form10-q.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-Q
x QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the quarterly period ended June 30,
2008
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Commission
file number 333-149804
(Exact
name of registrant as specified in its charter)
Nevada
|
|
26-2727362
|
|
|
|
(State
or other jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer Identification No.)
|
14301
North 87th
Street, Suite 301
|
|
|
Scottsdale,
AZ
|
|
85260
|
|
|
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Registrant's
telephone
number: (480)
272-7290
Copies
of Communication to:
Stoecklein
Law Group
4695
MacArthur Court,
Eleventh
Floor
Newport
Beach, CA 92660
(949)
798-5541
(949)
258-5112
Indicate
by check mark whether the issuer (1) 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 definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Ruble 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
The
number of shares of Common Stock, $0.001 par value, outstanding on July 31,
2008, was 850,000 shares
PART
I – FINANCIAL INFORMATION
Item
1. Financial Statements.
NORTHSIGHT
CAPITAL, INC.
|
(A
DEVELOPMENT STAGE COMPANY)
|
BALANCE
SHEET
|
(UNAUDITED)
|
|
|
|
|
|
|
June
30,
|
|
|
|
2008
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
|
$ |
5,100 |
|
Total
current assets
|
|
|
5,100 |
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ |
5,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
|
- |
|
Total
current liabilities
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
- |
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred
stock, $0.001 par value, 10,000,000 shares
|
|
|
|
|
authorized,
no shares issued and outstanding
|
|
|
- |
|
Common
stock, $0.001 par value, 100,000,000 shares
|
|
|
|
|
authorized,
850,000 shares issued and outstanding
|
|
|
850 |
|
Additional
paid-in capital
|
|
|
16,750 |
|
(Deficit)
accumulated during development stage
|
|
|
(12,500 |
) |
Total
stockholders' equity
|
|
|
5,100 |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$ |
5,100 |
|
|
|
|
|
|
|
|
|
|
|
See
Accompanying Notes to Financial Statements.
NORTHSIGHT
CAPITAL, INC.
|
(A
DEVELOPMENT STAGE COMPANY)
|
STATEMENTS
OF OPERATIONS
|
(UNAUDITED)
|
|
|
May
21, 2008
|
|
|
|
(inception)
to
|
|
|
|
June
30, 2008
|
|
|
|
|
|
|
Revenue
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Cost
of goods sold
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Gross
profit (loss)
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Professional
fees
|
|
|
12,500 |
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
12,500 |
|
|
|
|
|
|
|
|
|
|
|
(Loss)
before provision for income taxes
|
|
|
(12,500 |
) |
|
|
|
|
|
Provision
for income taxes
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)
|
|
$ |
(12,500 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares
|
|
|
764,634 |
|
|
|
|
|
|
outstanding
- basic and fully diluted
|
|
|
|
|
|
|
|
|
|
Net
(loss) per share - basic and fully diluted
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
See
Accompanying Notes to Financial Statements.
NORTHSIGHT
CAPITAL, INC.
|
(A
DEVELOPMENT STAGE COMPANY)
|
STATEMENTS
OF CASH FLOWS
|
(UNAUDITED)
|
|
|
May
21, 2008
|
|
|
|
(inception)
to
|
|
|
|
June
30, 2008
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
Net
(loss)
|
|
$ |
(12,500 |
) |
Adjustments
to reconcile net (loss)
|
|
|
|
|
to
net cash used in operating activities:
|
|
|
|
|
Shares
issued for services
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in operating activities
|
|
|
(2,500 |
) |
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
Proceeds
from sale of common stock, net of offering costs
|
|
|
7,600 |
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
7,600 |
|
|
|
|
|
|
|
|
|
|
|
NET
CHANGE IN CASH
|
|
|
5,100 |
|
|
|
|
|
|
CASH
AT BEGINNING OF YEAR
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
CASH
AT END OF YEAR
|
|
$ |
5,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
INFORMATION:
|
|
|
|
|
Interest
paid
|
|
$ |
- |
|
|
|
|
|
|
Income
taxes paid
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Non-cash
activities:
|
|
|
|
|
Number
of shares issued for services
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
|
|
See
Accompanying Notes to Financial Statements.
NORTHSIGHT
CAPITAL, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
1 – BASIS OF PRESENTATION
The
condensed interim financial statements included herein, presented in accordance
with United States generally accepted accounting principles and stated in US
dollars, have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading.
These
statements reflect all adjustments, consisting of normal recurring adjustments,
which in the opinion of management, are necessary for fair presentation of the
information contained therein. It is suggested that these condensed interim
financial statements be read in conjunction with the financial statements of the
Company for the period May 21, 2008, (inception) through June 25, 2008 and notes
thereto included in the Company’s S-1 filed on July 11, 2008. The Company
follows the same accounting policies in the preparation of interim
reports.
Results
of operations for the interim period are not indicative of annual
results.
NOTE
2 – GOING CONCERN
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the recoverability of
assets and the satisfaction of liabilities in the normal course of business. As
noted above, the Company is in the development stage and, accordingly, has not
yet generated revenues from operations. Since its inception, the Company has
been engaged substantially in financing activities and developing its business
plan, setting up its internet website, and incurring start up costs and
expenses. As a result, the Company incurred accumulated net losses from May 21,
2008, (inception) through the period ended June 30, 2008 of ($12,500). In
addition, the Company’s development activities since inception have been
financially sustained through equity financing.
The
ability of the Company to continue as a going concern is dependent upon its
ability to raise additional capital from the sale of common stock and,
ultimately, the achievement of significant operating revenues. The accompanying
financial statements do not include any adjustments that might be required
should the Company be unable to recover the value of its assets or satisfy its
liabilities.
NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Recently Issued Accounting
Pronouncements
FAS 161
In
March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities", an amendment of SFAS No. 133. SFAS 161
applies to all derivative
NORTHSIGHT
CAPITAL, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
instruments
and non-derivative instruments that are designated and qualify as hedging
instruments pursuant to paragraphs 37 and 42 of SFAS 133 and related hedged
items accounted for under SFAS 133. SFAS 161 requires entities to provide
greater transparency through additional disclosures about how and why an entity
uses derivative instruments, how derivative instruments and related hedged items
are accounted for under SFAS 133 and its related interpretations, and how
derivative instruments and related hedged items affect an entity's financial
position, results of operations, and cash flows. SFAS 161 is effective as of the
beginning of an entity's first fiscal year that begins after November 15, 2008.
The Company does not expect that the adoption of SFAS 161 will have a material
impact on its financial condition or results of operation.
FAS
162
In
May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS 162 will provide framework for selecting
accounting principles to be used in preparing financial statements that are
presented in conformity with U.S. generally accepted accounting principles
(GAAP) for nongovernmental entities. SFAS 162 will be effective 60 days
following the Securities and Exchange Commission’s approval of the Public
Company Accounting Oversight Board (PCAOB) amendments to AU Section 411.
The Company does not expect the adoption of SFAS 162 will have a material impact
on its financial condition or results of operation.
FAS 163
In
May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of FASB Statement No. 60.” SFAS
163 requires that an insurance enterprise recognize a claim liability prior to
an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This
Statement also clarifies how Statement 60 applies to financial guarantee
insurance contracts, including the recognition and measurement to be used to
account for premium revenue and claim liabilities. Those clarifications will
increase comparability in financial reporting of financial guarantee insurance
contracts by insurance enterprises. This Statement requires expanded disclosures
about financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. SFAS 163 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008. The
Company does not expect the adoption of SFAS 163 will have a material impact on
its financial condition or results of operation.
NOTE
4 – STOCKHOLDERS EQUITY
The
Company is authorized to issue 10,000,000 shares of it $0.001 par value
preferred stock and 100,000,000 shares of its $0.001 par value common
stock.
Common
Stock
On
May 21, 2008, the Company issued an officer of the Company 750,000 shares of its
$0.001 par value common stock at a price of $0.01 per share for cash totaling
$7,500.
NORTHSIGHT
CAPITAL, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
On
June 25, 2008, the Company issued 100,000 shares of its common stock toward
legal fees at a value of $0.10 per share.
On
June 26, 2008, an officer of the Company donated $100 to the Company which was
considered donated capital and recorded as additional paid in
capital.
As
of June 30, 2008, there have been no other issuances of common
stock.
NOTE
5 – RELATED PARTY TRANSACTIONS
On
May 21, 2008, the Company issued an officer of the Company 750,000 shares of its
$0.001 par value common stock at a price of $0.01 per share for cash totaling
$7,500. On June 26, 2008, an officer of the Company donated $100 to
the Company and is considered donated capital and recorded as additional paid in
capital.
FORWARD-LOOKING
STATEMENTS
This
document contains forward-looking statements. All statements other
than statements of historical fact are “forward-looking statements” for purposes
of federal and state securities laws, including, but not limited to, any
projections of earnings, revenue or other financial items; any statements of the
plans, strategies and objections of management for future operations; any
statements concerning proposed new services or developments; any statements
regarding future economic conditions or performance; any statements or belief;
and any statements of assumptions underlying any of the foregoing.
Forward-looking
statements may include the words “may,” “could,” “estimate,” “intend,”
“continue,” “believe,” “expect” or “anticipate” or other similar
words. These forward-looking statements present our estimates and
assumptions only as of the date of this report. Accordingly, readers
are cautioned not to place undue reliance on forward-looking statements, which
speak only as of the dates on which they are made. Except for our
ongoing securities laws, we do not intend, and undertake no obligation, to
update any forward-looking statement. You should, however, consult
further disclosures we make in future filings of our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Although
we believe the expectations reflected in any of our forward-looking statements
are reasonable, actual results could differ materially from those projected or
assumed in any of our forward-looking statements. Our future
financial condition and results of operations, as well as any forward-looking
statements, are subject to change and inherent risks and
uncertainties. The factors impacting these risks and uncertainties
include, but are not limited to:
o
|
our
ability to diversify our
operations;
|
o
|
our
ability to implement our business plan of producing unique, proprietary
water products;
|
o
|
inability
to raise additional financing for working
capital;
|
o
|
the
fact that our accounting policies and methods are fundamental to how we
report our financial condition and results of operations, and they may
require management to make estimates about matters that are inherently
uncertain;
|
o
|
our
ability to attract key personnel;
|
o
|
our
ability to operate profitably;
|
o
|
deterioration
in general or regional economic
conditions;
|
o
|
changes
in U.S. GAAP or in the legal, regulatory and legislative environments in
the markets in which we operate;
|
o
|
adverse
state or federal legislation or regulation that increases the costs of
compliance, or adverse findings by a regulator with respect to existing
operations;
|
o
|
inability
to achieve future sales levels or other operating
results;
|
o
|
the
inability of management to effectively implement our strategies and
business plans;
|
o
|
the
unavailability of funds for capital expenditures;
and
|
o
|
other
risks and uncertainties detailed in this
report.
|
For
a detailed description of these and other factors that could cause actual
results to differ materially from those expressed in any forward-looking
statement, please see Item 1A. Risk Factors in this document.
AVAILABLE
INFORMATION
We
file annual, quarterly and special reports and other information with the SEC
that can be inspected and copied at the public reference facility maintained by
the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405.
Information regarding the public reference facilities may be obtained from the
SEC by telephoning 1-800-SEC-0330. The Company’s filings are also available
through the SEC’s Electronic Data Gathering Analysis and Retrieval System which
is publicly available through the SEC’s website (www.sec.gov). Copies of such
materials may also be obtained by mail from the public reference section of the
SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405 at prescribed
rates.
Item
2. Plan of Operation.
Business Development
Summary
Northsight
is a development stage company incorporated in the State of Nevada on May 21,
2008. We were formed to engage in the business of marketing, developing, and
producing unique, proprietary water products, each which will have a health
benefit to the consumer. Northsight’s intended line of enhanced
bottled waters is based upon the experience and expertise of our founder,
designed to make everyday hydration and nutrition a more enjoyable
experience. In May of 2008 we commenced our planned principal
operations, and therefore have no significant assets.
Since
our inception on May 21, 2008 through June 30, 2008, we have not generated any
revenues and have incurred a net loss of $12,500. In May of 2008 our only
business activity was the formation of our corporate entity and the development
of our business model. On July 11, 2008 we filed an S-1 Registration
Statement with the SEC and the registration statement became effective on July
21, 2008. We anticipate the commencement of generating revenues in the next
twelve months, of which we can provide no assurance. The anticipated capital we
expect to raise in the recently filed offering has been budgeted to cover the
costs associated with the offering, travel expenses, product development,
working capital, and covering various filing fees and transfer agent
fees.
Enhanced
Bottle Water Product Background
One
of the latest trends to hit the U.S. is the healthy choice of enhanced bottled
water. The enhanced bottled water market is one of the few growing
beverage segments in the consumer food industry. Enhanced bottled
water consumption has continued to grow per annum and our line intends to add
sales for retailers through the proven bottled water market base, by offering a
proprietary product for our customers.
There
are many important factors having a significant impact on grocery food
categories sales: long-term, perennial trends, as well as convenience and
health. We recognize that the competition of non-alcoholic
products is extremely fierce. However among bottled waters, the
enhanced lines continue to grow. Our product line differs from many
of our competitors by offering nutritional supplements as well as essential
vitamins. We utilize a “Cold Fill” process which results in an
enhanced bottle water product which contains no calories, carbohydrates or
colors. In addition, our products offer a substantial amount of
supplements and organic ingredients.
Product
Development Strategy
The
Company’s future products are intended to offer convenience and added health
benefits. Northsight intends to introduce new product entries as research and
funds permit. All intended products will leverage the Company’s
unique access to cold–fill, enhanced bottled water, which has been formulated by
Mr. Steve Nickolas, our sole officer and director. Northsight’s
product strategy is to deliver enhanced bottled water which leverages
prevailing industry trends, which are conveniently incorporated into the
average American lifestyle. The Company is focused on finding ways to bring more
health conscious products into the market. Our proposed product
line will establish a solid base from which the Company will extend our brand
and build a franchise with line extensions and new products.
Short-Range
Plan (Years 1 and 2)
With
an appropriate level of capital resources from outside investors, our primary
business focus will be on establishing our initial products. Once the initial
products are established, we plan on obtaining shelving space for our products
in major grocery centers in Arizona and California. Our secondary focus will be
on other areas, to help build necessary distribution by year 5. A key element of
the Company’s short-range plan is an aggressive effort to gain new distribution.
There remain several potential upsides in the short-range plan which include the
following three most important opportunities:
1. Revenues
from new products (the Company will present new items to its current and target
accounts throughout the year),
2. Increased
consumption of enhanced bottled water (which requires an effective advertising
campaign with corresponding investment in marketing operations),
and
3.
Incremental sales to the grocery service sector.
Plan
Elements:
The
short-range plan assumes an active promotion program across a major grocery
chain, with public relations programs in key markets. It also assumes active new
distribution efforts in Arizona, Nevada and California, accompanied by
significant slotting allowance expenditures, which are briefly summarized
below.
· We will
need to establish public relations in major southwestern metropolitan areas and
key geographies. We hope to create awareness of our product
line, by publicizing local events as well as by the Company’s consumer supports
at fitness centers and trainers.
· Distribution
and slotting allowances to get on shelf and gain distribution.
· TPRs
(Temporary Price Reductions) for in-store support.
· In-store
demonstrations in selected markets.
· Coupons
to stimulate awareness and trial. This will be a combination of high probability
consumer targeted coupons (in store and direct mail) in addition to on-shelf
instant redeeming coupons.
Target
Customer Overview
Unlike
the typical consumer who thinks of bottled water as a commodity product strictly
for hydration purposes, Northsight’s products will be packaged and marketed for
individuals who take an active role in their own or their family’s wellness and
health. This customer base has become more widely targeted over the
past few years as large consumer companies, such as PepsiCo, has created
products specifically for this audience. These efforts have generated
a much broader awareness of enhanced waters, laying the groundwork for a
superior product, such as the intended line planned to be offered by
Northsight.
Plan
of Operation
As
mentioned above, Northsight is developing a line of enhanced bottled
waters. Made with a cold-fill, proprietary filling process, our waters are
exceptional means of hydration. Our product line
has been designed and developed for the North American lifestyle, and is
targeted to enter the mainstream beverage market. The line is intended to add
sales for retailers, through the introduction of a newer grocery category
(enhanced bottled waters), to established beverage categories.
Satisfaction of
our cash obligations for the next 12 months. Our plan of operation has
provided for us to: (i) develop a business plan, and (ii) establish a line of
products which can be produced in Phoenix, Arizona, as soon as practical. We
have accomplished the goal of developing our business plan; however, we are in
the early stages of setting up an operational company capable of providing
products available for sale to the general public. We do not have sufficient
cash to enable us to development significant inventory, which is an integral
part of our operations.
We
have filed an S-1 registration statement to raise the basic minimum amount of
funds to provide sufficient cash for the next 12 months. If we are unsuccessful
in generating the cash set forth in the offering, we will be forced into
curtailing the expenditures required to complete the product development, until
such time as we are able to either raise the cash required privately or launch
another offering.
Our
officer and director, Mr. Nickolas has agreed to continue his part time work
until such time as there are either sufficient funds from operations, or
alternatively, that funds are available through private placements or another
offering in the future. We have not allocated any
pay
for Mr. Nickolas out of the funds being raised in the offering. If we were to
not receive any additional funds, including the funds from this offering, we
could continue in business for the next 12 months. However, we would not be in a
position to complete the inventory as set forth in our business plan, or provide
any significant advertisement for our customers, thus we would not anticipate
any significant revenues.
Summary of any
product research and development that we will perform for the term of the plan.
We do not anticipate performing any significant product research and
development under our plan of operation in the near future. In lieu of product
research and development we anticipate maintaining control over our current line
of products, to assist us in determining the allocation of our limited inventory
dollars.
Expected purchase
or sale of plant and significant equipment. We do not anticipate the
purchase or sale of any plant or significant equipment; as such items are not
required by us at this time or in the next 12 months.
Significant
changes in number of employees. The number of employees required to
operate our business is currently one part time individual. After we complete
the current offering and have commenced our product development program, and
word of mouth advertising, and at the end of the initial 12 month period, our
plan of operation anticipates our requiring additional capital to hire at least
one full time person.
Milestones:
As a result of our being a development
stage company with minimal amounts of equity capital initially available,
$7,500, we have set our goals in three stages: (1) goals based upon the
availability of our initial funding of $7,500; (2) goals based upon our funding
of $55,000; and (3) goals based upon or funding additional equity and or debt in
the approximate sum of $100,000 to $200,000.
Stage I: Development of our business
operations based upon our founders’ investment of $7,500. With that
money, we were able to set up our corporate structure by filing for
incorporation and set up corporate governance; began development of an initial
product line of enhanced bottled waters capable of being produced in Scottsdale,
Arizona at the lowest possible cost and accomplished through our understanding
with Mr. Nickolas; retained counsel and an auditor to assist in preparation of
documents providing for the raising of $55,000 to complete Stage II of our Plan
of Operations.
Stage II: Development of our business
operations based upon our receipt of the net funds from our offering of $49,200.
We have not commenced the majority of milestones set forth in Stage II of our
Plan of Operation as a result of our not having the funds from our offering. In
the event we do not receive the funds from the offering, then we will be in a
position to continue with the operations of Northsight, however no significant
business will be accomplished until other equity or debt is raised, or in the
unlikely event that our product lines as currently developed, generates
sufficient revenues to incur additional inventory creation.
Stage III: Development of our business
operations is based upon our receipt of additional equity and/or debt in the
approximate sum of $100,000 to $200,000. If, and when we raise the $100,000 in
Stage III, we intend to pay our President a salary of $25,000 per year. There
are no accruals for past salary, and the commencement date of such salary would
not occur until such time as the additional funds (in addition to our present
offering) are acquired. An additional $20,000 would be allocated toward
salaries, and the balance of $55,000 would be utilized for legal, accounting,
website enhancements, inventory development and general office expenses. In the
event an additional $100,000 were raised (in addition to the $55,000 in this
offering, and $100,000 referenced above), we would allocate the 2nd
$100,000 primarily to additional inventory, office space and additional staff.
We anticipate that it will take us approximately 90 days after the funding
referenced in this Stage III to expand our inventory, hire personnel, and obtain
office space.
Until
an infusion of capital from this offering, we will not be able to complete Stage
II of our Plan of Operation. We currently have insufficient capital to commence
any significant inventory development. Our Plan of Operation is
premised upon having inventory dollars available. We believe that the inventory
dollars allocated in the offering will assist us in generating revenues. We have
suffered start up losses and have a working capital deficiency which raises
substantial concern regarding our ability to continue as a going concern. We
believe that the proceeds of the offering will enable us to maintain our
operations and working capital requirements for at least the next 12 months,
without taking into account any internally generated funds from operations. We
will need to raise $55,000, with net proceeds of $49,200, to comply with our
business plan of operations for the next 12 months based on our capital
expenditure requirements.
After
this offering, we will require additional funds to maintain and expand our
operations as referenced in our Stage III. These funds may be raised through
equity financing, debt financing, or other sources, which may result in further
dilution in the equity ownership of the shares being offered in this prospectus.
At this time we have no earmarked source for these funds. Additionally, there is
no guarantee that we will be able to locate additional funds. In the event we
are unable to locate additional funds, we will be unable to generate revenues
sufficient to operate our business as planned. For example, if we receive less
than $100,000 of the funds earmarked in Stage III, we would be unable to
significantly expand our inventory to levels under Stage III. Alternatively, we
may be required to reduce the payments of salary to our President and cover
legal and accounting fees required to continue our operations. There is still no
assurance that, even with the funds from the offering, we will be able to
maintain operations at a level sufficient for an investor to obtain a return on
their investment in our common stock. Further, we may continue to be
unprofitable.
Liquidity
and Capital Resources
Cash
will be increasing primarily due to the receipt of funds from this offering to
offset our near term cash equivalents. Since inception, we have financed our
cash flow requirements through issuance of common stock. As we expand our
activities, we may, and most likely will, continue to experience net negative
cash flows from operations, pending receipt of product sales. Additionally, we
anticipate obtaining additional financing to fund operations through
common
stock
offerings, to the extent available, or to obtain additional financing to the
extent necessary to augment our working capital.
We
anticipate that we will incur operating losses in the next twelve months. Our
lack of operating history makes predictions of future operating results
difficult to ascertain. Our prospects must be considered in light of
the risks, expenses and difficulties frequently encountered by companies in
their early stage of development, particularly companies in new and rapidly
evolving markets. Such risks for us include, but are not limited to, an evolving
and unpredictable business model and the management of growth. To address these
risks, we must, among other things, obtain a customer base, implement and
successfully execute our business and marketing strategy, continually develop
our line of enhanced bottle waters, respond to competitive developments, and
attract, retain and motivate qualified personnel. There can be no assurance that
we will be successful in addressing such risks, and the failure to do so can
have a material adverse effect on our business prospects, financial condition
and results of operations.
Off-Balance
Sheet Arrangements
We
do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to
investors.
Critical
Accounting Policies and Estimates
The
preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and liabilities.
We base our estimates and judgments on historical experience and on various
other assumptions we believe to be reasonable under the circumstances. Future
events, however, may differ markedly from our current expectations and
assumptions.
Recent Accounting
Pronouncements
In
March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities", an amendment of SFAS No. 133. SFAS 161
applies to all derivative instruments and non-derivative instruments that are
designated and qualify as hedging instruments pursuant to paragraphs 37 and 42
of SFAS 133 and related hedged items accounted for under SFAS 133. SFAS 161
requires entities to provide greater transparency through additional disclosures
about how and why an entity uses derivative instruments, how derivative
instruments and related hedged items are accounted for under SFAS 133 and its
related interpretations, and how derivative instruments and related hedged items
affect an entity's financial position, results of operations, and cash flows.
SFAS 161 is effective as of the beginning of an entity's first fiscal year that
begins after November 15, 2008. The Company does not expect that the adoption of
SFAS 161 will have a material impact on its financial condition or results of
operation.
Item
3. Quantitative and Qualitative Disclosure About Market Risk
This item in not applicable as we are
currently considered a smaller reporting company.
Item
4T. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
We
maintain disclosure controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of
1934, as amended, is recorded, processed, summarized and reported within the
specified time periods. As of the end of the period covered by this
report, Steve Nickolas, our President and Principal Accounting Officer evaluated
the effectiveness of our disclosure controls and procedures pursuant to Exchange
Act Rule 13a-15. Based on the evaluation, which disclosed no significant
deficiencies or material weaknesses, Mr. Nickolas, our President and Principal
Accounting Officer concluded that our disclosure controls and procedures are
effective in timely alerting him to material information required to be included
in our periodic SEC filings.
Changes
in Internal Control Over Financial Reporting
There
were no changes in our internal control over financial reporting that occurred
during our most recent fiscal quarter that have materially affected, or
reasonably likely to materially affect, our internal control over financial
reporting.
PART
II--OTHER INFORMATION
Item
1.
Legal Proceedings.
From
time to time, we may become involved in various lawsuits and legal proceedings
which arise in the ordinary course of business. However, litigation is subject
to inherent uncertainties, and an adverse result in these or other matters may
arise from time to time that may harm our business. We are not presently a party
to any material litigation, nor to the knowledge of management is any litigation
threatened against us, which may materially affect us.
Item
1A. Risk Factors
We
are a development stage company organized in May 2008 and have recently
commenced operations, which makes an evaluation of us extremely difficult. At
this stage of our business operations, even with our good faith efforts, we may
never become profitable or generate any significant amount of revenues, thus
potential investors have a high probability of losing their
investment.
We
were incorporated in May of 2008 as a Nevada corporation. As a result of our
start-up operations we have; (i) generated no revenues, (ii) accumulated
deficits of $12,500 for the period ended June 30, 2008, and (iii) we have
incurred losses of $12,500 for the period ended June 30,
2008. We
have been focused on organizational and start-up activities, business plan
development, and commenced the development of our products since we
incorporated. Although we have commenced the development of our enhanced bottle
water product lines, there is nothing at this time on which to base an
assumption that our business operations will prove to be successful or that we
will ever be able to operate profitably. Our future operating results will
depend on many factors, including our ability to raise adequate working capital,
demand for our service, the level of our competition and our ability to attract
and maintain key management and employees.
Our
auditor’s have substantial doubt about our ability to continue as a going
concern. Additionally, our auditor’s report reflects that the ability
of Northsight to continue as a going concern is dependent upon its ability to
raise additional capital from the sale of common stock and, ultimately, the
achievement of significant operating revenues.
Our
financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. Our auditor’s report reflects that the ability of
Northsight to continue as a going concern is dependent upon its ability to raise
additional capital from the sale of common stock and, ultimately, the
achievement of significant operating revenues. If we are unable to continue as a
going concern, you will lose your investment. We will be required to
seek additional capital to fund future growth and expansion. No assurance can be
given that such financing will be available or, if available, that it will be on
commercially favorable terms. Moreover, favorable financing may be dilutive to
investors.
We
will require additional financing in order to implement our business plan. In
the event we are unable to acquire additional financing, we may not be able to
implement our business plan resulting in a loss of revenues and ultimately the
loss of your investment.
Due
to our very recent start-up nature, we will have to incur the costs of product
development, production expenses, advertising, all which are intended to
generate revenues from our products, in addition to hiring new employees and
commencing additional marketing activities for product sales and distribution.
To fully implement our business plan we will require substantial additional
funding. This offering, if successful, will only enable us to commence our
product development, and will assist us in further developing our initial
business operations, including the enhancement of product lines; however, will
not be sufficient to allow us to expand our business meaningfully. Additionally,
since the net offering proceeds have been earmarked for travel, accounting,
legal, product development, and minimal working capital, we will not be
capitalized sufficiently to hire or pay employees.
Following
this offering we will need to raise additional funds to expand our operations.
We plan to raise additional funds through private placements, registered
offerings, debt financing or other sources to maintain and expand our
operations. Adequate funds for this purpose on terms favorable to us may not be
available, and if available, on terms significantly more adverse to us than are
manageable. Without new funding, we may be only partially successful or
completely unsuccessful in implementing our business plan, and our stockholders
will lose part or all of their investment.
We
are significantly dependent on our sole officer and director, who has limited
experience. The loss or unavailability to Northsight of Mr. Nickolas’ services
would have an adverse effect on our business, operations and prospects in that
we may not be able to obtain new management under the same financial
arrangements.
Our
business plan is significantly dependent upon the abilities and continued
participation of Steve Nickolas, our president. It would be difficult to replace
Mr. Nickolas at such an early stage of development of Northsight. The loss by or
unavailability to Northsight of Mr. Nickolas’ services would have an adverse
effect on our business, operations and prospects, in that our inability to
replace Mr. Nickolas could result in the loss of one’s
investment. Additionally, our business plan is significantly
dependent upon the abilities and continued participation of Mr. Nickolas’, which
the loss or unavailability of Mr. Nickolas could materially impact our business
operations.
There
can be no assurance that we would be able to locate or employ personnel to
replace Mr. Nickolas, should his services be discontinued. In the event that we
are unable to locate or employ personnel to replace Mr. Nickolas, then we may be
required to cease pursuing our business opportunity.
Mr.
Nickolas has no experience in running a public company. The lack of experience
in operating a public company could impact our return on investment, if
any.
As a result of our reliance on Mr.
Nickolas, and his lack of experience in operating a public company, our
investors are at risk in losing their entire investment. Mr. Nickolas intends to
hire personnel in the future, when sufficiently capitalized, who may have the
experience required to manage our company; however, such management is not
anticipated until the occurrence of future financing. Since this offering will
not sufficiently capitalize our company, future offerings will be necessary to
satisfy capital needs. Until such future offering occurs, and until such
management is in place, we are reliant upon Mr. Nickolas to make the appropriate
management decisions.
Mr.
Nickolas may become involved with other businesses and there can be no assurance
that he will continue to provide services to us. Mr. Nickolas’ limited time
devotion to Northsight could have the effect on our operations of preventing us
from being a successful business operation, which ultimately could cause a loss
of your investment.
As
compared to many other public companies, we do not have the depth of managerial
or technical personnel. Mr. Nickolas is currently involved in other businesses,
which have not, and are not expected in the future to interfere with Mr.
Nickolas’ ability to work on behalf of our company. Mr. Nickolas may in the
future be involved with other businesses and there can be no assurance that he
will continue to provide services to us. Mr. Nickolas will devote only a portion
of his time to our activities.
Since
two stockholders, upon completion of the recently filed offering will
beneficially own the majority of our outstanding common shares, those
stockholders will retain the ability to control our management and the outcome
of corporate actions requiring stockholder approval
notwithstanding the overall
opposition of our other stockholders. This concentration of ownership
could discourage or prevent a
potential takeover of our company that might negatively impact the value of your
common shares.
Mr.
Nickolas will own approximately 54% of our outstanding common shares after
completion of the offering. As a consequence of his stock ownership position,
Mr. Nickolas will retain the ability to elect a majority of our board of
directors, and thereby control our management. These individuals will also
initially have the ability to control the outcome of corporate actions requiring
stockholder approval, including mergers and other changes of corporate control,
going private transactions, and other extraordinary transactions. The
concentration of ownership by these individuals could discourage investments in
our company, or prevent a potential takeover of our company which will have a
negative impact on the value of our securities.
Because
of competitive pressures from competitors with more resources, Northsight may
fail to implement its business model profitably.
The business of developing bottled
water product lines is highly fragmented and extremely competitive. There are
numerous competitors offering similar products. The market for customers is
intensely competitive and such competition is expected to continue to increase.
There are no substantial barriers to entry in this market and we believe that
our ability to compete depends upon many factors within and beyond our control,
including the timing and market acceptance of enhanced water products developed
by us, our competitors, and their advisors.
Many
of our existing and potential competitors have longer operating histories in the
beverage markets, greater name recognition, larger customer bases, established
product lines, and significantly greater financial, technical and marketing
resources than we do. As a result, they will be able to respond more quickly to
new or emerging advertising techniques, and changes in customer demands, or to
devote greater resources to the development, promotion and marketing of their
products than we can. Such competitors are able to undertake more extensive
marketing campaigns for their products, adopt more aggressive pricing policies
and make more attractive offers to potential store outlets, and strategic
distribution partners.
We
anticipate that our sales, if and when they begin, will be affected by
seasonality.
The beverage industry generally
experiences its highest sales by volume during the spring and summer months and
its lowest sales by volume during winter months. As a result, our
working capital requirements and cash flow may vary substantially throughout the
year. Consumer demand for our products may be affected by weather
conditions. Cool, wet spring or summer weather could result in decreased sales
of our products and could have an adverse effect on our financial
position. Additionally, due to the seasonality of the industry,
results from any one or more quarters may not necessarily indicative of annual
results of continuing trends.
Risks Relating To Our Common
Stock
There
is no current public market for our common stock; therefore you may be unable to
sell your securities at any time, for any reason, and at any price, resulting in
a loss of your investment.
As
of the date of this filing, there is no public market for our common stock.
Although we plan, in the future, to contact an authorized OTC Bulletin Board
market maker for sponsorship of our securities on the Over-the-Counter Bulletin
Board, there can be no assurance that our attempt to do so will be successful.
Furthermore, if our securities are not quoted on the OTC Bulletin Board, or
elsewhere, there can be no assurance that a market will develop for the common
stock or that a market in the common stock will be maintained. As a result of
the foregoing, investors may be unable to liquidate their investment for any
reason. We have not originated contact with a market maker at this time, and do
not plan on doing so until completion of this offering.
Because
our common stock is deemed a low-priced “Penny” stock, an investment in our
common stock should be considered high risk and subject to marketability
restrictions.
Since
our common stock is a penny stock, as defined in Rule 3a51-1 under the
Securities Exchange Act, it will be more difficult for investors to liquidate
their investment even if and when a market develops for the common stock. Until
the trading price of the common stock rises above $5.00 per share, if ever,
trading in the common stock is subject to the penny stock rules of the
Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules
require broker-dealers, before effecting transactions in any penny stock,
to:
·
|
Deliver
to the customer, and obtain a written receipt for, a disclosure
document;
|
·
|
Disclose
certain price information about the
stock;
|
·
|
Disclose
the amount of compensation received by the broker-dealer or any associated
person of the broker-dealer;
|
·
|
Send
monthly statements to customers with market and price information about
the penny stock; and
|
·
|
In
some circumstances, approve the purchaser’s account under certain
standards and deliver written statements to the customer with information
specified in the rules.
|
Consequently, the penny
stock rules may restrict the ability or willingness of broker-dealers to sell
the common stock and may affect the ability of holders to sell their common
stock in the secondary market and the price at which such holders can sell any
such securities. These
additional procedures could also limit our ability to raise additional capital
in the future.
Our
internal controls may be inadequate, which could cause our financial reporting
to be unreliable and lead to misinformation being disseminated to the
public.
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. As defined in Exchange Act Rule 13a-15(f),
internal control over
financial
reporting is a process designed by, or under the supervision of, the principal
executive and principal financial officer and effected by the board of
directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures that: (i)
pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of Northsight;
(ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of Northsight are
being made only in accordance with authorizations of management and directors of
Northsight, and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of Northsight’s
assets that could have a material effect on the financial
statements.
We
have one individual performing the functions of all officers and directors. This
individual developed our internal control procedures and is responsible for
monitoring and ensuring compliance with those procedures. As a result, our
internal controls may be inadequate or ineffective, which could cause our
financial reporting to be unreliable and lead to misinformation being
disseminated to the public. Investors relying upon this misinformation may make
an uninformed investment decision.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
On
May 21, 2008, the Company issued an officer of the Company 750,000 shares of its
common stock at a price of $0.01 per share for cash totaling
$7,500.
On
June 25, 2008, the Company issued 100,000 shares of its common stock toward
legal fees at a value of $0.10 per share.
On
June 26, 2008, an officer of the Company donated $100 to the Company which was
considered donated capital and recorded as additional paid in
capital.
We
believe the issuance of the shares is exempt from the registration and
prospectus delivery requirement of the Securities Act of 1933 by virtue of
Section 4(2). The shares were issued directly by us and did not
involve a public offering or general solicitation. The recipients of
the shares were afforded an opportunity for effective access to our files and
records of that contained the relevant information needed to make their
investment decision, including our financial statements and 34 Act reports. We
reasonably believed that the recipients had such knowledge and experience in the
Company’s financial and business matters that they were capable of evaluating
the merits and risks of their investment.
Issuer
Purchases of Equity Securities
We did not repurchase any of our equity
securities from the time of our inception on March 7, 2008 through the period
ended June 30, 2008.
Item
3.
Defaults Upon Senior Securities.
None.
Item
4.
Submission of Matters to a Vote of Security Holders.
We did not submit any matters to a vote
of our security holders from the time of our inception through the period ended
June 30, 2008.
Item
5. Other
Information.
None.
Item
6.
Exhibits.
|
|
|
Incorporated
by reference
|
Exhibit
Number
|
Exhibit
Description
|
Filed
herewith
|
Form
|
Period
ending
|
Exhibit
|
Filing
date
|
3(i)(a)
|
|
|
S-1
|
|
3(i)(a)
|
07/11/08
|
3(ii)(a)
|
|
|
S-1
|
|
3(ii)(a)
|
07/11/08
|
4
|
Instrument
defining the rights of security holders:
(a)
Articles of Incorporation
(b)
Bylaws
(c)
Stock Certificate Specimen
|
|
S-1
|
|
4
|
07/11/08
|
10.1
|
|
|
S-1
|
|
10.1
|
07/11/08
|
31
|
|
X
|
|
|
|
|
32
|
|
X
|
|
|
|
|
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
(Registrant)
By:/s/ Steve
Nickolas
Steve
Nickolas, President
(On
behalf of the registrant and as
principal
financial officer)
Date:
August 8, 2008