UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 10-Q
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X. QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2011
. TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to____________
Commission File Number: 000-53661
NORTHSIGHT CAPITAL, INC.
(Exact name of issuer as specified in its charter)
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Nevada | | 26-2727362 |
(State or Other Jurisdiction of | | (I.R.S. Employer I.D. No.) |
incorporation or organization) | | |
7740 East Evans Rd.
Scottsdale, AZ 85260
(Address of Principal Executive Offices)
(480) - 385 3893
(Registrant’s Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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. 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 definition 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 | . (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 X. No .
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
The number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date:
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Class | | Outstanding as of November 1, 2011 |
Common Capital Voting Stock, $0.001 par value per share | | 12,500,000 shares |
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, Financial Statements and Notes to Financial Statements contain forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations and financial conditions. All forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or intended.
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PART I - FINANCIAL STATEMENTS
Item 1. Financial Statements.
September 30, 2011
C O N T E N T S
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Condensed Balance Sheets | 4 |
Condensed Statements of Operations | 5 |
Condensed Statements of Cash Flows | 6 |
Notes to Unaudited Condensed Financial Statements | 7 |
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NORTHSIGHT CAPITAL, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
September 30, 2011 and December 31, 2010
See accompanying notes to condensed financial statements.
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NORTHSIGHT CAPITAL, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2011
NOTE 1 BASIS OF PRESENTATION
The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The interim financial statements reflect all adjustments, consisting of normal recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the period.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The results of operations for the nine month period ended September 30, 2011, are not necessarily indicative of the operating results for the full year.
NOTE 2 LIQUIDITY/GOING CONCERN
The Company does not have assets, nor has it established operations, and has accumulated losses since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. It is the intent of the Company to seek a merger with an existing, well-capitalized operating company. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 3 RELATED PARTY TRANSACTIONS
The Company had expenses and payables paid on its behalf by a shareholder in the amount of $10,934 during the nine month period ended September 30, 2011, resulting in a $16,681 balance due two related party shareholders. On April 12, 2011, the Company issued an aggregate total of 1,555,603 of its $0.001 par value common stock comprised of “restricted securities,” as defined in Rule 144 of the SEC, in consideration of $28,500 in cash and the cancellation of the related party shareholder debt in the amount of $16,681, for total consideration of $45,181, equal to approximately $0.029 per share. See also Note 4, Change of Control Transaction.
The securities were sold to two directors, Thomas J. Howells (327,000 shares) and Travis T. Jenson (327,000 shares); Jenson Services, Inc., a Utah corporation that is controlled by Messrs. Howells and Jenson (383,000 shares); and Kelly Trimble, a present principal shareholder of the Company (518,603 shares).
During the three month period ended September 30, 2011, the company issued 1,225,000 warrants to its parent, Safe Communications, Inc. (“SAFE”) to purchase a like number of its $0.001 par value common stock at an exercise price of $.20 per share. These warrants were issued for reimbursement of expenses ($10,900) paid by SAFE on behalf of the Company.
NOTE 4CHANGE OF CONTROL TRANSACTION
Effective May 31, 2011, the Company and certain of its shareholders (Thomas Howells, Travis Jenson, Jenson Services, Inc. and Kelly Trimble, collectively, the “Principal Shareholders”) entered into a Stock Purchase Agreement dated as of May 27, 2011 (“SPA”) with Safe Communications, Inc., a Texas corporation (“Buyer”) under which the Buyer purchased for a $250,000 cash payment 10,000,000 shares of the Company’s common stock, representing 80% of the issued and outstanding common stock after giving effect to the purchase transaction. In addition, under the SPA, if the Buyer does not complete certain transactions within the time period prescribed by the SPA, the Buyer is obligated to pay the Company an additional $50,000 in cash.
Effective May 31, 2011, the Company also entered into a Principal Shareholders Agreement with each of the Principal Shareholders dated as of May 27, 2011 (“PSA”), under which the Company agreed make payments to the Principal shareholders in the aggregate amount of $250,000, in consideration of the Principal Shareholders’ undertakings in the SPA, including but not limited to their agreement to indemnify the Buyer in connection with the stock purchase contemplated in the SPA. If the Buyer is required to make the additional $50,000 payment referenced above, then the Company is required to pay such additional $50,000 to the Principal Shareholders in accordance with the PSA. Each of the Principal Shareholders is a significant shareholder of the Company, and, in addition, at the time of execution of the PSA, Messrs. Howells, Bassham and Jenson were directors of the Company, Mr. Howells was President and Mr. Bassham was Treasurer and Secretary.
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NORTHSIGHT CAPITAL, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2011
NOTE 4CHANGE OF CONTROL TRANSACTION (CONTINUED)
In connection with the closing of the transactions contemplated by the SPA, effective May 31, 2011, Travis Jenson resigned as President and Director of the Company, Thomas Howells resigned as a director of the Company and Wayne Bassham resigned as Treasurer and secretary of the Company. Mr. Bassham also tendered his resignation as a director of the Company, effective ten days after the Company’s mailing to its shareholders of an Information Statement on Schedule 14F-1. John P. Venners, President of the Buyer, was appointed interim President and a director of the Company, effective May 31, 2011. Mr. Venners was appointed an officer and director of the Company by Wayne Bassham, following the resignations of Messrs. Howells and Jenson, all as required by the SPA.
In connection with the closing of the stock purchase under the SPA, the Buyer obtained control of the Company by acquiring 80% of the Company’s issued and outstanding common stock and by having its designee, John P. Venners, President of the Buyer, appointed interim President and a director of the Company.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-looking Statements
Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.
Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Plan of Operations
Our Company’s plan of operation for the next 12 months is to: (i) consider a possible acquisition of going concern, including the possibility of engaging in a transaction with our parent company, (ii) adopt a business plan for any acquired business, and (iii) upon completion of an acquisition and funding, to commence the business operations of the acquired business.
During the next 12 months, provided we do not complete an acquisition during such period, our only foreseeable cash requirements will relate to maintaining our good standing as a corporation in our state of organization; the payment of our Securities and Exchange Commission and the Exchange Act reporting filing expenses, including associated legal and accounting fees; and costs incident to reviewing or investigating any potential business venture. We may have to raise additional funds during the next 12 months to fund our basic operating expenses.
Our common stock is currently quoted on the Over-the-Counter Bulletin Board (OTCBB) under the symbol NCAP.OB.
Results of Operations
Three Months Ended September 30, 2011 Compared to Three Months Ended September 30, 2010
We had no operations during the quarterly period ended September 30, 2011, nor do we have operations as of the date of this filing. We reported no sales during the three month periods ended September 30, 2011 and 2010. For the three months ended September 30, 2011 and 2010, we incurred operating expenses of approximately $11,000 and $6,900, respectively, an increase of approximately $4,000, or 57%. This increase is primarily attributable to an increase of approximately $1,700 for professional services and an increase of approximately $2,300 in general administrative expenses. For the three months ended September 30, 2011 and 2010, the Company reported a net loss of $10,900 and $6,942, respectively, an increase in net loss of approximately $4,000, or 57%. This increase in net loss is primarily attributable to the increase of approximately $4,000 in operating expenses.
Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010
We had no operations during the nine month period ended September 30, 2011, nor do we have operations as of the date of this filing. We reported no sales during the nine month periods ended September 30, 2011 and 2010. For the nine months ended September 30, 2011 and 2010, we incurred operating expenses of approximately $298,000 and $48,000, respectively, an increase of approximately $250,000, or 521%. This increase is primarily attributable to the increase of approximately $237,000 in consulting fees and a $19,000 increase in professional fees, partially offset by a $6,000 decrease in related party rent. For the nine months ended September 30, 2011, net loss increased approximately $276,000 to $298,000 from $21,000. This increase in net loss is primarily attributable to the increase of approximately $250,000 in operating expenses, partially offset by a decrease in other income, consisting primarily of $28,000 in forgiveness of debt income.
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Liquidity and Capital Requirements
We have no cash or cash equivalents on hand. If additional funds are required, such funds may be provided by our parent company or we may raise funds from third parties, either in the form of debt or equity. During the nine month period ended September 30, 2011, expenses were paid by a former principal shareholder in the amount of $10,934, which resulted in a balance due to related party shareholders in the amount of $16,681. On April 12, 2011, the Company issued 574,603 restricted shares of its $0.001 par value common stock in cancellation of its $16,681 debt obligation to the related party shareholders. Also, during the quarter ended September 30, 2011, SAFE, the Company’s parent, paid $10,900 to outside professionals for services rendered on behalf of the Company. The Company reimbursed SAFE by issuing 1,225,000 warrants to purchase a like number of its $0.001 par value common stock at an exercise price of $.20 per share.
Off-balance Sheet Arrangements
None.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not required.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including the President and Secretary, to allow timely decisions regarding required disclosures.
Under the supervision and with the participation of our management, including our President and Treasurer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our President and Treasurer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
During the fiscal quarter covered by this Quarterly Report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Not required.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During August, 2011, we issued our parent company, SAFE, warrants to purchase 1,225,000 shares of our common stock, at an exercise price of $.20 per share, in full satisfaction of SAFE having paid $10,900 in expenses we incurred.
Item 3. Defaults Upon Senior Securities
None; not applicable.
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Item 4. [Removed and Reserved]
Item 5. Other Information
Item 6. Exhibits
(a) Exhibits
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Exhibit No. |
Identification of Exhibit |
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4.1 | Form of Common Stock Purchase Warrant issued to SAFE |
31.1 | Certification of John P. Venners Pursuant to Section 302 of the Sarbanes-Oxley Act. |
31.2 | Certification of John P. Venners Pursuant to Section 302 of the Sarbanes-Oxley Act. |
32 | Certification of John P. Venners Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
NORTHSIGHT CAPITAL, INC.
(Issuer)
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Date: | 11/17/11 | | By: | /s/John P. Venners |
| | | | John P. Venners, President and Director(Principal executive and financial officer) |
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