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EX-32.1 - EXH 32-1 CERTIFICATION - HOMELAND RESOURCES LTD.exh32-1_certification.htm
 


 
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 October 31, 2012

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

For the transition period from ________________ to _______________

333-147501
 (Commission file number)

HOMELAND RESOURCES LTD.
 (Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction
Of incorporation or organization)
 
26-0841675
(IRS Employer
Identification No.)

6801 Los Trechos NE, Albuquerque New Mexico            87109
(Address of principal executive offices)                               (Zip Code)

(505) 264-0600
 (Registrant’s telephone number, including area code)

Not applicable
 (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[x] Yes                      [  ] 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[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.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]
Accelerated filer [  ]
Non-accelerated filer [  ]
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   [ x ] No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 60,300,000 shares of Common Stock, $0.0001 par value, December 14, 2012

 
 

 


HOMELAND RESOURCES LTD.

   
Page
PART I.
UNAUDITED FINANCIAL INFORMATION
 
     
Item 1.
Interim Financial Statements
 
     
 
Balance Sheets October 31, 2012 (unaudited) and July 31, 2012
 
3
 
 
Statements of Operations (unaudited)
Three Months Ended October 31, 2012 and 2011
 
 
4
 
 
Statements of Cash Flows (unaudited)
Three Months Ended October 31, 2012 and 2011
 
 
5
 
 
Notes to Financial Statements (unaudited)
6
     
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
10
     
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
12
     
Item 4.
Controls and Procedures
12
     
PART II.
OTHER INFORMATION
 
     
Item 1.
Legal Proceedings
13
     
Item 1A.
Risk Factors
13
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
13
     
Item 3.
Defaults Upon Senior Securities
13
     
Item 4.
Mine Safety Disclosures
13
     
Item 5.
Other Information
13
     
Item 6.
Exhibit Index
13
     
Signatures
 
15

 
2

 

HOMELAND RESOURCES LTD.
BALANCE SHEETS

 

   
October 31,
2012
   
July 31,
2012
 
   
(Unaudited)
       
ASSETS
           
             
Current Assets
           
Cash
 
$
89,838
   
$
143,552
 
Accounts receivable
   
7,000
     
5,000
 
Prepaid assets
   
6,000
     
8,000
 
Total Current Assets
   
102,838
     
156,552
 
                 
Deferred financing costs, net
   
10,133
     
14,421
 
Mineral property
   
1
     
1
 
                 
Oil and gas properties, at cost (full cost method)
               
Proved properties
   
212,086
     
211,238
 
Unproved properties
   
576,550
     
566,115
 
Less: accumulated depletion and depreciation
   
(77,764)
     
(75,897)
 
Net oil and gas properties
   
710,872
     
701,456
 
                 
Total Assets
 
$
823,844
   
$
872,430
 
                 
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
               
                 
Current Liabilities
               
Accounts payable and accrued liabilities
 
$
147,376
   
$
137,820
 
Accounts payable – related party
   
176,354
     
165,854
 
Notes payable
   
709,709
     
709,709
 
Total Current Liabilities
   
1,033,439
     
1,013,383
 
 
Long Term Liabilities
               
Asset retirement obligation
   
3,671
     
3,605
 
Total Liabilities
   
1,037,110
     
1.016,988
 
                 
Stockholders’(Deficit)
               
Preferred stock - $0.0001 par value; authorized – 250,000,000 shares issued and outstanding – nil
   
-
     
-
 
Common stock - $0.0001 par value; authorized – 500,000,000 shares Issued and outstanding – 60,300,000 shares
   
6,030
     
6,030
 
Additional paid in capital
   
109,140
     
109,140
 
(Deficit) accumulated during the development stage
   
(175,610)
     
(175,610)
 
 Retained earnings
   
(152,826)
     
(84,118)
 
Total Stockholders’ (Deficit)
   
(213,266)
     
(144,558)
 
                 
Total Liabilities and Stockholders’ (Deficit)
 
$
823,844
   
$
872,430
 
 
The accompanying notes are an integral part of these unaudited interim financial statements.

 
 
3

 


HOMELAND RESOURCES LTD.
STATEMENTS OF OPERATIONS (UNAUDITED)
 
   
Three Months Ended October 31, 2012
   
Three Months Ended October 31, 2011
 
REVENUES
           
Oil and gas revenue
  $ 10,983     $ 60,522  
Total Revenues
    10,983       60,522  
                 
COSTS AND EXPENSES
               
Lease operating expenses
    4,017       4,746  
Depreciation, depletion, and accretion
    1,933       7,627  
Consulting fees – related party
    10,500       7,500  
General and administrative
    45,799       42,253  
TOTAL OPERATING (EXPENSES)
    (62,249 )     (62,126 )
                 
LOSS FROM OPERATIONS
    (51,266 )     (1,574 )
                 
OTHER EXPENSES
               
Interest expense
    13,152       13,152  
Amortization of deferred financing costs
    4,289       5,660  
TOTAL OTHER EXPENSES
    (17,441 )     (18,812 )
                 
Net (Loss)
  $ (68,707 )   $ (20,386 )
                 
Net (Loss) Per Common Share
Basic and Diluted
  $ (0.00 )   $ (0.00 )
                 
Weighted average number of common shares outstanding Basic and Diluted
    60,300,000       60,300,000  
 
 




The accompanying notes are an integral part of these unaudited interim financial statements.
 

 

 

 
 
4

 

HOMELAND RESOURCES LTD.
STATEMENTS OF CASH FLOWS(UNAUDITED)
 
   
Three Months
Ended
October 31,
2012
   
Three Months
Ended
October 31,
2011
 
OPERATING ACTIVITIES
           
Net (loss)
  $ (68,707 )   $ (20,386 )
Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:
               
Depreciation, depletion, and accretion
    1,933       7,627  
Amortization of deferred financing costs
    4,289       5,660  
Change in non-cash working capital items:
               
(Increase) decrease in accounts receivable
    (2,000 )     14,000  
Increase  in accounts payable and accrued liabilities
    9,126       29,343  
Increase in accounts payable  related party
    10,500       7,500  
Increase (decrease) in prepaid assets
    2,000       (1,250 )
Net cash provided by (used in) operating activities
    (42,859 )     42,494  
 
INVESTING ACTIVITIES
               
Additions to interests in oil and gas properties
    (10,855 )     (6,796 )
Net cash (used in) investing activities
    (10,855 )     (6,796 )
 
FINANCING ACTIVITIES
               
Proceeds from notes payable
    -       -  
Net cash provided by financing activities
    -       -  
                 
Net (decrease) increase in cash
    (53,714 )     35,698  
Cash beginning of period
    143,552       65,811  
Cash end of period
  $ 89,838     $ 101,509  
 
SUPPLEMENTAL CASH FLOW DISCLOSURES
 
               
Cash paid for interest
  $ -     $ -  
Cash paid for income taxes
  $ -     $ -  
 
The accompanying notes are an integral part of these unaudited interim financial statements.

 
 
 
5

 
 
HOMELAND RESOURCES, LTD.
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
OCTOBER 31, 2012
 

 
NOTE 1 - BASIS OF PRESENTATION

The interim financial statements of Homeland Resources Ltd. (“we,” “us,” “our,” “Homeland” or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods due in part, but not limited to, interest rates, drilling risks, geological risks, the timing of acquisitions, and our ability to obtain additional capital. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in Homeland’s Annual Report on Form 10-K for the year ended July 31, 2012, as filed with the Securities and Exchange Commission (“SEC”) on October 29, 2012. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
 
NOTE 2–GOING CONCERN

As of October 31, 2012, our current liabilities exceeded our current assets by $930,601 and for the three months ended October 31, 2012, our net loss was $68,707.  Our results of operations have resulted in an accumulated deficit of $328,436 and a total stockholders’ deficit of $213,266 as of October 31, 2012.  We have participated in the drilling of test wells on undeveloped properties.  We plan further participation in drilling and seismic operations for the remainder of calendar 2012 and during the remainder of the fiscal year.  It is difficult to anticipate our capital requirements for the remainder of the fiscal year as we participate in a seismic program wherein significant drilling activities may commence in the near future. We will need to raise equity or borrow additional capital to fund our continued participation in planned activities. If additional financing is not available, we may be compelled to reduce the scope of our business activities.  If we are unable to fund our operating cash flow needs and planned capital investments, it may be necessary to sell all or a portion of our interests in our oil and gas properties.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounts Receivable – Accounts receivable consists of amounts receivable from oil and gas sold from our well interests. As of October 31, 2012, our accounts receivable amounted to $7,000, all of which is due from one party, the operator of our oil and gas properties.  Management believes this amount to be fully collectible; we will continue to monitor amounts receivable for collectability on a periodic basis.

Asset Retirement Obligation– Asset retirement obligations associated with tangible long-lived assets are accounted for in accordance with ASC 410, “Accounting for Asset Retirement Obligations.” The estimated fair value of the future costs associated with dismantlement, abandonment and restoration of oil and gas properties is recorded generally upon the completion of a well. The net estimated costs are discounted to present values using a risk adjusted rate over the estimated economic life of the oil and gas properties. Such costs are capitalized as part of the related asset. The asset is depleted on the units-of-production method on a field-by-field basis. The liability is periodically adjusted to reflect: (1) new liabilities incurred; (2) liabilities settled during the period; (3) accretion expense; and (4) revisions to estimated future cash flow requirements. The accretion expense is recorded as a component of depreciation, depletion, accretion and amortization expense in the accompanying statements of operations.

Revenue Recognition– The Company recognizes oil and gas revenue when production is sold at a fixed or determinable price, persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, and collectability is reasonably assured.


 
6

 
HOMELAND RESOURCES, LTD.
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
OCTOBER 31, 2012

 
Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions.

NOTE 4 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting standards-setting organizations frequently issue new or revised accounting rules. We regularly review all new pronouncements that have been issued to determine their impact, if any, on our financial statements.

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company's financial position, results of operations or cash flows.

NOTE 5 – (LOSS) PER SHARE

We do not report fully diluted loss per common share as the effect would be anti-dilutive.

 
NOTE 6 – OIL AND GAS PROPERTIES
 
The Company holds the following oil and gas interests:

   
October 31,
2012
   
July 31,
2012
 
Oil and Gas Properties
           
Washita Bend 3D Exploration Project
  $ 537,387     $ 526,952  
2010-1 Drilling Program
    39,163       39,163  
Total Oil and Gas Properties - unproved
    576,550       566,115  
                 
Oil and Gas Properties - proved
    208,895       208,047  
Asset Retirement Cost
    3,191       3,191  
Less: accumulated depletion and impairment
    (77,764 )     (75,897 )
Total
  $ 710,872     $ 701,456  

Washita Bend 3D Exploration Project 

In April 2010, we acquired a 5% working interest in the Washita Bend 3D Exploration Project for a total buy-in cost of $46,250.  The project provides for the acquisition of approximately 135 miles of 3D seismic data to identify drillable prospects in a study area comprising 119,680 acres in Oklahoma.  The Washita prospect area is located in Cleveland, Garvin, McCain and Pottawatomie Counties, Oklahoma.  As of October 31, 2012, the shooting of seismic data and interpretation had been completed. As of October 31, 2012, the operator has indicated that additional prospect areas may be included in the program. Drilling will commence when all prospects have been identified. Drilling is anticipated to start in early calendar 2013 and the project is anticipated to include a minimum of ten prospect wells. The Company will be carried by the seller, in a 10% working interest to casing point in the first eight wells in the Washita Bend prospect area.


 
7

 
HOMELAND RESOURCES, LTD.
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
OCTOBER 31, 2012

               2010–1 Drilling Program

In April 2010, we acquired a 5% working interest in a drilling program located in Garvin County, Oklahoma for a total buy-in cost of $39,163. The Company agreed to participate in the drilling operations to casing point in the initial test well of each prospect.  The before casing point interest shall be 6.25% and the after casing point interest shall be 5.00%.  

As of October 31, 2012, we have participated in the drilling of four test wells.  Of the four wells, one was abandoned in October 2010 and three have been placed into production.

Impairment

Under the full cost method, the Company is subject to a ceiling test.  This ceiling test determines whether there is any impairment to the proved properties.  The impairment amount represents the excess of capitalized costs over the present value, discounted at 10%, of the estimated future net cash flows from the proven oil and gas reserves plus the cost, or estimated fair market value.  There was no impairment cost for the three-month periods ended October 31, 2012 and 2011, respectively.

Depletion

Under the full cost method, depletion is computed on the units of production method based on proved reserves, or upon reasonable estimates where proved reserves have not yet been established due to the recent commencement of production.  Depletion expense recognized was $1,867 and $7,566 for the three-month periods ended October 31, 2012 and 2011, respectively.

NOTE 7 – NOTES PAYABLE

The Company has recorded the following notes payable:

   
October 31, 2012
   
July 31, 2012
 
Radium Ventures 6.5%
  $ 55,000     $ 55,000  
Radium Ventures 6.5%
    50,000       50,000  
Radium Ventures 7.5%
    604,709       604,709  
                 
Total
  $ 709,709     $ 709,709  

Interest expense incurred during the three months ended October 31, 2012 amounted to $13,152. Accrued interest expense related to these notes amounted to $111,510 at October 31, 2012 and has been included in accrued liabilities on the Company’s balance sheet.

NOTE 8–STOCKHOLDERS’ (DEFICIT)
 
As of October 31, 2012, we had 250,000,000 and 500,000,000 shares of preferred stock and common stock authorized, respectively.  10,000,000 shares of preferred stock were designated as Series A Preferred Stock, with a par value of $0.0001 per share.  As of October 31, 2012, there were nil and 60,300,000 shares of preferred stock and common stock outstanding, respectively.

 The Company did not issue any shares of its common stock or preferred shares during the three- month period ended October 31, 2012.

 
8

 
HOMELAND RESOURCES, LTD.
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
OCTOBER 31, 2012

NOTE 9 – COMMITMENTS AND CONTINGENCIES
 
Although not completely estimable as of October 31, 2012, based on the terms of the Company’s original agreements with the operator, the Company anticipates additional expenditures related to its share of the drilling program during the remainder of the fiscal year, and that additional  expenditures related to its seismic program may be significant during the remainder of the fiscal year as drilling may commence on the prospect area.  In addition, should the Company choose to terminate its involvement in the seismic program, the Company may incur significant additional liabilities per the terms of its initial agreement with the operator.

NOTE 10 – RELATED PARTY TRANSACTIONS

As of October 31, 2012, the Company owed $176,354 to a related party.  During the three months ended October 31, 2012, the Company incurred $10,500 in consulting expense with the related party.  The Company made no cash payments to related parties during the three months ended October 31, 2012.

 NOTE 11 – SUBSEQUENT EVENTS

The Company has evaluated all transactions through the date of issuance of these financial statements and noted there are no subsequent events that would require disclosure.




 
9

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

General

Our original business plan was to proceed with the exploration of the Home Ranch Prospect to determine whether there were commercially exploitable reserves of minerals located on the property comprising such mineral claims.  In fiscal 2010, we determined that our ability to explore for minerals on these claims had become economically non-feasible and we therefore suspended our activities on the Home Ranch Prospect indefinitely in order to focus on our oil and gas interests.  We did not conduct any operations or exploration activities on the Home Ranch Prospect during the three-month period ended October 31, 2012.  At the time of this report, we do not know when or if we will proceed with the Home Ranch Prospect.
 
In April 2010, we acquired working interests in a seismic exploration program as well as a drilling program in oil and gas properties located in Oklahoma, as further described below.  Our present plan of operation is to continue to invest in oil and gas properties. 

Oil and Gas Properties

“Bbl” is defined herein to mean one stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to oil or other liquid hydrocarbons.

“Mcf” is defined herein to mean one thousand cubic feet of natural gas at standard atmospheric conditions.

Washita Bend 3D Exploration Project   

In April 2010, we acquired a 5% working interest in the Washita Bend 3D Exploration Project for a total buy-in cost of $46,250.  The project provides for the acquisition of approximately 135 miles of 3D seismic data to identify drillable prospects in a study area comprising 119,680 acres in Oklahoma.  The Washita prospect area is located in Cleveland, Garvin, McCain and Pottawatomie Counties, Oklahoma.  As of October 31, 2012, the shooting of seismic data and interpretation had been completed. As of October 31, 2012, the operator has indicated that additional prospect areas may be included in the program. Drilling will commence when all prospects have been identified. Drilling is anticipated to start in early calendar 2013 and the project is anticipated to include a minimum of ten prospect wells. The Company will be carried by the seller, in a 10% working interest to casing point in the first eight wells in the Washita Bend prospect area.

 2010–1 Drilling Program

In April 2010, we acquired a 5% working interest in a Drilling Program located in Garvin County, Oklahoma.  We have participated in the drilling of four exploratory wells on the prospect acreage. Of the four wells in which we had participated, as of October 31, 2012, three were in production and one was abandoned

Loans

We had no borrowings during the three months ended October 31, 2012.

Results of Operations

Three months ended October 31, 2012 compared to the three months ended October 31, 2011.

Revenues - We recognized $10,983 in revenues during the three months ended October 31, 2012, compared with $60,522 for the three months ended October 31, 2011.  The decrease results primarily from temporary decreases in production resulting from production limitations imposed by the State of Oklahoma. During October 2012, these production limits began to expire and we noted an increase in our production for that month. Permanent decreases in production levels were noted resulting from normal decline curves in the wells.

Expenses - During the three months ended October 31, 2012, we incurred operating expenses of $62,249 as compared to $62,126 during the three months ended October 31, 2011, resulting in an increase of $123.  The
 
 
10

 
 
increase in direct costs is primarily attributable to the following:

·     
increases in general and administrative expenses to $45,799 as compared to $42,253 in the corresponding prior period, which related primarily to increases in accounting and audit fees offset by decreases in legal expense; and
·     
increases in related party consulting expense to $10,500 as compared to $7,500 in the corresponding prior period

These increases were partially offset by:

·     
depreciation, depletion and accretion expense of $1,933 as compared to $7,627 in the corresponding prior period; and
·     
decreased lease operating expenses to $4,017 from $4,746 in the corresponding prior period.

Other expenses – We incurred $17,441 in other expenses during the three months ended October 31, 2012 as compared to $18,812 during the three months ended October 31, 2011 resulting in a decrease of $1,371.  The decrease in other expenses is attributable to decreased amortization of deferred financing costs.

Liquidity and Capital Resources

As of October 31, 2012, we had cash of $89,838, compared to cash of $143,552 as of July 31, 2012.  Our working capital deficit at October 31, 2012 was $930,601, compared to $856,831 as of July 31, 2012. The increase in our working capital deficit relates primarily to decreased cash balances resulting from decreases in revenue generated through operations. The statement of cash flows reflects cash of $10,855 used for the purchase of oil and gas properties, and a total of $nil of cash provided by financing transactions.

We anticipate that we may be required to make additional expenditures relating to our share of the drilling programs during the remainder of the fiscal year. While we have approximately $90,000 of cash currently, such cash may not be sufficient to meet our requirements under our existing agreements.  Our loan facility with Radium expired on December 31, 2011.  Although we are in negotiations with Radium to extend such loan facility, there is no assurance that an agreement can be finalized before we are required to make any expenditure for these drilling programs in excess of what we hold in cash. If we exhaust all our cash, are unable to timely arrange for new financing, and do not pay our share of drilling program costs, we will be in default of our agreements.  In such event, we may incur significant liabilities per our initial agreement with the operator, forfeit our rights to our interest and be forced to impair the interest.
 
Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of October 31, 2012.

Going Concern

In its report prepared in connection with our fiscal year 2012 financial statements, our independent registered public accounting firm included an explanatory paragraph stating that, because we had an accumulated deficit of $259,728  a working capital deficit of $856,831 and a stockholders’ deficit of $144,558 at July 31, 2012, there was substantial doubt about our ability to continue as a going concern.  At October 31, 2012, our accumulated deficit was $328,436 and our stockholder’s deficit amounted to $213,266.  Our continued existence will depend in large part upon our ability to raise sufficient additional capital adequate to fund our participation in drilling and seismic programs through debt and/or equity offerings.  Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Forward Looking Statements

Certain statements in this Quarterly Report on Form 10-Q, as well as statements made by us in periodic press releases and oral statements made by our officials to analysts and shareholders in the course of presentations about the Company, constitute “forward-looking statements.”   Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements to be
 
 
 
11

 
 
materially different from any future results, performance or achievements expressed or implied by the forward looking statements.  Such factors include, among other things: (1) the prices of oil and gas; (2) general economic and business conditions; (3) interest rate changes; (4) the relative stability of the debt and equity markets; (5) government regulations particularly those related to the natural resources industries; (6) required accounting changes; (7) disputes or claims regarding our property interests; and (8) other factors over which we have little or no control.

Item 3.      Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4.      Controls and Procedures

Evaluation of Disclosure Controls and Procedures
 
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 15d-15(f) under the Exchange Act.  Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of our financial statements for external purposes in accordance with generally accepted accounting principles.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our sole officer has assessed the effectiveness of our internal controls over financial reporting as of October 31, 2012.  In making this assessment, management used the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In conducting his evaluation, our sole officer considered advice from our Independent Registered Public Accounting Firm, StarkSchenkein, LLP (“StarkSchenkein”), that based on several minor corrections to our financial statements and related disclosures proposed by StarkSchenkein, there may be material weaknesses in our internal controls over financial reporting.  Specifically, the following deficiencies are noted:

·
We do not have an Audit Committee.  Although we are not legally required to have one, this means that we do not have entity control over our financial statements.
 
·
While our external consultants provide sufficient documentation of our financial statements preparation and review procedures, our sole officer must rely on such documentation.

·
We do not have proper segregation of duties for the preparation of our financial statements, resulting in journal entries being prepared and approved by the same person and lack of entity control over the preparation of financial statements.

As a result of these deficiencies in our internal controls, our sole officer concluded further that the design and operation of our disclosure controls and procedures may not be effective and that our internal control over financial reporting was not effective.

Our sole officer also considered various mitigating factors in making his determination.  Our sole officer also noted that we are still evaluating and implementing changes in our internal controls in response to the requirements of Sarbanes Oxley §404.  During fiscal year ending July 31, 2013, we will continue to implement appropriate changes as they are identified, including changes to remediate material weaknesses in our internal controls.
 
Changes In Internal Controls Over Financial Reporting

In connection with the evaluation of our internal controls during our last fiscal quarter, our sole officer has concluded that there were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended October 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 
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PART II - OTHER INFORMATION

Item 1.       Legal Proceedings

None.

Item 1A.     Risk Factors

Not required for smaller reporting companies.

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

During the quarter ended October 31, 2012, the registrant issued no shares of the Company’s common stock.

Item 3.       Defaults Upon Senior Securities

None.

Item 4.       Mine Safety Disclosures

Not Applicable


Item 5.       Other Information

Not applicable

Item 6.       Exhibits
  
Regulation S-K
Number
Exhibit
3.1
Articles of Incorporation (1)
3.2
Amendment to Articles of Incorporation (1)
3.3
Certificate of Change Pursuant to NRS 78.209 (2)
3.4
Bylaws (1)
10.1
Notice of Mining Claims HR #1-6, recorded by Luna County, New Mexico, on March 24, 2004 (1)
10.2
Confirmation of Agreement with Leroy Halterman dated August 1, 2007 (1)
10.3
Loan Commitment Letter from Wellington Financial Corporation dated August 1, 2007 (1)
10.4
Notice of Intent to Hold the HR #1-6 Lode Mining Claims, filed with the Bureau of Land Management on August 15, 2007 (1)
10.5
Notice of Intent to Hold the HR #1-6 Lode Mining Claims recorded by Luna County, New Mexico, on August 17, 2007 (1)
10.6
Loan Commitment dated April 19, 2010 from Radium Ventures Corp. (3)
10.6
Loan Commitment dated May 11, 2010 from Radium Ventures Corp. (3)
10.6
Loan Agreement dated May 15, 2010 from Radium Ventures Corp. (3)
31.1
Rule 15d-14(a) Certification of Armando Garcia
32.1
Certification of Armando Garcia Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
101*
Financial statements from the Quarterly Report on the Form 10-Q of Homeland Resources Ltd. for the quarter ended October 31, 2012 formatted in XBRL (i) the Balance Sheets; (ii) the Statements of Operations; (iii) the Statements of Cash Flows; and (iv) the Notes to the Financial Statements.
________________________
 
 
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(1)     
Incorporated by reference to the exhibits to the registrant’s registration statement on Form SB-1 filed November 19, 2007, file number 333-147501.
(2)     
Incorporated by reference to the exhibits to the registrant’s current report on Form 8-K filed June 29, 2009, file number 333-147501.
(3)     
Incorporated by reference to the exhibits to the registrant’s current report on Form 8-K filed April 19, 2010, file number 333-147501
 
*In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

 
 

 

 

 

 
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SIGNATURES

 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
HOMELAND RESOURCES LTD.
     
Date: December 14, 2012
By:
/s/ Armando Garcia
   
Armando Garcia
   
President, Secretary, Treasurer
   
(principal executive and financial officer)

 
 
 
 
 
 
 
 
 
 
 
 
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