Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 December 31, 2009
[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from ______________ to _____________
Commission File Number: 333-125068
Northern Explorations, Ltd.
(Exact name of registrant as specified in its charter)
Nevada 26-3633813
(State of incorporation) (IRS Employer ID Number)
9002 Green Oaks Circle, 2nd Floor, Dallas, Texas 75243-7212
(Address of principal executive offices)
(866) 570-9822
(Issuer's telephone number)
Copies of all communications including all communications sent to the agent for
service of process should be sent to:
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.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
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act): YES [ ] NO [X]
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: February 12, 2010: 99,720,000
NORTHERN EXPLORATIONS, LTD.
Form 10-Q for the Quarter ended December 31, 2009
Table of Contents
Page
----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements 3
Item 2 - Management's Discussion and Analysis or Plan of Operation 14
Item 3 - Quantitative and Qualitative Disclosures about Market Risk 17
Item 4 - Controls and Procedures 17
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 18
Item 1A - Risk Factors 19
Item 2 - Recent Sales of Unregistered Securities and Use of Proceeds 19
Item 3 - Defaults upon Senior Securities 19
Item 4 - Submission of Matters to a Vote of Security Holders 19
Item 5 - Other Information 19
Item 6 - Exhibits 19
SIGNATURES 20
2
PART I
ITEM 1 - FINANCIAL STATEMENTS
NORTHERN EXPLORATIONS, LTD.
(A development stage company)
BALANCE SHEETS
As of December 31, 2009 and March 31, 2009
(Unaudited) (Audited)
December 31, March 31,
2009 2009
--------- ---------
ASSETS
CURRENT ASSETS
Cash on hand and in bank $ -- $ 620
--------- ---------
TOTAL CURRENT ASSETS -- 620
--------- ---------
TOTAL ASSETS $ -- $ 620
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable - trade $ 26,949 $ 18,670
Other accrued liabilities 155,946 53,928
Bank overdraft payable -- --
Loans from related party and other 280,240 98,500
--------- ---------
TOTAL LIABILITIES 463,135 171,098
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock - $0.001 par value
150,000,000 shares authorized. 99,720,000 shares issued and
outstanding, as of December 31, 2009 and March 31, 2009, respectively 99,720 99,720
Additional paid-in capital (67,720) (67,720)
Deficit accumulated during development stage (495,135) (202,478)
--------- ---------
TOTAL STOCKHOLDERS' DEFICIT (463,135) (170,478)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ -- $ 620
========= =========
See accompanying notes to condensed financial statements.
3
NORTHERN EXPLORATIONS, LTD.
(A development stage company)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Three months and nine months ended December 31, 2009 and 2008 and
Period from November 17, 2004 (date of inception) through December 31, 2009
(Unaudited)
Period from
November 17, 2004
Three months Three months Nine months Nine months (date of inception)
ended ended ended ended through
December 31, December 31, December 31, December 31, December 31,
2009 2008 2009 2008 2009
------------ ------------ ------------ ------------ ------------
REVENUES $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES
General and administrative expenses 12,390 17,672 292,657 31,685 495,135
------------ ------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 12,390 17,672 292,657 31,685 495,135
------------ ------------ ------------ ------------ ------------
INCOME FROM OPERATIONS (12,390) (17,672) (292,657) (31,685) (495,135)
PROVISION FOR INCOME TAXES -- -- -- -- --
------------ ------------ ------------ ------------ ------------
NET LOSS (12,390) (17,672) (292,657) (31,685) (495,135)
OTHER COMPREHENSIVE INCOME -- -- -- -- --
------------ ------------ ------------ ------------ ------------
COMPREHENSIVE LOSS $ (12,390) $ (17,672) $ (292,657) $ (31,685) $ (495,135)
============ ============ ============ ============ ============
Loss per weighted-average share of
common stock outstanding, computed
on net loss - basic and fully diluted nil nil nil nil
============ ============ ============ ============
Weighted-average number of shares of
common stock outstanding - basic and
fully diluted 99,720,000 99,720,000 99,720,000 99,720,000
============ ============ ============ ============
See accompanying notes to condensed financial statements.
4
NORTHERN EXPLORATIONS, LTD.
(A development stage company)
STATEMENTS OF CASH FLOWS
Nine months ended December 31, 2009 and 2008 and
Period from November 17, 2004 (date of inception) through December 31, 2009
(Unaudited)
Period from
November 17, 2004
Nine months Nine months (date of inception)
ended ended through
December 31, December 31, December 31,
2009 2008 2009
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $(292,657) $ (31,685) $(495,135)
Adjustments to reconcile net loss to net
cash provided by operating activities
Increase in accounts payable and other
accrued liabilities 110,297 1,037 182,895
--------- --------- ---------
NET CASH USED IN OPERATING ACTIVITIES (182,360) (30,648) (312,240)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -- -- --
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on loan from related party 181,740 30,500 280,240
Sale of common stock -- -- 32,000
--------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 181,740 30,500 312,240
--------- --------- ---------
INCREASE (DECREASE) IN CASH (620) (148) --
Cash at beginning of period 620 270 --
--------- --------- ---------
CASH AT END OF PERIOD $ -- $ 122 $ --
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF INTEREST AND INCOME TAXES PAID
Interest paid during the period $ -- $ -- $ --
========= ========= =========
Income taxes paid during the period $ -- $ -- $ --
========= ========= =========
See accompanying notes to condensed financial statements.
5
NORTHERN EXPLORATIONS, LTD.
(A development stage company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE A - BACKGROUND AND DESCRIPTION OF BUSINESS
Northern Explorations, Ltd. (Company) was incorporated under the laws of the
State of Nevada on November 17, 2004 and has been engaged in the business of
exploration of natural resource properties in the United States since its
inception.
On March 30, 2009, our Board of Directors approved the filing with the Nevada
Secretary of State an amendment to our Articles of Incorporation to change the
corporate name from "Northern Explorations, Ltd." to "Clean Gen Corporation" to
better reflect the inclusion of anticipated additional business operations
involving clean energy alternatives. On May 12, 2009, an amendment was filed
with the Nevada Secretary of State changing our name to "Clean Gen
Corporation.." On June 8, 2009, our Board of Directors approved the filing with
the Nevada Secretary of State an amendment to our Articles of Incorporation to
change the corporate name back to "Northern Explorations, Ltd." based upon an
analysis that substantially all of the business operations would remain as a
natural resources exploration company. On June 25, 2009, an amendment was filed
with the Nevada Secretary of State changing our name back to "Northern
Explorations, Ltd."
The Company has never generated revenues or fully implemented its business plan
and is considered a "Development Stage Company" as defined by Statement of
Financial Accounting Standard ("SFAS") No. 7.
NOTE B - PREPARATION OF FINANCIAL STATEMENTS
FINANCIAL STATEMENT PREPARATION
The unaudited financial statements have been prepared by Northern Explorations,
Ltd. according to the rules and regulations of the Securities and Exchange
Commission (SEC) and, therefore, certain information and disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been omitted.
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements for the periods presented reflect all adjustments, which
are normal and recurring, necessary to fairly state the financial position,
results of operations and cash flows. These unaudited condensed consolidated
financial statements should be read in conjunction with the audited financial
statements included in our Annual Report on Form 10-K for the fiscal year ended
March 31, 2009 filed with the SEC on June 29, 2009.
BASIS OF ACCOUNTING
The Company's policy is to use the accrual method of accounting and to prepare
and present the consolidated financial statements in accordance with accounting
principles generally accepted in the United States.
ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE C - GOING CONCERN UNCERTAINTY
The Company has no operating history, limited cash on hand, no assets and a
business plan with inherent risk. The Company has incurred losses since
inception resulting in an accumulated deficit of $495,135 since inception and
further losses are anticipated in the development of its business plan. Because
of these factors, the Company's auditors issued an audit opinion on the
Company's financial statements which includes a statement describing our going
concern status. This means, in the auditor's opinion, substantial doubt about
our ability to continue as a going concern exists at the date of their opinion.
6
The Company's ultimate existence is dependent upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis. Further, the Company faces considerable risk in its business plan
and a potential shortfall of funding due to our inability to raise capital in
the equity securities market. If no additional operating capital is received
during the next twelve months, the Company will be forced to rely on existing
cash in the bank and additional funds loaned by management and/or significant
stockholders.
The Company anticipates offering future sales of equity securities. However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional equity securities or, that such funding, if
available, will be obtained on terms favorable to or affordable by the Company.
The Company's Certificate of Incorporation authorizes the issuance of up to
150,000,000 shares of common stock and no shares of preferred stock. The
Company's inability to issue preferred stock may limit the Company's ability to
obtain debt or equity financing as well as impede potential takeover of the
Company, which takeover may be in the best interest of stockholders.
In the event that insufficient working capital to maintain the corporate entity
and implement our business plan is not available, the Company's controlling
stockholders may have to maintain the corporate status of the Company and
provide all necessary working capital support on the Company's behalf. However,
no formal commitments or arrangements to advance or loan funds to the Company or
repay any such advances or loans exist. There is no legal obligation for the
Company's significant stockholders to provide additional future funding.
Further, the Company is at the mercy of future economic trends and business
operations for the Company's controlling stockholders to have the resources
available to support the Company. At the current time, it is uncertain if the
Company's controlling stockholders will provide additional resources to support
the corporate entity and satisfy existing debts and obligations.
In such a restricted cash flow scenario, the Company would be unable to complete
its business plan steps, and would, instead, delay all cash intensive
activities. Without necessary cash flow, the Company may become dormant during
the next twelve months, or until such time as necessary funds could be raised in
the equity securities market.
While the Company is of the opinion that good faith estimates of the Company's
ability to secure additional capital in the future to reach its goals have been
made, there is no guarantee that the Company will receive sufficient funding to
sustain operations or implement any future business plan steps.
NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. CASH AND CASH EQUIVALENTS
The Company considers all cash on hand and in banks, certificates of
deposit and other highly-liquid investments with maturities of three months
or less, when purchased, to be cash and cash equivalents.
2. ORGANIZATION AND FORMATION COSTS
The Company has adopted the provisions of AICPA Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities" whereby all costs incurred
with the incorporation and organization of the Company were charged to
operations as incurred.
3. MINERAL PROPERTY COSTS
Mineral property acquisition and exploration costs are charged to
operations as incurred. When it has been determined that a property can be
economically developed as a result of establishing proven and probable
reserves, the costs incurred to develop such property, are capitalized.
Such costs will be amortized using the units-of-production method over the
estimated life of the probable reserve.
7
4. ENVIRONMENTAL COSTS
Environmental expenditures that relate to current operations are charged to
operations or capitalized as appropriate. Expenditures that relate to an
existing condition caused by past operations, and which do not contribute
to current or future revenue generation, are charged to operations.
Liabilities are recorded when environmental assessments and/or remedial
efforts are probable, and the cost can be reasonably estimated. Generally,
the timing of these accruals coincides with the earlier of completion of a
feasibility study or the Company's commitments to plan of action based on
the then known facts.
5. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes, using
enacted tax rates in effect for the year in which the differences are
expected to reverse. Valuation allowances are established, when necessary,
to reduce deferred tax assets to the amount expected to be realized.
Effective January 1, 2008, the Company adopted FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes (FIN48). FIN48 prescribes a
more-likely-than-not threshold for financial statement recognition and
measurement of a tax position taken or expected to be taken in a return.
The adoption of this interpretation did not have a material impact on our
financial statements.
6. INCOME (LOSS) PER SHARE
Basic income (loss) per share excludes dilution and is computed by dividing
income (loss) by the weighted average number of common shares outstanding
during the reported periods. Diluted income (loss) per share reflects the
potential dilution that could occur if stock options and other commitments
to issue common stock were exercised.
Diluted income (loss) per share reflects the potential dilution that could
occur from the following items:
* Convertible debentures where the effect of those securities are
dilutive;
* Dilutive stock options; and
* Dilutive common stock warrants.
As the Company has incurred losses, since it has none of the above it has
not needed to exclude shares related to convertible debentures, stock
options or warrants from its calculation of diluted net loss per share, as
most likely the effect of their inclusion would be anti-dilutive if so
issued.
7. NEW ACCOUNTING PRONOUNCEMENTS
In June 2009, the FASB issued Accounting Standards Update ("ASU") No.
2009-01, Topic 105 - Generally Accepted Accounting Principles - amendments
based on Statement of Financial Accounting Standards No. 168, The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles. This ASU reflected the issuance of FASB Statement
No. 168. This Accounting Standards Update amends the FASB Accounting
Standards Codification for the issuance of FASB Statement No. 168, The FASB
Accounting Standards CodificationTM and the Hierarchy of Generally Accepted
Accounting Principles. This Accounting Standards Update includes Statement
168 in its entirety, including the accounting standards update instructions
contained in Appendix B of the Statement. The Codification does not change
current U.S. GAAP, but is intended to simplify user access to all
authoritative U.S. GAAP by providing all the authoritative literature
related to a particular topic in one place. The Codification is effective
for interim and annual periods ending after December 15, 2009, and as of
the effective date, all existing accounting standard documents will be
superseded. The Codification is effective for us in the second quarter of
2009, and accordingly, our Quarterly Report on Form 10-Q for the quarter
ending December 31, 2009 and all subsequent public filings will reference
the Codification as the sole source of authoritative literature.
8
In June 2009, the FASB issued Accounting Standards Update No. 2009-02,
Omnibus Update-Amendments to Various Topics for Technical Corrections. This
omnibus ASU detailed amendments to various topics for technical
corrections. The adoption of ASU 2009-02 will not have a material impact on
our condensed financial statements.
In August 2009, the FASB issued Accounting Standards Update No. 2009-03,
SEC Update - Amendments to Various Topics Containing SEC Staff Accounting
Bulletins. This ASU updated cross-references to Codification text. The
adoption of ASU 2009-03 will not have a material impact on our condensed
financial statements.
In August 2009, the FASB issued Accounting Standards Update No. 2009-04,
Accounting for Redeemable Equity Instruments - Amendment to Section
480-10-S99. This ASU represents an update to Section 480-10-S99,
Distinguishing Liabilities from Equity, per Emerging Issues Task Force
Topic D-98, "Classification and Measurement of Redeemable Securities." The
adoption of ASU 2009-04 will not have a material impact on our condensed
financial statements.
In August 2009, the FASB issued Accounting Standards Update No. 2009-05,
Fair Value Measurements and Disclosures (Topic 820) - Measuring Liabilities
at Fair Value. This Accounting Standards Update amends Subtopic 820-10,
Fair Value Measurements and Disclosures > Overall, to provide guidance on
the fair value measurement of liabilities. The adoption of ASU 2009-05 is
not expected to have a material impact on our condensed financial
statements.
In September 2009, the FASB issued Accounting Standards Update No. 2009-06,
Implementation Guidance on Accounting for Uncertainty in Income Taxes and
Disclosure Amendments for Nonpublic Entities. This Accounting Standards
Update provides additional implementation guidance on accounting for
uncertainty in income taxes and eliminates the disclosures required by
paragraph 740-10-50-15(a) through (b) for nonpublic entities. The adoption
of ASU 2009-06 will not have material impact on our condensed financial
statements.
In September 2009, the FASB issued Accounting Standards Update No. 2009-07,
Technical Corrections to SEC Paragraphs. This Accounting Standards Update
corrected SEC paragraphs in response to comment letters. The adoption of
ASU 2009-07 will not have material impact on our condensed financial
statements.
In September 2009, the FASB issued Accounting Standards Update No. 2009-08,
Earnings Per Share Amendments to Section 260-10-S99. This Codification
Update represents technical corrections to Topic 260-10-S99, Earnings per
Share, based on EITF Topic D-53, Computation of Earnings Per Share for a
Period that Includes a Redemption or an Induced Conversion of a Portion of
a Class of Preferred Stock and EITF Topic D-42, The Effect of the
Calculation of Earnings per Share for the Redemption or Induced Conversion
of Preferred Stock. The adoption of ASU 2009-08 will not have material
impact on our condensed financial statements.
In September 2009, the FASB issued Accounting Standards Update No. 2009-09,
Accounting for Investments-Equity Method and Joint Ventures and Accounting
for Equity-Based Payments to Non-Employees. This Accounting Standards
Update represents a correction to Section 323-10-S99-4, Accounting by an
Investor for Stock-Based Compensation Granted to Employees of an Equity
Method Investee. Section 323-10-S99-4 was originally entered into the
Codification incorrectly. The adoption of ASU 2009-09 will not have
material impact on our condensed financial statements.
In September 2009, the FASB issued Accounting Standards Update No. 2009-10,
Financial Services-Brokers and Dealers: Investments-Other, Amendment to
Subtopic 940-325. This Accounting Standards Update codifies the Observer
comment in paragraph 17 of EITF 02-3, Issues Involved in Accounting for
Derivative Contracts Held for Trading Purposes and Contracts Involved in
Energy Trading and Risk Management. The adoption of ASU 2009-10 will not
have material impact on our condensed financial statements.
9
In September 2009, the FASB issued Accounting Standards Update No. 2009-11,
Extractive Activities-Oil and Gas, Amendment to Section 932-10-S99. This
Accounting Standards Update represents a technical correction to the SEC
Observer comment in EITF 90-22, Accounting for Gas-Balancing Arrangements.
The adoption of ASU 2009-11 will not have material impact on our condensed
financial statements.
In September 2009, the FASB issued Accounting Standards Update No. 2009-12,
Fair Value Measurements and Disclosures (Topic 820), Investments in Certain
Entities that Calculate Net Asset Value per Share (or Its Equivalent) .
This Accounting Standards Update amends Subtopic 820-10, Fair Value
Measurements and Disclosures > Overall, to provide guidance on the fair
value measurement of investments in certain entities that calculate net
asset value per share (or its equivalent). The adoption of ASU 2009-12 will
not have material impact on our condensed financial statements.
In June 2009, FASB issued Statement of Financial Accounting Standard
("SFAS") No. 168, "The FASB Accounting Standards Codification(TM) and the
Hierarchy of Generally Accepted Accounting Principles--a replacement of
FASB Statement No. 162." Codification will become the source of
authoritative U.S. generally accepted accounting principles (GAAP)
recognized by the FASB to be applied by nongovernmental entities. Rules and
interpretive releases of the Securities and Exchange Commission (SEC) under
authority of federal securities laws are also sources of authoritative GAAP
for SEC registrants. The Codification will supersede all then-existing
non-SEC accounting and reporting standards and all other nongrandfathered
non-SEC accounting literature not included in the Codification will become
nonauthoritative. This statement is effective for financial statements
issued for interim and annual periods ending after September 15, 2009. The
Company will adopt this guidance in the interim period beginning January 1,
2010 and it is not expected to have a material impact on the Company's
condensed consolidated financial results.
In May 2009, FASB issued SFAS No. 165, "Subsequent Events." This Statement
establishes general standards of accounting for and disclosures of events
that occur after the balance sheet date but before financial statements are
issued or are available to be issued. It defines subsequent events and also
requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date. This Statement is effective
for interim and annual periods ending after June 15, 2009. The Company has
adopted this guidance in the interim period beginning April 1, 2009 and has
included all necessary disclosures.
In December 2007, FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements--an amendment of ARB No. 51," which
impacts the accounting for noncontrolling interest in the consolidated
financial statements of filers. The statement requires the reclassification
of noncontrolling interest from the liabilities section or the mezzanine
section between liabilities and equity to the equity section of the balance
sheet. The statement also requires that the results from operations
attributed to the noncontrolling interest to be disclosed separately from
those of the parent, in addition to the change in accounting and reporting
requirement for deconsolidated subsidiaries. The Company has adopted this
guidance in the year beginning April 1, 2009 without material impact.
FASB Statement No. 157 (FAS 157), "Fair Value Measurements," issued in
September 2006, defines fair value, establishes a framework for measuring
fair value and expands disclosures about assets and liabilities measured at
fair value in the financial statements. In February 2008, the FASB issued
FASB Staff Position 157-2 (FSP 157-2) which allows for the delay of the
effective date of FAS 157 for one year for all nonfinancial assets and
liabilities, except those that are recognized or disclosed at fair value in
the financial statements on a recurring basis. The Company adopted FAS 157
for financial assets and liabilities effective January 1, 2008 but elected
a partial deferral under the provision of FSP 157-2 related to nonfinancial
assets and liabilities that are measured at fair value on a nonrecurring
basis, including goodwill, wireless licenses, other intangible and
long-lived assets, guarantees and asset retirement obligations. The Company
has adopted this guidance in the year beginning April 1, 2009 without
material impact.
10
In December 2007, the FASB revised Statement No. 141 (FAS 141R), "Business
Combinations," which establishes principles and requirements for how the
acquirer in a business combination (i) recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities
assumed and any noncontrolling interest in the acquiree, (ii) recognizes
and measures the goodwill acquired in the business combination or a gain
from a bargain purchase and (iii) determines what information to disclose
to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. FAS 141R will be effective
for the Company's fiscal 2009 beginning April 1, 2009. The Company is in
the process of determining the effects, if any, the adoption of FAS 141R
will have on its consolidated financial statements.
In April 2009, the FASB issued FASB Staff Position FAS 115-2 and FAS 124-2
(FSP 115-2 and 124-2), "Recognition and Presentation of
Other-Than-Temporary Impairments," which amends the existing guidance on
determining whether an impairment is other-than-temporary for investments
in debt securities. In addition, the FASB issued FASB Staff Position FAS
157-4 (FSP 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," which provides additional
guidance on determining the fair value of financial assets in an inactive
market or when a distressed transaction is present. FSP 115-2 and 124-2 and
FSP 157-4 will be effective for the Company's third quarter of fiscal 2009,
as the Company has not elected to early adopt either FSP. The Company has
adopted this guidance in the year beginning April 1, 2009 without material
impact.
8. SUBSEQUENT EVENTS
In May 2009, FASB issued SFAS No. 165, "Subsequent Events." This Statement
establishes general standards of accounting for and disclosures of events
that occur after the balance sheet date but before financial statements are
issued or are available to be issued. It defines subsequent events and also
requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date. This Statement is effective
for interim and annual periods ending after June 15, 2009. The Company
adopted SFAS No. 165 for the quarter ended June 30, 2009, and have
evaluated subsequent events through February 16, 2010.
NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
Interest rate risk is the risk that the Company's earnings are subject to
fluctuations in interest rates on either investments or on debt and is fully
dependent upon the volatility of these rates. The Company does not use
derivative instruments to moderate its exposure to interest rate risk, if any.
Financial risk is the risk that the Company's earnings are subject to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the volatility of these rates. The Company does not use derivative
instruments to moderate its exposure to financial risk, if any.
11
NOTE F - OPTION PURCHASE AGREEMENT
On July 14, 2009, the Company entered into a Farm-in Agreement with Dominus
Energy, A. G. (a corporation domiciled in Switzerland) by which we acquired ten
percentage points (10%) of Dominus' thirty-five percentage point (35%)
participatory interest in various specified oil and gas interests totaling 638
net acres in the Randall Island Prospect (the "Farm-in Agreement"). As a
condition precedent to the effectiveness of the Farm-in Agreement, the Company
was to be obligated to pay Dominus the amount of $475,000 to be memorialized in
a promissory note (the "Note") which would mature and become due and payable on
July 13, 2011. The Note was never executed by the Company and the obligation no
longer exists. Under Section 2 of the Farm-in Agreement, the Note was only
supposed to be payable by the Company in the event of "successful [test] well
completion.." In addition, Section 3 of the Farm-in Agreement provides other
contingencies to our payments under the Note, including the completion and
execution of assignment documents, all of which were conditions precedent to the
parties' obligations under both the Note and the Farm-in Agreement, which were
required to be waived or satisfied by the parties on or before August 15, 2009
or the Farm-In Agreement otherwise automatically would terminate without any
further action by the parties. The parties failed to waive or satisfy any of
these conditions contained in the Farm-in Agreement by August 15, 2009. As a
result, on August 16, 2009 the Farm-in Agreement and the Note automatically
terminated. A copy of the Farm-in Agreement was filed as Exhibit 2.1 to a
Current Report on Form 8-K filed by the Company on July 20, 2009, and is
expressly incorporated herein by reference.
On July 28, 2009, the Company entered into an Option Purchase Agreement (the
"Option Agreement") by which we acquired from Dominus an option to buy its
working interest in gas wells in the Adams-Baggett field in Crockett County,
Texas. Under the Option Agreement, Dominus and the Company effectively
terminated and released themselves from their prior acquisition agreement
announced in early June 2009. Under the Option Agreement, we may exercise our
option through October 31, 2009, and Dominus reserves for itself an overriding
royalty interest on all revenue generated by the project. A copy of this Option
Agreement was filed as Exhibit 10.1 to a Current Report on Form 8-K filed by the
Company on July 29, 2009, and is expressly incorporated herein by reference. The
Company on October 31, 2009 failed to exercise its option under the agreement
and therefore has let the Option Agreement lapse. The Company is currently not
pursuing other business opportunities with Dominus Energy A. G. or other energy
businesses at this time.
NOTE G - LOANS FROM RELATED PARTY AND OTHER
Since inception through the period ended December 31, 2009, a former director
and two shareholders of the Company, have advanced the Company aggregate funds
totaling approximately $280,240. The balances are unsecured and interest free
with no repayment terms.
NOTE H - INCOME TAXES
In June 2006, the FASB issued Interpretation No. 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes," an interpretation of SFAS 109, "Accounting for
Income Taxes." FIN 48 clarifies the accounting for uncertain tax positions. FIN
48 prescribes a comprehensive model for how companies should recognize, measure,
present and disclose in their financial statements uncertain tax positions taken
or expected to be taken on a tax return. Under FIN 48, tax benefits shall
initially be recognized in the financial statements when it is more likely than
not the position will be sustained upon examination by the tax authorities. Such
tax positions shall initially and subsequently be measured as the largest amount
of tax benefit that is greater than 50% likely of being realized upon ultimate
settlement with the tax authority, assuming full knowledge of the position and
all relevant facts. FIN 48 also revises disclosure requirements to include an
annual tabular rollforward of unrecognized tax benefits. The provisions of this
interpretation are required to be adopted for fiscal periods beginning after
December 15, 2006. The Company adopted this provision beginning January 1, 2007.
Net impact due to the adoption of FIN 48 was no decrease to retained earnings.
12
At December 31, 2009, the Company had approximately $495,000 of federal net
operating losses (NOL) carry forwards, respectively. It is more likely than
not that the Company will not fully realize certain federal or states' NOL's.
The federal and state NOL carry forwards begin to expire in 2019 and 2014,
respectively.
The realization of any future income tax benefits from the utilization of net
operating losses may be severely limited. Federal and state tax laws contain
complicated change of control provisions (generally when a more than 50 percent
ownership change occurs within a three-year period), which, if triggered, could
limit or eliminate the use of the Company's net operating loss carry-forwards.
NOTE I - CAPITAL STOCK TRANSACTIONS
On July 14, 2008, the Company authorized and approved a forward stock split of
six for one (6:1) of the total issued and outstanding shares of common stock.
This forward stock split increased issued and outstanding shares of common stock
from 5,540,000 to 33,240,000 shares of common stock.
On March 30, 2009, the Company authorized and approved a forward stock split of
three for one (3:1) of the total issued and outstanding shares of common stock.
This forward stock split increased issued and outstanding shares of common stock
from 33,240,000 to 99,720,000 shares of common stock. All share amounts have
been retroactively adjusted for all periods presented.
NOTE J - COMMITMENTS AND CONTINGENCIES
On February 5, 2009, the Company entered into a consulting agreement with
Capital Consulting, Inc. to provide financial consulting and managerial support
services to the Company. Mr. Mark Schaftlein, Capital Consulting, Inc.'s
controlling shareholder has been designated as the Company's Chief Executive
Officer in accordance with this agreement. In consideration for the services the
Company agreed to pay Capital Consulting, Inc. compensation of $10,000 per month
beginning February 2009 through July 2009 and $15,000 per month August 2009
through January 2010. Mr. Schaftlein resigned from his position as Chief
Executive Officer of the Company on August 24, 2009 thereby terminating his
agreement. The Company has recorded an outstanding obligation of $60,000 under
this agreement as of December 31, 2009.
On June 30, 2009, the Company entered into a consulting agreement with S. W.
Hatfield, CPA to provide financial consulting and managerial support services to
the Company. Mr. Scott Hatfield, S. W. Hatfield, CPA's principal, has been
designated as the Company's Chief Financial Officer in accordance with this
agreement. In consideration for the services the Company agreed to pay S. W.
Hatfield, CPA compensation of $3,000 per month beginning July 1, 2009 for a term
of 12 months. Mr. Hatfield resigned from his position as Chief Financial Officer
of the Company on August 24, 2009 thereby terminating his agreement. The Company
has recorded an outstanding obligation of $6,000 under this agreement as of
December 31, 2009.
On December 14, 2009 the Board of Directors retained the services of Mr. Kenneth
Yonika, CPA as interim Chief Executive Officer and Chief Financial Officer. Mr.
Yonika provides his services to the Company through a consulting agreement with
Pacific Crest Equity Partners, Inc. (Pacific Crest). In consideration for the
services the Company agreed to pay Pacific Crest compensation based on a formula
of equity and cash determined by the number of professional hours that Mr.
Yonika/Pacific Crest provides to the Company on a monthly basis. The Company as
of the date of this report has not paid any consideration to Pacific Crest. The
Company has recorded an outstanding obligation of $24,000 under this agreement
as of December 31, 2009.
13
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(1) FORWARD-LOOKING STATEMENTS
Any statements in this Quarterly Report on Form 10-Q about our expectations,
beliefs, plans, objectives, prospects, financial condition, assumptions or
future events or performance are not historical facts and are "forward-looking
statements" as that term is defined under the Federal Securities Laws. These
statements are often, but not always, made through the use of words or phrases
such as "believe," "anticipate," "should," "intend," "plan," "will," "expects,"
"estimates," "projects," "positioned," "strategy," "outlook," and similar words.
You should read statements that contain these types of words carefully. Such
forward-looking statements are subject to a number of risks, uncertainties and
other factors that could cause actual results to differ materially from what is
expressed or implied in such forward-looking statements. There may be events in
the future that we are not able to predict accurately or over which we have no
control. Potential risks and uncertainties include, but are not limited to,
those discussed below under "Risk Factors" and elsewhere in this Quarterly
Report as well as other risks and uncertainties detailed in our Annual Report on
Form 10-K, filed with the Securities and Exchange Commission on June 29, 2009.
We do not undertake any obligation to release publicly any revisions to such
forward-looking statements to reflect events or uncertainties after the date
hereof or to reflect the occurrence of unanticipated events.
(2) GENERAL
Northern Explorations, Ltd. was incorporated under the laws of the State of
Nevada on November 17, 2004 and has been engaged in the business of exploration
of natural resource properties in the United States since its inception. After
the effective date of our registration statement filed with the Securities and
Exchange Commission, we commenced trading on the Over-the-Counter Bulletin Board
under the symbol "NORT.OB." Currently our symbol on the Over-the-Counter
Bulletin Bulletin Board is "NXPN.OB."
Please note that throughout this Quarterly Report, and unless otherwise noted,
the words "we," "our," "us," the "Company," or "Northern Explorations," refers
to Northern Explorations Ltd.
(3) RESULTS OF OPERATIONS
THE THREE MONTHS ENDED DECEMBER 31, 2009 COMPARED TO THE THREE MONTHS ENDED
DECEMBER 31, 2008.
The Company has had no revenues for the three month periods ended December 31,
2009 and 2008.
General and administrative expenses for the respective three month periods ended
December 31, 2009 and 2008 were approximately $12,400 and $17,700. These
expenses relate directly to the maintenance of the corporate entity and
compliance with the filing requirements of the Securities Exchange Act of 1934,
as amended, including the payment of consulting fees for various financial,
management and oversight services. The Company may or may not experience
increases in expenses in future periods as the Company explores various options
for the implementation of its business plan. Further, it is anticipated that
future expenditure levels may increase as the Company intends to fully comply
with its periodic reporting requirements. The Company has identified some
limited options within its business niche, however they have not panned out to
be of any success.
Earnings per share for the respective three month periods ended December 31,
2009 and 2008, respectively, were nil, based on the adjusted weighted-average
shares issued and outstanding at the end of each respective period.
14
THE NINE MONTHS ENDED DECEMBER 31, 2009 COMPARED TO THE NINE MONTHS ENDED
DECEMBER 31, 2008.
The Company has had no revenues for the nine month periods ended December 31,
2009 and 2008 nor for the period from November 17, 2004 (date of inception)
through December 31, 2009.
General and administrative expenses for the respective nine month periods ended
December 31, 2009 and 2008 were approximately $292,700 and $31,700. These
expenses relate directly to the maintenance of the corporate entity and
compliance with the filing requirements of the Securities Exchange Act of 1934,
as amended, including the payment of consulting fees for various financial,
management and oversight services. The Company may or may not experience
increases in expenses in future periods as the Company explores various options
for the implementation of its business plan. Further, it is anticipated that
future expenditure levels may increase as the Company intends to fully comply
with its periodic reporting requirements. The Company has identified some
limited options within its business niche, however they have not panned out to
be of any success.
Earnings per share for the respective nine month periods ended December 31, 2009
and 2008, respectively, were nil, based on the adjusted weighted-average shares
issued and outstanding at the end of each respective period.
At December 31,2009 and March 31, 2009,the Company had a working capital deficit
of approximately $495,000 and $170,000, respectively.
In the event that insufficient working capital to maintain the corporate entity
and implement our business plan is not available, the Company's controlling
stockholders may have to maintain the corporate status of the Company and
provide all necessary working capital support on the Company's behalf. However,
no formal commitments or arrangements to advance or loan funds to the Company or
repay any such advances or loans exist. There is no legal obligation for the
Company's significant stockholders to provide additional future funding.
Further, the Company is at the mercy of future economic trends and business
operations for the Company are controlling stockholders to have the resources
available to support the Company. At the current time, it is uncertain if the
Company's controlling stockholders will provide additional resources to support
the corporate entity and satisfy existing debts and obligations.
The Company's need for working capital may change dramatically as a result of
any business acquisition or combination transaction. There can be no assurance
that the Company will identify any such business, product, technology or company
suitable for a business transaction in the future. Further, there can be no
assurance that the Company would be successful in consummating any acquisition
on favorable terms or that it will be able to profitably manage the business,
product, technology or company it acquires.
(3) PLAN OF BUSINESS
We are a natural resource exploration and production company engaged in the
exploration, acquisition and development of properties in the United States and
within North America.
During our fiscal year ended March 31, 2009, our primary activity and focus was
the consummation of the transaction with Dominus Energy AG (see our Annual
Report filed of Form 10-K on June 29, 2009) and reviewing potential
acquisitions in the natural resources sector.
On July 14, 2009, the Company entered into a Farm-in Agreement with Dominus
Energy, A. G. (a corporation domiciled in Switzerland) by which we acquired ten
percentage points (10%) of Dominus' thirty-five percentage point (35%)
participatory interest in various specified oil and gas interests totaling 638
net acres in the Randall Island Prospect (the "Farm-in Agreement"). As a
condition precedent to the effectiveness of the Farm-in Agreement, the Company
was to be obligated to pay Dominus the amount of $475,000 to be memorialized in
a promissory note (the "Note") which would mature and become due and payable on
15
July 13, 2011. The Note was never executed by the Company and the obligation no
longer exists. Under Section 2 of the Farm-in Agreement, the Note was only
payable by the Company in the event of "successful[test] well completion.." In
addition, Section 3 of the Farm-in Agreement provides other contingencies to our
payments under the Note, including the completion and execution of assignment
documents, all of which were conditions precedent to the parties' obligations
under both the Note and the Farm-in Agreement, which were required to be waived
or satisfied by the parties on or before August 15, 2009 or the Farm-In
Agreement otherwise automatically would terminate without any further action by
the parties. The parties failed to waive or satisfy any of these conditions
contained in the Farm-in Agreement by August 15, 2009. As a result, on August
16, 2009 the Farm-in Agreement and the Note automatically terminated. A copy of
the Farm-in Agreement was filed as Exhibit 2.1 to a Current Report on Form 8-K
filed by the Company on July 20, 2009, and is expressly incorporated herein by
reference.
On July 28, 2009, the Company entered into an Option Purchase Agreement (the
"Option Agreement") by which we acquired from Dominus an option to buy its
working interest in gas wells in the Adams-Baggett field in Crockett County,
Texas. Under the Option Agreement, Dominus and the Company effectively
terminated and released themselves from their prior acquisition agreement
announced in early June 2009. Under the Option Agreement, we may exercise our
option through October 31, 2009, and Dominus reserves for itself an overriding
royalty interest on all revenue generated by the project. A copy of this Option
Agreement was filed as Exhibit 10.1 to a Current Report on Form 8-K filed by the
Company on July 29, 2009, and is expressly incorporated herein by reference. The
Company on October 31, 2009 failed to exercise its option under the agreement
and therefore has let the Option Agreement lapse. The Company is currently not
pursuing other business opportunities with Dominus Energy A. G. or other energy
business at this time.
NEW LEASE ACQUISITION AND DEVELOPMENT
If mineral quality and quantities are not deemed sufficient from work to be
conducted on our potential leases during the first few months of operation,
additional land acquisitions will be assessed and obtained subject to adequate
capital resources being available and further sources of debt and equity being
obtained. The following outlines anticipated activities pursuant to this
option.
* Site preparation for entry including roadway upgrade and operations
site, design, review, and finalize testing procedures, arrange
equipment required.
* Run test tools,
* If mineral content not deemed conducive to production, target further
leases for exploration potential and obtain further funding to acquire
new development targets.
We will require significant additional funding to implement our proposed future
business activities.
Currently we do not expect to purchase any significant equipment or increase
significantly the number of our employees during the next twelve months. Our
current business strategy is to obtain resources under contract where possible
because management believes that this strategy, at its current level of
development, provides the best services available in the circumstances, leads to
lower overall costs, and provides the best flexibility for our business
operations.
(4) LIQUIDITY AND CAPITAL RESOURCES
The Company is in default under meeting various financial obligations related to
management and financial consulting support. Further, the Company is in default
on several oral agreements related to the payment of delinquent accounts
payable. Without proper attention, any or all of these agreements could leave
the Company vulnerable to a lack of management oversight, inability to obtain
operating supplies from vendors and/or potential litigation, including
involuntary bankruptcy proceedings.
In the event that insufficient working capital to maintain the corporate entity
and implement our business plan is not available, the Company's controlling
stockholders may have to maintain the corporate status of the Company and
16
provide all necessary working capital support on the Company's behalf. However,
no formal commitments or arrangements to advance or loan funds to the Company or
repay any such advances or loans exist. There is no legal obligation for the
Company's significant stockholders to provide additional funding.
Further, the Company is at the mercy of future economic trends and business
operations for the Company are controlling stockholders to have the resources
available to support the Company. At the current time, it is uncertain if the
Company's controlling stockholders will provide additional resources to support
the corporate entity and satisfy existing debts and obligations.
The Company has no current plans, proposals, arrangements or understandings with
respect to any other potential business transaction. Accordingly, there can be
no assurance that sufficient funds will be available to the Company to allow it
to cover the expenses related to such activities.
Regardless of whether the Company's cash assets prove to be inadequate to meet
the Company's operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.
(5) CRITICAL ACCOUNTING POLICIES
Our financial statements and related public financial information are based on
the application of accounting principles generally accepted in the United States
("GAAP"). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenue and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
Our significant accounting policies are summarized in Note D of our financial
statements. While all these significant accounting policies impact our financial
condition and results of operations, we view certain of these policies as
critical. Policies determined to be critical are those policies that have the
most significant impact on our financial statements and require management to
use a greater degree of judgment and estimates. Actual results may differ from
those estimates. Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or
estimate methodologies would cause effect on our consolidated results of
operations, financial position or liquidity for the periods presented in this
report.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for smaller reporting companies.
ITEM 4 - CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
We maintain a system of disclosure controls and procedures designed to ensure
that information required to be disclosed in our reports filed or submitted
under the U.S. Securities Exchange Act of 1934, as amended (Exchange Act), is
recorded, processed, summarized and reported within the time periods specified
in the SEC rules and forms. These controls and procedures are also designed to
ensure that such information is accumulated and communicated to the Company's
management, including the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), as appropriate to allow timely decisions regarding required
disclosure. Internal controls are procedures designed to provide reasonable
assurance that: transactions are properly authorized; assets are safeguarded
against unauthorized or improper use; and transactions are properly recorded and
reported, to permit the preparation of our financial statements in conformity
with generally accepted accounting principles.
A control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the control system's objectives will be
met. Further, the design of a control system must reflect the fact that there
17
are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
errors or mistakes. Controls can also be circumvented by the individual acts of
some persons, by collusion of two or more people, or by management override of
the controls. The design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Over time, controls may become inadequate because of changes
in conditions or deterioration in the degree of compliance with its policies or
procedures. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected. We
continuously evaluate our internal controls and make changes to improve them as
necessary. Our intent is to maintain our disclosure controls as dynamic systems
that change as conditions warrant.
An evaluation was carried out, under the supervision of and with the
participation of our management, including our CEO and CFO, of the effectiveness
of the Company's disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period
covered by this report. Based upon the controls evaluation, our CEO and CFO have
concluded that, as of the end of the period covered by this Form 10-Q, the
Company's disclosure controls and procedures are effective to provide reasonable
assurance that information required to be disclosed in our Exchange Act reports
is recorded, processed, summarized and reported within the time periods
specified in the SEC rules and forms, and is accumulated and communicated to our
management, including our CEO and CFO, as appropriate to allow timely decisions
regarding required disclosure.
(b) Changes in Internal Controls
During the quarter ended June 30, 2009, a press release, unknown to prior
management and unapproved by prior management, was distributed to the general
public without the filing of a Current Report on Form 8-K or without compliance
with various fact checking protocols. Corrective action was taken by prior
management through the filing of a Current Report on Form 8-K on July 29, 2009.
There were no other significant changes (including corrective actions with
regard to significant deficiencies or material weaknesses) in our internal
controls over financial reporting that occurred during the quarter ended June
30, 2009 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
(c) Corrective Actions
Management has taken steps to assure that the Company's former as well as any
future investor relations firm issues no document. Only the Company's management
may issue press releases and that no press release may be issued without outside
legal counsel review for the need to concurrently file a Current Report on Form
8-K is assessed. Further, management has notified all potential sources for
press releases that only authorized corporate officers may issue any information
on the Company to the general public.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The Company is subject to other potential liabilities under government
regulations and various claims and legal actions that may be asserted. Matters
may arise in the ordinary course and conduct of the Company's business, as well
as through its acquisitions. Claim estimates that are probable and can be
reasonably estimated are reflected as liabilities of the Company. The ultimate
resolution of these matters is subject to many uncertainties. It is reasonably
possible that matters, which may be asserted, could ultimately be decided
unfavorably for the Company. Although the amount of liability at December 31,
2009, currently cannot be ascertained, the Company believes that any resulting
liability should not materially affect the Company's consolidated financial
statements.
18
ITEM 1A - RISK FACTORS
There are no material changes from risk factors disclosed in our Form 10-K for
the year ended March 31, 2009, as filed on June 29, 2009.
ITEM 2 - RECENT SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS ON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT
OF PRINCIPAL OFFICERS
RESIGNATIONS
Reference is made to a Current Report on Form 8-K filed on June 17, 2009 noting
that the Board of Directors accepted the resignation of David Naylor as a member
of the Board of Directors of the Company. On June 24, 2009, Mr. Naylor resigned
as the Company's Chief Financial Officer.
Reference is made to a Current Report on Form 8-K filed on August 27, 2009
noting that the Board of Directors accepted the resignations of Mssrs. Mark
Schaftlein, former Chief Executive Officer and Mr. Scott W. Hatfield, CPA,
former Chief Financial Officer, effective the 24th of August, 2009.
Reference is made to a Current Report on Form 8-K filed on November 4, 2009
noting that the Board of Directors accepted the resignation of Mr. Stephen Mohan
as a director, effective the 27th of October, 2009.
The Company accepted the resignations of Mr. Darrin Holman from the Board of
Directors and Mr. P. Andrew Jeschke from the office of Chief Operating Officer
of the Company.
INFORMATION STATEMENT UNDER SECTION 14(C) OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED
No reports required.
ITEM 6 - EXHIBITS
31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002 - Chief
Executive Officer
31.2 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002 - Chief
Financial Officer
32.1 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002 - Chief
Executive Officer
32.2 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002 - Chief
Financial Officer
(Signatures follow on next page)
19
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NORTHERN EXPLORATIONS, LTD.
Dated: February 22, 2010 /s/ KENNETH J. YONIKA
----------------------------------
Kenneth J. Yonika, CPA
Interim Chief Executive Officer
And Chief Financial Officer
2