Forward-Looking Statements
This report on Form 10-Q contains certain forward-looking statements. All
statements other than statements of historical fact are "forward-looking
statements" for purposes of these provisions, including any projections of
earnings, revenues, or other financial items; any statements of the plans,
strategies, and objectives of management for future operation; any statements
concerning proposed new products, services, or developments; any statements
regarding future economic conditions or performance; statements of belief; and
any statement of assumptions underlying any of the foregoing. Such
forward-looking statements are subject to inherent risks and uncertainties, and
actual results could differ materially from those anticipated by the
forward-looking statements.
These forward-looking statements involve significant risks and uncertainties,
including, but not limited to, the following: competition, promotional costs and
the risk of declining revenues. Our actual results could differ materially from
those anticipated in such forward-looking statements as a result of a number of
factors. These forward-looking statements are made as of the date of this
filing, and we assume no obligation to update such forward-looking statements.
The following discusses our financial condition and results of operations based
upon our unaudited financial statements which have been prepared in conformity
with accounting principles generally accepted in the United States. It should be
read in conjunction with our financial statements and the notes thereto included
elsewhere herein.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
As used in this quarterly report, the terms "we", "us", "our" and "our company"
mean Northern Minerals & Exploration Ltd., unless otherwise indicated.
General Overview
We are an emerging natural resource company operating in oil and gas production
in central Texas and exploration for gold and silver in northern Nevada.
Current Business
Refer to NOTE 4 for property information.
Results of Operations
Results of Operations for the Three Months Ended January 31, 2023 and 2022
Revenue
We had no revenue for the three months ended January 31, 2023 and 2022.
Officer compensation
Officer compensation was $6,600 and $6,600 for the three months ended January
31, 2023 and 2022, respectively. Officer compensation is paid to our CFO.
Consulting - related party
Consulting - related party services were $18,000 and $20,000 for the three
months ended January 31, 2023 and 2022, respectively. Fees are paid to Noel
Schaefer, Director, but are recorded as consulting fees. Mr. Schaefer's fee was
increased from $5,000 to $6,000 per month on August 1, 2022.
Professional fees
Professional fees were $0 and $5,945 for the three months ended January 31, 2023
and 2022, respectively, a decrease of $5,945. Professional fees generally
consist of legal, audit and accounting expense. The decrease can be attributed
to a decrease in audit fees billed during the period.
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General and administrative
General and administrative expense was $1,151 and $5,025 for the three months
ended January 31, 2023 and 2022, respectively, a decrease of $3,875 or 77.1%.
Interest expense
During the three months ended January 31, 2023 and 2022, we had interest expense
of $1,585 and $10,392, respectively. The decrease is due to the repayment and/or
conversion of debt prior to the current quarter.
Other income
During the three months ended January 31, 2023 and 2022, we recognized other
income of $465 and $2,287. In the prior year we also recognized a gain on
forgiveness of debt of $17,167.
Net Loss
For the three months ended January 31, 2023, we had a net loss of $26,871 as
compared to a net loss of $28,508 for the three months ended January 31, 2022, a
decrease of $1,637, or 5.7%.
Results of Operations for the Six Months Ended January 31, 2023 and 2022
Revenue
We had no revenue for the six months ended January 31, 2023 and 2022.
Officer compensation
Officer compensation was $13,200 and $13,200 for the six months ended January
31, 2023 and 2022, respectively. Officer compensation is paid to our CFO.
Consulting - related party
Consulting - related party services were $36,000 and $35,000 for the six months
ended January 31, 2023 and 2022, respectively. Fees are paid to Noel Schaefer,
Director, but are recorded as consulting fees. Mr. Schaefer's fee was increased
from $5,000 to $6,000 per month on August 1, 2022.
Professional fees
Professional fees were $16,500 and $25,395 for the six months ended January 31,
2023 and 2022, respectively, a decrease of $8,895 or 35%. Professional fees
generally consist of legal, audit and accounting expense. The decrease can be
attributed to a decrease in audit fees billed during the period.
General and administrative
General and administrative expense was $11,703 and $15,472 for the six months
ended January 31, 2023 and 2022, respectively, a decrease of $3,769 or 24.4%.
Interest expense
During the six months ended January 31, 2023 and 2022, we had interest expense
of $3,170 and $12,376, respectively. The decrease is due to the repayment and/or
conversion of debt prior to the current quarter.
Other income
During the six months ended January 31, 2023 and 2022, we recognized other
income of $1,946 and $2,287. In the prior year we also recognized a gain on
forgiveness of debt of $17,167.
Net Loss
For the six months ended January 31, 2023, we had a net loss of $78,627 as
compared to a net loss of $81,989 for the six months ended January 31, 2022, a
decrease of $3,362, or 4.1%.
Liquidity and Financial Condition
Operating Activities
Cash used by operating activities was $59,957 for the six months ended January
31, 2023. Cash used for operating activities was $103,169 for the six months
ended January 31, 2022.
Financing Activities
Net cash provided by financing activities was $55,000 for the six months ended
January 31, 2023. We received $50,000 from the sale of our common stock. $10,000
of which was from a related party, and $5,000 from a related party loan.
Net cash provided by financing activities was $155,550 for the six months ended
January 31, 2022. We received $160,550 from the sale of our common stock and
$5,000 from a loan payable, which was offset by repayment of $10,000.
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We had the following loans outstanding as of January 31, 2023:
On April 16, 2017, the Company executed a promissory note for $15,000 with a
third party. The note matures in two years and interest is set at $3,000 for the
full two years. As of January 31, 2023, there is $15,000 and $7,125 of principal
and accrued interest, respectively, due on this loan. As of July 31, 2022, there
was $15,000 and $6,375 of principal and accrued interest, respectively, due on
this loan. This loan is currently in default.
On June 11, 2020, a third party loaned the Company $14,000. On March 3, 2021,
the party loaned another $5,000 to the Company. During the year ended July 31,
2022, the Company repaid $15,000 of the loan. The loan is unsecured,
non-interest bearing and due on demand. As of January 31, 2023, there is a
balance due of $4,000.
During the year ended July 31, 2020, a third party loaned the Company $60,000.
The loan is unsecured, bears interest at 8% per annum and matures on September
1, 2021. As of January 31, 2023, there is $23,130 of interest accrued on this
note. This note is in default.
On January 9, 2023, Ivan Webb, CEO, advanced the Company $5,000. The advance is
intended as a short term, non-interest bearing and due on demand.
We will require additional funds to fund our budgeted expenses over the next
twelve months. These funds may be raised through equity financing, debt
financing, or other sources, which may result in further dilution in the equity
ownership of our shares. There is still no assurance that we will be able to
maintain operations at a level sufficient for an investor to obtain a return on
his investment in our common stock. Further, we may continue to be unprofitable.
We need to raise additional funds in the immediate future in order to proceed
with our budgeted expenses.
Off-Balance Sheet Arrangements
We have no 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 stockholders.
Critical Accounting Policies
Refer to Note 2 of our financial statements contained elsewhere in this Form
10-Q for a summary of our critical accounting policies and recently adopting and
issued accounting standards.
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