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 February 29, 2012
[  ]	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 April 11, 2012.

 

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:	Mine Safety Disclosures	7
Item 5:	Other Information	7
Item 6:	Exhibits	7

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

F-1	Balance Sheets as of February 29, 2012 and November 30, 2011(unaudited);
F-2	Statements of Operations for the three months ended February 29, 2012 and February 28, 2011, and from May 21, 2010 (inception) through February 29, 2012 (unaudited);
F-3	Statements of Cash Flows for the three months ended February 29, 2012 and February 28, 2011, and from May 21, 2010 (inception) through February 29, 2012 (unaudited);
F-4	Notes to Financial Statements.

 

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 February 29, 2012 are not necessarily indicative of the results that can be expected for the full year.

 

 

NORTHWEST RESOURCES, INC.

(AN EXPLORATION STAGE COMPANY)

BALANCE SHEETS (unaudited)

AS OF FEBRUARY 29, 2012 AND NOVEMBER 30, 2011

 

ASSETS		February 29, 2012				November 30, 2011
Current Assets
Cash and equivalents		$	11,939			$	17,839
Other Assets
Mineral property			6,500				6,500
Total Assets		$	18,439			$	24,339
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accrued professional fees		$	63,934			$	68,834
Total Liabilities			63,934				68,834
Stockholders’ Equity (Deficit)
Preferred stock – $.001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding			0				0
Common stock – $.001 par value, 90,000,000 shares authorized, 11,000,000 shares issued and outstanding as of February 29, 2012 (11,000,000 – 2011)			11,000				11,000
Additional paid in capital			27,000				27,000
Deficit accumulated during the exploration stage			(83,495	)			(82,495	)
Total Stockholders’ Equity (Deficit)			(45,495	)			(44,495	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)		$	18,439			$	24,339

 

See accompanying notes to financial statements.

NORTHWEST RESOURCES, INC.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF OPERATIONS (unaudited)

FOR THE THREE MONTHS ENDED FEBRUARY 29, 2012 AND FEBRUARY 28, 2011

FOR THE PERIOD FROM MAY 21, 2010 (INCEPTION) TO FEBRUARY 29, 2012

 

		Three months ended February 29, 2012				Three months ended February 28, 2011				For the period from May 21, 2010 (Inception) to February 29, 2012
REVENUES		$	0			$	0			$	0
OPERATING EXPENSES
Professional fees			1,000				1,000				77,581
Exploration costs			0				600				4,100
General and administrative			0				19				1,814
TOTAL OPERATING EXPENSES			1,000				1,619				83,495
LOSS FROM OPERATIONS BEFORE PROVISION FOR INCOME TAX			(1,000	)			(1,619	)			(83,495	)
PROVISION FOR INCOME TAX			—				—				—
NET LOSS		$	(1,000	)		$	(1,619	)		$	(83,495	)
LOSS PER SHARE:
Basic and diluted		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic and diluted			11,000,000				8,000,000

 

See accompanying notes to financial statements.

NORTHWEST RESOURCES, INC.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF CASH FLOWS (unaudited)

FOR THE THREE MONTHS ENDED FEBRUARY 29, 2012 AND FEBRUARY 28, 2011

FOR THE PERIOD FROM MAY 21, 2010 (INCEPTION) TO FEBRUARY 29, 2012

 

		For the three months ended February 29, 2012				For the three months ended February 28, 2011				For the period from May 21, 2010 (Inception) to February 29, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		$	(1,000	)		$	(1,619	)		$	(83,495	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Change in assets and liabilities:
Increase (decrease) in accrued professional fees			(4,900	)			(5,000	)			63,934
Net Cash Used in Operating Activities			(5,900	)			(6,619	)			(19,561	)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of mineral property			—				—				(6,500	)
Net Cash Used in Investing Activities			—				—				(6,500	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock			—				—				38,000
Proceeds from note payable			—				—				5,100
Repayment of note payable			—				—				(5,100	)
Net Cash Provided by Financing Activities			—				—				38,000
			—
Net Increase in Cash and Cash Equivalents			(5,900	)			(6,619	)			11,939
Cash, Beginning of Period			17,839				9,904				0
Cash, End of Period		$	11,939			$	3,285			$	11,939
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid		$	0			$	0			$	0
Income taxes paid		$	0			$	0			$	0

 

See accompanying notes to financial statements.

NORTHWEST RESOURCES, INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FEBRUARY 29, 2012

 

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 operations. Northwest is currently conducting exploration activities on its mining claim.

 

Exploration Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to accounting and reporting by exploration stage companies. An exploration stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

 

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 10-K.  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 2011 as reported in Form 10-K, have been omitted.

 

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a November 30 fiscal year end.

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. At February 29, 2012 and November 30, 2011, the Company had $11,939 and $17,839 of unrestricted cash to be used for future business operations.

 

Fair Value of Financial Instruments

Northwest Resources’ financial instruments consist of cash and accrued professional fees. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

NORTHWEST RESOURCES, INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FEBRUARY 29, 2012

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of February 29, 2012, there have been no interest or penalties incurred on income taxes.

 

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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue Recognition

The Company is in the exploration stage and has yet to realize revenues from operations.  Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

 

Dividends

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.

 

Mineral Properties

Costs of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. Mineral property acquisition costs are capitalized including licenses and lease payments. Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

 

Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount.

 

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.  The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered. There has been no stock-based compensation issued to employees.

NORTHWEST RESOURCES, INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FEBRUARY 29, 2012

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants and other non-employees.  In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined.   There has been no stock-based compensation issued to non-employees.

 

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of February 29, 2012.

 

Recent Accounting Pronouncements

Northwest Resources 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 – MINERAL PROPERTY

 

On June 22, 2010, the Company purchased a 100% interest in mining claim number 296945 located in the State of California, County of Plumas. The total purchase price of the claim was $6,500.

 

NOTE 3 – INCOME TAXES

 

For the period ended February 29, 2012, the Company has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is $83,495 at February 29, 2012, and will begin to expire in the year 2030.

 

The provision for Federal income tax consists of the following:

 

		February 29, 2012				February 28, 2011
Federal income tax benefit attributable to:
Current operations		$	340			$	550
Less: valuation allowance			(340	)			(550	)
Net provision for Federal income tax		$	0			$	0

 

 

NORTHWEST RESOURCES, INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FEBRUARY 29, 2012

 

NOTE 3 – INCOME TAXES (continued)

 

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

		February 29, 2012				November 30, 2011
Deferred tax asset attributable to:
Net operating loss carryover		$	28,388			$	28,048
Valuation allowance			(28,388	)			(28,048	)
Net deferred tax asset		$	0			$	0

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.

 

NOTE 4 – STOCKHOLDERS’ EQUITY

 

The Company has 90,000,000 shares of $0.001 par value common stock authorized. On June 2, 2010, the Company sold 8,000,000 common shares at $.0025, to its founder for cash proceeds of $20,000.

 

During the year ended November 30, 2011, Northwest sold 3,000,000 shares of common at $0.006 per share for cash proceeds of $18,000.

 

The Company had 11,000,000 and 11,000,000 shares of common stock issued and outstanding as of February 29, 2012 and November 30, 2011, respectively.

 

The Company has 10,000,000 shares of $0.001 par value preferred stock authorized.

 

As of February 29, 2012, the company had no preferred shares, warrants or options outstanding.

 

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

The Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities

 

NOTE 6 – LIQUIDITY AND GOING CONCERN

 

Northwest Resources has not generated any revenues, has limited working capital, and has suffered a loss from operations since inception. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

 

The ability of Northwest Resources to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations or acquiring or merging with a profitable company. Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirements; however, there can be no assurance the Company will be successful in these efforts.

NORTHWEST RESOURCES, INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FEBRUARY 29, 2012

 

NOTE 7 – SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to February 29, 2012 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

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.

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 summer of 2012.  We will require some additional financing in order to fund and complete Phase II of our exploration program, to conduct Phase III of our planned exploration program, and to undertake commercial gold production on the Check and Checkmate claim.   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 months ended February 29, 2012 and February 28, 2011, and from May 21, 2010 (inception) through February 29, 2012.

 

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 $1,000 for the three months ended February 29, 2012. We incurred expenses and a net loss of $1,619 for the three months ended February 28, 2011. We have incurred total expenses and a net loss of $83,495 from inception on May 21, 2010 through February 29, 2012.

 

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 February 29, 2012, we had current assets in the amount of $11,939, consisting entirely of cash. Our current liabilities as of February 29, 2012 were $63,934. Thus, we had a working capital deficit of $51,995 as of February 29, 2012.

 

Our ability to carry out our business plan will depend on our ability to raise additional capital. We will require significant additional capital in order to fund and complete Phase II of our exploration program, to conduct Phase III of our planned exploration program, and to undertake commercial gold production on the Check and Checkmate claim.  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.

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 February 29, 2012, 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 February 29, 2012. 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 February 29, 2012, our disclosure controls and procedures are not effective. There have been no changes in our internal controls over financial reporting during the quarter ended February 29, 2012.

 

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.

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

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.

 

Item 1A: Risk Factors

 

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. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None

 

Item 6. Exhibits

 

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	Northwest Resources, Inc.
Date:	April 11, 2012
By:	/s/ Taylor Edgerton Taylor Edgerton
Title:	Chief Executive Officer and Director