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EXCEL - IDEA: XBRL DOCUMENT - Cubed, Inc. | Financial_Report.xls |
EX-32.1 - EXHIBIT 32.1 - Cubed, Inc. | ex32_1.htm |
EX-31.2 - EXHIBIT 31.2 - Cubed, Inc. | ex31_2.htm |
EX-31.1 - EXHIBIT 31.1 - Cubed, Inc. | ex31_1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended August 31, 2011 | |
[ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from __________ to __________ | |
Commission File Number: 333-171371 |
Northwest Resources, Inc.
(Exact name of registrant as specified in its charter)
Nevada | 37-1603977 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
1285 Baring Blvd., Sparks, Nevada 89434 |
(Address of principal executive offices) |
(775) 771-3176 |
(Registrant’s telephone number) |
_______________________________________ |
(Former name, former address and former fiscal year, if changed since last report) |
Indicated 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 [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
[ ] Large accelerated filer [ ] Non-accelerated filer |
[ ] Accelerated filer [X] Smaller reporting company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [ ] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 11,000,000 common shares as of October 14, 2011.
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 (§ 229.405 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 [X]
TABLE OF CONTENTS |
Page | |
PART I – FINANCIAL INFORMATION
| ||
Item 1: | Financial Statements | 3 |
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 6 |
Item 4: | Controls and Procedures | 6 |
PART II – OTHER INFORMATION
| ||
Item 1: | Legal Proceedings | 7 |
Item 1A: | Risk Factors | 7 |
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 7 |
Item 3: | Defaults Upon Senior Securities | 7 |
Item 4: | Removed and Reserved | 7 |
Item 5: | Other Information | 7 |
Item 6: | Exhibits | 7 |
2 |
PART I - FINANCIAL INFORMATION
These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended August 31, 2011 are not necessarily indicative of the results that can be expected for the full year.
3 |
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS (unaudited)
As of August 31, 2011 and November 30, 2010
August 31, 2011 | November 30, 2010 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash | $ | 17,838 | $ | 9,904 | |||
Mineral Property | 6,500 | 6,500 | |||||
Total assets | $ | 24,338 | $ | 16,404 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
LIABILITIES | |||||||
Current Liabilities | |||||||
Accrued expenses | $ | 5,147 | $ | 8,146 | |||
Total current liabilities | 5,147 | 8,146 | |||||
STOCKHOLDERS’ EQUITY | |||||||
Common stock, $.001 par value, 100,000,000 shares authorized, 11,000,000 shares issued and outstanding (2010- 8,000,000 common shares issued) | 11,000 | 8,000 | |||||
Additional paid in capital | 27,000 | 12,000 | |||||
Deficit accumulated during the exploration stage | (18,809 | ) | (11,742 | ) | |||
Total stockholders’ equity | 19,191 | 8,258 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 24,338 | $ | 16,404 |
See accompanying notes to financial statements.
F-1 |
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
Three months and nine months ended August 31, 2011
Three months ended August 31, 2010
For the period from May 21, 2010 (Date of Inception) through August 31, 2010
For the period from May 21, 2010 (Date of Inception) through August 31, 2011
Three months ended August 31, 2011 | Three months ended August 31, 2010 | Nine months ended August 31, 2011 | Period from May 21, 2010 (Inception) to August 31, 2010 | Period from May 21, 2010 (Inception) to August 31, 2011 | |||||||||||||||
General and administrative expenses: | |||||||||||||||||||
Professional fees | $ | 1,500 | $ | — | $ | 5,447 | $ | — | $ | 13,593 | |||||||||
Exploration costs | — | — | 600 | — | 4,100 | ||||||||||||||
Other | — | 36 | 1,020 | 36 | 1,116 | ||||||||||||||
Total general and administrative expenses | 1,500 | 36 | 7,067 | 36 | 18,809 | ||||||||||||||
Net loss | $ | (1,500 | ) | $ | (36 | ) | $ | (7,067 | ) | $ | (36 | ) | $ | (18,809 | ) | ||||
Net loss per share: | |||||||||||||||||||
Basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic and diluted | 10,000,000 | 8,000,000 | 9,333,333 | 8,000,000 |
See accompanying notes to financial statements.
F-2 |
(A EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
Nine months ended August 31, 2011
For the period from May 21, 2010 (Date of Inception) through August 31, 2010
For the period from May 21, 2010 (Date of Inception) through August 31, 2011
Nine months ended August 31, 2011 | Period from May 21, 2010 (Inception) to August 31, 2010 | Period from May 21, 2010 (Inception) to August 31, 2011 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net loss | $ | (7,067 | ) | $ | (36 | ) | $ | (18,809 | ) | ||
Change in non-cash working capital items | |||||||||||
Increase in accrued expenses | (2,999 | ) | — | 5,147 | |||||||
CASH FLOWS USED IN OPERATING ACTIVITIES | (10,066 | ) | (36 | ) | (13,662 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITY | |||||||||||
Proceeds from sale of common stock | 18,000 | 20,000 | 38,000 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | 18,000 | 20,000 | 38,000 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITY | |||||||||||
Acquisition of mineral property | — | (6,500 | ) | (6,500 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | — | (6,500 | ) | (6,500 | ) | ||||||
NET INCREASE IN CASH | 7,934 | 13,474 | 17,838 | ||||||||
Cash, beginning of period | 9,904 | — | — | ||||||||
Cash, end of period | $ | 17,838 | $ | 13,474 | $ | 17,838 | |||||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||||
Interest paid | $ | — | $ | — | $ | — | |||||
Income taxes paid | $ | — | $ | — | $ | — |
See accompanying notes to financial statements.
F-3 |
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2011
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Northwest Resources, Inc. (“Northwest” or the “Company”) was incorporated in Nevada on May 21, 2010. Northwest is an exploration stage company and has not yet realized any revenues from its planned operations. Northwest is currently in the process of acquiring certain mining claims.
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 reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
Basic Loss Per Share
Basic loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period.
Mineral Properties
Cost of license acquisition, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. Costs of acquisition are capitalized subject to impairment testing when facts and circumstances indicate impairment may exist.
Comprehensive Income
The Company has established standards for reporting and display of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.
Income Tax
Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carryforwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carryforward has been recognized, as it is not deemed likely to be realized.
F-4 |
NORTHWEST RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2011
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation
The accompanying unaudited interim financial statements of Northwest Resources, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s registration statement filed with the SEC on Form S-1. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for the financial statements to be not misleading have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2010 as reported in Form S-1, have been omitted.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents
Recent Accounting Pronouncements
Northwest does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
NOTE 2 - GOING CONCERN
Northwest has recurring losses and has a deficit accumulated during the exploration stage of $18,809 as of August 31, 2011. Northwest's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, Northwest has no current source of revenue. Without realization of additional capital, it would be unlikely for Northwest to continue as a going concern. Northwest's management plans on raising cash from public or private debt or equity financing, on an as needed basis and in the longer term, revenues from the acquisition, exploration and development of mineral interests, if found. Northwest's ability to continue as a going concern is dependent on these additional cash financings, and, ultimately, upon achieving profitable operations through the development of mineral interests.
NOTE 3 - MINERAL PROPERTY RIGHTS
During the period ended August 31, 2011, the Company acquired a 100% interest in a mining claim in the County of Plumas in the state of California for cash consideration of $6,500.
F-5 |
NORTHWEST RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2011
NOTE 4 – INCOME TAXES
The provision for Federal income tax consists of the following:
August 31, 2011 | August 31, 2010 | ||||||
Federal income tax benefit attributable to: | |||||||
Current Operations | $ | 2,405 | $ | 10 | |||
Less: valuation allowance | (2,405 | ) | (10 | ) | |||
Net provision for Federal income taxes | $ | — | $ | — |
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
August 31, | |||
2011 | |||
Deferred tax asset attributable to: | |||
Net operating loss carryover | $ | 6,395 | |
Less: valuation allowance | (6,395 | ) | |
Net deferred tax asset | $ | — |
At August 31, 2011, Northwest had an unused net operating loss carryover approximating $18,800 that is available to offset future taxable income; it expires beginning in 2030.
NOTE 5 – COMMON STOCK
At inception, Northwest issued 8,000,000 shares of stock at $0.0025 to its founding shareholder for $20,000 cash.
During the period ended August 31, 2011, Northwest issued 3,000,000 shares of common at $0.06 for $ 18,000 cash.
NOTE 6 – COMMITMENTS
Northwest neither owns nor leases any real or personal property. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.
NOTE 7 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events
occurring after the balance sheet date through the date the financial statements were issued.
F-6 |
Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
We are an exploration stage mineral exploration company incorporated in Nevada on May 21, 2010. On June 22, 2010, we acquired a 100% ownership interest in the Check and Checkmate placer mining claim located in Plumas County, California. The Check and Checkmate claim is located on federal lands administered by the U.S. Forest Service and the Bureau of Land Management. Our ownership rights on the claim are limited to the exploration and extraction of mineral deposits subject to applicable regulations. The Check and Checkmate claim is roughly 70 acres in size and is located on Little Blackhawk Creek near Quincy, California.
We have
performed an initial reconnaissance sampling program on our mining claim. Our initial sampling program indicated the
presence of gold in the sediments which were sampled, with the highest and coarsest populations of gold being located in samples
from older mining excavations taken from at or near the bedrock. Based upon the results of our initial reconnaissance sampling
program, our consulting geologist has recommended an additional program of bulk sampling from both stream sediments and waste piles
from historical excavations, as well as geophysical investigations. Our planned additional exploration activities
will be designed to explore for indications that the Check and Checkmate claim may contain commercially viable quantities of gold. We
have not identified commercially exploitable reserves of gold or other precious metals on the Check and Checkmate claim to date. We
are an exploration stage company and there is no assurance that commercially viable gold quantities exist on the Check and Checkmate
mineral claim.
7 |
Phase II and III Exploration Plan for the Check and Checkmate Claim
Our business plan is to proceed with the exploration of the Check and Checkmate mineral claim to determine whether there are commercially exploitable reserves of gold. We intend to proceed with the additional exploration program as recommended by our consulting geologist.
Based on the results of our initial Phase 1 reconnaissance sampling program, our consulting geologist has recommended undertaking additional exploration activities.
Our planned additional exploration activities and their estimated costs are as follows:
Estimated Cost | ||
Phase II |
· Preparing and submitting permits for the use of mechanical excavating and processing equipment. · Processing of the waste piles from selected historical excavations. · Bulk sampling the waste piles developed from the Newton Pond excavation. · Bulk sampling of the active stream sediments. |
$15,000 |
Phase III | · Conducting geophysical investigations to determine the bedrock morphology to ascertain the location of the “pay streak” and the extent of historical underground workings. | to be determined |
We currently expect to commence Phase II in the spring of 2012. We believe that we have sufficient funds available to complete Phase II of our exploration program. We will require additional financing in order complete Phase III of our planned exploration program and to undertake commercial gold production on the Check and Checkmate claim. In the event that we are able to raise sufficient funds to undertake Phase III, we expect that phase to begin in late 2012. We currently do not have any arrangements for financing and we may not be able to obtain financing when required.
Sampling and other data acquired during our exploration of the Check and Checkmate claim will ultimately determine whether the project will become economically viable.
Results of Operations for the three and nine months ended August 31, 2011, three months ended August 31, 2010, from May 21, 2010 (inception) through August 31, 2011, and from May 21, 2010 (inception) through August 31, 2010.
We have not earned any revenues since the inception of our current business operations. We incurred expenses and a net loss in the amount of $1,500 for the three months ended August 31, 2011. We incurred expenses and a net loss of $36 for the three months ended August 31, 2010. We incurred expenses and a net loss of $7,067 for the nine months ended August 31, 2011. We have incurred total expenses and a net loss of $18,809 from inception on May 21, 2010 through August 31, 2011. We incurred total expenses and a net loss of $36 from inception on May 21, 2010 through August 31, 2010.
Our losses are attributable to operating expenses together with a lack of any revenues. We anticipate our operating expenses will increase as we continue with our plan of operations.
Liquidity and Capital Resources
As of August 31, 2011, we had current assets in the amount of $17,838, consisting entirely of cash. Our current liabilities as of August 31, 2011, were $5,147. Thus, we had working capital of $12,691 as of August 31, 2011.
Although we believe we have sufficient capital
resources to complete Phase II of our exploration plan as outlined above, the longer-term success of our business plan will ultimately
depend on our ability to raise additional capital. We will require significant additional capital in order to undertake Phase III
of our exploration plan and to commence commercial gold production on our mineral claim following completion of our planned exploration
activities. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan
of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or
at all.
8 |
Going Concern
As discussed in the notes to our financial statements, we have no established source of revenue. This has raised substantial doubt for our auditors about our ability to continue as a going concern. Without realization of additional capital, it would be unlikely for us to continue as a going concern.
Our activities to date have been supported by equity financing. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan.
Off Balance Sheet Arrangements
As of August 31, 2011, there were no off balance sheet arrangements.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Currently, we do not believe that any accounting policies fit this definition.
Recently Issued Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of August 31, 2011. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Mr. Taylor Edgerton. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of August 31, 2011, our disclosure controls and procedures are not effective. There have been no changes in our internal controls over financial reporting during the quarter ended August 31, 2011.
Management determined that the material weaknesses that resulted in controls being ineffective are primarily due to lack of resources and number of employees. Material weaknesses exist in the segregation of duties required for effective controls and various reconciliation and control procedures not regularly performed due to the lack of staff and resources.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
9 |
PART II – OTHER INFORMATION
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None
Item 4. [Removed and Reserved]
None
10 |
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Northwest Resources, Inc. | |
Date: | October 17, 2011 |
By: |
/s/ Taylor Edgerton Taylor Edgerton |
Title: | Chief Executive Officer and Director |