SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q   (Mark One) [X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934  For the quarterly
period ended September 30, 2012 OR [  ]  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
            
000-54533  USG1, INC. (Exact name of
registrant as specified in its charter)  Delaware                            
27-2288541 (State or other jurisdiction
of           (I.R.S. Employer incorporation or
organization)         
Identification No.)  1126 Madison 9517, Fredericktown, Missouri 63645 (Address of principal executive offices)  (zip code)  573-561-4283


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(Registrant's telephone number, including area code)   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 XNo  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 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. Yes XNo  Indicate
the number of shares outstanding of each of the issuer's classes of stock, as
of the latest practicable date.  Class
 Outstanding
  atNovember
  14, 2012Common Stock, par
  value $0.0001
 6,600,000Documents
  incorporated by reference:
 None
   PART I — FINANCIAL INFORMATION  ITEM 1.
FINANCIAL STATEMENTS  USG1, INC. INDEX TO UNAUDITED FINANCIAL STATEMENTS  PageUnaudited
  Financial Statements:Balance Sheets
 F-1Statements of Operations
 F-2Statements of Cash Flows
 F-3Notes to Unaudited Financial
  Statements
 F-4


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USG1, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS  September
  30,
 
 December
  31,Assets
 
 2012
 
 2011(Unaudited)
 
 (Audited)Current AssetsCash and
  cash equivalents
 $
 1,062
 $
 21Total Current Assets
 
 1,062
 
 21Total Assets
 $
 1,062
 $
 21Liabilities
  and Stockholders' DeficitCurrent
  LiabilitiesAccrued interest
  - related party
 $
 -
 $
 21Accrued
  expenses
 
 6,403
 
 2,500Note
  payable - related party
 
 -
 
 2,500Total Current Liabilities
 
 6,403
 
 5,021Stockholders'
  DeficitPreferred
  stock - $.0001 par value; 20,000,000 shares authorized, 0 shares
  issued and outstanding-
 
 -Common
  stock - $.0001 par value; 100,000,000 shares authorized,
  6,600,000 shares issued and outstanding660
 
 660Additional
  paid-in capital
 
 35,233
 
 26,983Accumulated deficit
 
 (41,234)
 
 (32,643)Total Stockholders' Deficit
 
 (5,341)
 
 (5,000)Total Liabilities and Stockholders' Deficit
 $
 1,062
 $
 21


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The accompanying notes are an integral part of financial
statements.   USG1, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS (UNAUDITED) For
  The Period From February 27, 2010 (Inception) through September 30, 2012For
  The Three Months Ended
 
 
 For
  The Nine Months EndedSeptember
  30,
 
 
 September
  30,2012
 
 2011
 
 
 2012
 
 2011Net Revenue
 $
 -
 $
 -
 
 $
 -
 $
 -
 
 $
 -General and
  Administrative ExpensesLegal and professional expenses
 
 2,480
 
 2,000
 
 
 7,403
 
 5,500
 
 
 39,696Business Taxes and Licenses
 
 -
 
 -
 
 
 1,208
 
 -
 
 
 1,208Office supplies
 
 -
 
 202
 
 
 -
 
 202
 
 
 202Bank service fees
 
 1
 
 54
 
 
 1
 
 54
 
 
 128Total general and administrative expenses
 
 2,481
 
 2,256
 
 
 8,612
 
 5,756
 
 
 41,234Operating loss
 
 (2,481)
 
 (2,256)
 
 
 (8,612)
 
 (5,756)
 
 
 (41,234)Gain on
  forgiveness of interest payable
 
 -
 
 -
 
 
 24
 
 -
 
 
 24Interest expense
 
 -
 
 (4)
 
 
 (3)
 
 (10)
 
 
 (24)Net Loss before
  Income Taxes
 
 (2,481)
 
 (2,260)
 
 
 (8,591)
 
 (5,766)
 
 
 (41,234)Income Tax
  Expense
 
 -
 
 -
 
 
 -
 
 -
 
 
 -Net
  Loss
 $
 (2,481)
 $
 (2,260)
 
 $
 (8,591)
 $
 (5,766)
 
 $
 (41,234)Loss per common
  share - basic and diluted
 $
 -
 $
 -
 
 $
 -
 $
 -
 
 $
 -Weighted average
  shares outstanding, basic and diluted
 
 6,600,000
 
 6,600,000
 
 
 6,600,000
 
 6,600,000
 
 
 6,600,000


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The accompanying notes are an integral part of financial
statements.   USG1, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS (UNAUDITED) For
  The Period From February 27, 2010 (Inception) through 
  September 30, 2012For
  The Nine Months EndedSeptember
  30,2012
 
 2011CASH FLOWS
  FROM OPERATING ACTIVITIESNet loss
 
 
 $
 (8,591)
 $
 (5,766)
 $
 (41,234)Gain on
  forgiveness of interest payable
 
 (24)
 
 -
 
 (24)Shares issued for
  legal and consulting services
 
 -
 
 -
 
 793Adjustments to
  reconcile net loss to net cash provided by operating activities:Increase in
  accrued interest
 
 3
 
 10
 
 24Increase in
  accrued expenses
 
 3,903
 
 3,000
 
 6,403Net cash used in
  operating activities
 
 (4,709)
 
 (2,756)
 
 (34,038)CASH FLOWS
  FROM FINANCING ACTIVITIESProceeds from issuance
  of common stocks
 
 -
 
 -
 
 20,100Proceeds
  from loans from related party
 
 -
 
 -
 
 2,500Proceeds
  from capital contributions
 
 5,750
 
 2,700
 
 12,500Net cash provided
  by financing activities
 
 5,750
 
 2,700
 
 35,100NET INCREASE
  (DECREASE) IN CASH & CASH EQUIVALENTS
 
 1,041
 
 (56)
 
 1,062CASH &
  CASH EQUIVALENTS, BEGINNING BALANCE
 
 21
 
 67
 
 -CASH &
  CASH EQUIVALENTS, ENDING BALANCE
 $
 1,062
 $
 11
 $
 1,062SUPPLEMENTAL
  DISCLOSURES:Non-cash
  financing activities:Transfer from
  note payable - related party to additional paid-in capital
 $
 2,500
 $
 -
 $
 -Interest paid
 
 $
 -
 $
 -
 $
 -Income taxes paid
 
 $
 -
 $
 -
 $
 -


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The accompanying notes are an integral part of financial
statements.   NOTE
1: ORGANIZATION  USG1, Inc. (“the Company”) was incorporated under
the laws of the State of Delaware, U.S. on February 27, 2010.  The Company
intends to engage in any lawful corporate undertaking, including, but not
limited to, selected mergers and acquisitions. The Company will attempt to
locate and negotiate with a business entity for the combination of that target
company with it. The combination will normally take the form of a merger,
stock-for-stock exchange or stock-for-assets exchange. In most instances the
target company will wish to structure the business combination to be within the
definition of a tax-free reorganization under Section 351 or Section 368 of the
Internal Revenue Code of 1986, as amended.  No assurances can be given that USG1 will be
successful in locating or negotiating with any target company.  The proposed business activities described herein
classify USG1 as a “blank check” company. The Securities and Exchange
Commission and certain states have enacted statuettes, rules and regulations
limiting the public sale of securities of blank check companies. USG1 will not
make any efforts to cause a market to develop in its securities until such time
as it has successfully implemented its business plan and is no longer classified
as a blank check company.  Development Stage Risk  The Company has not earned revenues from
operations. Accordingly, the Company’s activities have been accounted for as
those of a “Development Stage Enterprise” as set forth in Accounting Standards
Codification (“ASC”) 915 “Development Stage Entities”, which was previously
Statement of Financial Accounting Standards No. 7 (“SFAS 7”). Among the
disclosures required by ASC 915 are that the Company’s financial statements be
identified as those of a development stage company, and that the statements of
operations, stockholders’ equity and cash flows disclose activity since the
date of the Company’s inception. For the period from February 27, 2010
(inception) through September30, 2012, the Company has
accumulated losses of $41,234.


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Since its inception,
the Company has been dependent upon the receipt of capital investment to fund
its continuing activities. In addition to the normal risks associated with a
new business venture, there can be no assurance that the Company’s business
plan will be successfully executed. Our ability to execute our business plan
will depend on our ability to obtain additional financing and achieve a
profitable level of operations. There can be no assurance that sufficient
financing will be obtained. Further, we cannot give any assurance that we will
generate substantial revenues or that our business operations will prove to be
profitable.  NOTE 2: GOING CONCERN  The Company’s financial statements are prepared
using generally accepted accounting principles in the United States of America
applicable to a going concern, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. The Company
has not yet established an ongoing source of revenues sufficient to cover its
operating costs and allow it to continue as a going concern. The ability of the
Company to continue as a going concern is dependent on the Company obtaining
adequate capital to fund operating losses until it becomes profitable. If the
Company is unable to obtain adequate capital, it could be forced to cease
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.  Management’s Plan 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 plans to obtain such resources for the Company include (1)
obtaining capital from the sale of its securities, and (2) short-term
borrowings from shareholders or related party when needed. However, management
cannot provide any assurance 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.   NOTE 3: SUMMARY OF ACCOUNTING POLICIES  Interim
Financial Statements:  The unaudited financial statements of the Company
have been prepared in accordance with U.S. generally accepted accounting
principles for interim financial information. Accordingly, they do not include
all the information and footnotes required by accounting principles generally
accepted in the United States of America for annual audited financial
statements. However, the information included in these interim financial
statements reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for the fair
presentation of the financial position and the results of operations of the
Company. Results shown for interim periods are not necessarily indicative of
the results to be obtained for a full year. These interim financial statements
should be read in conjunction with the Company’s audited financial statements
as of December 31, 2011 and related notes included therein.  Basis of Presentation:


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The accompanying
financial statements have been prepared by the Company. The Company’s financial
statements are prepared in accordance with generally accepted accounting
principles in the United States of America (“US GAAP”).  Fiscal Year:  The Company’s fiscal year end is December 31.  Cash and Cash Equivalents:  Cash and cash equivalents include cash and all highly liquid
instruments with original maturities of three months or less.  Use of Estimates:  The preparation of financial statements in
conformity with generally accepted accounting principles in the Unites States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Accordingly,
actual results could differ from those estimates.  Share Based Payments:  In December, 2004, the FASB issued SFAS No.
123(R), “Share-Based Payment”, which replaces SFAS No. 123 and supersedes APB
Opinion No. 25. SFAS No. 123(R) is now included in ASC 718 “Compensation –
Stock Compensation”. Under SFAS No. 123(R), companies are required to measure
the compensation costs of share-based compensation arrangements based on the
grant-date fair value and recognize the costs in the financial statements over
the period during which employees or independent contractors are required to
provide services. Share-based compensation arrangements include stock options
and warrants, restricted share plans, performance-based awards, share
appreciation rights and employee share purchase plans. In March, 2005, the SEC
issued Staff Accounting Bulletin No. 107 (“SAB 107”) which expresses views of
the staff regarding the interaction between SFAS No. 123(R) and certain SEC
rules and regulations and provides the staff’s views regarding the valuation of
share-based payment arrangements for public companies. SFAS No. 123(R) permits
public companies to adopt its requirements using one of two methods. On April
14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS No.
123(R). Companies may elect to apply this statement either prospectively, or on
a modified version of retrospective application under which financial
statements for prior periods are adjusted on a basis consistent with the
pro forma disclosures required for those periods under SFAS No. 123. To date,
the Company has not adopted a stock option plan nor granted any stock options.  Advertising Costs:  The Company expenses all advertising costs in the
current period. The results of future benefits from advertising are minimal
based upon the type of advertising involved. To date, the Company has not
incurred any advertising expenses.  Income Taxes:  Income taxes are accounted for under the assets
and liabilities method. Deferred tax assets and liabilities are recognized for
the estimated future tax consequences attributable to differences between the
financialstatement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax
credit carry forwards. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary differences
are expected to be recovered or settled.


---



Net Loss per Common Share:  Basic net loss per share is calculated by
dividing net loss by the weighted-average number of common shares outstanding
during the period. Diluted net loss per share reflects the potential dilution
of securities by including common stock equivalents, such as stock options,
stock warrants and convertible preferred stock, in the weighted average number
of common shares outstanding for a period, if dilutive. For the ninemonths ended September 30, 2012 and 2011, there were
no potentially dilutive securities.  Recently Issued Accounting Pronouncements:  The Company has adopted all recently issued
accounting pronouncements. The adoption of the accounting pronouncements,
including those not yet effective, is not anticipated to have a material effect
on the financial position or results of operations of the Company.   NOTE 4: STOCKHOLDERS’ EQUITY  The Company is authorized to issue a total of
120,000,000 shares of stock consisting of 100,000,000 shares of Common Stock
with par value of $.0001 per share and 20,000,000 shares of Preferred Stock,
par value of $.0001.  On February 27, 2010 (inception), the Company
issued 6,350,000 shares of common stock to 43 individual shareholders at an
average price of $.00317 per share for cash in the amount of $20,100. On the
same date, the Company issued 250,000 shares of common stock as payment for
legal and consulting services at $.00317 per share for a total value of $793.  On June 30, 2012, the Company entered a loan conversion agreement
with itsmajor shareholder, Ms. Kimi Royer,
who is also the Chairman and Chief Executive Officer of the Company.Pursuant to the agreement, Ms. Royer agrees to convert
the $2,500 loan provided in June 2010 to the Company to additional paid-in
capital and to forgive any accrued interest that has accumulated as of the
conversion date.  NOTE 5: RELATED PARTY TRANSACTIONS  The parties primarily refer to the shareholders
and officers of the Company and corporate entities related to the Company
through common ownership.  Note Payable  Note payable to officer amounted to $0 and $2,500
as of September 30, 2012 and December 31, 2011, respectively. The loan was
borrowed from the President and Chairman of the Company on July 6, 2010 for
short-term with written agreement, unsecured, and bearing an interest of
0.43% per annum. Unpaid interests accrued associated with the note amounted to
$0and $21 as of September 30, 2012 and December 31,
2011, respectively.  On June 30, 2012, the Company entered a loan conversion agreement
with itsmajor shareholder, Ms. Kimi Royer,
who is also the Chairman and Chief Executive Officer of the Company.Pursuant to theagreement, Ms.
Royer agrees to convert the $2,500 loan provided in June 2010 to the Company to
additional paid-in capital and to forgive any accrued interest that has
accumulated as of June 30, 2012. (See Note 4.) Unpaid interests accrued
associated with the note amounted to$24
as of the conversion date was recorded as other income for the nine months
ended September 30, 2012.


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NOTE 6: COMMITMENTS AND CONTINGENCIES  On August 10, 2012, the Company entered into an Agreement and Plan
of Merger (the “Merger Agreement”) with Canwealth Minerals Corporation, a
Delaware corporation (“Canwealth”), and Ms. Kimi Royer as representative of the
Company’s stockholders, pursuant to which Canwealth will merge with and into
the Company at the closing, as contemplated by the Merger Agreement.  Pursuant to the Merger Agreement, the existing shares of Canwealth
common stock will be converted into 44,169,231 shares of the Company’s common
stock at the closing.  The existing stockholders of the Company with
continue to hold 6,600,000 shares of the Company’s common stock.  As
consideration for the merger, Canwealth shall pay $50,000 in the aggregate to
the participating stockholders of the Company.  Upon the merger becoming
effective, the current officers and directors of the Company will resign and
new officers and directors will be appointed.  The closing of the merger is subject to certain closing
conditions, such as the delivery of the written consent of the holders of at
least 90% of the issued and outstanding shares of the Company common stock
approving the terms of the Merger Agreement and the proposed merger.   NOTE 7: SUBSEQUENT EVENTS  In accordance with FASB Accounting Standards Codification
Topic 855, “Subsequent Events”, the Company has evaluated subsequent eventsthrough November 14, 2012, the date which the
unaudited financial statements were available to be issued.  All
subsequent events requiring recognition as of September 30, 2012, have been
incorporated into these financial statements and there are no subsequent events
that require disclosure. ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING
STATEMENTS  This Quarterly Report on Form 10-Q, including "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
in Item 2 of Part I of this report include forward-looking statements. These
forward looking statements are based on our management’s current expectations
and beliefs and involve numerous risks and uncertainties that could cause
actual results to differ materially from expectations. In some cases, you can
identify forward-looking statements by terminology such as "may,"
"should," "expects," "plans,"
"anticipates," "believes," "estimates,"
"predicts," "potential," "proposed,"
"intended," or "continue" or the negative of these terms or
other comparable terminology. You should read statements that contain these
words carefully, because they discuss our expectations about our future
operating results or our future financial condition or state other
"forward-looking" information. Many factors could cause our actual
results to differ materially from those projected in these forward-looking
statements, including but not limited to: variability of our revenues and
financial performance; risks associated with product development and
technological changes; the acceptance our products in the marketplace by
existing and potential future customers; general economic conditions. You
should be aware that the occurrence of any of the events described in this
Quarterly Report couldsubstantially harm our business,
results of operations and financial condition, and that upon the occurrence of
any of these events, the trading price of our securities could decline.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, growth rates,
levels of activity, performance or achievements. We are under no duty to update
any of the forward-looking statements after the date of this Quarterly Report
to conform these statements to actual results.


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INTRODUCTION  The following Management’s Discussion and Analysis (“MD&A”) is
intended to help the reader understand the results of operations and financial
condition of USG1, Inc (“USG1”). MD&A is provided as a supplement to, and
should be read in conjunction with, our financial statements and the
accompanying notes to the financial statements. As used in this Quarterly
Report, the terms "we", "us", "our",
“Registrant”, and “the Company” mean USG1.  The Company was incorporated in the State of Delaware on February
27, 2010.  NATURE
OF BUSINESS  USG1, Inc. ("USG1" or the "Company") was
incorporated on February 27, 2010 under the laws of the State of Delaware to
engage in any lawful corporate undertaking, including, but not limited to,
selected mergers and acquisitions. USG1 has been in the developmental stage
since inception and its operations to date have been limited to issuing shares
to its original shareholders and filing a registration statement. USG1 has been
formed to provide a method for a foreign or domestic private company to become
a reporting company with a class of securities registered under the Securities
Exchange Act of 1934.  The Company registered its common stock on a Form 10 registration
statement filed pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act") and Rule 12(g) thereof. The Company files with the
Securities and Exchange Commission periodic and current reports under Rule
13(a) of the Exchange Act, including quarterly reports on Form 10-Q and annual
reports Form 10-K.  The Company has no employees and one officer, who is also the sole
director.  USG1 intends to help a company become a public reporting company.
In the event USG1 is successful in a business combination, our advisors may
recommend that the company file a registration statement; most likely on Form
S-1, or alternatively that a company first effect a business combination with
USG1 and then subsequently file a registration statement. A company may choose
to effect a business combination with USG1 before filing a registration
statement as such method may be an effective way to obtain exposure to the
brokerage community.  A combination will normally take the form of a merger,
stock-for-stock exchange or stock-for-assets exchange. In most instances the target
company will wish to structure the business combination to be within the
definition of a tax-free reorganization under Section 351 or Section 368 of the
Internal Revenue Code of 1986, as amended.  As of September 30, 2012, USG1 had not generated revenues and had
no income or cash flows from operations since inception. The continuation of
USG1 as a going concern is dependent upon financial support from its
stockholders, its ability to obtain necessary equity financing to continue
operations, to successfully locate and negotiate with a business entity for the
combination of that target company with USG1. There is no assurance that USG1
will ever be profitable.


---



RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011  The Company has received no income and has incurred operating
expenses for general corporate upkeep and accounting fees. Operations will
likely remain similar until USG1 transacts a business combination. Since there
is minimal cash on hand, the Company will be reliant on the additional capital
from existing shareholders or will need to issue more shares to continue as a
going concern.  Operating expenses during the three months ended September 30,
2012 totaled $2,481 compared to $2,256 for the three months ended September 30,
2011.  The increase resulted primarily from professional fees incurred
related to our public filing obligations.  On August 10, 2012, the Company entered into an Agreement and Plan
of Merger (the “Merger Agreement”) with Canwealth Minerals Corporation, a
Delaware corporation (“Canwealth”), a mining and mineral company headquartered
in Canada.  Upon the merger becoming effective, the Company would have a
material change that will include a change in control and material business
operations.  RESULTS
OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011  The Company has received no income and has incurred operating
expenses for general corporate upkeep and accounting fees. Operations will
likely remain similar until USG1 transacts a business combination. Since there
is minimal cash on hand, the Company will be reliant on the additional capital
from existing shareholders or will need to issue more shares to continue as a
going concern.  Operating expenses for the nine months ended September 30, 2012
totaled $8,612 compared to $5,756 for the nine months ended September 30,
2011.  The increase resulted primarily from professional fees incurred
related to our public company filing obligations.  On August 10, 2012, the Company entered into an Agreement and Plan
of Merger (the “Merger Agreement”) with Canwealth Minerals Corporation, a
Delaware corporation (“Canwealth”), a mining and mineral company headquartered
in Canada.  Upon the merger becoming effective, the Company would have a
material change that will include a change in control and material business
operations.  LIQUIDITY
AND CAPITAL RESOURCES  As of September 30, 2012, we had working capital deficit of
$5,341. Operating expenses during the nine months ended September 30, 2012 totaled
$8,612 compared to $5,756 for the nine months ended September 30, 2011. The
increase resulted primarily from professional fees incurred related to our
public company filing obligations.  Net cash provided by financing activities during the nine months
ended September 30, 2012 was $5,750, which was solely contributed by
shareholders.  No shares were sold during the nine months ended September 30,
2012.  We have not yet recognized revenues from our operations. As a
result, our current cash position is not sufficient to fund our cash
requirements during the next twelve months, including operations and capital
expenditures.


---



Current assets consisted of cash of
$1,062 as of September 30, 2012. We will be reliant upon additional paid-in
capital from shareholders, shareholder loans, private placements or public
offerings of equity to fund our operations. We have secured no sources of
loans. We had negative cash flow from operations and no revenues during the
nine months ended September 30, 2012.  OFF-BALANCE
SHEET ARRANGEMENTS  There are 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 investors.  INFLATION  We do not believe our business and operations have been materially
affected by inflation.  CRITICAL
ACCOUNTING POLICIES AND ESTIMATES  Our critical accounting policies are as follows:  Use of
Estimates  The preparation of financial statements in conformity with
generally accepted accounting principles in the Unites States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Accordingly, actual results
could differ from those estimates.  Share
Based Payments  In December, 2004, the FASB issued SFAS No. 123(R), “Share-Based
Payment”, which replaces SFAS No. 123 and supersedes APB Opinion No. 25. SFAS
No. 123(R) is now included in ASC 718 “Compensation – Stock Compensation”.
Under SFAS No. 123(R), companies are required to measure the compensation costs
of share-based compensation arrangements based on the grant-date fair value and
recognize the costs in the financial statements over the period during which
employees or independent contractors are required to provide services.
Share-based compensation arrangements include stock options and warrants,
restricted share plans, performance-based awards, share appreciation rights and
employee share purchase plans. In March, 2005, the SEC issued Staff Accounting
Bulletin No. 107 (“SAB 107”) which expresses views of the staff regarding the
interaction between SFAS No. 123(R) and certain SEC rules and regulations and
provides the staff’s views regarding the valuation of share-based payment arrangements
for public companies. SFAS No. 123(R) permits public companies to adopt its
requirements using one of two methods. On April 14, 2005, the SEC adopted a new
rule amending the compliance dates for SFAS No. 123(R). Companies may elect to
apply this statement either prospectively, or on a modified version of
retrospective application under which financial statements for prior periods
are adjusted on a basis consistent with the pro forma disclosures required for
those periods under SFAS No. 123. To date, the Company has not adopted a stock
option plan nor granted any stock options.  Income
Taxes  Income taxes are accounted for under the assets and liabilities
method. Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between thefinancial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax
credit carry forwards. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary differences
are expected to be recovered or settled.


---



Recently
Issued Accounting Pronouncements  The Company has adopted all recently issued accounting
pronouncements. The adoption of the accounting pronouncements, including those
not yet effective, is not anticipated to have a material effect on the
financial position or results of operations of the Company.  ITEM 3.
QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Information
not required to be filed by Smaller reporting companies.  ITEM
4.  CONTROLS AND PROCEDURES  Disclosures
and Procedures  Pursuant to Rules adopted by the Securities and Exchange
Commission, the Company carried out an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures pursuant to Exchange
Act Rules. This evaluation was done as of the end of the period covered by this
report under the supervision and with the participation of the Company's
principal executive officer (who is also the principal financial officer).  Based upon that evaluation, she believes that the Company's
disclosure controls and procedures are effective in gathering, analyzing and
disclosing information needed to ensure that the information required to be
disclosed by the Company in its periodic reports is recorded, processed,
summarized and reported, within the time periods specified in the Commission's
rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.  This Quarterly Report does not include an attestation report of
the Company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only management's
report in this Quarterly Report.  Changes
in Internal Controls  There were no changes in the Company's internal control over
financial reporting that was identified in connection with such evaluation that
occurred during the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the Company's internal control
over financial reporting.  PART II — OTHER INFORMATION  ITEM
1.  LEGAL PROCEEDINGS


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There are no legal proceedings against the Company and the Company
is unaware of such proceedings contemplated against it.  ITEM
1A.  RISK FACTORS  As a “smaller reporting company”, we are not required to provide
disclosure under this Item 1A.  ITEM
2.  UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS  On
February 27, 2010 (inception), the Company issued 6,350,000 shares of common
stock to 43 individual shareholders at an average price of $.00317 per share
for cash in the amount of $20,100. On the same date, the Company issued 250,000
shares of common stock as payment for legal and consulting services at $.00317
per share for a total value of $793.  The
proceeds of these sales have been used to cover operating, legal, and
professional fees since inception.  ITEM
3.  DEFAULTS UPON SENIOR SECURITIES  None.  ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.  None.  ITEM
5.  OTHER INFORMATION  (a)  Not applicable (b)  Item 407(c)(3) of Regulation S-K:  During the quarter covered by this Report, there have not been any
material changes to the procedures by which security holders may recommend
nominees to the Board of Directors.  ITEM
6.  EXHIBITS  31  Certification of the Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  32  Certification of the Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  101. INS          XBRL Instance
Document 101. CAL         XBRL Taxonomy
Extension Calculation Link base Document 101. DEF         XBRL Taxonomy
Extension Definition Link base Document 101. LAB         XBRL Taxonomy Label
Link base Document 101. PRE         XBRL Extension
Presentation Link base Document 101. SCH         XBRL Taxonomy
Extension Scheme Document


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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. USG1,
INC By:   /s/ Kimi Royer President, Chief Executive Officer Dated:   November 14, 2012