NORTHSIGHT CAPITAL, INC. - FORM 10-Q

Attached files

file	filename
EX-31 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT - NORTHSIGHT CAPITAL, INC.	ex31.htm
EX-32 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - NORTHSIGHT CAPITAL, INC.	ex32.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended September 30, 2009

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

Commission file number 333-149804

NORTHSIGHT CAPITAL, INC.

(Exact name of registrant as specified in its charter)

Nevada		26-2727362
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

14301 North 87th Street, Suite 301
Scottsdale, AZ		85260
(Address of principal executive offices)		(Zip Code)

(480) 272-7290

(Registrant’s telephone number, including area code)

Copies of Communication to:

Vincent & Rees175 South Main Street

15th Floor

Salt Lake City, UT 84111

(801)303-5730

Fax: (801)355-5005

Indicate by check mark whether the issuer (1) 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 R No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 12b-2 of the Exchange Act.

Large accelerated filer 	Accelerated filer 

Non-accelerated filer  (Do not check if a smaller reporting company)	Smaller reporting company R

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

Yes R No 

The number of shares of Common Stock, $0.001 par value, outstanding on November 23, 2009, was 1,400,000 shares.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

NORTHSIGHT CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS

	September 30,			December 31,
	2009			2008
	(unaudited)			(audited)
ASSETS

Current assets:
Cash	$	450		$	1,576
Prepaid expenses - related party		-			2,000
Total current assets		450			3,576

Total assets	$	450		$	3,576


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable		3,004			3,345
Accounts payable - related party		74,821			4,699
Accrued payroll taxes		422			422
Accrued interest payable - related party		1,279			-
Notes payable		55,000			55,000
Notes payable - related party		25,187			1,387
Total current liabilities		159,713			64,853

Total liabilities		159,713			64,853

Stockholders' equity:
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding
as of September 30, 2009 and December 31, 2008		-			-
Common stock, $0.001 par value, 100,000,000 shares
authorized, 1,400,000 and 1,400,000 shares issued and outstanding
as of September 30, 2009 and December 31, 2008, respectively		1,400			1,400
Additional paid-in capital		66,200			66,200
(Deficit) accumulated during development stage		(226,863	)		(128,877	)
Total stockholders' equity		(159,263	)		(61,277	)

Total liabilities and stockholders' equity	$	450		$	3,576

See Accompanying Notes to Financial Statements.

NORTHSIGHT CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)

							For the
							nine months			May 21, 2008			May 21, 2008
	For the three months ended						ended			(inception) to			(inception) to
	September 30,						September 30,			September 30,			September 30,
	2009			2008			2009			2008			2009

Revenue	$	-		$	-		$	-		$	-		$	-

Cost of goods sold		-			-			-			-			-

Gross profit		-			-			-			-			-

Operating expenses:
General and administrative		3,247			11,730			9,903			11,730			25,001
Business plan development - related party		-			-			-			10,000			10,000
Consulting expense - related party		13,500			-			36,000			-			53,350
Executive compensation - related party		-			-			100			-			5,100
Professional fees		4,181			2,217			14,275			4,717			23,575
Professional fees - related party		4,568			9,574			16,989			9,574			60,396
Rent - related party		6,000			4,200			16,000			4,200			26,200
Research and development - related party		-			-			3,000			-			10,850
Travel		-			-			440			-			11,112

Total operating expenses		31,496			27,721			96,707			40,221			225,584

Other expenses:
Interest expense		(640	)		-			(1,279	)		-			(1,279	)
Total other expenses		(640	)		-			(1,279	)		-			(1,279	)


(Loss) before provision for income taxes		(32,136	)		(27,721	)		(97,986	)		(40,221	)		(226,863	)

Provision for income taxes		-			-			-			-			-

Net (loss)	$	(32,136	)	$	(27,721	)	$	(97,986	)	$	(40,221	)	$	(226,863	)


Weighted average number of common shares		1,400,000			850,000			1,400,000			823,684
outstanding - basic and fully diluted

Net (loss) per common share - basic and fully diluted	$	(0.02	)	$	(0.03	)	$	(0.07	)	$	(0.05	)

See Accompanying Notes to Financial Statements.

NORTHSIGHT CAPITAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)

	For the
	nine months			May 21, 2008			May 21, 2008
	ended			(inception) to			(inception) to
	September 30,			September 30,			September 30,
	2009			2008			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss)	$	(97,986	)	$	(40,221	)	$	(226,863	)
Adjustments to reconcile net (loss)
to net cash used in operating activities:
Shares issued for services		-			10,000			10,000
Changes in operating assets and liabilities:
Decrease in prepaid expenses		2,000			-			-
Increase in accounts payable		(341	)		1,000			3,004
Increase in accounts payable - related party		70,122			20,474			74,821
Increase in accrued payroll taxes		-			-			422
Increase in accrued interest payable - related party		1,279			-			1,279

Net cash (used) in operating activities		(24,926	)		(8,747	)		(137,337	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock, net of offering costs		-			7,600			57,500
Donated capital		-			-			100
Proceeds fron notes payable		-			-			55,000
Proceeds from notes payable - related party		24,000			1,440			25,440
Payments to notes payable - related party		(200	)		(53	)		(253	)

Net cash (used) provided by financing activities		23,800			8,987			137,787

NET CHANGE IN CASH		(1,126	)		240			450

CASH AT BEGINNING OF YEAR		1,576			-			-

CASH AT END OF YEAR	$	450		$	240		$	450


SUPPLEMENTAL INFORMATION:
Interest paid	$	-		$	-		$	-
Income taxes paid	$	-		$	-		$	-

Non-cash activities:
Number of shares issued for services		-			100,000			100,000

See Accompanying Notes to Financial Statements.

NORTHSIGHT CAPITAL, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

Note 1 – Basis of Presentation

The condensed interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these condensed interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2008 and notes thereto included in the Company’s 10-K filed on March 31, 2009. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for the interim period are not indicative of annual results

Note 2 – Going Concern

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not commenced its planned principal operations and it has not generated significant revenues. As shown on the accompanying financial statements, the Company has incurred a net loss of $226,863 for the period from May 21, 2008 (inception) to September 30, 2009. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its business opportunities.

In order to obtain the necessary capital, the Company will seek equity and/or debt financing. If the financing does not provide sufficient capital, shareholders of the Company have agreed to provide sufficient funds as a loan over the next twelve-month period. However, the Company is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful. Without sufficient financing, it is unlikely for the Company to continue as a going concern.

Note 3 – Prepaid Expenses

As of December 31, 2008, the Company had $2,000 in prepaid expenses. The prepaid expenses relate to a prepayment of rent, utilities, and telephone fees for 2009 which will be amortized as the services are rendered. During the nine months ended September 30, 2009, the Company amortized $2,000 to expenses and the balance in prepaid expenses as of September 30, 2009 was $0.

Note 4 – Notes Payable

On October 6, 2008, the Company executed a convertible promissory note for $55,000 from an individual. The note is due in 90 days. Within a period of 60 days from the execution date of the note, the lender can decide on the form of repayment. The first option is a payment of $65,000 in cash to include the repayment of the principal amount plus $10,000 of interest. The second option is a payment of $60,000 in cash plus 50,000 shares of common stock. The fair value of the shares of common stock is $5,000. In the second option, the holder will have received a repayment of the principal amount plus $10,000 of interest. Within a period of 90 days from the execution date of the note, the lender can choose to convert the entire amount of the note plus any accrued interest into 165,000 shares of common stock. The fair value of the common stock is $16,500. The lender also has the option to convert 50% of the note into 82,500 shares of common stock and the remaining amount will be repaid in cash. As of September 30, 2009, the lender did not notify the Company of their repayment option.

Interest expense for the nine months ended September 30, 2009 was $0.

Note 5 – Notes Payable – Related Party

Notes payable consists of the following at September 30, 2009:

		September 30, 2009
Note payable to an officer, director and shareholder, unsecured, 10% interest, due upon demand		$ 4,737
Notes payable to an entity owned and controlled by an officer, director and shareholder of the Company, unsecured, 10% interest, due upon demand		14,050
Notes payable to an entity owned and controlled by an officer, director and shareholder of the Company, unsecured, 10% interest, due upon demand		6,400

		$ 25,187

Interest expense for the nine months ended September 30, 2009 was $1,279. As of September 30, 2009, the balance of accrued interest payable – related party was $1,279.

Note 6 – Stockholders’ Equity

The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 100,000,000 shares of its $0.001 par value common stock.

As of September 30, 2009, there have been no other issuances of common stock.

Note 7 – Warrants and Options

As of September 30, 2009, there were no warrants or options outstanding to acquire any additional shares of common stock.

Note 8 – Agreements

On April 23, 2009, the Company executed an exclusive license agreement with XND Technologies (“XND”) for a trademark. XND is a related party and is an entity that is owned and controlled by an officer, director and shareholder of the Company. The effective date of the agreement will commence upon the receipt of financing totaling $1,000,000 which is needed to complete the manufacturing and distribution of the products. The term is for a period of 10 year and will renew for an additional period of 10 years. The Company must pay a royalty of 3% of all gross sales. The royalty payments shall be made monthly based on the sales for the preceeding month. XND may terminate this agreement upon 30 days written notice to the Company.

On April 23, 2009, the Company executed an exclusive license agreement with Steve Nickolos and Enhanced Beverages(“Enhanced”) for a patent. Steve Nickolas is an officer, director and shareholder of the Company. Enhanced is a related party and is an entity that is owned and controlled by an officer, director and shareholder of the Company. The effective date of the agreement will commence upon the receipt of financing totaling $1,000,000 which is needed to complete the manufacturing and distribution of the products. The term is for a period of 10 year and will renew for an additional period of 10 years. The Company must pay a royalty of 3% of all gross sales. The royalty payments shall be made monthly based on the sales for the preceeding month. XND may terminate this agreement upon 30 days written notice to the Company.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

o	our ability to diversify our operations;
o	our ability to implement our business plan of producing unique, proprietary water products;

o	inability to raise additional financing for working capital;
o	the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;

o	our ability to attract key personnel;
o	our ability to operate profitably;

o	deterioration in general or regional economic conditions;
o	changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

o	adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
o	inability to achieve future sales levels or other operating results;

o	the inability of management to effectively implement our strategies and business plans;
o	the unavailability of funds for capital expenditures; and

o	other risks and uncertainties detailed in this report.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Item 1A. Risk Factors” in this document and in our Annual Report on Form 10-K for the year ended December 31, 2008.

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

References in the following discussion and throughout this quarterly report to “we”, “our”, “us”, “Northsight”, “the Company”, and similar terms refer to Northsight Capital, Inc., unless otherwise expressly stated or the context otherwise requires.

Business Development Summary

Northsight is a development stage company incorporated in the State of Nevada on May 21, 2008. We were formed to engage in the business of marketing, developing, and producing unique, proprietary water products, each which will have a health benefit to the consumer. Northsight’s intended line of enhanced bottled waters is based upon the experience and expertise of our founder, designed to make everyday hydration and nutrition a more enjoyable experience. In May of 2008, we commenced our planned principal operations, and therefore have no significant assets.

Since our inception on May 21, 2008 through September 30, 3009, we have not generated any revenues and have incurred a net loss of $226,863. On July 11, 2008 we filed an S-1 Registration Statement with the SEC and the registration statement became effective on July 21, 2008. We anticipate the commencement of generating revenues in the next twelve months, of which we can provide no assurance. The capital we raised in the recently filed registration statement has been budgeted to cover the costs associated with the offering, travel expenses, product development, working capital, and covering various filing fees and transfer agent fees.

On April 23, 2009, we executed an exclusive license agreement with XND Technologies (“XND”) for a trademark. XND is a related party and is an entity that is owned and controlled by an officer, director and shareholder of the Company. The effective date of the agreement will commence upon the receipt of financing totaling $1,000,000 which is needed to complete the manufacturing and distribution of the products. The term is for a period of 10 years and will renew for an additional period of 10 years. The Company must pay a royalty of 3% of all gross sales. The royalty payments shall be made monthly based on the sales for the preceding month. XND may terminate this agreement upon 30 days written notice to the Company.

On April 23, 2009, we executed an exclusive license agreement with Steve Nickolos and Enhanced Beverages (“Enhanced”) for a patent. Steve Nickolas is an officer, director and shareholder of the Company. Enhanced is a related party and is an entity that is owned and controlled by an officer, director and shareholder of the Company. The effective date of the agreement will commence upon the receipt of financing totaling $1,000,000 which is needed to complete the manufacturing and distribution of the products. The term is for a period of 10 year and will renew for an additional period of 10 years. The Company must pay a royalty of 3% of all gross sales. The royalty payments shall be made monthly based on the sales for the preceding month. XND may terminate this agreement upon 30 days written notice to the Company.

Enhanced Bottle Water Product Background

One of the latest trends to hit the U.S. is the healthy choice of enhanced bottled water. The enhanced bottled water market is one of the few growing beverage segments in the consumer food industry. Enhanced bottled water consumption has continued to grow per annum and our line intends to add sales for retailers through the proven bottled water market base, by offering a proprietary product for our customers.

There are many important factors having a significant impact on grocery food categories sales: long-term, perennial trends, as well as convenience and health. We recognize that the competition of non-alcoholic products is extremely fierce. However, among bottled waters, the enhanced lines show signs of growth. Our product line differs from many of our competitors by offering nutritional supplements as well as essential vitamins. We intend to utilize a “Cold Fill” process which results in an enhanced bottle water product but contains no calories, carbohydrates or colors. In addition, our intended products will offer a substantial amount of supplements and organic ingredients.

Product Development Strategy

The Company’s future products are intended to offer convenience and added health benefits. Northsight intends to introduce new product entries as research and funds permit. All intended products will leverage the Company’s unique access to cold–fill, enhanced bottled water, which has been formulated by Mr. Steve Nickolas, our sole officer and director. Northsight’s product strategy is to deliver enhanced bottled water which leverages prevailing industry trends, which are conveniently incorporated into the average American lifestyle. The Company is focused on finding ways to bring more health conscious products into the market. Our proposed product line will establish a solid base from which the Company will extend our brand and build a franchise with line extensions and new products.

Short-Range Plan (Years 1 and 2)

With an appropriate level of capital resources from outside investors, our primary business focus will be on establishing our initial products. Once the initial products are established, we plan on obtaining shelving space for our products in major grocery centers in Arizona and California. Our secondary focus will be on other areas, to help build necessary distribution by year 5. A key element of the Company’s short-range plan is an aggressive effort to gain new distribution. There remain several potential upsides in the short-range plan, which include the following three most important opportunities:

1. Revenues from new products (the Company will present new items to its current and target accounts throughout the year),

2. Increased consumption of enhanced bottled water (which requires an effective advertising campaign with corresponding investment in marketing operations), and

3. Incremental sales to the grocery service sector.

Plan Elements:

The short-range plan assumes an active promotion program across a major grocery chain, with public relations programs in key markets. It also assumes active new distribution efforts in Arizona, Nevada and California, accompanied by significant slotting allowance expenditures, which are briefly summarized below.

·	We will need to establish public relations in major southwestern metropolitan areas and key geographies. We hope to create awareness of our product line, by publicizing local events as well as by the Company’s consumer supports at fitness centers and through trainers;

·	Distribution and slotting allowances to get on shelf and gain distribution;

·	TPRs (Temporary Price Reductions) for in-store support;

·	In-store demonstrations in selected markets;

·	Coupons to stimulate awareness and trial. This will be a combination of high probability consumer targeted coupons (in store and direct mail) in addition to on-shelf instant redeeming coupons.

Target Customer Overview

Unlike the typical consumer who thinks of bottled water as a commodity product strictly for hydration purposes, Northsight’s products will be packaged and marketed for individuals who take an active role in their own or their family’s wellness and health. This customer base has become more widely targeted over the past few years as large consumer companies, such as PepsiCo, has created products specifically for this audience. These efforts have generated a much broader awareness of enhanced waters, laying the groundwork for a superior product, such as the intended line planned to be offered by Northsight.

Plan of Operation

As mentioned above, Northsight is developing a line of enhanced bottled waters. Made with a cold-fill, proprietary filling process, our waters are exceptional means of hydration. Our product line has been designed and developed for the North American lifestyle, and is targeted to enter the mainstream beverage market. The line is intended to add sales for retailers, through the introduction of a newer grocery category (enhanced bottled waters), to established beverage categories.

Liquidity and Capital Resources

The following table summarizes total current assets, total current liabilities and working capital at September 30, 2009 compared to December 31, 2008.

	September 30, 2009	December 31, 2008	Increase / (Decrease)
	September 30, 2009	December 31, 2008	$	%

Current Assets	$450	$3,576	$(3,126)	(87%)

Current Liabilities	159,713	64,853	94,860	246%

Working Capital (deficit)	$(159,263)	$(61,277)	$97,986	160%

Liquidity is a measure of a company’s ability to meet potential cash requirements. We have historically met our capital requirements through the issuance of stock and by borrowings. In the future we anticipate we will be able to provide the necessary liquidity we need by the revenues generated from the sales of our products, however, if we do not generate sufficient sales revenues we will continue to finance our operations through equity and/or debt financings with traditional financial or industry “partners.”

Since inception, we have financed our cash flow requirements through issuance of common stock. As we expand our activities, we may, and most likely will, continue to experience net negative cash flows from operations, pending receipt of listing or some form of advertising revenues. Additionally we anticipate obtaining additional financing to fund operations through common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital.

On October 6, 2008, we executed a convertible promissory note for $55,000 from an individual. The note was due in 90 days (approximately January 5, 2009). Within a period of 60 days from the execution date of the note, the lender can decide on the form of repayment. The first option is a payment of $65,000 in cash to include the repayment of the principal amount plus $10,000 of interest. The second option is a payment of $60,000 in cash plus 50,000 shares of common stock. The fair value of the shares of common stock is $5,000. In the second option, the holder will have received a repayment of the principal amount plus $10,000 of interest. Within a period of 90 days from the execution date of the note, the lender can choose to convert the entire amount of the note plus any accrued interest into 165,000 shares of common stock. The fair value of the common stock is $16,500. The lender also has the option to convert 50% of the note into 82,500 shares of common stock and the remaining amount will be repaid in cash. As of September 30, 2009, the lender did not notify the Company of their repayment option.

In the first quarter ended March 31, 2009, we received loans from an officer, director and stockholder and from an entity owned by an officer, director and stockholder of the Company totaling $11,390. The loan bears interest at 10% per annum and is due upon demand.

In the second quarter ended June 30, 2009, we received loans from an officer, director and stockholder and an entity owned by an officer, director and stockholder of the Company totaling $9,250. The loan bears interest at 10% per annum and is due upon demand. As of September 30, 2009, $100 has been paid toward the principal amount of the loan.

In July 2009, we received loans from an officer and director of the Company totaling $3,000. The loan bears interest at 10% per annum and is due upon demand.

As of September 30, 2009, the Company has a note payable to an officer, director and shareholder which is unsecured and bears interest at 10% per annum due upon demand, with an outstanding balance of $4,737. As of September 30, 2009, the Company has notes payable to entities owned and controlled by an officer, director and shareholder of the Company which are unsecured and bear interest at 10% per annum and are due upon demand with outstanding balances of $14,050 and $6,400 respectively. Thus, the total amount of notes payable to related parties is $25,187.

We anticipate that we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

Satisfaction of our cash obligations for the next 12 months.

As of September 30, 2009, our cash balance was $450. Our plan for satisfying our cash requirements for the next twelve months is through sale of shares of our common stock, third party financing, and/or traditional bank financing. We do not anticipate generating sufficient amounts of revenues to meet our working capital requirements. Consequently, we intend to make appropriate plans to insure sources of additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities.

Going Concern

The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its business opportunities.

Summary of any product research and development that we will perform for the term of the plan.

We do not anticipate performing any significant product research and development under our plan of operation in the near future. In lieu of product research and development we anticipate maintaining control over our current line of products, to assist us in determining the allocation of our limited inventory dollars.

Expected purchase or sale of plant and significant equipment.

We do not anticipate the purchase or sale of any plant or significant equipment; as such items are not required by us at this time or in the next 12 months.

Significant changes in number of employees.

The number of employees required to operate our business is currently one part time individual. We anticipate requiring additional capital within the next 12 months to hire at least one full time person. Additionally, we anticipate the need for additional personnel upon certain events occurring such as: the current offering being completed, commencement of our product development program, and the establishment of an advertising campaign, which we anticipate to occur during the next 12 months.

Off-Balance Sheet Arrangements

We do not have any 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.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions.

Recent Accounting Pronouncements

In September 2008, the FASB issued exposure drafts that eliminate qualifying special purpose entities from the guidance of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” and FASB Interpretation 46 (revised December 2003), “Consolidation of Variable Interest Entities − an interpretation of ARB No. 51,” as well as other modifications. While the proposed revised pronouncements have not been finalized and the proposals are subject to further public comment, the Company anticipates the changes will not have a significant impact on the Company’s financial statements. The changes would be effective March 1, 2010, on a prospective basis.

In October 2008, the FASB issued FSP No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active,” (“FSP FAS 157-3”), which clarifies application of SFAS 157 in a market that is not active. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of FSP FAS 157-3 had no impact on the Company’s results of operations, financial condition or cash flows.

In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.” This disclosure-only FSP improves the transparency of transfers of financial assets and an enterprise’s involvement with variable interest entities, including qualifying special-purpose entities. This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged. The Company adopted this FSP effective January 1, 2009. The adoption of the FSP had no impact on the Company’s results of operations, financial condition or cash flows.

In December 2008, the FASB issued FSP No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 requires additional fair value disclosures about employers’ pension and postretirement benefit plan assets consistent with guidance contained in SFAS 157. Specifically, employers will be required to disclose information about how investment allocation decisions are made, the fair value of each major category of plan assets and information about the inputs and valuation techniques used to develop the fair value measurements of plan assets. This FSP is effective for fiscal years ending after December 15, 2009. The Company does not expect the adoption of FSP FAS 132(R)-1 will have a material impact on its financial condition or results of operation.

In April 2009, the FASB issued FSP No. FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”). FSP FAS 157-4 provides guidance on estimating fair value when market activity has decreased and on identifying transactions that are not orderly. Additionally, entities are required to disclose in interim and annual periods the inputs and valuation techniques used to measure fair value. This FSP is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP FAS 157-4 will have a material impact on its financial condition or results of operation.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

This item in not applicable as we are currently considered a smaller reporting company.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Principal Financial Officer, Mr. Steve Nickolas, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on that evaluation, Mr. Nickolas concluded that our disclosure controls and procedures are effective in timely alerting him to material information relating to us required to be included in our periodic SEC filings and in ensuring that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow for timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.

PART II--OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

Item 1A. Risk Factors

We are a development stage company organized in May 2008 and have recently commenced operations, which makes an evaluation of us extremely difficult. At this stage of our business operations, even with our good faith efforts, we may never become profitable or generate any significant amount of revenues, thus potential investors have a high probability of losing their investment.

We were incorporated in May of 2008 as a Nevada corporation. As a result of our start-up operations we have; (i) generated no revenues, (ii) accumulated deficits of $226,863 as of September 30, 2009, and (iii) we have incurred a net loss $97,986 for the nine month period ended September 30, 2009. We have been focused on organizational and start-up activities, business plan development, and commenced the development of our products since we incorporated. Although we have commenced the development of our enhanced bottle water product lines, there is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. Our future operating results will depend on many factors, including our ability to raise adequate working capital, demand for our products, the level of our competition and our ability to attract and maintain key management and employees.

We will require additional financing in order to implement our business plan. In the event we are unable to acquire additional financing, we may not be able to implement our business plan resulting in a loss of revenues and ultimately the loss of your investment.

Due to our very recent start-up nature, we will have to incur the costs of product development, production expenses, advertising, all which are intended to generate revenues from our products, in addition to hiring new employees and commencing additional marketing activities for product sales and distribution. To fully implement our business plan we will require substantial additional funding. The recent direct public offering of $55,000, will only enable us to commence our product development, and will assist us in further developing our initial business operations, including the enhancement of product lines; however, will not be sufficient to allow us to expand our business meaningfully. Additionally, since the net offering proceeds have been earmarked for travel, accounting, legal, product development, and minimal working capital, we will not be capitalized sufficiently to hire or pay employees.

Following this offering we will need to raise additional funds to expand our operations. We plan to raise additional funds through private placements, registered offerings, debt financing or other sources to maintain and expand our operations. Adequate funds for this purpose on terms favorable to us may not be available, and if available, on terms significantly more adverse to us than are manageable. Without new funding, we may be only partially successful or completely unsuccessful in implementing our business plan, and our stockholders will lose part or all of their investment.

Our auditor’s have substantial doubt about our ability to continue as a going concern. Additionally, our auditor’s report reflects that the ability of Northsight to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues.

Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our auditor’s report reflects that the ability of Northsight to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. If we are unable to continue as a going concern, investors will lose their investment. We will be required to seek additional capital to fund future growth and expansion. No assurance can be given that such financing will be available or, if available, that it will be on commercially favorable terms. Moreover, favorable financing may be dilutive to investors.

We are significantly dependent on our sole officer and director, Mr. Steve Nickolas. The loss or unavailability to Northsight of Mr. Nickolas’ services would have an adverse effect on our business, operations and prospects in that we may not be able to obtain new management under the same financial arrangements.

Our business plan is significantly dependent upon the abilities and continued participation of Steve Nickolas, our president. It would be difficult to replace Mr. Nickolas at such an early stage of development of Northsight. The loss by or unavailability to Northsight of Mr. Nickolas’ services would have an adverse effect on our business, operations and prospects, in that our inability to replace Mr. Nickolas could result in the loss of one’s investment. Additionally, our business plan is significantly dependent upon the abilities and continued participation of Mr. Nickolas’, which the loss or unavailability of Mr. Nickolas could materially impact our business operations.

There can be no assurance that we would be able to locate or employ personnel to replace Mr. Nickolas, should his services be discontinued. In the event that we are unable to locate or employ personnel to replace Mr. Nickolas, then we may be required to cease pursuing our business opportunity.

Mr. Nickolas has no experience in running a public company. The lack of experience in operating a public company could impact our return on investment, if any.

As a result of our reliance on Mr. Nickolas, and his lack of experience in operating a public company, our investors are at risk in losing their entire investment. Mr. Nickolas intends to hire personnel in the future, when sufficiently capitalized, who may have the experience required to manage our company; however, such management is not anticipated until the occurrence of future financing. Since the offering of $55,000 will not sufficiently capitalize our company, future offerings will be necessary to satisfy capital needs. Until such future offering occurs, and until such management is in place, we are reliant upon Mr. Nickolas to make the appropriate management decisions.

Mr. Nickolas may become involved with other businesses and there can be no assurance that he will continue to provide services to us. Mr. Nickolas’ limited time devotion to Northsight could have the effect on our operations of preventing us from being a successful business operation, which ultimately could cause a loss of your investment.

As compared to many other public companies, we do not have the depth of managerial or technical personnel. Mr. Nickolas is currently involved in other businesses, which have not, and are not expected in the future to interfere with Mr. Nickolas’ ability to work on behalf of our company. Mr. Nickolas may in the future be involved with other businesses and there can be no assurance that he will continue to provide services to us. Mr. Nickolas will devote only a portion of his time to our activities.

As a result of Mr. Nickolas’ majority ownership of our outstanding common shares even after the offering of $55,000, Mr. Nickolas will control our issuance of securities.

Mr. Nickolas owns approximately 54% of our outstanding common shares after the completion of the $55,000 direct public offering. As a consequence of Mr. Nickolas’ controlling stock ownership position, acting alone he will be able to authorize the issuance of securities that may dilute and otherwise adversely affect the rights of purchasers of stock in the offering, including preferred stock. Additionally, he may authorize the issuance of securities to anyone he wishes, including himself and his affiliates at prices significantly less than the offering price.

As a consequence of his stock ownership position, Mr. Nickolas retains the ability to elect a majority of our board of directors, and thereby control our management. These individuals will also initially have the ability to control the outcome of corporate actions requiring stockholder approval, including mergers and other changes of corporate control, going private transactions, and other extraordinary transactions. The concentration of ownership by these individuals could discourage investments in our company, or prevent a potential takeover of our company which will have a negative impact on the value of our securities.

Because of competitive pressures from competitors with more resources, Northsight may fail to implement its business model profitably.

The business of developing bottled water product lines is highly fragmented and extremely competitive. There are numerous competitors offering similar products. The market for customers is intensely competitive and such competition is expected to continue to increase. There are no substantial barriers to entry in this market and we believe that our ability to compete depends upon many factors within and beyond our control, including the timing and market acceptance of enhanced water products developed by us, our competitors, and their advisors.

Many of our existing and potential competitors have longer operating histories in the beverage markets, greater name recognition, larger customer bases, established product lines, and significantly greater financial, technical and marketing resources than we do. As a result, they will be able to respond more quickly to new or emerging advertising techniques, and changes in customer demands, or to devote greater resources to the development, promotion and marketing of their products than we can. Such competitors are able to undertake more extensive marketing campaigns for their products, adopt more aggressive pricing policies and make more attractive offers to potential store outlets, and strategic distribution partners.

We anticipate that our sales, if and when they begin, will be affected by seasonality.

The beverage industry generally experiences its highest sales by volume during the spring and summer months and its lowest sales by volume during winter months. As a result, our working capital requirements and cash flow may vary substantially throughout the year. Consumer demand for our products may be affected by weather conditions. Cool, wet spring or summer weather could result in decreased sales of our products and could have an adverse effect on our financial position. Additionally, due to the seasonality of the industry, results from any one or more quarters may not necessarily indicative of annual results of continuing trends.

Risks Relating To Our Common Stock

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board, which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Companies trading on the OTC Bulletin Board, such as us, generally must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. More specifically, FINRA has enacted Rule 6530, which determines eligibility of issuers quoted on the OTC Bulletin Board by requiring an issuer to be current in its filings with the Commission. Pursuant to Rule 6530(e), if we file our reports late with the Commission three times in a two-year period or our securities are removed from the OTC Bulletin Board for failure to timely file twice in a two-year period, then we will be ineligible for quotation on the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Because our common stock is deemed a low-priced “Penny” stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment even if and when a market develops for the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

·	Deliver to the customer, and obtain a written receipt for, a disclosure document;
·	Disclose certain price information about the stock;
·	Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;
·	Send monthly statements to customers with market and price information about the penny stock; and
·	In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

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

Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

We have a limited number of personnel that are required to perform various roles and duties as well as be responsible for monitoring and ensuring compliance with our internal control procedures. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.

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

There were no issuances during the quarter ended September 30, 2009.

Issuer Purchases of Equity Securities

We did not repurchase any of our securities during the quarter ended September 30, 2009.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

We did not submit any matters to a vote of our security holders during the quarter ended September 30, 2009.

Item 5.Other Information.

None.

Item 6. Exhibits.

			Incorporated by reference
Exhibit Number	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
3(i)(a)	Articles of Incorporation of Northsight		S-1		3(i)(a)	07/11/08
3(ii)(a)	Bylaws of the Northsight		S-1		3(ii)(a)	07/11/08
4	Instrument defining the rights of security holders: (a) Articles of Incorporation (b) Bylaws (c) Stock Certificate Specimen		S-1		4	07/11/08
10.1	Subscription Agreement		S-1		10.1	07/11/08
31	Certification pursuant to Section 302 of the Sarbanes-Oxley Act	X
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act	X

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.

NORTHSIGHT CAPITAL, INC

(Registrant)

By: /S/ Steve Nickolas

Steve Nickolas, President

(On behalf of the registrant and as

principal financial officer)

Date: November 23, 2009

Attached files

NORTHSIGHT CAPITAL, INC. Reports

Also read