569,923. Each unit consisted of the following: (1) one share of common stock; (2) one warrant, entitling the holder to purchase one share of common stock of the Company at an exercise price of $0.90 per share during a period of three years from issuance. No warrants have been exercised as of June 30, 2012.

The Company calculated the fair value of these warrants to be $1,247,800 using the Black Scholes model. The Company used the following assumptions: stock price of $1.71, an exercise price of $0.90, expected term of 36 months, volatility of 220.54%, and discount rate of 0.765%. The fair value of the warrants is treated as offering costs and it would be a debit and credit entry to additional paid in capital resulting in a null effect in net equity.

The following is a summary of the status of all of the Company’s stock warrants as of June 30, 2012.

	Number Of Warrants		Weighted-Average Exercise Price
Outstanding at January 1, 2012		893,176	$	0.90
Granted		-	$	-
Exercised		-	$	-
Cancelled		-	$	-
Outstanding at June 30, 2012		893,176	$	0.90
Warrants exercisable at June 30, 2012		893,176	$	0.90

ALLIED AMERICAN STEEL CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

June 30, 2012

The following tables summarize information about stock warrants outstanding and exercisable at June 30, 2012:

		STOCK WARRANTS OUTSTANDING AND EXERCISABLE
Exercise Price		Number of Warrants Outstanding		Weighted-Average Remaining Contractual Life in Years		Weighted- Average Exercise Price
$	0.90		893,176		1.95	$	0.90
			893,176		1.95	$	0.90

Shares Issued Pursuant to Various Consulting Agreements

On June 1, 2011, the Company entered into a consulting agreement with Richard Tschauder to provide consulting services as the Company’s Senior Geologist. As compensation, Mr. Tschauder was to receive $3,333 per month, payable each quarter in advance, plus $550 per day plus expenses for visits to the Company’s Property. The Company was entitled to require that Mr. Tschauder perform site visits three times per calendar year. In addition, Mr. Tschauder was to receive 50,000 shares of the Company’s restricted common stock, 25,000 of which shares were to be issued as soon as practicable following the execution of the consulting agreement and 25,000 of which shares were to be issued as soon as practicable after December 1, 2011. The term of this agreement was for a twelve month period commencing June 1, 2011. 25,000 of these shares were issued in June 2011 and 25,000 of these shares were issued in March 2012. The valuation of the stock was determined by recent sales of stock that provided the most reliable measure of fair value in accordance with ASC 505-50-30-6. For the six months ended June 30, 2012, the Company recorded compensation expense in the amount of $16,667.

On June 1, 2011, the Company entered into a consulting agreement with Erik Ostensoe to provide consulting services as the Company’s Senior Exploration Advisor. As compensation, Mr. Ostensoe was to receive $2,500 per month, payable each month in advance, plus $550 per day plus expenses for visits to the Company’s Property. The Company was entitled to require that Mr. Ostensoe perform site visits three times per calendar year. In addition, Mr. Ostensoe was to receive 50,000 shares of the Company’s restricted common stock, 25,000 of which shares were to be issued as soon as practicable following the execution of the consulting agreement and 25,000 of which shares were to be issued as soon as practicable after December 1, 2011. The term of this agreement was for a twelve month period commencing June 1, 2011. 25,000 of these shares were issued in June 2011 and 25,000 of these shares were issued in March 2012. The valuation of the stock was determined by recent sales of stock that provided the most reliable measure of fair value in accordance with ASC 505-50-30-6. For the six months ended June 30, 2012, the Company recorded compensation expense in the amount of $12,500.

On June 22, 2011, the Company entered into a consulting agreement with David Dunn to provide consulting services as the Company’s Advisor. As compensation, Mr. Dunn was to receive $550 per day plus expenses for visits to the Company’s Property. The Company was entitled to require that Mr. Dunn perform site visits three times per calendar year. In addition, Mr. Dunn was to receive 50,000 shares of the Company’s restricted common stock, 25,000 of which shares were to be issued as soon as practicable following the execution of the consulting agreement and 25,000 of which shares were to be issued as soon as practicable after December 22, 2011. The term of this agreement was for a twelve month period commencing June 22, 2011. 25,000 of these shares were issued in June 2011 and 25,000 of these shares were issued in March 2012. The valuation of the stock was determined by recent sales of stock that provided the most reliable measure of fair value in accordance with ASC 505-50-30-6. For the six months ended June 30, 2012, the Company recorded compensation expense in the amount of $0.

ALLIED AMERICAN STEEL CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

June 30, 2012

On June 22, 2011, the Company entered into a consulting agreement with Stewart Jackson to provide consulting services as the Company’s Advisor. As compensation, Mr. Jackson was to receive an upfront cash fee of $5,000 and $550 per day plus expenses for visits to the Company’s Property. The Company was entitled to require that Mr. Jackson perform site visits three times per calendar year. In addition, Mr. Jackson was to receive 100,000 shares of the Company’s restricted common stock, 50,000 of which shares were to be issued as soon as practicable following the execution of the consulting agreement and 50,000 of which shares were to be issued as soon as practicable after December 22, 2011. The term of this agreement was for a twelve month period commencing June 22, 2011. 50,000 of these shares were issued in June 2011 and 50,000 of these shares were issued in March 2012. The valuation of the stock was determined by recent sales of stock that provided the most reliable measure of fair value in accordance with ASC 505-50-30-6. For the six months ended June 30, 2012, the Company recorded compensation expense in the amount of $0.

On May 7, 2012 the Company determined not to exercise its Option under the Assignment Agreement. This determination was made on the basis of work performed on the Lake Touladi Property, review of diligence materials and internal discussions with members of the Company’s Advisory Board. The Company does not believe the Lake Touladi Property to be a viable resource mine as significant portions of the iron and some of the titanium resources located on the Lake Touladi Property are locked in silicate materials where economic recovery is unlikely. Further, the Company believes that the Lake Touladi Property contains substantially lower grades of titanium compared to similar mining projects in the area. The Company is actively seeking to locate alternate mining opportunities.

Note 7. Subsequent Events

The Company has evaluated subsequent events through the date the financial statements were issued, and has determined there are no other subsequent events to be reported.

ITEM 2.

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

Forward-Looking Statements

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein. You should carefully review the risks described herein and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-Q to the “Company,” “we,” “us,” or “our” are to Allied American Steel Corp.

General Overview

We were incorporated in the State of Nevada on March 7, 2007 under the name Zion Nevada Corporation to acquire, develop and manage commercial and residential real estate properties. We were unsuccessful in this endeavor and never commenced material operations in this area. On May 21, 2009, we changed our name to Royal Union Holding Corporation. On April 28, 2011, we entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which we merged with our wholly owned subsidiary, Allied American Steel Corporation, a Nevada corporation with no material operations ("Merger Sub" and such merger transaction, the "Merger"). Upon the consummation of the Merger, the separate existence of Merger Sub ceased and our shareholders became shareholders of the surviving company named Allied American Steel Corporation. We changed our name to Allied American Steel Corporation to reflect a name which recognized our present business focused on the discovery and production of iron ore resources and titanium dioxide resources.

Assignment and Sale Agreement

On May 27, 2011, we entered into an Assignment and Sale Agreement (the “Assignment Agreement”) with North American Iron Ore, Inc., a Nevis corporation (“North American”) and Canamara Energy Corporation, a British Columbia, Canada corporation (“Canamara”). The Assignment Agreement provided us with the option to acquire up to a 60% undivided interest in certain mineral claims (the “Mineral Claims”, the “Property” or the “Lake Touladi Property”) located in Lyonne Township, Roberval County in the Province of Quebec, free and clear of all claims, liens, charges and encumbrances, save and except for those set forth in the Assignment Agreement, including a 2.5% royalty held by the underlying owner. The Mineral Claims represent 48 contiguous claims totaling approximately 2,741 hectares of iron and titanium dioxide resources.

Pursuant to the Assignment Agreement, we were the assignee of North American which had entered into an agreement with Canamara on May 7, 2010, under which North American had the option to acquire the Mineral Claims by making cash payment to Canamara or making expenditures on the Property as follows:

CDN $150,000 (for Canamara) on May 7, 2010;

CDN $250,000 (for Property expenditures) on or prior to November 7, 2010; and

CDN $1,750,000 (for Property expenditures) on or prior to May 7, 2012.

As of the May 27, 2011, North American had paid Canamara or made expenditures with respect to the Mineral Claims in the aggregate amount of CDN $601,654 (approximately US$603,007 at the times of payment). In connection with the foregoing, expenditures means the sum of all monies spent in prospecting, exploring, geological, geophysical and geochemical surveying, sampling, examining, diamond and other types of drilling, developing, dewatering, assaying, testing, constructing, maintaining and operating roads, trails and bridges upon or across the Property, buildings, equipment, plant and supplies, salaries and wages (including fringe benefits) of employees and contractors directly engaged therein, insurance premiums, and all other expenses ordinarily incurred in prospecting, exploring and developing mining lands.

Pursuant to the Assignment Agreement, we issued to North American 15,075,175 shares of our restricted common stock which were valued, for the purpose of the Assignment Agreement, at a price of $0.04 per share or an aggregate of US$603,007.

To exercise the option assigned to us in the Assignment Agreement, we were required to incur expenditures on the Property in the amount of CDN $1,548,346 (approximately US$1,599,000 based on the conversion rate in effect as of June 1, 2011) on or before May 7, 2012. Based upon work performed by us on the Lake Touladi Property, review of diligence materials and internal discussions with the members of our Advisory Board, in May 2012 we determined not to exercise the option. We continue to look at other ventures involving the discovery and production of iron ore resources and the titanium dioxide resources often associated with iron deposits.

Exploration and Prospecting Program

During July 2011, we completed Phase I of our initial Prospecting Program at a cost of approximately $31,500 under which we located mineral outcrops on the Lake Touladi Property, estimated the size of mineralized zones, identified prospect targets and hired clearers to establish access to the Property.

During August, 2011, we completed Part A of Phase II of our Exploration Program at a cost of approximately $30,400 and under which we cleared outcrops, prepared preliminary access to outcrops and conducted limited channel sampling.

In August 2011, we retained Multi-Resources Boreal, a Quebec corporation (“MRB”) that provides mineral exploration services, to verify the presence of iron bearing rock on the Lake Touladi Property. A total of 43 one meter channel samples were taken at 18 separate outcrops and the samples were assayed at AGAT Laboratories in Mississauga, Ontario.

On October 21, 2011 we entered into a Services Agreement (the “Services Agreement”) with MRB. Under the Services Agreement, MRB provided us with prospecting, trenching, sampling and other exploration services and manpower with respect to the Lake Touladi Property. The Services Agreement expired on April 21, 2012.

Performance of services by MRB under the Services Agreement was contingent on the prior receipt by MRB on the first of each month of an expense advance sufficient to cover budgeted expenses for that month. The term of the Services Agreement principally related to Part B of Phase II of our work program which was dedicated to Prospect Exploration. Part A of our Phase II Program which involved the clearing of outcrops, preparing a preliminary map of outcrops and limited channel sampling has been completed. Part B of Phase II ran through March 2012 and involved costs of approximately US$189,000. Activities included geological mapping and sampling of outcrops. MRB was responsible for locating subcontractors including, but not limited to, heavy equipment operators, drilling companies, and assay labs.

Further to Part A of our Phase II Program, in August 2011 we retained MRB to verify the presence of iron-bearing rock on the Property. A number of outcrops were discovered in or near the southern portion of the property in an area that was approximately 250 meters wide (east to west) and 500 meters long (north to south). A total of 43 one meter channel samples were taken at 18 separate outcrops. The samples were assayed at AGAT Laboratories in Mississauga, Ontario using a lithium borate fusion and ICP-OES finish. The average of all samples taken was 30.11% Iron Oxide (Fe2O3) and 2.83% Titanium Dioxide (TiO2). The best sample assayed indicated 40.75% Fe2O3. Titanium Dioxide appeared to be highly variable with assays reported as high as 5.48% and as low as 0.149%. In addition, the samples contained an average of 0.42%, Phosphorous Pentoxide (P2O5), with a maximum of 5.48%. Additional exploration verified the presence of iron bearing rock in an area one kilometer to the north of the northern edge of the minerals detected in the previously tested area. Exploration was also done to investigate continuity of mineral between the two zones. No outcrops of iron-rich rock were found between the two zones. A total of 47 samples were taken during this phase and analyzed at the ALS Chemex Lad in Val d’Or, Quebec. Analysis of those samples indicated that the deposit was subtly zoned, being more iron-rich in the south and more titanium-rich in the north. Permits for trenching were applied for, but not granted due to wetlands issues. We were in the process of reapplying for trenching and drilling permits when the determination was made not to exercise the option.

In September 2011, Bueno de Oro, a Nevada Geological Services corporation, was hired to manage the program. After managing the fall field program described above, Bueno de Oro designed and implemented a number of activities in order to use the data obtained during the field program to advance understanding of the deposit and design a more efficient approach to project exploration. Work included more detailed petrographic analysis, magnetic susceptibility testing, preliminary density determinations, metallurgical testing, analysis of analog deposits, construction of cross sections, geochemical analysis, geologic modeling, estimates of geologic potential, drill proposals, creation of customized standards for a QA/QC program and geologic reports. As a result of the work performed and related diligence, we determined that a significant portion of the iron and possibly some of the titanium located on the Lake Touladi property was locked in silicate minerals where economic recovery is unlikely. This changed the economic focus on the Lake Touladi Property from iron potential to titanium potential.

Results of Operations for the Six Month Period Ended June 30, 2012 Compared to Six Month Period Ended June 30, 2011

During the six month period ended June 30, 2012, we generated no revenues, we had operating expenses of $180,773 and we incurred a net loss of $180,773. The principal components of our operating expenses and net loss were $52,263 allocated to officer salary and related expenses, and $128,510 of general administrative expenses. During the six month period ended June 30, 2011, we generated no revenues, we had operating expenses of $523,082, and we incurred a net loss of $523,082. The principal components of our operating expenses and net loss were $212,000 allocated to a stock compensation bonus, $125,626 of impairment of interest in mineral rights, $151,230 of general administrative expenses, and $34,226 allocated to officer salary and related expenses.

Results of Operations for the Three Month Period Ended June 30, 2012 Compared to Three Month Period Ended June 30, 2011

During the three month period ended June 30, 2012, we generated no revenues, we had total operating expenses of $79,476 and we incurred a net loss of $79,476. The principal components of our operating expenses and net loss were $27,315 allocated to officer salary and related expenses, and $52,161 of general administrative expenses. During the three month period ended June 30, 2011, we generated no revenues, we had total operating expenses of $301,583, and we incurred a net loss of $301,583.

Liquidity and Capital Resources

We will need additional capital to implement our strategies. Given the currently unsettled state of the capital markets and credit markets, there is no assurance that we will be able to raise the amount of capital that we seek. Even if financing is available, it may not be available on terms that are acceptable to us. In addition, we do not have any determined sources for any future funding. If we are unable to raise the necessary capital at the times we require such funding, we may have to materially change our business plan, including delaying implementation of aspects of our business plan or curtailing or abandoning our business plan. We represent a speculative investment and investors may lose all of their investment.

Since inception, we have been financed primarily by way of loans and sales of our equity and debt securities. During 2011, these financings principally consisted of our April 15, 2011 and June 20, 2011 Securities Purchase Agreements with North American under which we received net proceeds of $669,885.

The report of our auditors on our audited financial statements for the fiscal year ended December 31, 2011 contains a going concern qualification as we have suffered losses since our inception. We have achieved no operating revenues since our inception. As of June 30, 2012 and December 31, 2011, we had cash and cash equivalents of $81,678 and $225,036, current assets of $83,553 and $235,535 and current liabilities of $57,684 and $28,893, respectively. Unless and until we achieve material revenues, we will remain dependent on loans and on financings to continue our operations.

We do not currently engage in any product research and development and have no plans to do so in the foreseeable future. We have no present plans to purchase or sell any plant or significant equipment. We also have no present plans to add employees although we may do so in the future if we engage in any merger or acquisition transactions. We have however engaged strategic advisors who are serving in consulting capacities.

Net Cash Used in Operating Activities

Net cash used in operating activities was ($143,358) for the six month period ended June 30, 2012, as compared to net cash used of ($133,077) for the six month period ended June 30, 2011.

Net Cash Provided by Financing Activities

During the six month period ended June 30, 2012, we received no cash from financing activities. During the period from March 7, 2007 (date of inception) through June 30, 2012, we received net cash of $791,081 from financing activities consisting primarily of proceeds from the issuance of common stock and warrants.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have not formed any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Our Disclosure Controls

Under the supervision and with the participation of our management, including our chief executive officer (principal executive officer) and chief financial officer (principal financial officer), Jes Black, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective to insure such that the information relating to us, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer concluded, as of the Evaluation Date, that our disclosure controls and procedures were not effective because of the identification of what might be deemed a material weakness in our internal control over financial reporting which is identified below.

We do not have an audit committee. While we are not currently obligated to have an audit committee, including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards, it is management’s view that such a committee is an important internal control over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal controls and procedures.

We did not maintain proper segregation of duties for the preparation of our financial statements. We currently only have one officer overseeing all transactions. This has resulted in several deficiencies including the lack of control over preparation of financial statements, and proper application of accounting policies.

Management believes that the material weaknesses set forth in the two items above did not have an effect on our financial reporting. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our Board of Directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Management’s Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate the following series of measures once we have the financial resources to do so:

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. We also plan to appoint one or more outside directors to our Board of Directors who shall be appointed to an audit committee resulting in a fully functioning audit committee which will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, would remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2012 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

In December 2008, we were named as a defendant in an amended complaint filed in the District Court of Nevada, Clark County by Phyllis Wynn Family Trust, Plaintiff vs. Onecap Holding Corp, Onecap Properties, et al, defendant(s) [case number 08A578385]. The complaint names over eighty defendants including the Company and alleges multiple causes of actions including breach of contract and fraud against various other defendants and fraudulent conveyance. The substance of the Complaint involves a real estate transaction not involving the Company. We have answered with affirmative defenses including but not limited to the following: the injuries and damages complained of did not occur as the result of any action on the part of the Company but as the sole, direct and proximate result of actions by the Plaintiff and third parties not otherwise related to the Company. Since then one or more of the other defendants filed for bankruptcy and this case was removed to a federal bankruptcy court [case number: Nevada Federal Bankruptcy Court Case No.: BK-S 10-20833-BA].

In May 2010, we were named as an intervenor defendant in an amended complaint filed in the District Court of Nevada, Clark County by Anthony Puerner, Plaintiff vs. Onecap Mortgage, et al, defendant(s) [case number A-09-596875-C]. The complaint names more than 30 other individuals and/or entities as defendants. The Plaintiff’s claim as against these defendants, including the Company, is that they are the alter egos of a judgment debtor, not otherwise related to the Company. The Plaintiff in Intervention is an unsecured creditor with a judgment against an individual personally, who is not an officer, director or shareholder of the Company. We have answered with affirmative defenses including but not limited to the following: the injuries and damages complained of did not occur as the result of any action on the part of the Company and failure to state a claim. In February 2011, the case was moved to federal bankruptcy court [case number 10-18090-mkn United States Bankruptcy Court District of Nevada].

In the ordinary course of our business, we may from time to time become subject to routine litigation or administrative proceedings which are incidental to our business. Except as set forth above, we are not a party to nor are we aware of any existing, pending or threatened lawsuits or other legal actions involving us.

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 under this item.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We did not sell any unregistered securities during the three month period ended June 30, 2012.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

As discussed in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, in May 2012 we determined not to exercise the option on the Lake Touladi Property which was the subject of the Assignment Agreement. We are actively seeking to locate alternate mining opportunities.

ITEM 6.

EXHIBITS

In reviewing the agreements included as exhibits to this Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Form 10-Q and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

The following exhibits are included as part of this report:

Exhibit No.		Description

31.1 / 31.2		Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial Officer

32.1 / 32.2*		Rule 1350 Certification of Chief Executive and Financial Officer

101.INS**		XBRL Instance Document

101.SCH**		XBRL Schema Document

101.CAL**		XBRL Calculation Linkbase Document

101.DEF**		XBRL Definition Linkbase Document

101.LAB**		XBRL Label Linkbase Document

101.PRE**		XBRL Presentation Linkbase Document

* This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

** Pursuant to Rule 406T of Regulation S-T, this XBRL related information shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filings.

SIGNATURES

Pursuant to the requirements 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.

	ALLIED AMERICAN STEEL CORP.

Dated: August 20, 2012	By:	/s/ Jes Black
	Name:	Jes Black
	Title:	President, Chief Executive Officer and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description

31.1 / 31.2		Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial Officer

32.1 / 32.2*		Rule 1350 Certification of Chief Executive and Financial Officer

101.INS**		XBRL Instance Document

101.SCH**		XBRL Schema Document

101.CAL**		XBRL Calculation Linkbase Document

101.DEF**		XBRL Definition Linkbase Document

101.LAB**		XBRL Label Linkbase Document

101.PRE**		XBRL Presentation Linkbase Document

ALLIED AMERICAN STEEL CORP. 10-Q