UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For the quarterly period ended September 30, 2009
Commission File Number 333-144840
NORTHERN MINERALS INC.
(Name of small business issuer in its charter)
Nevada 20-8624019
(State of incorporation) (IRS Employer ID Number)
167 Caulder Drive
Oakville, Ontario, Canada L6J 4T2
(905) 248-3277
(Address and telephone number of principal executive offices)
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 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 (ss.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 shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
There were 5,400,000 shares of Common Stock outstanding as of November 9, 2009.
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if Smaller reporting company)
ITEM 1. FINANCIAL STATEMENTS.
The un-audited quarterly financial statements for the period ended September 30,
2009, prepared by the company, immediately follow.
2
NORTHERN MINERALS INC.
(An Exploration Stage Company)
Balance Sheet
- --------------------------------------------------------------------------------
As of As of
September 30, March 31,
2009 2009
-------- --------
ASSETS
CURRENT ASSETS
Cash $ 1,513 $ 747
-------- --------
TOTAL CURRENT ASSETS 1,513 747
-------- --------
$ 1,513 $ 747
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Loan from a director $ 12,600 $ 4,700
-------- --------
TOTAL CURRENT LIABILITIES 12,600 4,700
TOTAL LIABILITIES 12,600 4,700
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 75,000,000 shares
authorized; 5,400,000 shares issued and outstanding
as at September 30, 2009 and March 31, 2009 5,400 5,400
Additional paid-in capital 51,600 51,600
Deficit accumulated during exploration stage (68,087) (60,953)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (11,087) (3,953)
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,513 $ 747
======== ========
See Notes to Financial Statements
3
NORTHERN MINERALS INC.
(An Exploration Stage Company)
Statement of Operations
- --------------------------------------------------------------------------------
March 5, 2007
Three Months Three Months Six Months Six Months (inception)
Ended Ended Ended Ended through
September 30, September 30, September 30, September 30, September 30,
2009 2008 2009 2008 2009
---------- ---------- ---------- ---------- ----------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
TOTAL REVENUES -- -- -- -- --
EXPENSES
Professional Fees 1,500 1,500 5,500 5,500 23,000
Mineral Claim Expenses -- 8,578 -- 8,578 21,328
General & Administrative Expenses 1,584 900 1,634 9,104 23,759
---------- ---------- ---------- ---------- ----------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES 3,084 10,978 7,134 23,182 68,087
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (3,084) $ (10,978) $ (7,134) $ (23,182) $ (68,087)
========== ========== ========== ========== ==========
BASIC EARNINGS PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,400,000 5,400,000 5,400,000 5,400,000
========== ========== ========== ==========
See Notes to Financial Statements
4
NORTHERN MINERALS INC.
(An Exploration Stage Company)
Statement of Cash Flows
- --------------------------------------------------------------------------------
March 5, 2007
Six Months Six Months (inception)
Ended Ended through
September 30, September 30, September 30,
2009 2008 2009
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (7,134) $(23,182) $(68,087)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Increase (decrease) in Loan from a director 7,900 -- 12,600
(Increase) decrease in Deposits -- 4,250 --
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 766 (18,932) (55,487)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock -- -- 5,400
Additional paid-in capital -- -- 51,600
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES -- -- 57,000
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 766 (18,932) 1,513
CASH AT BEGINNING OF PERIOD 747 22,271 --
-------- -------- --------
CASH AT END OF YEAR $ 1,513 $ 3,339 $ 1,513
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
See Notes to Financial Statements
5
NORTHERN MINERALS INC.
(An Exploration Stage Company)
Notes to Financial Statements
As at September 30, 2009
- --------------------------------------------------------------------------------
NOTE 1 - NATURE AND PURPOSE OF BUSINESS
Northern Minerals Inc. (the OCompanyO) was incorporated under the laws of the
State of Nevada on March 5, 2007. The Company's activities to date have been
limited to organization and capital formation. The Company is Oan exploration
stage companyO and had acquired a series of mining claims for exploration. After
performing exploration work on the claims the Company abandoned the claims due
to unfavorable results and is currently searching for new claims or other
business opportunities which may or may not be in an unrelated field.
NOTE 2 - NATURE OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with maturity
of three months or less to be cash equivalents.
REVENUE RECOGNITION
The Company considers revenue to be recognized at the time the service is
performed.
USE OF ESTIMATES
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's short-term financial instruments consist of cash and cash
equivalents and accounts payable. The carrying amounts of these financial
instruments approximate fair value because of their short-term maturities.
Financial instruments that potentially subject the Company to a concentration
of credit risk consist principally of cash. During the year the Company did not
maintain cash deposits at financial institution in excess of the $100,000 limit
covered by the Federal Deposit Insurance Corporation. The Company does not hold
or issue financial instruments for trading purposes nor does it hold or issue
interest rate or leveraged derivative financial instruments.
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NORTHERN MINERALS INC.
(An Exploration Stage Company)
Notes to Financial Statements
As at September 30, 2009
- --------------------------------------------------------------------------------
NOTE 2 - NATURE OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER SHARE
Basic Earnings per Share (OEPSO) is computed by dividing net income available to
common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-average number of common stock
shares outstanding during the year plus potential dilutive instruments such as
stock options and warrant. The effect of stock options on diluted EPS is
determined through the application of the treasury stock method, whereby
proceeds received by the Company based on assumed exercises are hypothetically
used to repurchase the Company's common stock at the average market price during
the period. Loss per share is unchanged on a diluted basis since the assumed
exercise of common stock equivalents would have an anti-dilutive effect.
INCOME TAXES
The Company uses the asset and liability method of accounting for income taxes
as required by SFAS No. 109 OAccounting for Income TaxesO. SFAS 109 requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and the tax
basis of certain assets and liabilities. Deferred income tax assets and
liabilities are computed annually for the difference between the financial
statement and tax bases of assets and liabilities that will result in taxable or
deductible amounts in the future, based on enacted tax laws and rates applicable
to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized. Income tax expense is the tax
payable or refundable for the period, plus or minus the change during the period
in deferred tax assets and liabilities.
Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial accounting and tax purposes in
different periods. Deferred taxes are classified as current or non-current,
depending on the classification of the assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that are not related
to an asset or liability are classified as current or non-current depending on
the periods in which the temporary differences are expected to reverse. The
Company had no significant deferred tax items arise during any of the periods
presented.
CONCENTRATION OF CREDIT RISK
The Company does not have any concentration of related financial credit risk.
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NORTHERN MINERALS INC.
(An Exploration Stage Company)
Notes to Financial Statements
As at September 30, 2009
- --------------------------------------------------------------------------------
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact to its financial statements.
NOTE 3 - MINERAL CLAIMS
On March 29, 2007 the Company acquired a 100% interest in a total of four
mineral claims located in the Weepah Hills area of Esmeralda County, Nevada.
The claims and related geological report were acquired for 1,400,000 shares of
common stock valued at $.005 per share for a total of $7,000. These costs have
been expensed as exploration costs during the year ended March 31, 2007.
Northern Minerals has been in the exploration stage since its formation on March
5, 2007 and has not yet realized any revenues from its planned operations.
Mineral property exploration costs are expensed as incurred. When it has been
determined that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs incurred to develop such
property are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve. If
mineral properties are subsequently abandoned or impaired, any capitalized costs
will be charged to operations.
NOTE 4 - COMMON STOCK
Transactions, other than employees' stock issuance, are in accordance with
paragraph 8 of SFAS 123. Thus issuances shall be accounted for based on the fair
value of the consideration received. Transactions with employees' stock issuance
are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, or whichever is more readily
determinable.
On March 5, 2007 the Company issued 500,000 shares of common stock to Damian
O'Hara, a director and 500,000 shares of common stock to Nicole O'Hara, a
director, for cash in the amount of $0.005 per share for a total of $5,000.
On March 29, 2007 the Company issued a total of 1,400,000 shares of common stock
at $.005 per share to Damian O'Hara in repayment of $7,000 paid on behalf of the
Company for the acquisition of the mining claims.
On July 3, 2007 the Company issued 1,000,000 shares of common stock to Nicole
O'Hara, a director, for cash in the amount of $0.005 per share for a total of
$5,000.
On February 18, 2008 the Company issued 2,000,000 shares of common stock to 30
unrelated investors in the Company's SB-2 offering for cash in the amount of
$0.02 per share for a total of $40,000.
8
NORTHERN MINERALS INC.
(An Exploration Stage Company)
Notes to Financial Statements
As at September 30, 2009
- --------------------------------------------------------------------------------
NOTE 5 - RELATED PARTY TRANSACTIONS
Damian O'Hara and Nicole O'Hara, the officers and directors of the Company may,
in the future, become involved in other business opportunities as they become
available, thus they may face a conflict in selecting between the Company and
their other business opportunities. The Company has not formulated a policy for
the resolution of such conflicts.
As of June 30, 2009, $12,600 is owed to Damian O'Hara and is non interest
bearing with no specific repayment terms.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As shown in the accompanying financial
statements, the Company has no sales and has incurred a net loss of
$68,087 since inception. The future of the Company is dependent upon its ability
to obtain financing and upon future profitable operations form the development
of its mineral properties. The financial statements do not include any
adjustments relating to the recoverability and classifications of recorded
assets, or the amounts of and classification of liabilities that might be
necessary in the event the Company cannot continue in existence.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. Any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act. The words "believes," "anticipates," "plans," "seeks,"
"expects," "intends" and similar expressions identify some of the
forward-looking statements. Forward-looking statements are not guarantees of
performance or future results and involve risks, uncertainties and assumptions.
The factors discussed elsewhere in this Form 10-Q could also cause actual
results to differ materially from those indicated by the Company's
forward-looking statements. The Company undertakes no obligation to publicly
update or revise any forward-looking statements.
BUSINESS AND PLAN OF OPERATION
Northern Minerals Inc. was incorporated in the State of Nevada on March 5, 2007
to engage in the acquisition, exploration and development of natural resource
properties. We are an exploration stage company with no revenues or operating
history.
We received the results of Phase 1 and Phase 1A of the exploration program from
the consulting geologist. The findings were not promising and management
determined it was in the best interests of the shareholders to allow the claim
to lapse. As a result, we are investigating other properties on which
exploration could be conducted and other business opportunities to enhance
shareholder value. During the next twelve months we anticipate spending
approximately $8,500 on professional fees, including fees payable in complying
with reporting obligations, and general administrative costs.
LIQUIDITY AND CAPITAL RESOURCES
Our cash in the bank at September 30, 2009 was $1,513 and outstanding
liabilities were $12,600. We have sold $57,000 in equity securities since
inception, $10,000 from the sale of 2,000,000 shares of stock to our officers
and directors, $7,000 from the issuance of 1,400,000 shares of stock to a
director in repayment of the funds paid by him for the acquisition of the
mineral claim and $40,000 from the sale of 2,000,000 shares registered pursuant
to our SB-2 Registration Statement which became effective on October 12, 2007.
If we experience a shortfall of funds our directors have agreed to loan us
funds, however they have no obligation to do so.
RESULTS OF OPERATIONS
We are still in our development stage and have no revenues to date.
We incurred operating expenses of $3,084 for the three months ended September
30, 2009. These expenses consisted of general operating expenses incurred in
connection with the day to day operation of our business and the filing of our
required statements with the Securities and Exchange Commission. For the same
three month period ended September 30, 2008 the operating expenses were $10,978,
which consisted of general operating expenses and $8,578 in mineral claim
expenses. Our net loss since inception through September 30, 2009 was $68,087.
If we experience a shortage of funds we may utilize funds from our directors,
who have informally agreed to advance funds, however they have no formal
commitment, arrangement or legal obligation to advance or loan funds to the
company. If they fail to do so we may be required to terminate our business. We
are an exploration stage company and have generated no revenue to date. Through
September 30, 2009 we had sold $57,000 in equity securities to pay for our
business operations. On February 18, 2008, we closed our offering pursuant to a
10
SB-2 Registration Statement filed with the U.S. Securities and Exchange
Commission, which became effective on October 12, 2007. We sold 2,000,000 shares
of common stock to 30 unaffiliated shareholders at $.02 per share for total
proceeds of $40,000.
Our auditor has issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated revenues and no revenues are anticipated until we
begin removing and selling minerals. There is no assurance we will ever reach
that point.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
ITEM 4. CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Management maintains "disclosure controls and procedures," as such term is
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed in Northern Minerals' Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission rules and forms, and that such information is accumulated
and communicated to management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, an
evaluation was carried out by management, with the participation of the Chief
Executive Officer and the Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of September 30, 2009.
Based on that evaluation, management concluded, as of the end of the period
covered by this report, that Northern Minerals' disclosure controls and
procedures were effective in recording, processing, summarizing, and reporting
information required to be disclosed, within the time periods specified in the
Securities and Exchange Commission's rules and forms.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
As of the end of the period covered by this report, there have been no changes
in Northern Minerals' internal controls over financial reporting during the
quarter ended September 30, 2009, that materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting
subsequent to the date of management's last evaluation.
11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Northern Minerals Inc. is not currently involved in any legal proceedings and we
are not aware of any pending or potential legal actions.
ITEM 1A. RISK FACTORS.
There has been no change to the Risk Factors disclosed in our Form 10-K filed on
July 2, 2009 with the Securities and Exchange Commission for the year ended
March 31, 2009.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
There were no sales of unregistered securities during the period covered by this
report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
There were no defaults upon senior securities during the period covered by this
report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders during the period
covered by this report.
ITEM 5. OTHER INFORMATION.
There is no other information to report.
ITEM 6. EXHIBITS.
The following exhibits are included with this quarterly filing. Those marked
with an asterisk and required to be filed hereunder, are incorporated by
reference and can be found in their entirety in our original Form SB-2
Registration Statement, filed under SEC File Number 333-144840, at the SEC
website at www.sec.gov:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31 Rule 13a-14(a)/15d-14(a) Certification
32 Certification Pursuant to 18 U.S.C. 1350
12
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.
November 9, 2009 Northern Minerals Inc., Registrant
/s/ Damian O'Hara
------------------------------------------
By: Damian O'Hara, President & Director
(Chief Executive Officer, Principal
Financial Officer & Principal
Accounting Officer)
/s/ Nicole O'Hara
------------------------------------------
By: Nicole O'Hara
(Director, Secretary)
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Damian O'Hara November 9, 2009
- ------------------------------------- ----------------
Damian O'Hara, President & Director Date
(Chief Executive Officer, Principal Financial
Officer, Principal Accounting Officer)
/s/ Nicole O'Hara November 9, 2009
- ------------------------------------- ----------------
Nicole O'Hara, Secretary & Director Date
13