UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended June 30, 2012

        . 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: 0-19620

AMERICA WEST RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Nevada		84-1152135
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

57 West 200 South, Suite 400

Salt Lake City, Utah 84101

(Address of principal executive offices)

(801) 521-3292

(Registrant's telephone number)

Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

Yes   X  . No      .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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  X  . No      .

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

Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes      . No   X  .

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes   X  . No      .

APPLICABLE ONLY TO CORPORATE REGISTRANTS

The number of shares of common stock issued and outstanding as of August 10, 2012, is 68,488,691.

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America West Resources, Inc.

Table of Contents

			Page No.
Part I	Financial Information
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
	Item 4T.	Controls and Procedures	17
Part II	Other Information
	Item 1.	Legal Proceedings	18
	Item 1A.	Risk Factors	18
	Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	18
	Item 3.	Defaults Upon Senior Securities	19
	Item 4.	Submission of Matters to a Vote of Security Holders	19
	Item 5.	Other Information	19
	Item 6.	Exhibits	19

2

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PART I. FINANCIAL INFORMATION

 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

 

America West Resources, Inc. and Subsidiary

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Page
Condensed Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011 (Unaudited)	4
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2012 and 2011 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2012 and 2011 (Unaudited)	6
Notes to Condensed Consolidated Financial Statements as of June 30, 2012 (Unaudited)	7

3

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America West Resources, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
		June 30, 2012		December 31, 2011
Assets
Current assets:
Cash and cash equivalents	$	7,381	$	97,533
Accounts receivable		74,465		9,958
Deferred financing costs		-		1,897
Prepaid expenses		207,832		473,222
Total current assets		289,678		582,610
Deposits		441,629		807,272
Long-term restricted cash		204,041		204,024
Property and equipment:
Property and equipment		14,171,275		15,075,804
Land and mineral properties		11,683,448		26,424,721
Total property and equipment		25,854,723		41,500,525
Less: accumulated depreciation and depletion		(8,029,987)		(11,504,505)
Net property and equipment		17,824,736		29,996,020
Total assets	$	18,760,084	$	31,589,926
Liabilities and Stockholders’ Deficit
Current liabilities:
Bank overdraft	$	72,948	$	-
Accounts payable		4,898,376		3,347,028
Accounts payable - related party		445,749		398,386
Accrued expenses		4,858,828		3,616,678
Deferred revenue		500,000		500,000
Short-term debt – related party		9,564,157		8,144,611
Current maturities of long-term debt, net of unamortized     discount of $11,441 and $17,587, respectively
		4,631,749		5,192,956
Short-term convertible debt-related party		7,489,160		7,489,160
Derivative liabilities		72,166		109,711
Total current liabilities		32,533,133		28,798,530
Long-term debt:
Long term debt net of unamortized discount of    $0 and $2,512, respectively
		-		164,541
Asset retirement obligation		223,881		213,220
Total liabilities		32,757,014		29,176,291
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 2,500,000 shares authorized;   none issued and outstanding
		-		-
Common stock, $0.0001 par value; 300,000,000    shares   authorized; 68,488,691 and 66,414,175 shares issued    and outstanding, respectively
		6,848		6,641
Additional paid-in capital		65,423,592		64,974,535
Accumulated deficit		(79,427,370)		(62,567,541)
Total stockholders’ deficit		(13,996,930)		2,413,635
Total liabilities and stockholders’ deficit	$	18,760,084	$	31,589,926
See accompanying notes and accountant's compilation report.

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America West Resources, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2012		2011		2012		2011
Coal sales	$	4,040,355	$	4,005,504	$	8,071,825	$	7,468,743
Machine repair services		2,783		2,751		35,011		25,456
Total revenue		4,043,138		4,008,255		8,106,836		7,494,199
Cost of revenue:
Coal production costs		4,031,534		3,467,133		8,848,998		5,892,906
Depreciation, depletion and accretion		513,551		551,179		1,117,144		979,808
Machine repair costs		(354)		-		6,454		-
Total cost of revenue		4,544,731		4,018,312		9,972,596		6,872,714
Gross profit (loss)		(501,593)		(10,057)		(1,865,760)		621,485
Operating expenses:
General and administrative		1,570,915		2,043,510		2,526,271		4,101,212
Loss on abandonment of mineral property		11,632,068		-		11,632,201		-
Gain on settlement of property tax		-		-		(183,359)		-
Net operating expense		13,202,983		2,043,510		13,975,113		4,101,212
Loss from operations		(13,704,576)		(2,053,567)		(15,840,873)		(3,479,727)
Other income (expenses):
Gain on derivative liabilities		33,691		349,368		37,545		779,411
Other income		27,057		501		131,992		502
Interest expense		(499,808)		(1,872,707)		(1,188,492)		(6,839,808)
Loss on extinguishment of debt		-		(246,071)		-		(812,428)
Total other expenses, net		(439,060)		(1,768,909)		(1,018,955)		(6,872,323)
Net Loss	$	(14,143,636)	$	(3,822,476)	$	(16,859,828)	$	(10,352,050)
Basic and Diluted Loss Per Share	$	(0.21)	$	(0.09)	$	(0.25)	$	(0.26)
Weighted Average Shares Outstanding   Basic and Diluted
		68,443,499		44,431,500		67,769,738		39,565,812
See accompanying notes and accountant's compilation report.

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America West Resources, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Six Months Ended
		June 30,
		2012		2011
Cash Flows from Operating Activities:
Net loss	$	(16,859,828)	$	(10,352,050)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and depletion		1,117,144		979,808
Amortization of debt discounts		333,917		4,510,004
Amortization of deferred financing costs		1,897		1,266,917
Gain on settlement of property tax		(183,359)		-
Common stock issued for services		14,381		303,709
Warrant expense		-		130,000
Option expense		-		270,087
Loss on debt extinguishment		-		812,428
Loss on abandonment of mineral property		11,632,201		-
Gain on derivative liabilities		(37,545)		(779,411)
Changes in current assets and liabilities:
Accounts receivable		(64,507)		(209,252)
Inventory		-		125,881
Prepaid expenses		265,390		(181,399)
Accounts payable		1,551,347		918,655
Accounts payable-related party		47,363		(37,620)
Accrued liabilities		1,535,400		1,449,223
Net cash used in operating activities		(646,199)		(793,020)
Cash Flows from Investing Activities:
Purchase of property and equipment		(518,779)		(2,437,917)
Capital expenditures for land and mineral properties		(48,620)		(4,320,079)
Restricted cash		(17)		-
Deposits		365,643		(122,691)
Net cash used in investing activities		(201,773)		(6,880,687)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock, net of issuance costs		-		3,835,267
Proceeds from exercise of warrants		-		168
Bank overdraft (replenish bank overdraft)		72,948		57,964
Payment for deferred financing costs		-		(44,850)
Proceeds from related party debt and common stock		1,419,546		184,380
Payments on related party debt		-		(5,000)
Proceeds from convertible debt		-		3,928,000
Proceeds from debt		210,136		1,210,356
Payments on debt		(944,810)		(1,466,520)
Payments made on capital lease obligations		-		(89,488)
Net cash provided by financing activities		757,820		7,610,277
Net decrease in cash and cash equivalents		(90,152)		(63,430)
Cash and cash equivalents at beginning of period		97,533		65,003
Cash and Cash Equivalents at End of Period	$	7,381	$	1,573
Supplemental cash flow information:
Cash paid for interest	$	137,636	$	188,051
Cash paid for income taxes		-		-
Noncash Investing and Financing Activities:
Equipment acquired through capital lease	$	-	$	180,302
Equipment acquired through issuance of accounts payable		-		168,835
Debt and interest converted to common shares		-		5,556,697
Accrued interest converted to convertible debt		-		2,127,408
Debt discount due to beneficial conversion feature		-		6,513,580
Warrants issued for debt issuance costs		-		1,123,979
Debt financing costs accrued		-		257,500
Common shares issued for settlement of accrued liabilities		109,892		299,000
See accompanying notes and accountant's compilation report.

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America West Resources, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 –BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements as of June 30, 2012, 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, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the 2011 Annual Report filed with the SEC on Form 10-K/A on June 1, 2012. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented 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 consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for fiscal 2011 as reported in the Form 10-K/A on June 1, 2012 have been omitted.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the financial information of America West Resources, Inc., and its wholly owned subsidiaries, Hidden Splendor Resources, Inc. (“Hidden Splendor”), America West Services, Inc., and America West Marketing, Inc. (collectively “America West”). All significant inter-company accounts and transactions have been eliminated.

Reclassifications

Certain amounts for 2011 have been reclassified to conform to the 2012 presentation. The reclassifications had no effect on the net loss for 2011.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, America West believes that the impact of recently issued accounting pronouncements that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

NOTE 2 – GOING CONCERN

As shown in the accompanying consolidated financial statements, America West has incurred continual losses and an accumulated deficit of $79,427,370 as of June 30, 2012. At June 30, 2012 current liabilities exceeded current assets by $32,243,455. During the six months ended June 30, 2012 the company used $646,199 of cash in its operating activities. These conditions raise substantial doubt as to America West’s ability to continue as a going concern. Management is attempting to raise additional capital through sales of stock and to enhance the operations of Hidden Splendor to achieve cash-positive operations. The unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if America West is unable to continue as a going concern.

NOTE 3 – LAND AND MINERAL PROPERTIES

During June, 2012 the Mine Safety Health Administration (MSHA) required changes in the mine plan which resulted in the Company deciding to abandon and seal a section of the mine.  $11,632,201 of net mine development costs related to the section that was abandoned were written off.  Production of coal was suspended during the last half of June resulting in no coal sales for that period.  There has only been 2,349 tons of coal produced since June 30, 2012.  The mine has been idle while moving equipment, exploration and preparation of the new section for mining.  MSHA is processing changes to the mine plan that will likely result in the mine being idle until late August or early September.

The Company assesses the carrying value of its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing estimated undiscounted cash flows expected to be generated from such assets to their net book value.  If net book value exceeds estimated cash flows, the asset is written down to its fair value, determined by the estimated discounted cash flows from such asset.  

NOTE 4 – DEBT

A summary of the third party debt and third party convertible debt activity for the six months ended June 30, 2012 is as follows:

Balance, net at December 31, 2011	$	5,357,497
Borrowings		210,136
Principal payments		(944,810)
Discounts amortized		8,926
Balance, net at June 30, 2012		4,631,749
Less: current maturities, net		(4,631,749)
Long term, net debt at June 30, 2012	$	-0-

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NOTE 5 – RELATED PARTY TRANSACTIONS

Debt Owed to Related Parties

During the six months ended June 30, 2012, America West borrowed an aggregate of $1,370,000 from a major shareholder. The notes bear interest at 8% per annum and are secured by the majority of the assets of the company. Of these notes $970,000 matured on March 31, 2012 and $400,000 of these notes matured on June 30, 2012. America West has defaulted on all the loans. A total of 1,370,000 common shares were issued in connection with the debt. The Company allocated $318,716 of the proceeds to the common shares issued based on their relative fair value, which resulted in the recognition of a $318,716 discount on the notes payable. The debt discount was amortized and recorded as interest expense over the term of the debt using the effective interest method.

During the three months ended March 31, 2012, America West issued a $29,516 promissory note and 29,516 common shares to the Chairman of the board of directors in order to reimburse him for settling $29,516 of liabilities on behalf of the Company. The note is unsecured due on demand and bears interest at 8% per annum.The Company did not receive any other unstated rights or services from the Chairman in exchange for the issuance of the promissory note and the common shares. The amount of liabilities settled was allocated to the promissory note and the common shares based on their relative fair values and resulted in allocating $23,241 to the promissory note and $6,275 to the common shares. The allocation resulted in a $6,275 discount to the note payable. The debt discount was amortized and recorded as interest expense during the three months ended March 31, 2012.

Amortization for the six months ended June 30, 2012 was $324,991. The unamortized discount on these notes as of June 30, 2012 was $0.

A summary of the related party debt and related party convertible debt activity for the six months ended June 30, 2012 is as follows:

Balance, net at December 31, 2011	$	8,144,611		$	7,489,160
Borrowings		1,094,555			-
Discounts amortized		324,991			-
Balance, net at June 30, 2012	$	17,053,317		$	7,489,160

Other Related Party Transactions

America West leases office space from an entity owned by certain stockholders of America West. In addition, Hidden Splendor leases certain water rights from the entity. As of June 30, 2012 and December 31, 2011, the total accrued liability for these items was $389,100 and $345,600, respectively.

America West receives transfer agent services from an entity controlled by a director of America West. The payable to this entity totaled $56,649 and $0 as of June 30, 2012 and December 31, 2011, respectively.

Hidden Splendor ships a portion of its coal utilizing a trucking company owned by America West's Chief Executive Officer. For the six months ended June 30, 2012 and 2011, Hidden Splendor incurred trucking fees amounting to $755,535 and $1,161,822, respectively which are included in coal production costs in the consolidated statements of operations. The amount payable to this trucking company as of June 30, 2012 and December 31, 2011 totaled $244,225 and $0, respectively.

NOTE 6 – STOCKHOLDERS’ EQUITY

Common Stock

During the six months ended June 30, 2012, America West issued 600,000 common shares to repay an accrued liability of $109,892. The fair value of the shares was determined to be $109,892 based on the market value of the common stock on the date issued.

During the six months ended June 30, 2012, America West issued the Chairman of the board of directors 29,516 common shares to compensate him in part for paying a liability of $29,516.  The fair value of the shares was $6,275.

During the six months ended June 30, 2012, America West issued 75,000 common shares for services rendered valued at $14,381.

During the six months ended June 30, 2012, America West issued 1,370,000 common shares with debt payable to related parties. The relative fair value of the shares was determined to be $318,716.

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Options

A summary of option transactions for the six months ended June 30, 2012 is as follows:

		Options		Wtd. Avg Exercise Price
Outstanding at December 31, 2011		1,250,625	$	2.93
Outstanding at June 30, 2012		1,250,625	$	2.93
Exercisable at June 30, 2012		1,250,625	$	2.93

At June 30, 2012, the range of exercise prices and the weighted average remaining contractual life of the options outstanding were $0.12 to $5.40 and 1.47 years, respectively. The intrinsic value of the exercisable options outstanding at June 30, 2012 was $0.

Warrants

A summary of warrant transactions for the six months ended June 30, 2012 is as follows:

		Warrants		Wtd. Avg Exercise Price
Outstanding at December 31, 2011		3,568,985	$	1.47
Outstanding at June 30, 2012		3,568,985	$	1.47
Exercisable at June 30, 2012		3,568,985	$	1.47

At June 30, 2012, the range of exercise prices and the weighted average remaining contractual life of the warrants outstanding were $0.12 to $3.60 and 3.95 years, respectively. The intrinsic value of the warrants exercisable at June 30, 2012 was $11,321.

NOTE 7 – DERIVATIVES

As of June 30, 2012, America West has an aggregate of 911,564 outstanding warrants containing exercise price reset provisions which requires derivative treatment under FASB ASC 815-15.

The fair value of these liabilities as of June 30, 2012 totaled $72,166 and was calculated using the Black Scholes stock option valuation model. The significant assumptions used in the June 30, 2012 valuation were: the exercise prices ranging from $0.12 to $3.60; the market value of America West’s common stock on June 30, 2012, $.12; expected volatilities between 271.13% and 286.02%; risk free interest rates of .33%; and remaining contract terms between 1.34 and 1.53 years.

Fair value measurement

America West values its derivative instruments under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). America West utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. America West classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

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America West uses Level 3 to value its derivative instruments.

The following table sets forth by level with the fair value hierarchy the Company’s financial liabilities measured at fair value on June 30, 2012.

	Level 1			Level 2			Level 3			Total
Liabilities
Derivative Financial instruments	$	-		$	-		$	72,166		$	72,166

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments measured at fair value on a recurring basis using significant unobservable inputs:

		Warrants
Balance at December 31, 2011		$	109,711
Unrealized gain included in other income (expense)			(37,545)
Balance at June 30, 2012		$	72,166

NOTE 8 – COMMITMENTS & CONTINGENCIES

The Company has an existing coal lease agreement with the U.S. Bureau of Land Management (“BLM”). Rental payments of $3,867 are payable to the BLM by the first of September each year. In addition, a royalty payment of eight percent of gross sales for production up to 900,000 tons is due to the BLM each month. The Company is also required to make payments each quarter to the Bureau of Land Reclamation. The payment is equal to $0.15 per ton of coal mined.

Mining operations are subject to conditions that can impact the safety of our workforce or delay coal deliveries or increase the cost of mining for varying lengths of time. These conditions include mine collapses; fires and explosions from methane gas or coal dust; accidental mine water discharges; weather, flooding and natural disasters; unexpected maintenance problems; key equipment failures; variations in coal seam thickness; variations in the amount of rock and soil overlying the coal deposit; variations in rock and other natural materials and variations in geologic conditions.

Coal mining, especially underground coal mining, is inherently dangerous and great care must be taken to assure safe, continued operations. Past experiences of others in the industry indicate that lapses in safety practices can result in catastrophic collapse of a coal mining operation. Even when best mining practices are strictly observed, natural disasters such as an earthquake could possibly destroy a coal mine’s operations. Any catastrophic event at the coal mine which would close the mine for an extended period of time likely would cause the failure of operations. The Company maintains insurance policies that provide limited coverage for some of these risks, although there can be no assurance that these risks would be fully covered by these insurance policies. Despite the Company’s efforts, significant mine accidents could occur and have a substantial impact. Such impact resulting from accidents could take the form of increased premiums on insurance policies, litigation, fines and penalties imposed by regulating agencies.

In connection with the Hidden Splendor Plan of Reorganization, which became effective on December 19, 2008, Hidden Splendor is obligated to make payments to creditors over time in an aggregate principal amount of not less than approximately $10,000,000 and up to approximately $10,700,000 over a period not exceeding seven years from the effective date of the Plan. Under the Plan, America West must pay all of Hidden Splendor’s post-petition liabilities that Hidden Splendor cannot pay, in the ordinary course of business, in an amount not to exceed $1,560,000.

In September 2010, Kenneth Rushton, the Chapter 7 Trustee for C.W. Mining Company dba Co-Op Mining Company in the Chapter 7 bankruptcy action on file in the United States District Bankruptcy Court in the District of Utah, brought an adversarial proceeding naming Hidden Splendor Resources, Inc. as a defendant. In this action, the trustee alleges that a $40,000 payment the debtor made to Hidden Splendor in 2007 is avoidable under 11 U .S.C. Section 548 and alleges that the Trustee may recover from Hidden Splendor the value of that payment. Hidden Splendor denies that the trustee is entitled to the relief he seeks and will file an answer to the complaint. America West believes the probability of incurring any losses associated with this claim to be minimal. As such, no expenses have been accrued.

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In September 2010, Kenneth Rushton, the Chapter 7 Trustee for C.W. Mining Company dba Co-Op Mining Company in the Chapter 7 bankruptcy action on file in the United States District Bankruptcy Court in the District of Utah, brought an adversarial proceeding naming America West Marketing, Inc. as a defendant. In this action, the trustee alleges that during 2009, America West Marketing purchased 5,795 tons of coal that was either: (1) mined by a third party under the authority of the debtor's operating permit and in violation of the automatic stay in the pending bankruptcy action; (2) mined by the debtor; or (3) purchased by a third party with coal sale proceeds generated by coal previously mined by the Debtor, and claims trustee is entitled to a judgment against America West Marketing in the amount of $204,077 in connection with the transfer of that coal. America West Marketing denies that the trustee is entitled to the relief he seeks and will file an answer to the complaint. America West believes the probability of incurring any losses associated with this claim to be minimal. As such, no expenses have been accrued.

Occasionally, Hidden Splendor is issued citations by the Mine Safety and Health Administration in connection with regular inspections of the Horizon Mine. At times, Hidden Splendor challenges citations, resulting in reductions to proposed penalties or administrative adjudications with no penalties. As of June 30, 2012, Hidden Splendor has challenges pending in several administrative actions. Such actions cover a total of approximately $1,200,000 of proposed, assessed penalties. Management is unable to predict the outcome of these pending administrative actions. If America West is not successful in eliminating or significantly reducing such proposed penalties, such result could adversely affect the company’s financial condition and operations. Management has determined that of the total amount, the probable liability arising from these citations is approximately $771,800 which was accrued at December 31, 2011. An additional $474,935 was accrued during the three months ended June 30, 2012 for a total accrual as of June 30, 2012 of $1,246,735.

In December 2010, the Company agreed to serve as guarantor on $250,000 of debt payments owed by Wild West Trucking, a trucking company owned by America West's Chief Executive Officer, to its secured creditor Zions Bank.

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

This Management’s Discussion and Analysis should be read in conjunction with the unaudited consolidated financial statements of America West Resources, Inc. and its wholly-owned subsidiaries, Hidden Splendor Resources, Inc. (“Hidden Splendor”), America West Services and America West Marketing (collectively, the “Company”) and notes thereto set forth herein. Our auditor's report on our consolidated financial statements contained in our Annual Report filed on Form 10-K for the fiscal year ended December 31, 2011, expressed an opinion that substantial doubt exists as to whether we can continue as an on-going business. This means that there is substantial doubt that we can continue as an on-going business. The consolidated financial statements of the Company do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Forward-Looking Statement Notice When used in this report, the words "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," and similar expressions are intended to identify forward-looking statements regarding events, conditions, and financial trends that may affect the Company's future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and those actual results may differ materially from those included within the forward-looking statements as a result of various factors.

Overview

The Company is an established domestic coal producer engaged in the mining of clean and compliant (low-sulfur) coal. The majority of our coal is sold to utility companies for use in the generation of electricity. During fiscal 2011, we derived approximately 99% of our total coal revenues from sales to our four largest customers . We expect these customers to collectively account for the majority of our revenues during 2012 as well.   We have entered into contracts with these customers to deliver a certain quantity of coal at fixed prices, subject to other terms and conditions that are standard in the industry. With respect to customers not subject to long-term contracts, we have short-term or market delivery and price contracts that we negotiate and perform on a continuous basis. Our strategy is to have a combination of long-term and short-term delivery contracts. We operate the Horizon Mine located in Carbon County, Utah, and we plan to expand mining operations in this mine, and acquire additional mining properties.

The Horizon Mine is operated through our wholly-owned subsidiary Hidden Splendor Resources, Inc. Hidden Splendor’s only business is the coal mining operation at the Horizon Mine located approximately eleven miles west of Helper, Utah in Carbon County. This mine produces what is commonly known as “steam coal,” that is, coal used to heat water to create steam which, in turn, is used to turn turbine engines to produce electricity. While steam coal primarily is sold to power companies for use in coal-fired power plants, steam coal also can be used in the production process for concrete and often is sold in the western United States for this purpose. Since 2003, the market for the coal mined from the Horizon Mine has been sold to local utilities, other coal mining operations, a concrete producer and a coal broker.

Coal mined from the Horizon Mine is loaded into trucks which haul the coal either directly to end users of the coal or to distribution facilities known as loadouts where the coal is loaded into rail cars and transported via rail to customers. The Horizon Mine is located approximately eight miles from the nearest loadout facility (which we acquired during the 3^rd quarter of 2011) and approximately sixteen miles from the loadout facility previously most commonly used to ship our coal to end users. Hidden Splendor sells the coal mined at the Horizon Mine on a “FOB the mine” or “FOB the railcar” basis. For the “FOB the mine” basis, Hidden Splendor earns payment for the coal mined from the Horizon Mine as that coal is loaded into trucks at the mine site. Once the coal is loaded into those trucks, the coal belongs to our customers. For the “FOB the railcar” basis, Hidden Splendor earns payment for the coal mined from the Horizon Mine as that coal is loaded into the railcar at the railroad loadout facility. Once the coal is loaded into those railcars, the coal belongs to our customers.

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Hidden Splendor Bankruptcy & Plan of Reorganization

On October 15, 2007, Hidden Splendor filed a Chapter 11 Petition in the United States Bankruptcy Court for the District of Nevada as a debtor in possession.  On December 8, 2008, Hidden Splendor’s Plan of Reorganization (the “Plan”) in that matter was formally confirmed by the U.S. Bankruptcy Court for the District of Nevada to emerge from Chapter 11 bankruptcy protection.  The Plan became effective on December 19, 2008, at which time Hidden Splendor officially emerged from bankruptcy.  In connection with the Plan, the Company paid an initial $500,000 “administrative earmark contribution” payment and an initial $2,250,000 “Plan Funding Contribution” payment, which were allocated to the payment of professional fees, taxes, and initial settlement payments to various creditors.  Additionally, the Plan provides for payments to creditors over time in an aggregate principal amount of not less than approximately $10,000,000 and up to approximately $10,700,000 over a period not exceeding seven years from the effective date of the Plan.  Thereafter, Hidden Splendor made payments under the terms of the Plan.  As of this filing, the following Plan obligations remain:

1.

Zions Bank, the secured creditor receives in equal monthly installments of $94,879 with a balance of approximately $2,866,000 still owed:

2.

The Internal Revenue Service and certain State of Utah tax authorities are owed $878,964.  Hidden Splendor is delinquent on the $162,156 quarterly payments due March 31, 2010, June 30, 2010, September 30, 2010, December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011, December 31, 2011, March 31, 2012 and June 30, 2012 to the Internal Revenue Service and

3.

The Howard Kent, Inc. Profit Sharing Plan is owed $242,772 and receives monthly payments.  Hidden Splendor is current on the payment to the Howard Kent, Inc. Profit Sharing Plan as of the date of this Report.

The delinquency on payments of other loans to third parties and as outlined herein result in Hidden Splendor being in default on its secured creditor loan, the Company has received no notice of default in this regard.  The Company is currently working to remedy the aforementioned defaults. As of the date of this Report, no parties had provided the Company an uncured notice default, nor has any party to the Plan filed a notice of default under the Plan with the bankruptcy court.

  

As of September 30, 2011, the balance owed to the general unsecured creditors under the Plan was paid in full.

   Company Obligations under the Plan    Under the Plan, America West must pay all of Hidden Splendor’s post-petition liabilities that Hidden Splendor cannot pay, in the ordinary course of business, in an amount not to exceed $1,560,000.  Additionally, America West must make capital expenditures in connection with the operations of the Horizon Mine by making available at least $2,000,000 in new equipment within 180 days of the effective date of the Plan.  In the event the Company borrows money or otherwise incurs a liability to fund capital expenditures, Hidden Splendor may make payments to service such debt up to $13,500 for every $1,000,000 dollars borrowed and made available to Hidden Splendor.  Hidden Splendor may make additional payments to the Company provided certain Plan repayment benchmarks are achieved.    Since the Plan was initiated and through the date of this Report, Hidden Splendor has been in compliance with the capital expenditure and associated debt service requirements set forth herein.

Default under the Plan.  In the event Hidden Splendor (i) fails to pay fully any payments when due, or (ii) fails to comply with any provision of the Plan, and its creditors file a default under the Plan with the bankruptcy court, then (A) 100% (reduced only by the amounts actually paid and received by creditors) of all allowed claims of general unsecured creditors shall be immediately due and accelerated and (B) Hidden Splendor must immediately list its assets for sale.   As stated above, Hidden Splendor is in default in payments to various creditors under the Plan.   The Company is working to remedy the aforementioned defaults.

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Results of Operations for the Three Months Ended June 30, 2012 Compared to June 30, 2011

Material changes in financial statement line items

The following table presents statements of operations data for each of the periods indicated and presents the percentage of change in each line item from one period to the next.

	Three Months Ended						Percentage
	June 30,						Increase
	2012			2011			(Decrease)
Coal sales	$	4,040,355		$	4,005,504		1%
Machine repair services		2,783			2,751		1%
Total revenue		4,043,138			4,008,255		1%
Coal production costs		4,031,534			3,467,133		16%
Depreciation, depletion and accretion		513,551			551,179		(7%)
Machine repair costs		(354)			-		-
Total cost of revenue		4,544,731			4,018,312		13%
Gross loss		(501,593)			(10,057)		(4,888%)
Operating expenses:
General and administrative		1,570,915			2,043,510		(23%)
Loss on abandonment of mineral property		11,632,068			-		-
Net operating expense		13,202,983			2,043,510		546%
Loss from operations		(13,704,576)			(2,053,567)		(567%)
Other income (expenses):
Interest expense		(499,808)			(1,872,709)		(73%)
Other income		27,057			501		-
Loss on extinguishment of debt		-			(246,071)		-
Gain on derivative liabilities		33,691			349,368		(90%)
Total other expenses, net		(439,060)			(1,768,909)		582%
Net loss	$	(14,143,636)		$	(3,822,476)		(270%)

We had revenue for the three months ended June 30, 2012 of approximately $4 million which is approximately the same as for the same period in 2011. The revenue from coal sales decreased by approximately $1 million but was offset by an equal increase in the revenues from the Wildcat Load out facility.  The decrease in coal sales was due to the Company intermittently idling the mine due to MSHA changes in the mine plan and the Seely forest fire that interfered with the proper ventilation of the mine during the second quarter of 2012.  All coal sales revenue during the second quarter of 2012 was related to coal produced from our Horizon coal mine operations by our wholly-owned subsidiary, Hidden Splendor Resources, Inc.

Our cost of revenue during the three months ended June 30, 2012 was approximately $4.5 million, an increase of 13% over the cost of revenue of approximately $4 million reported for the three months ended June 30, 2011.  The 13% increase in cost of revenue was primarily due to the increase in activity for the load out facility compared to the same period in 2011.  Coal production costs increased relative to sales due to a decrease in the quality of the coal produced and the increase in maintenance expense during the idle period due to the Seely forest fire in the area.

General and administrative expenses for the three months ended June 30, 2012 totaled approximately $1.6 million, a decrease of approximately $400 thousand, or 23% decrease, from operating expenses of approximately $2 million in the prior year’s comparable three month period. The decrease is primarily attributed to a decrease in MSHA compliance legal expenses in the second quarter of 2012 compared to 2011.

During June, 2012 the Mine Safety Health Administration (MSHA) required changes in the mine plan which resulted in the Company deciding to abandon and seal a section of the mine. $11.6 million of net mine development costs related to the section that was abandoned were written off. Production of coal was suspended during the last half of June resulting in no coal sales for that period.

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Net other expenses totaled approximately $.4 million for the second quarter of 2012, compared to net other expenses of $1.8 million for the second quarter of 2011. The positive variance between periods of approximately $1.3 million was primarily due to an approximate $1.4 million decrease in interest expense. Interest expense of approximate $1.8 million in 2011 included a one-time charge associated with the amortization of debt discount in relation to the restructure of loans with shareholders.

We incurred an approximate $14 million net loss for the three months ended June 30, 2012, compared to an approximate $3.8 million net loss for the three months ended June 30, 2011. The negative variance between the periods of $10.2 million, or 270%, is primarily attributed to the $11.6 million loss on abandoned mineral property offset by the $1.3 million decrease in interest expense.

Results of Operations for the Six Months Ended June 30, 2012 Compared to June 30, 2011

Material changes in financial statement line items

The following table presents statements of operations data for each of the periods indicated and presents the percentage of change in each line item from one period to the next.

	Six Months Ended						Percentage
	June 30,						Increase
	2012			2011			(Decrease)
Coal sales	$	8,071,825		$	7,468,743		8%
Machine repair services		35,011			25,456		38%
Total revenue		8,106,839			7,494,199		8%
Coal production costs		8,848,998			5,892,906		50%
Depreciation, depletion and accretion		1,117,144			979,808		14%
Machine repair costs		6,454			-		-
Total cost of revenue		9,972,596			6,872,714		45%
Gross profit (loss)		(1,865,760)			621,485		(400%)
Operating expenses:
General and administrative expenses		2,526,271			4,101,212		(38%)
Loss on abandonment of mineral property		11,632,201			-		-
Gain on settlement of property tax		(183,359)			-		-
Net operating expense		13,975,113			4,101,212		241%
Loss from operations		(15,840,873)			(3,479,727)		355%
Other income (expenses):
Interest expense		(1,188,492)			(6,839,808)		(83%)
Other income		131,992			502		-
Loss on extinguishment of debt		-			(812,428)		-
Gain on derivative liabilities		37,545			779,411		(95%)
Total other expenses, net		(1,018,955)			(6,872,323)		(85%)
Net loss	$	(16,859,828)		$	(10,352,050)		(63%)

We had revenue for the six months ended June 30, 2012 of approximately $8 million, a 8% increase from revenues of $7.5 million for the same six month period in 2011. The increase in revenues was attributable to increased revenues from the Wildcat Loadout facility of $1.3 million offset by a decrease in coal sales of $617 thousand in 2012 compared to 2011.  The decrease in coal sales was due to the Company intermittently idling the mine due to MSHA changes in the mine plan and the Seely forest fire that interfered with the proper ventilation of the mine during the second quarter of 2012.  All coal sales revenue during the first six months of 2012 was related to coal produced from our Horizon coal mine operations by our wholly-owned subsidiary, Hidden Splendor Resources, Inc.

Our cost of revenue during the six months ended June 30, 2012 was approximately $9.9 million, an increase of 45% over the cost of revenue of approximately $6.8 million reported for the six months ended June 30, 2011.  The 45% increase in cost of revenues was due to cost of the Wildcat Loadout facility of $1.3 million the first six months of 2012 compared to the same period in 2011.

General and administrative expenses for the six months ended June 30, 2012 totaled approximately $2.5 million, a decrease of approximately $1.6 million, or 38% decrease, from operating expenses of approximately $4.1 million in the prior year’s comparable six month period. The decrease is primarily attributed to an approximate $0.9 million decrease in MSHA compliance legal expenses in the first six months of 2012 compared to 2011, decrease in workers compensation expense of approximately $100,000 as well as a $248,000 decrease in consulting expenses.

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In addition to the loss in abandonment of mineral property mentioned above we experience a gain on settlement of property tax during the six months of 2012.

Net other expenses totaled approximately $1 million for the first six months of 2012, compared to net other expenses of $6.8 million for the first six months of 2011. The variance between periods of approximately $5.8 million was primarily due to an approximate $5.6 million decrease in interest expense.   Interest expense of approximate $2.5 million in 2011 included a one-time charge associated with the amortization of debt discount in relation to the restructure of loans with shareholders.

Liquidity and Capital Resources.

Our current liquidity position has allowed us to meet our ongoing Plan payment obligations and nominal working capital requirements to date. Due to delinquency of payments to certain creditors by our Company in 2012 and through the date of this Report, certain debts to both related and third parties are in default. As a result, a total of approximately $4 million associated with Hidden Splendor’s Bankruptcy Plan of Reorganization is in default and due upon demand and $17 million of related party short term debt is in default. The Company is working to remedy these defaults and, as of the date of this Report, no creditors have filed a notice of default. In addition, we have accrued unpaid federal taxes of approximately $1 million related to 2009 and 2010, which is subject to a payment plan of $50,000 per month over the next approximate three years.

Our cash flows from operations during 2012 and through the date of this Report have not been sufficient to meet all our obligations. Historically, we have funded the Company’s cash shortfalls with ad hoc loans from related parties and third parties. However, these loans have not been enough to fund our expansion plans to the point of achieving cash positive operations, nor refinance our debt.  As a result, we will likely be required to either continue borrowing funds from shareholders or raise additional capital to meet the aforementioned obligations and fund expected working capital to expand our mining operation in 2012. Management’s plan is to complete a financing to deploy additional equipment, which we expect to escalate our rate of production and, as a result, our cash flows from operations. Should the Company receive a notice of default and demand for immediate payment on any of the aforementioned debts, we will likely be required to raise up to a total of approximately $21 million. Our inability to obtain immediate financing from third parties will negatively impact our ability to fund operations and execute our business plan. Any failure to obtain such financing could force us to abandon or curtail our operations. There is no assurance that we can raise additional capital from external sources, the failure of which could cause us to sell assets or curtail operations. We have no credit facilities in place, and as the Company has no debt or equity funding commitments, we will need to rely upon best efforts financings. Accordingly, we cannot identify or predict what external sources may provide financing, nor what terms any prospective financing may have.   Our auditors have issued a going concern opinion for our consolidated financial statements due to the substantial doubt about our ability to continue as a going concern.

Trends, events or uncertainties which could impact either liquidity or revenues.

Several of the matters discussed in this report contain forward-looking statements that involve risks, trends and uncertainties. Factors associated with the forward-looking statements that could cause actual results to differ materially from those projected or forecast are included in the statements below. In addition to other information contained in this report, readers should carefully consider the cautionary statements contained in Item 1 of Part I above.

  

Off-Balance Sheet Arrangements

As of June 30, 2012, the Company had no off-balance sheet arrangements.

Critical Accounting Policies

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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Property and Equipment - Property and equipment are carried at cost and include expenditures for new facilities and those expenditures that substantially increase the productive lives of existing equipment. Maintenance and repair costs are expensed as incurred. Mine development costs are capitalized and depleted by the units of production method over estimated total recoverable proven and probable reserves.

Property and equipment are depreciated on a straight-line basis over the assets’ estimated useful lives. Fully depreciated property and equipment still in use are not eliminated from the accounts.

 

The Company assesses the carrying value of its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing estimated undiscounted cash flows expected to be generated from such assets to their net book value. If net book value exceeds estimated cash flows, the asset is written down to its fair value. When an asset is retired or sold, its cost and related accumulated depreciation and amortization are removed from the accounts. The difference between the net book value of the asset and proceeds on disposition is recorded as a gain or loss.

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Asset Retirement Obligations - FASB ASC 410-20 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company’s asset retirement obligation (“ARO”) liabilities primarily consist of estimated costs related to reclaiming mines and related facilities in accordance with federal and state reclamation laws as defined by each mining permit.

The Company estimates its ARO liabilities for final reclamation and mine closure based upon detailed engineering calculations of the amount and timing of the future costs for a third party to perform the required work. Cost estimates are escalated for inflation, and then discounted at the credit-adjusted risk-free rate. The Company records an ARO asset associated with the initial recorded liability. When the liability is initially recorded, the offset is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is amortized based on the units of production method over the estimated proved and probable reserves at the related mine. Accretion expense is included in coal production costs. To the extent there is a difference between the liability recorded and the cost incurred, a gain or loss upon settlement is recognized.

The reclamation plan calls for a bonding and insurance requirement. The bond is the deed to residential property owned personally by the shareholders.

 

Revenue Recognition - Hidden Splendor’s revenues are generated under a long-term sales contract with a single coal brokerage company. The terms of the contract are “FOB the mine” or “FOB the railcar”. Revenues from coal sales are recognized when the coal is loaded onto the delivery truck at the mine or the railcar at the railroad loadout facility, both of which are contracted by the customer. At the end of each month, the amount of coal delivered to the coal brokerage is estimated. In addition, the customer may apply a penalty against invoices relating to deviations in delivered coal quality per the contract terms. Variances between estimated revenue and actual payment are recorded in the month the payment is received; however, differences have been minimal.

Share-Based Payments - The Company accounts for share-based payments in accordance with the authoritative guidance issued by the FASB on stock compensation, which establishes the accounting for transactions in which an entity exchanges its equity instruments for goods or services. Under the provisions of the authoritative guidance, share-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period). The Company estimates the fair value of share-based payments using the Black-Scholes option-pricing model. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  

Cash and Cash Equivalents

Not required.

ITEM 4T : CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls Procedures.

The Company’s management, with the participation of the chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of the Company's internal controls over financial reporting, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework, (as defined in the Exchange Act) Rules 13a-15(3) and 15-d-15(3) as of the end of the period covered by this report (the “Evaluation Date”). The following material weaknesses were noted in the evaluation of our internal controls over financial reporting:

1

There are inadequate controls over the creation and posting of journal entries to ensure they are authorized, accurate, and complete. In addition, there are no controls to ensure that all authorized journal entries have been posted and that the postings reflected the authorized journal entry.

2

The Company has not established an Audit Committee independent of management.

3

There are inadequate controls to ensure that subjective analyses (e.g. impairment analysis of assets) are prepared and reviewed by appropriate personnel.

4.

The Company had significant debt activity during the year, which resulted in complex debt transactions that were not accounted for correctly.

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These material weaknesses have been disclosed to our Board of Directors and we are continuing our efforts to improve and strengthen our control processes and procedures. Our management and directors will continue to work with our auditors to ensure that our controls and procedures are adequate and effective.

As a result of the existence of these material weaknesses as of June 30, 2012, management has concluded that we did not maintain effective internal control over financial reporting as of June 30, 2012, based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

(c) Changes in Internal Controls.

During the second quarter of 2012 we implemented changes in internal control that we believe will allow us to be more timely in filing reports with the SEC and have made available an accounting research library to our accounting staff.  There were no other changes in the Company’s internal controls over financial reporting, known to the chief executive officer or to the chief financial officer that occurred during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material changes in the status of legal proceedings previously reported in the Company’s 2011 Annual Report on Form 10-K, excepted as noted in this Item 1 under Part II.

Occasionally, Hidden Splendor is issued citations by the Mine Safety and Health Administration in connection with regular inspections of the Horizon Mine. At times, Hidden Splendor challenges citations, resulting in reductions to proposed penalties or administrative adjudications with no penalties. As of June 30, 2012, Hidden Splendor has challenges pending in several administrative actions. Such actions cover a total of approximately $1,200,000 of proposed, assessed penalties.   We are unable to predict the outcome of these pending administrative actions. If the Company is not successful in eliminating or significantly reducing such proposed penalties, such result could adversely affect our financial condition and operations.

ITEM 1A. RISK FACTORS

This Report should be read in conjunction with “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

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

Set forth below is certain information concerning issuances and pending obligations of issuances of common stock that were not registered under the Securities Act of 1933 (“Securities Act”) that occurred, but were not reported in the Form 10-K filed with the SEC on May 16, 2012 for the fiscal year ended December 31, 2011, during the first and second quarter of fiscal 2012 and to date:

In January 2012, the Company borrowed $29,516 from the Chairman of the board of directors and issued 29,516 common shares in connection with the debt.

In March 2012, we entered into a debt settlement agreement with a third party pursuant to which we issued the third party lender a total of 600,000 shares of the Company’s Common Stock as settlement of a total of $109,894 accounts payable.

During the first six months of 2012, the Company borrowed $1,370,000 from a related party and issued 1,370,000 common shares in connection with the debt.

The issuance of these equity securities were consummated pursuant to Section 4(2) of the Securities Act and the rules and regulations promulgated thereunder on the basis that such transactions did not involve a public offering and the offerees were sophisticated, accredited investors with access to the kind of information that registration would provide. The recipient of these securities represented its intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the share certificates and other instruments issued in such transactions. Unless otherwise noted, no sales commissions were paid.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

  

Exhibits

Exhibit		Description		Location of Exhibit
31.1		Chief Executive Officer Section 302 Certification pursuant to Sarbanes-Oxley Act.		Included with this filing.
31.2		Chief Financial Officer Section 302 Certification pursuant to Sarbanes-Oxley Act.		Included with this filing.
32.1		Chief Executive Officer Section 906 Certification pursuant to Sarbanes-Oxley Act.		Included with this filing.
32.2		Chief Financial Officer Section 906 Certification pursuant to Sarbanes-Oxley Act.		Included with this filing

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SIGNATURES

In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMERICA WEST RESOURCES, INC.
Dated: August 16, 2012	By:	/s/ Dan R. Baker
		Dan R. Baker
		Chief Executive Officer
	By:	/s/ Brent M. Davies
		Brent M. Davies
		Chief Financial Officer

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EXHIBIT INDEX

  

Exhibit Number		Description
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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