Northeast Island Corp. - FORM 10-Q

Attached files

file	filename
EX-31.1 - CERTIFICATION BY THE PRINCIPAL EXECUTIVE OFFICER - Northeast Island Corp.	f10q0711ex31i_neastisland.htm
EX-32.1 - CERTIFICATION BY THE PRINCIPAL EXECUTIVE OFFICER - Northeast Island Corp.	f10q0711ex32i_neastisland.htm
EX-32.2 - CERTIFICATION BY THE PRINCIPAL FINANCIAL OFFICER - Northeast Island Corp.	f10q0711ex32ii_neastisland.htm
EX-31.2 - CERTIFICATION BY THE PRINCIPAL FINANCIAL OFFICER - Northeast Island Corp.	f10q0711ex31ii_neastisland.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: July 31, 2011

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

For the transition period from to

Commission File Number: 000-53903

NORTHEAST ISLAND CORP.

(Exact Name of registrant as specified in its charter)

Nevada		27-1800601
(State or other Jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

100 East Cook Avenue, Suite 101

Libertyville, IL 60048

(Address of principal executive offices)

(847) 932-4151

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer	¨	Accelerated Filer	¨

Non-Accelerated Filer	¨	Smaller Reporting Company	ý

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

As of September 12, 2011, there were 1,500,000 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements.	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	9

Item 3.	Quantitative and Qualitative disclosures about Market Risk.	13

Item 4.	Controls and Procedures.	13

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings.	14

Item 1A.	Risk Factors.	14

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	14

Item 3.	Defaults Upon Senior Securities.	14

Item 4.	(Removed and Reserved).	14

Item 5.	Other Information.	14

Item 6.	Exhibits.	14

	Signatures	15

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Northeast Island Corp.

(A Development Stage Company)

Notes to Financial Statements

July 31, 2011

(Unaudited)

		Page(s)

Balance Sheets		2
	As of July 31, 2011 (Unaudited) and January 31, 2011

Statements of Operations		3
	Three months ended July 31, 2011 and 2010 and Six months ended July 31, 2011 and 2010, and from January 29, 2010 (inception) to July 31, 2011 (Unaudited)

Statements of Cash Flows		4
	Six months ended July 31, 2011 and 2010, and from January 29, 2010 (inception) to July 31, 2011 (Unaudited)

Notes to Financial Statements (unaudited)		5-8

Northeast Island Corp.

(A Development Stage Company)

Balance Sheets

	July 31, 2011			January 31, 2011
	(Unaudited)

Liabilities and Stockholders' Deficit

Liabilities:
Accounts payable	$	17,225		$	8,225
Loans payable - related party		33,072			23,925
Total Current Liabilities		50,297			32,150

Stockholders' Deficit:
Preferred stock ($0.001 par value, 10,000,000 shares authorized,
none issued and outstanding)		-			-
Common stock, ($0.001 par value, 100,000,000 shares authorized,
1,500,000 issued and outstanding)		1,500			1,500
Deficit accumulated during the development stage		(51,797	)		(33,650	)
Total Stockholders' Deficit		(50,297	)		(32,150	)

Total Liabilities and Stockholders' Deficit	$	-		$	-

See accompanying notes to financial statements

Northeast Island Corp.
(A Development Stage Company)
Statements of Operations
(Unaudited)

	Three Months Ended						Six Months Ended						From January 29, 2010
	July 31, 2011			July 31, 2010			July 31, 2011			July 31, 2010			(Inception) to July 31, 2011

General and administrative expenses	$	6,647		$	6,300		$	18,147		$	18,547		$	51,797

Net loss	$	(6,647	)	$	(6,300	)	$	(18,147	)	$	(18,547	)	$	(51,797	)


Net loss per common share - basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.03	)

Weighted average number of common shares outstanding
during the period - basic and diluted		1,500,000			1,500,000			1,500,000			1,500,000			1,500,000

See accompanying notes to financial statements

Northeast Island Corp.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)

	Six Months Ended			Six Months Ended			From January 29, 2010
	July 31, 2011			July 31, 2010			(Inception) to July 31, 2011

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(18,147	)	$	(18,547	)	$	(51,797	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock issued for services - founders		-			-			1,500
Changes in operating assets and liabilities:
Increase (decrease) in:
Accounts payable		9,000			5,324			17,225
Net Cash Used in Operating Activities		(9,147	)		(13,223	)		(33,072	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan payable - related party		9,147			13,223			33,072
Net Cash Provided by Financing Activities		9,147			13,223			33,072

Net Increase in Cash		-			-			-

Cash - Beginning of Period		-			-			-

Cash - End of Period	$	-		$	-		$	-

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes	$	-		$	-		$	-
Interest	$	-		$	-		$	-

See accompanying notes to financial statements

Northeast Island Corp.

(A Development Stage Company)

Notes to Financial Statements

July 31, 2011

NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Northeast Island Corp. (the “Company”), was incorporated in the State of Nevada on January 29, 2010.

The Company was formed to pursue a business combination with an existing operating company.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information.

The financial information as of January 31, 2011, is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the years ended January 31, 2011 and 2010. The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the years ended January 31, 2011 and 2010.

Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been or omitted, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the six months ended July 31, 2011, are not necessarily indicative of results for the full fiscal year.

Summary of Significant Accounting Policies

Development Stage

The Company’s unaudited interim financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include obtaining related party debt financing and continuing to seek a viable merger candidate. The Company has not generated any revenues since inception.

Risks and Uncertainties

The Company’s operations will be subject to significant risk and uncertainties including financial, operational, regulatory and other risks associated with a development stage company, including the potential risk of business failure. Also, see Note 2 regarding going concern matters.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 the financial statements and the reported amounts of revenues and expenses during the reporting period.

Such estimates and assumptions impact, among others, a 100% valuation allowance for deferred taxes due to the Company’s continuing and expected future losses.

Northeast Island Corp.

(A Development Stage Company)

Notes to Financial Statements

July 31, 2011

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

Share Based Payments

Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights, are measured at their fair value on the awards’ grant date, and based on the estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded as a component of general and administrative expense.

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. The computation of basic and diluted loss per share for the six months ended July 31, 2011 and 2010 and from January 29, 2010 (Inception) to July 31, 2011, is equivalent since the Company has had continuing losses. The Company also has no common stock equivalents.

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

·	Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

·	Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

Northeast Island Corp.

(A Development Stage Company)

Notes to Financial Statements

July 31, 2011

The Company’s financial instruments consisted primarily of accounts payable and related party loans. The carrying amounts of the Company’s financial instruments generally approximated their fair values as of July 31, 2011 and January 31, 2011, respectively, due to the short-term nature of these instruments.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that are expected to have an effect on the Company’s financial statements.

NOTE 2 – GOING CONCERN

As reflected in the accompanying unaudited interim financial statements, the Company has a net loss of $18,147 and net cash used in operating activities of $9,147 for the six months ended July 31, 2011. The Company also has a working capital deficit and stockholder’s deficit of $50,297 at July 31, 2011. The Company is in the development stage and has not yet generated any revenues.

The ability of the Company to continue as a going concern is dependent on Management's plans, which include the expectation of raising debt or equity based capital, with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The company may need to incur additional liabilities with certain related parties to sustain the Company’s existence.

In response to these problems, management has taken the following actions:

·	Seeking additional third party debt and/or equity financing, and

·	Continue with the implementation of the business plan.

The accompanying unaudited interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 3 – LOANS PAYABLE - RELATED PARTY

(A)

Fiscal Year Ended January 31, 2011

The Company executed loans with an entity that is affiliated with the Company’s Chief Executive Officer for $23,925. These loans were non-interest bearing, unsecured and due on demand.

(B)	Fiscal Period Ended July 31, 2011

The Company executed four loans with an entity that is affiliated with the Company’s Chief Executive Officer for a total of $9,147. These loans were non-interest bearing, unsecured. The balance as of January 31, 2011 is due on demand. New notes created during the 6 months ended July 31, 2011 mature within one year.

The following is a summary of loans payable – related party:

Balance – January 31, 2011	$ 23,925
Advances – 6 months ended July 31, 2011	9,147
Balance – July 31, 2011	$ 33,072

Northeast Island Corp.

(A Development Stage Company)

Notes to Financial Statements

July 31, 2011

NOTE 4 – STOCKHOLDER’S DEFICIT

On January 29, 2010, the Company issued 1,500,000 shares of common stock, having a fair value of $1,500 ($0.001/share), to its founder for pre-incorporation services. Fair value of the services provided reflected a more readily determinable fair value of the shares issued. At January 31, 2010, the Company expensed this stock issuance as a component of general and administrative expenses.

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

Forward Looking Statements

This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the United States Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements (collectively the “Filings”) and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2011, filed with the SEC on May 10, 2011, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our unaudited financial statements and notes thereto appearing elsewhere in this report.

Overview

Northeast Island Corp. (“we”, “us”, “our”, “Northeast Island”, the “Company” or the “Registrant”) was incorporated in the State of Nevada on January 29, 2010. Since inception, we have been engaged in organizational efforts and obtaining initial financing. We were formed as a vehicle to pursue a business combination and have made no efforts to identify a possible business combination. As a result, we have not conducted negotiations or entered into a letter of intent concerning any target business. Our business purpose is to seek the acquisition of, or merger with, an existing company. Our fiscal year end is January 31.

Description of Business

Based on our proposed business activities, we are a “blank check” company which is defined by the SEC as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Exchange Act, we also qualify as a “shell company,” because we have no or nominal assets and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.

We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the advantages of being a publicly held corporation. To date, our efforts have been limited to organizational activities. We have no capital and will depend on Mr. Gene Maher and Mr. John Prinz to provide us with the necessary funds to implement our business plan.

We intend to seek opportunities demonstrating the potential of long-term growth as opposed to short-term earnings. However, at the present time, we have not identified any business opportunity that we plan to pursue, nor have we reached any agreement or definitive understanding with any person concerning an acquisition or merger.

The analysis of new business opportunities will be undertaken by or under the supervision of Mr. Gene Maher, our President and director, and Mr. Prinz, our director. Messers Maher and Prinz are experienced with advising and consulting publicly traded companies. Messers Maher and Prinz manage Greenview Capital, a firm engaged in advising and consulting publicly traded companies. In addition, Mr. Prinz manages Daybreak Special Situations Fund which provides funding for private and public transactions and other special situations, and specializes in investing in rapidly-growing Chinese companies that trade in the United States. Although neither Greenview nor Daybeak Special Situations Fund has similar business objectives to us, conflicts of interest may be present for Messers Maher and Prinz in allocating their time to our business and to the business of Greenview Capital and Daybreak Special Situations Fund. As our President, Mr. Maher will be expected to allocate approximately (10) ten hours per week to supervise our operations and search for a target company until the acquisition of a successful business opportunity has been identified. However, it is possible that he will not be able to consistently allocate (10) ten hours each week due to his commitment to managing Greenview Capital. However, we believe that business opportunities may also come to our attention from various sources, including Mr. Maher, professional advisors such as attorneys, and accountants, securities broker-dealers, venture capitalists, members of the financial community and others who may present unsolicited proposals. We have no plan, understanding, agreements, or commitments with any individual for such person to act as a finder of opportunities for us. We can give no assurances that we will be successful in finding or acquiring a desirable business opportunity, given the limited funds that are expected to be available to us for implementation of our business plan. Furthermore, we can give no assurances that any acquisition, if it occurs, will be on terms that are favorable to us or our current stockholders.

During the next 12 months we anticipate incurring costs related to:

(i)	Filing of Exchange Act reports, and

(ii)	Consummating an acquisition.

Plan of Operations

We may consider a merger with a business which (A) is a developing company, or (B) is an established business, which is in need of additional funds from investors who have declined to invest in a privately held company. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

Our officers and directors have not had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

Results of Operations

We are in the development stage and have working capital deficit, stockholders’ deficit and have not earned any revenues from operations to date. These conditions raise substantial doubt about our ability to continue as a going concern. We are currently devoting our efforts to locating merger candidates. Our ability to continue as a going concern is dependent upon our ability to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve profitable operations.

Six Months Ended July 31, 2011 Compared to the Six Months Ended July 31, 2010

Loss from operations

Loss from operations decreased by $400, or 2%, from a net loss of $18,547 for the six months ended July 31, 2010, to a net loss of $18,147 for the six months ended July 31, 2011. This was primarily due to lower legal, accounting and filing fees.

Three Months Ended July 31, 2011 Compared to the Three Months Ended July 31, 2010

Loss from operations

Loss from operations increased by $347, or 5.5%, from a net loss of $6,300 for the three months ended July 31, 2010, to a net loss of $6,647 for the three months ended July 31, 2011. This was primarily due to an increase in legal fees.

Liquidity and Capital Resources

Cash and working capital – At July 31, 2011 and January 31, 2011, we had no cash on hand. Our working capital deficit increased $18,147, or 56%, from $32,150 at January 31, 2011 to $50,297 at July 31, 2011. This was primarily due to continued losses from operations resulting from legal, accounting and filing fees.

Cash used in operations – Net cash used in operations decreased by $4,076, or 31%, from $13,223 for the six months ended July 31, 2010 to $9,147 for the six months ended July 31, 2011. This change was due mainly to an increase in accounts payable of $9,000.

Financing activities – Net cash provided by financing activities decreased by $4,076, or 31%, from $13,223 for the six months ended July 31, 2010 to $9,147 for the six months ended July 31, 2011.

Going Concern

The ability of the Company to continue as a going concern is dependent on Management’s plans, which include the expectation of raising debt or equity based capital, with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The company may need to incur additional liabilities with certain related parties to sustain the Company’s existence.

In response to these problems, management has taken the following actions:

·	Seeking additional third party debt and/or equity financing, and

·	Continue with the implementation of the business plan.

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, revenues 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 1 of our unaudited interim 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 results of operations, financial position or liquidity for the periods presented in this report.

We believe the following critical accounting policies and procedures, among others, affect our more significant judgments and estimates used in the preparation of our financial statements:

Use of Estimates, Going Concern Consideration – The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Among the estimates we have made in the preparation of the financial statements is an estimate of our expenses and cash flows in making the disclosures about our liquidity in this report. As an early stage company, many variables may affect our estimates of cash flows that could materially alter our view of our liquidity and capital requirements as our business develops. Our interim financial statements have been prepared assuming we are a “going concern”. No adjustment has been made in the financial statements which could result should we be unable to continue as a going concern.

Development Stage - The Company’s financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include obtaining related party debt financing and continue to seek a viable merger candidate. The Company has not generated any revenues since inception.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s principal executive officer (“PEO”) and principal financial officer (“PFO”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, the PEO and PFO concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective to ensure that information that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2011, filed with the SEC on May 10, 2011.

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

There were no unregistered sales of the Company’s equity securities during the quarter ended July 31, 2011, that were not otherwise required to be disclosed in a Current Report on Form 8-K.

Item 3. Defaults upon Senior Securities.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default not cured within 30 days, with respect to any indebtedness of the Company.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.		Description

31.1		Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *

31.2		Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *

32.1		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

32.2		Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

* Filed herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NORTHEAST ISLAND CORP.

Dated: September 13, 2011	By:	/s/ Gene D. Maher
		Gene D. Maher
		Chief Executive Officer (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons of the registrant and in the capacities and on the dates indicated have signed this report below:

Dated: September 13, 2011	/s/ Gene D. Maher
	Gene D. Maher
	Director
Dated: September 13, 2011	/s/ John G. Printz
	John G. Printz
	Director

Northeast Island Corp. - FORM 10-Q - September 13, 2011

Attached files

Northeast Island Corp. Reports