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EX-32 - EX-32.1 SECTION 906 CERTIFICATION - Willow Creek Enterprises Inc.willowcreek10q113010ex321.htm
EX-31 - EX-31.1 SECTION 302 CERTIFICATION - Willow Creek Enterprises Inc.willowcreek10q113010ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 


FORM 10-Q

 

 X . QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended November 30, 2010


     . TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For the transition period from ______ to _______

 

Commission File Number: 000-52970

 

WILLOW CREEK ENTERPRISES, INC.

(Name of registrant as specified in its charter)

 

Delaware

 

27-3231761

(State of incorporation)

  

(I.R.S. Employer Identification No.)

 

7251 W. Lake Mead Blvd., Suite 300

Las Vegas, Nevada 89128

(Address of principal executive offices)

 

(310) 600-8757

 (Registrant’s telephone number)

 

with a copy to:


Carrillo, Huettel & Zouvas, LLP

3033 Fifth Ave. Suite 400

San Diego, CA 92103

Telephone (619) 546-6100

Facsimile: (619) 546-6060


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  X . No      .

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes      . No      . (Not required)


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


Large accelerated filer

      .

Accelerated filer

      .

Non-accelerated filer

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      . No  X .


As of December 31, 2010, there were 67,199,986 shares of the Registrant’s common stock issued and outstanding.





WILLOW CREEK ENTERPRISES, INC.*


TABLE OF CONTENTS


 

 

PAGE

PART I

FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)

4

ITEM 2.

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

12

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

15

ITEM 4.

CONTROLS AND PROCEDURES

15

PART II

OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS

16

ITEM 1.A.

RISK FACTORS

16

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

16

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

16

ITEM 4.

[REMOVED AND RESERVED]

16

ITEM 5.

OTHER INFORMATION

16

ITEM 6.

EXHIBITS

17




2



Special Note Regarding Forward-Looking Statements


Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Willow Creek Enterprises, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.


*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "Willow Creek" refers to Willow Creek Enterprises, Inc.



3



PART I: FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS


WILLOW CREEK ENTERPRISES, INC.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS


 

 

(Unaudited)

 

(Audited)

 

 

November 30, 2010

 

August 31, 2010

ASSETS

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

$

34,706

$

-

 

 

 

 

 

Total Current Assets

 

34,706

 

-

 

 

 

 

 

TOTAL ASSETS

$

34,706

$

-

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

Accounts payable & accrued liabilities

$

23,846

$

45,031

   Loans payable

 

20,460

 

21,635

   Subscription proceeds

 

151,224

 

-

TOTAL CURRENT LIABILITIES

 

195,530

 

66,666

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders’ (Deficit):

 

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares

authorized,  none issued and outstanding

 

-

 

-

Common stock, $0.001 par value, 300,000,000 shares

authorized, 67,199,986 shares issued and outstanding

 

67,200

 

167,200

Additional paid in capital

 

1,423,800

 

1,323,800

Deficit accumulated during the exploration stage

 

(1,651,824)

 

(1,557,666)

TOTAL STOCKHOLDERS’ (DEFICIT)

 

(160,824)

 

(66,666)

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

$

34,706

$

-




4



WILLOW CREEK ENTERPRISES, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS


 

 

For the three

months ended

 

For the three

months ended

 

For the Period

From January 16,

2007 (Inception) to

 

 

November 30, 2010

 

November 30, 2009

 

November 30, 2010

 

 

 

 

 

 

 

Revenues

$

-

$

-

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Professional fees

 

10,710

 

3,000

 

1,481,211

General and administrative

 

34,425

 

184

 

121,590

Mineral rights impairment

 

49,023

 

-

 

49,023

  Total operating expenses

 

94,158

 

3,184

 

1,651,824

 

 

 

 

 

 

 

Net loss before income taxes

 

(94,158)

 

(3,184)

 

(1,651,824)

 

 

 

 

 

 

 

Benefit for income taxes

 

-

 

-

 

-

 

 

 

 

 

 

 

Net loss

$

(94,158)

$

(3,184)

$

(1,651,824)

 

 

 

 

 

 

 

Weighted average number of shares outstanding

during the period - basic and diluted

 

136,835,541

 

165,199,986

 

136,835,541

 

 

 

 

 

 

 

Net loss per share - basic and diluted

$

(0)

$

(0)

$

(0)




5



WILLOW CREEK ENTERPRISES, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS


 

 

For the three

months ended

 

For the three

months ended

 

For the Period

From

January 16,

2007

(Inception) to

 

 

November 30,

2010

 

November 30,

2009

 

November 30,

2010

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

$

(94,158)

$

(3,184)

$

(1,651,824)

Adjustment to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

   Impairment loss

 

49,023

 

-

 

49,023

Changes in current assets and liabilities:

 

 

 

 

 

 

Issuance of common stock for services rendered

 

-

 

-

 

1,400,000

Accounts payable & accrued liabilities

 

(21,185)

 

3,151

 

23,846

Net cash used in operating activities

 

(66,320)

 

(33)

 

(178,955)

 

 

 

 

 

 

 

CASH FLOWS TO INVESTING ACTIVITIES:

 

 

 

 

 

 

   Mineral rights acquisition

 

(49,023)

 

-

 

(49,023)

           Net cash used by investing activities

 

(49,023)

 

-

 

(49,023)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

   Proceeds from subscriptions of common stock

 

151,224

 

-

 

242,224

   Proceeds from loans payable

 

(1,175)

 

-

 

20,460

         Net cash provided by financing activities

 

150,049

 

-

 

262,684

 

 

 

 

 

 

 

CHANGE IN CASH

 

34,706

 

(33)

 

34,706

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

-

 

330

 

-

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

34,706

$

296

$

34,706

 

 

 

 

 

 

 

SUPPLEMENTARY DISCLOSURE OF CASH FLOW

 

 

 

 

 

 

INFORMATION

 

 

 

 

 

 

Cash paid for income taxes

$

-

$

-

$

-

Cash paid for interest expense

$

-

$

-

$

-

SUPPLEMENTARY NON-CASH FINANCING AND

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

Share Issuance of common shares for services

$

-

$

-

$

1,400,000




6



WILLOW CREEK ENTERPRISES, INC.

(A Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For the period of January 16, 2007(inception)

through November 30, 2010



NOTE 1 - NATURE OF OPERATIONS


Willow Creek Enterprises, Inc. (Company) was incorporated in the State of Delaware on January 16, 2007.  The Company was organized to explore mineral properties.

 

NOTE 2 – GOING CONCERN


These financial statements are presented on the basis that the Company is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business over a reasonable length of time. As of November 30, 2010, the Company had $34,706 in cash, a working capital deficit of $160,824 and stockholders’ equity deficit of $111,801 and accumulated net losses of $1,602,801 since inception. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Its continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing or refinancing as may be required, to develop commercially viable mining reserves, and ultimately to establish profitable operations.


Management's plans for the continuation of the Company as a going concern include financing the Company's operations through issuance of its common stock. If the Company is unable to complete its financing requirements or achieve revenue as projected, it will then modify its expenditures and plan of operations to coincide with the actual financing completed and actual operating revenues. There are no assurances, however, with respect to the future success of these plans.  Unless otherwise indicated, amounts provided in these notes to the financial statements pertain to continuing operations. The Company is not currently earning any revenues.


Interim Reporting


 While the information presented in the accompanying interim three months financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. These interim financial statements follow the same accounting policies and methods of their application as the August 31, 2010 audited annual financial statements of Willow Creek Enterprises, Inc. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s audited August 31, 2010 annual financial statements.


Operating results for the three months ended November 30, 2010 are not necessarily indicative of the results that can be expected for the year ended August 31, 2011.


Basis of Presentation


These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in United States (US) dollars. The Company has not produced any revenue from its principal business and is an exploration stage company as defined by FASB ASC 915 “Accounting and Reporting by Development Stage Enterprises.”


The accompanying unaudited consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Item 310(b) of Regulation S-B. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the report on Form 10-K of Willow Creek Enterprises, Inc. for the year ended August 31, 2010. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended November 30, 2010 are not necessarily indicative of the results that should be expected for any interim period or the entire year. For further information, these consolidated financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended August 31, 2010 included in the Company’s report on Form 10-K



7



WILLOW CREEK ENTERPRISES, INC.

(A Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For the period of January 16, 2007(inception)

through November 30, 2010



Principles of Consolidation


The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Willow Creek Development, Inc. a company incorporated under the Company Act of Alberta on August 28, 2007.  All inter-company transactions have been eliminated.

 

Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of these financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Regulatory Matters


The Company and its mineral property interests are subject to a variety of Unitrd States and State regulations governing land use, health, safety and environmental matters. The Company’s management believes it has been in substantial compliance with all such regulations, and is unaware of any pending action or proceeding relating to regulatory matters that would affect the financial position of the Company.


Impaired Asset Policy


The Company periodically reviews its long-lived assets when applicable to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable, pursuant to guidance established in FASB ASC 360, "Accounting for the Impairment or Disposal of Long-lived Assets". The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by its assets to their respective carrying amounts. If impairment is deemed to exist, the assets will be written down to fair value.


Start-up Expenses


The Company has adopted FASB ASC 720 "Reporting the Costs of Start-up Activities," which requires that costs associated with start-up activities be expensed as incurred. Accordingly, start-up costs associated with the Company's formation have been included in the Company's general and administrative expenses for the period from inception on January 16, 2007 to November 30, 2010.


Mineral Property Costs


Mineral property acquisition, exploration and development costs are expenses as incurred until such time as economic reserves are quantified. From that time forward, the Company will capitalize all costs to the extent that future cash flows from mineral resources equal or exceed the costs deferred. The deferred costs will be amortized over the recoverable reserves when a property reaches commercial production. Costs related to site restoration programs will be accrued over the life of the project. To date, the Company has not established any proven reserves on its mineral properties.


Foreign Currency Translation


The Company’s functional currency is the Canadian dollar as substantially all of the Company’s operations are in Canada.  The Company used the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission (SEC) and in accordance with the FASB ASC 830 “Foreign Currency Matters.”


Assets and liabilities that are denominated in a foreign currency are translated at the exchange rate in effect at the year end and capital accounts are translated at historical rates.  Income statement accounts are translated at the average rates of exchange prevailing during the period.  Translation adjustments from the use of different exchange rates from period to period are included in the Comprehensive Income statement account in stockholders’ equity, if applicable.  There were no translation adjustments as of November 30, 2010.



8



WILLOW CREEK ENTERPRISES, INC.

(A Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For the period of January 16, 2007(inception)

through November 30, 2010



Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date.  If applicable, exchange gains and losses are included in other items on the consolidated statements of operations.   There were no exchange gains or losses as of November 30, 2010.


Cash and Cash Equivalents


The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  


Stock-Based Compensation


The Company accounts for stock options issued to employees in accordance with the provisions of FASB ASC 718, “Stock Compensation”.  As such, compensation cost is measured on the date of grant as the excess of current market price of the underlying stock over the exercise price.  Such compensation amounts are amortized over the respective vesting periods of the option grant.  The Company adopted the disclosure provisions of FASB ASC 718, “Accounting for Stock-Based Compensation,” and FASB ASC 718, which allows entities to provide pro forma net income (loss) and pro forma earnings (loss) per share disclosures for employee stock option grants as if the fair-valued based method has been applied.


The Company accounts for stock options or warrants issued to non-employees for goods or services in accordance with the fair value method of FASB ASC 718.  Under this method, the Company records an expense equal to the fair value of the options or warrants issued.  The fair value is computed using an options pricing model.


Basic and Diluted Loss Per Share


The Company computed basic and diluted loss per share amounts for November 30, 2010 pursuant to the FASB ASC 260, “Earnings per Share.”  There are no potentially dilutive shares outstanding; accordingly, dilutive and basic per share amounts are the same.


Fair Value of Financial Instruments


FASB ASC 820, “Disclosures about Fair Value of Financial Instruments,” (requires disclosures of information regarding the fair value of certain financial instruments for which it is practicable to estimate the value.  For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale of liquidation. The Company’s only financial instrument is cash. The fair value of cash approximates its carrying value due to the short maturities.


Comprehensive Loss


FASB ASC 220, “Reporting Comprehensive Income” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements.  As of November 30, 2010 the Company has no items that represent comprehensive loss and therefore, has not included a schedule of comprehensive loss in financial statements.  


Income Taxes


Income taxes are recognized in accordance with FASB ASC 740 "Accounting for Income Taxes", whereby deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized.


Recent Accounting Pronouncements


Recent accounting pronouncements that the Company has adopted or will be required to adopt in the future are summarized below.



9



WILLOW CREEK ENTERPRISES, INC.

(A Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For the period of January 16, 2007(inception)

through November 30, 2010



In February 2010, the FASB issued ASU 2010-09 which requires that an SEC filer, as defined, evaluate subsequent events through the date that the financial statements are issued. The update also removed the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. The adoption of this guidance on January 1, 2010 did not have a material effect on the Company’s consolidated financial statements.


In January 2010, the FASB has published ASU 2010-06 “Fair Value Measurements and Disclosures (Topic 820): - Improving Disclosures about Fair Value Measurements. ASU No. 2010-06 clarifies improve disclosure requirement related to fair value measurements and disclosures – Overall Subtopic (Subtopic 820-10) of the FASB Accounting Standards Codification.


The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosure about purchase, sales, issuances, and settlement in the roll forward of activity in Level 3 fair value measurements.  Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The amendments in this Update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis.  The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.  The adoption of this standard did not have an impact on the Company’s financial position and results of operations.  


In August 2009, the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10, “Fair Value Measurements and Disclosures—Overall”. The update provides clarification that in circumstances, in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update. The amendments in this ASU clarify that a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability and also clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements.


The guidance provided in this ASU is effective for the first reporting period, including interim periods, beginning after issuance.  The adoption of this standard did not have a material impact on the Company’s financial position and results of operations.


In June 2009, the Financial Accounting Standards Board issued Statement “FASB” issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 168”).  SFAS No. 168 will become the single source of authoritative nongovernmental U.S. generally accepted accounting principles (“GAAP”), superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), Emerging Issues Task Force (“EITF”), and related accounting literature.  SFAS No. 168 reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure.  Also included is relevant Securities and Exchange Commission guidance organized using the same topical structure in separate sections.  SFAS No. 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009.  This statement will have an impact on the Company’s financial statements since all future references to authoritative accounting literature will be references in accordance with SFAS No. 168.


There have been no significant changes or additions, as applicable to the Company, noted in the recently issued accounting pronouncements in the quarter ending November 30, 2010 that affects or may affect the Company’s interim financial statements.


NOTE 4 – MINERAL LEASES AND CLAIMS


On August 28, 2007, the Company acquired a 100% interest in numerous claims known as the Lori Mamquam Property and is located in the Vancouver Mining Division, British Columbia. The claims were purchased for $6,000 cash and have been included in general and administrative expenses. As of November 30, 2010 the company has not renewed these claims and has abandoned the property.


On October 9, 2010, the Company entered into that certain Minerals Lease and Agreement (the “Agreement") with MinQuest, Inc., a Nevada S Corporation ("MinQuest"), giving the Company the right to conduct mineral exploration activities on and in unpatented mining claims collectively known as Dolly Varden South (the“Property”), situated in Elko County, Nevada for a term of twenty (20) years (the “Term”) with the right to renew. As consideration, the Company shall pay ten thousand dollars ($10,000) upon execution of the Agreement, and an annual payment of ten thousand dollars ($10,000) for the remainder of the Term. Additionally, pursuant to the Agreement, the Company shall be granted the subsequent right to participate in the development of minerals from the Property subject to the terms and conditions of the Agreement.



10



WILLOW CREEK ENTERPRISES, INC.

(A Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For the period of January 16, 2007(inception)

through November 30, 2010



On November 17, 2010, the Company entered into a Minerals Lease and Agreement (the “Agreement") with MinQuest, Inc., a Nevada corporation ("MinQuest") whereby the Company acquired the right to conduct mineral exploration activities for a term of seven (7) years on various unpatented mining claims situated in Lyon County, Nevada collectively known as the Hercules Property. As consideration for the leased mineral rights the Company shall pay an aggregate of $290,000 over the term of the lease and shall provide $3,500,000 in work commitments over the term of the Agreement. Additionally, MinQuest is entitled to receive a 3% royalty from all mineral production derived from the exploration and development of the Hercules Property.


NOTE 5 – STOCKHOLDERS’ EQUITY


Between January 16, 2007 and August 31, 2007 the company received one subscription from the company’s sole officer and director totaling a cash proceeds of $5,000 and the issuance of 105,000,000 common shares.


Between January 16, 2007 and August 31, 2007 the company received subscriptions from 45 non affiliate shareholders, totaling cash proceeds of $86,000 and the issuance of 60,199,986 common shares.


On February 23, 2010 the Company completed a 21-1 forward split of the company’s issued and outstanding common shares, bringing the total of issued common shares to 165,199,986 from 7,866,666.


On August 10, 2010 the Company Issued 2,000,000 shares of restricted common stock to the Company’s new incoming President there was no cash consideration paid for these shares and have been valued at $0.70 the trading value on the day the agreement was entered at $1,400,000.


On September 21, 2010, Willow Creek Enterprises, Inc., a Delaware corporation , (the Company”) announced that it is in the process of completing a non-broker private placement, subject to market and other conditions, of $500,000 (the “Private Placement”). The Private Placement consists of 40 Units (“each unit”) offered at $12,500 per unit, with each Unit being comprised of 25,000 shares of the company’s common stock and common stock purchase warrant(for “2010 warrant”) for the purchase of 12,500 shares of the company’s common stock at $0.75 per share.


The Private Placement agreements contain standard representations, and warranties and affirmative and negative covenants.


On October 22, 2010 the Company retired a total of 100,000,000 common restricted shares owned by the Company’s former president.


As of November 30, 2011 the Company received a total of $151,224 as subscription proceeds for a private placement that was subsequently completed on December 16, 2010.


NOTE 6 - LOANS PAYABLE


As of November 30, 2010, the Company owed loans in the amount of $20,460 to an unrelated third party. The funds are non interest bearing, unsecured, and do not have any specific repayment terms.


NOTE 7 – SUBSEQUENT EVENTS


On December 16, 2010 the company completed a private placement for $250,000.


The Private Placement consists of up to 40 Units (“each unit”) offered at $12,500 per unit, with each Unit being comprised of 25,000 shares of the company’s common stock and common stock purchase warrant(for “2010 warrant”) for the purchase of 12,500 shares of the company’s common stock at $0.75 per share.



11





ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FORWARD-LOOKING STATEMENTS


This Management's Discussion and Analysis or Plan of Operation (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should specifically consider various factors, including the risk factors outlined below.  These factors may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.


RESULTS OF OPERATIONS


Working Capital


  

At November 30, 2010

At August 31, 2010

Current Assets

$                           34,706

$                                     -

Current Liabilities

$                         195,530

$                            66,666

Working Capital (Deficit)

$                       (160,824)

$                           (66,666)


Cash Flows


 

Three Months Ended

Three Months Ended

  

November 30, 2010

November 30, 2009

Cash Flows from (used in) Operating Activities

$                      (66,320)

$                            (3,184)

Cash Flows from (used in) Investing Activities

$                      (49,023)

 

Cash Flows from (used in) Financing Activities

$                      150,049

 -

Net Increase (decrease) in Cash During Period

$                        34,706

$                                 (33)


The decline in our working capital surplus at November 30, 2010 from the period ended November 30, 2009 is reflective of the current state of our business development, primarily due to the increase in our professional fees paid in connection with expenses associated with our continuing reporting obligations under the Securities and Exchange Act of 1934.


As of November 30, 2010, we had cash on hand of $34,706. Since our inception, we have used our common stock to raise money for our operations and for our property acquisitions. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation.


Operating Revenues


We have not generated any revenues since inception.


Operating Expenses and Net Loss


Operating expenses for the period ended November 30, 2010 was $94,158 compared with $3,184 for the period ended November 30, 2009. The increase in operating expenditures was attributed to higher amounts of professional fees relating to the Company’s filings and the and the acquisition of mineral Properties.



Net loss for the period ended November 30, 2010 was $94,158 compared with $3,184 for the period ended November 30, 2009. The overall increase in net loss of $90,974 was attributed to the acquisition of mineral properties and professional services incurred with the Company’s SEC filings including accounting, audit, and legal services.



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Liquidity and Capital Resources


As at November 30, 2010, the Company’s cash balance was $34,706 compared to $330 as at November 30, 2009 and its total assets were $34,706 compared with $330 as at November 30, 2009. The increase in total assets is attributed to the company securing financing for its ongoing operations.


As at November 30, 2010, the Company had total liabilities of $195,530 compared with total liabilities of $3,151 as at November 30, 2009. The increase in total liabilities was attributed to increases in accounts payable and accrued liabilities of $23,846 as the Company did not have sufficient cash flow to settle obligations. The increase was partially offset by loans to the company of $20,460 and subscription proceeds of 151,224


As at November 30, 2010, the Company had a working capital deficit of $160,824 compared with a working capital deficit of $3,151 as at November 30, 2009. The increase in working capital deficit was attributed to the increase in accounts payable and accrued liabilities of $23,846 due to the lack of sufficient cash flow to pay its obligations the increase was partially offset by loans to the company of $20,460 and subscription proceeds of $151,224.


Cashflow from Operating Activities


During the period ended November 30, 2010, the Company used $66,320 of cash for operating activities compared to the use of $33 of cash for operating activities during the period ended November 30, 2009. The increase in cashflows used for operating activities is attributed to the fact that the Company received $151,224 of financing subscriptions received and $1,175 from notes payable, of which the majority was used to settle outstanding obligations of the Company and the acquisition of mineral properties..

 

Cashflow from Investing Activities


During the period ended November 30, 2010the Company had $49,023 in cash transaction for the acquisition of mineral properties and November 30, 2009, the Company did not have any cash transactions related to investing activities.


Cashflow from Financing Activities


During the period ended November 30, 2010, the Company received $151,224 of cash from financing activities compared to $0 for the period ended November 30, 2009. The increase in cashflows provided from financing activities is based on the fact that the Company received $151,224 of financing from a subscribers and $0 from related parties to settle outstanding obligations of the Company during the day-to-day operations as compared to $0 in 2009.


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing. 


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.


Off-Balance Sheet Arrangements


We have no significant 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 are material to stockholders.


Critical Accounting Policies


We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in the notes to the audited financial statements included in this Quarterly Report.



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Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes for the reporting period. Significant areas requiring the use of management estimates relate to the valuation of its mineral leases and claims and our ability to obtain final government permission to complete the project.


Exploration Stage Enterprise


Our financial statements are prepared using the accrual method of accounting and according to the provisions of Statement of Financial Accounting Standards No. 7 (“SFAS 7”), “Accounting and Reporting for Development Stage Enterprises,” as we devote substantially all of our efforts to acquiring and exploring mineral properties. Until such properties are acquired and developed, we will continue to prepare our financial statements and related disclosures in accordance with entities in the exploration stage.


Cost of Maintaining Mineral Properties


We do not accrue the estimated future costs of maintaining our mineral properties in good standing.


Mineral Property Acquisition Payments and Exploration Costs


We record our interest in mineral properties at cost. We expense all costs incurred on mineral properties to which we have secured exploration rights, other than acquisition costs, prior to the establishment of proven and probable reserves. If and when proven and probable reserves are determined for a property and a feasibility study prepared with respect to the property, then subsequent exploration and development costs of the property will be capitalized.


We regularly perform evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of our investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable.


Exploration Expenditures


We follow a policy of expensing exploration expenditures until a production decision in respect of the project and we are reasonably assured that it will receive regulatory approval to permit mining operations which may include the receipt of a legally binding project approval certificate.


Management periodically reviews the carrying value of its investments in mineral leases and claims with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a production mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that we will continue exploration on such project. We do not set a pre-determined holding period for properties with unproven deposits, however, properties which have not demonstrated suitable metal concentrations at the conclusion of each phase of an exploration program are reevaluated to determine if future exploration is warranted, whether there has been any impairment in value and that their carrying values are appropriate.


If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or determination of value. The amounts recorded as mineral leases and claims represent costs to date and do not necessarily reflect present or future values.


Our exploration activities and proposed mine development are subject to various laws and regulations governing the protection of the environment. These laws are continually changing, generally becoming more restrictive. We have made, and expect to make in the future, expenditures to comply with such laws and regulations.


The accumulated costs of properties that are developed in the stage of commercial production will be amortized to operations through unit-of-production depletion.



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Recent Accounting Pronouncements


In February 2010, the FASB issued ASU 2010-09 which requires that an SEC filer, as defined, evaluate subsequent events through the date that the financial statements are issued. The update also removed the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. The adoption of this guidance on January 1, 2010 did not have a material effect on the Company’s consolidated financial statements.


In January 2010, the FASB has published ASU 2010-06 “Fair Value Measurements and Disclosures (Topic 820): - Improving Disclosures about Fair Value Measurements. ASU No. 2010-06 clarifies improve disclosure requirement related to fair value measurements and disclosures – Overall Subtopic (Subtopic 820-10) of the FASB Accounting Standards Codification. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosure about purchase, sales, issuances, and settlement in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The amendments in this Update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. The adoption of this standard did not have an impact on the Company’s financial position and results of operations.


In August 2009, the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10, “Fair Value Measurements and Disclosures—Overall”. The update provides clarification that in circumstances, in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update. The amendments in this ASU clarify that a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability and also clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The guidance provided in this ASU is effective for the first reporting period, including interim periods, beginning after issuance. The adoption of this standard did not have a material impact on the Company’s financial position and results of operations.


In June 2009, the Financial Accounting Standards Board issued Statement “FASB” issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 168”). SFAS No. 168 will become the single source of authoritative nongovernmental U.S. generally accepted accounting principles (“GAAP”), superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), Emerging Issues Task Force (“EITF”), and related accounting literature. SFAS No. 168 reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure. Also included is relevant Securities and Exchange Commission guidance organized using the same topical structure in separate sections. SFAS No. 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009. This statement will have an impact on the Company’s financial statements since all future references to authoritative accounting literature will be references in accordance with SFAS No. 168.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 4. CONTROLS AND PROCEDURES


Disclosure Controls and Procedures


We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.


We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of November 30, 2010. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.  Please refer to our Annual Report on Form 10-K as filed with the SEC on December 13, 2010, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.



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Management’s Annual Report on Internal Control Over Financial Reporting


Our management is responsible for establishing and maintaining adequate control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of November 30, 2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework. Our management has concluded that, as of November 30, 2010, our internal control over financial reporting is not effective based on these criteria, due to material weaknesses resulting from not having an Audit Committee or financial expert on our Board of Directors and our failure to maintain appropriate cash controls.  


Changes In Internal Control and Financial Reporting

 

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.


The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.


PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS.


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


ITEM 1A. RISK FACTORS.


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


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


1.

Quarterly Issuances:


During the quarter, we did not issue any unregistered securities other than as previously disclosed.


2.

Subsequent Issuances:


Subsequent to the quarter, we did not issue any unregistered securities other than as previously disclosed.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES.


None.


ITEM 4.  [REMOVED AND RESERVED].


ITEM 5. OTHER INFORMATION.


On January 14, 2011, the Company effectuated a 4-for-1 forward split of its issued and outstanding common shares, whereby every one old share of common stock was exchanged for four new shares of the Company's common stock. As a result, the issued and outstanding shares of common stock increased from 67,199,986 prior to the forward split to 268,799,944 following the forward split.  FINRA confirmed approval of the forward split, payable as a dividend to shareholders as of January 14 2011. The forward split shares are payable upon surrender of certificates to the Company's transfer agent.



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ITEM 6. EXHIBITS


Exhibit

Number

Description of Exhibit

Filing

 3.01

Articles of Incorporation

Filed with the SEC on November 15, 2007 as part of our Registration Statement on Form SB-2.

 3.02

Bylaws

Filed with the SEC on November 15, 2007 as part of our Registration Statement on Form SB-2.

 10.01

Employment Agreement between Willow Creek Enterprises, Inc. and Terry Fields dated August 9, 2010

Filed with the SEC on August 16, 2010 as part of our Current Report on Form 8-K.

 10.02

Form of Securities Purchase Agreement

Filed with the SEC on September 22, 2010 as part of our Current Report on Form 8-K.

 10.03

Form of Common Stock Purchase Warrant

Filed with the SEC on September 22, 2010 as part of our Current Report on Form 8-K.

 10.04

Minerals Lease and Agreement between Willow Creek Enterprises, Inc. and MinQuest, Inc. dated October 9, 2010

Filed with the SEC on October 21, 2010 as part of our Current Report on Form 8-K.

 10.05

Minerals Lease and Agreement between Willow Creek Enterprises, Inc. and MinQuest, Inc. dated November 17, 2010

Filed with the SEC on December 2, 2010 as part of our Current Report on Form 8-K.

 14.01

Code of Ethics

Filed with the SEC on November 15, 2007 as part of our Registration Statement on Form SB-2.

 31.01

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14

Filed herewith.

 32.01

CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

Filed herewith.



SIGNATURES


Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

 

 

  

  

WILLOW CREEK ENTERPRISES, INC.

 

 

  

Dated: January19, 2011

 

By:   /s/ Terry Fields                              

  

  

TERRY FIELDS

  

  

Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer

  

  

 






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