New You, Inc. - Quarter Report: 2011 August (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended August 31, 2011

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

COMMISSION FILE NUMBER 000-52668

NOVA MINING CORPORATION
(Exact name of registrant as specified in its charter)

(315) 558-3702
(Registrant's telephone number, including area code)

 (Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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 [ ] No [X]

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ITEM 1. FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS

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NOVA MINING CORP.OG, INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Nature of Business & Going Concern

Nova Mining, Corp. (‘Nova Mining” or the “Company”), was incorporated in the state of Nevada on December 29, 2005. The Company is an Exploration Stage Company, as defined by ASC 915 “Development Stage Companies”. The Company’s principal business is the acquisition and exploration of mineral resources. The Company has not presently determined whether its mineral claims contain reserves that are economically recoverable.

Going Concern

The accompanying financial statements have been prepared on the basis of accounting principles applicable to a “going concern”, which assume that Nova Mining will continue in operation for at least one year and will be able to realize its assets and discharge its liabilities in the normal course of operations.

Several conditions and events cast substantial doubt about Nova Mining’s ability to continue as a going concern.  Nova Mining has incurred net losses of $453,406 for the period from (inception), December 29, 2005 to August 31, 2011, has had limited revenues and requires additional financing in order to finance its business activities on an ongoing basis. Nova Mining’s future capital requirements will depend on numerous factors including, but not limited to, executing its existing mining based business plan and the pursuit of business opportunities. Nova Mining is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained.  In the interim, shareholders of Nova Mining have committed to meeting its minimal operating expenses.  

Management believes that actions presently being taken to revise Nova Mining’s operating and financial requirements provide them with the opportunity to continue as a going concern.

These financial statements do not reflect adjustments that would be necessary if Nova Mining were unable to continue as a going concern.  While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the “going concern” assumption used in preparing these financial statements, there can be no assurance that these actions will be successful.  If Nova Mining were unable to continue as a “going concern,” then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported revenues and expenses, and the balance sheet classifications used.

NOTE 2 – RELATED PARTY TRANSACTIONS

As of August 31, 2011 the Company has paid the President, Carmen Joseph Carbona $10,000 in compensation for services rendered as Sole Officer and Director of the Company.

As of August 31, 2011, all activities of Nova Mining have been conducted by corporate officers from either their homes or business offices.  Currently, there are no outstanding debts owed by Nova Mining for the use of these facilities and there are no commitments for future use of the facilities.

NOTE  3 – NOTES PAYABLE

In the years 2005 - 2008, the Company’s former President advanced to the Company an aggregate of $110,000. The advances are unsecured, non-interest bearing and due on demand. During 2011, the Company applied $2,366 toward this amount while the previous President was temporarily in possession of the Company’s funds from a closed bank account before it was deposited into the Company’s new bank account. The amount of $2,366 applied in payment was reversed when it was deposited into the Company’s new bank account by the previous President. As of August 31, 2011 this advance has been reclassified and is no longer a related party and the Company owes $110,000 for these loans.  

During the months of December 2010 and January 2011, a third party loaned the company $13,455. The loan bears 18% simple interest annually and is payable on demand. In March 2011 $13,455 in principal and $629 in interest was paid in full on this note. As of August 31, 2011 the Company owes $0 in principal and $0 in interest on this note.

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In the years 2005 - 2008, the Company’s former President advanced to the Company an aggregate of $110,000. The advances are unsecured, non-interest bearing and due on demand. During 2011, the Company applied $2,366 toward this amount while the previous President was temporarily in possession of the Company’s funds from a closed bank account before it was deposited into the Company’s new bank account. The amount of $2,366 applied in payment was reversed when it was deposited into the Company’s new bank account by the previous President. As of August 31, 2011 the Company owes $110,000 for these loans.  

On February 17, 2011 a third party loaned the Company $200,000. This loan is unsecured and payable on February 16, 2012 and is accruing 10% simple interest annually. As of August 31, 2011 the Company owes $200,000 in principal and $10,685 in interest on this note.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report constitute "forward-looking statements." These statements, identified by words such as "plan," "anticipate," "believe," "estimate," "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Part II - Item 1A. Risk Factors" and elsewhere in this Quarterly Report. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents, particularly our Annual Reports, Quarterly Reports and our Current Reports, we file from time to time with the Securities and Exchange Commission (the "SEC").

As used in this Quarterly Report, the terms "we," "us," "our," "Nova," and the "Company" refer to Nova Mining Corporation unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.

INTRODUCTION

We were incorporated on December 29, 2005 under the laws of the State of Nevada.

During the fiscal year ended February 29, 2008, we completed Phase IA of our exploration program on a claim known as the Columbia VI Claim, which included the placement of a control grid and the collection and analysis of soil and rock samples from the property.  At the conclusion of the program, and upon the recommendation of our consulting geologist, we abandoned the exploration program on the Columbia VI Claim and began researching alternate claim sites.

In February 2009, we engaged Consulting Geologist, D. Bain, B.Sc., P.Geo. of DUNCAN BAIN CONSULTING LTD. (“BAIN”), to select an area in Saskatchewan considered favorable for hosting diamondiferous kimberlite pipes. That site was staked by the Mr. Bain and registered with the province of Saskatchewan on March 18, 2009.

Duncan J. Bain, P.Geo. is an independent Qualified Person in accordance with Canadian securities National Instrument 43-101 and as defined in the CIM (Canadian Institute of Mining and Metallurgy) Standards on Mineral Resources and Reserves.

The Bittern Lake Project (“Claim”) consists of one claim of 256 hectares. This claim was registered on March 18, 2009 in the name of Duncan Bain, 49 Midale Crescent, London, Ontario, Canada N5X 3C2. Title to the Claim was subsequently transferred to Nova in April 2009.

The Claim is located in the east-central part of the province of Saskatchewan, in the NW corner of N.T.S. map sheet 73H/13, centered at Latitude 53o 59' North, Longitude 105o 53' West and UTM co-ordinates 5983000 N, 442000 E, Zone 13, using NAD 27 datum. The Claim covers an area of 256 hectares.

On March 29, 2011 the Company re-engaged the services of BAIN to direct a Phase 1 Exploration Program on the Claim.  The Company has agreed to pay to BAIN approximately $20,000 for the exploration and subsequent report. The Company anticipates the Phase 1 report will include positive findings and form the basis for further exploration of the Claim.

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RECENT CORPORATE DEVELOPMENTS

Effective November 30, 2010, Mr. Andriv Volianuk resigned as our Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer, and from our Board of Directors. There were no disagreements between Mr. Volianuk and us regarding any matter relating to our operations, policies or practices.

Mr. Carmen Joseph Carbona was appointed to our Board of Directors as our Chief Executive Officer, Chief Financial Officer, President, Treasurer in place of Mr. Volianuk. There is currently no compensatory arrangement with Mr. Carbona for acting as our officer or director.

Concurrently with the change of our President, we moved our principal executive offices to:

2903 ½ Frank Gay Rd.

Marcellus, New York 13108

Our new telephone number is: (315) 558-3702

This location is the office our new President Mr. Carbona.

PLAN OF OPERATION

During the fiscal year ended February 29, 2008, we completed Phase IA of our exploration program on a claim known as the Columbia VI Claim, which included the placement of a control grid and the collection and analysis of soil and rock samples from the property.  At the conclusion of the program, and upon the recommendation of our consulting geologist, we abandoned the exploration program on the Columbia VI Claim and began researching alternate claim sites.

In February 2009, we engaged Consulting Geologist, D. Bain, B.Sc., P.Geo. of DUNCAN BAIN CONSULTING LTD. (“BAIN”), to select an area in Saskatchewan considered favorable for hosting diamondiferous kimberlite pipes. That site was staked by the Mr. Bain and registered with the province of Saskatchewan on March 18, 2009.

Duncan J. Bain, P.Geo. is an independent Qualified Person in accordance with Canadian securities National Instrument 43-101 and as defined in the CIM (Canadian Institute of Mining and Metallurgy) Standards on Mineral Resources and Reserves.

The Bittern Lake Property was staked to explore for diamond-bearing kimberlite bodies of the Fort a la Corne type. The property consists of one claim which was staked by Duncan Bain in March 2009. The claim covers an area of 256 hectares in Townships 58, Range 27, Section 1West of the Second Meridian, and falls within N.T.S. map sheet 73H/13. The property lies approximately 60 kilometers NNW of Shore Gold's Star kimberlite body, 75 kilometers NNW of Kensington/DeBeers' 140/141 kimberlites and 25 kilometers W of the Kennecott/War Eagle/Great West Gold kimberlite bodies C-28, 29 and 30.

No exploration work has been carried out on the Bittern Lake property. Fifteen kilometers to the N an airborne magnetic survey was conducted in 1994. From that work three small claim blocks were staked and surveyed with ground-based magnetics. Targets selected from this work were drill tested but no kimberlite was noted. The Bittern Lake project area was selected due to the presence of a circular strong positive gravity anomaly on the edge of a positive linear magnetic anomaly along trend of the main kimberlite field. Accessibility was also a factor in selecting the area.

On March 29, 2011 the Company re-engaged the services of BAIN to direct a Phase 1 Exploration Program on the Claim.  The Company has agreed to pay to BAIN approximately $20,000 for the exploration and subsequent report. The Company anticipates the Phase 1 report will include positive findings and form the basis for further exploration of the Claim.

The Fort a la Corne kimberlite field is one of the world's largest known resources of diamondiferous kimberlite, and is located in east-central Saskatchewan, Canada. Currently 75 kimberlite bodies have been confirmed by drilling since the initial discovery in 1988. The main kimberlite field seems to follow a NNW-oriented trend. The Bittern Lake Property lies along trend NNW from the main field.

The Fort a la Corne area of Saskatchewan is easily accessible by road. The southern half of the area consists of agricultural land, while the northern half is of provincial forest. The kimberlite bodies have no surface expression and are covered by 100 m, on average, of glacial overburden. The Fort a la Corne Joint Venture of Cameco Corp., De Beers Canada Exploration Inc. and Kensington Resources Ltd., holds 63 drill-tested kimberlite bodies. Eight kimberlite bodies are held by Shore Gold Inc., one by Consolidated Pine Channel/Shane Resources/United Carina, and one by Forest Gate Resources. Three kimberlites, held by Great Western Minerals Corp/War Eagle Mining make up one of several sub-clusters of kimberlite bodies found around the main field.

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As of August 31, 2011, we had cash on hand of $6,952 and a working capital deficit of $(320,356). As such, we anticipate that we will require substantial financing in the near future in order to meet our current obligations and to continue our operations. In addition, in the event that we are successful in identifying suitable alternative business opportunities, of which there is no assurance, we anticipate that we will need to obtain additional financing in order to pursue those opportunities.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant 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

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operation.

USE OF ESTIMATES

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

FINANCING REQUIREMENTS

From December 29, 2005 (Inception) to August 31, 2011, we have suffered cumulative losses in the amount of $(453,406). We expect to continue to incur substantial losses as we continue the development of our business. Since our inception, we have funded operations through common stock issuances, related party loans, and the support of creditors in order to meet our strategic objectives. Our management believes that sufficient funding will be available to meet our business objectives, including anticipated cash needs for working capital, and are currently evaluating several financing options, including a public offering of securities. However, we do not have any financing arrangements currently in place and there can be no assurance that we will be able to obtain sufficient financing when needed. As a result of the foregoing, our independent auditors believe there exists substantial doubt about our ability to continue as a going concern.

There is no assurance that we will be able to obtain additional financing if and when required. We anticipate that additional financing may come in the form of sales of additional shares of our common stock which may result in dilution to our current shareholders.

GOING CONCERN QUALIFICATION

Several conditions and events cast substantial doubt about the Company’s ability to continue as a going concern.  The Company has incurred net losses of $453,406 for the period from December 29, 2005 to August 31, 2011, has no revenues and requires additional financing in order to finance its business activities on an ongoing basis.  The Company’s future capital requirements will depend on numerous factors including, but not limited to, executing the company’s mining based business plan and the pursuit of other business opportunities. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained.  In the interim, shareholders of the Company have committed to meeting its minimal operating expenses.  Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide them with the opportunity to continue as a going concern. 

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At February 28, 2011, we had $197,266 on hand, and a deficit accumulated during the development stage of $(299,691). At August 31, 2011, we had $ 6,952 cash on hand, and a deficit accumulated during the development stage of $(453,406).  See Liquidity and Capital Resources.”

LIQUIDITY AND CAPITAL RESOURCES

 It is the intent of our management, stockholders, and specifically the majority Shareholder, Joseph Passalaqua and our President, Carmen Joseph Carbona to provide sufficient working capital necessary to support and preserve the integrity of our Company as a corporate entity.  However, there is no legal obligation for either Mr. Passalaqua or Mr. Carbona to provide additional future funding. If our management and/or Mr. Carbona ceases to provide us the needed financing and we fail to identify any alternative sources of funding, there will be substantial doubt about our ability to continue as a “going concern”.

We have no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities.  As a result, there can be no assurance that sufficient funds will be available to us to enable us to pay the expenses related to such activities.

Regardless of whether or not our cash assets prove to be adequate to meet our operational needs, we may have to compensate providers of services by issuances of our common stock in lieu of cash.

At August 31, 2011, we had $6,952 cash on hand and an accumulated deficit of $453,406.  Our primary source of liquidity has been from loans from a previous majority shareholder and loans from an outside party.  As of August 31, 2011, the Company owed $310,000 in amounts loaned to the company.

Net cash used in operating activities was $179,225 during the six-month period ended August 31, 2011.  

Net cash provided by financing activities was $11,089 during the six-month period ended August 31, 2011.

Our expenses to date are largely due to professional fees that include accounting and legal fees.

To date, we have had minimal revenues and require additional financing in order to finance our business activities on an ongoing basis.  Our future capital requirements will depend on numerous factors, including, but not limited to, executing our mining based business plan and the ability to pursue other business opportunities. We are actively pursuing alternative financing and have had discussions with various third parties, although no firm commitments have been obtained to date.  In the interim, shareholders of the Company have agreed to meet our minimal operating expenses.  We believe that actions presently being taken to revise our operating and financial requirements provide the Company with the opportunity to continue as a “going concern,” although no assurances can be given.

NET LOSS FROM OPERATIONS

The Company had a net loss of $453,406 for the period from inception through August 31, 2011. The Company had net loss of $153,715 for the six months ended August 31, 2011 as compared to a net loss of $5,198 for the six months ended August 31, 2010.

CASH FLOW

Our primary source of liquidity has been cash from shareholder loans and advances.

WORKING CAPTIAL

As of February 28, 2011, the Company had total current assets of $197,266 and total current liabilities of $363,907, resulting in working capital deficit of $166,641.  As of August 31, 2011, the Company had total current assets of $6,952 and total current liabilities of $327,308, resulting in a working capital deficit of $320,356.  

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THREE MONTHS ENDED AUGUST 31, 2011 COMPARED TO THE THREE MONTHS ENDED AUGUST 31, 2010

OPERATION AND ADMINISTRATIVE EXPENSES

Operating expenses increased by $6,259 from $2,563 in the three months ended August 31, 2010, to $8,822 in the three months ended August 31, 2011.  Operating expenses for the three months comparison primarily consist of General and Administrative expenses (G&A). G&A expenses are made up primarily of office expense, accounting, and legal expenses. Such fees are paid to accountants and attorneys throughout the year for performing various tasks.  

SIX MONTHS ENDED AUGUST 31, 2011 COMPARED TO THE  SIX MONTHS ENDED AUGUST 31, 2010

OPERATION AND ADMINISTRATIVE EXPENSES

Operating expenses increased by $138,362 from $5,198 in the six months ended August 31, 2010, to $143,560 in the six months ended August 31, 2011.  Operating expenses for the six months comparison primarily consist of General and Administrative expenses (G&A). G&A expenses are made up primarily of office expense, accounting, and legal expenses. Such fees are paid to accountants and attorneys throughout the year for performing various tasks.  

COMMON STOCK

We are authorized by our Amended and Restated Articles of Incorporation to issue an aggregate of 100,000,000 shares of capital stock, of which 100,000,000 are shares of common stock, par value $0.00001 per share (the “Common Stock”). As of August 31, 2011, 6,000,000 shares of Common Stock were issued and outstanding and there were 40 shareholders of our Common Stock.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to lack of segregation of duties  identification of a material weakness in our internal control over financial reporting which is identified in our Management's Report on Internal Control Over Financial Reporting included with our Annual Report on Form 10-K for the fiscal year ended February 28, 2011, which we view as an integral part of our disclosure controls and procedures.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting identified in connection with our evaluation of these controls as of the end of the period covered by this report that could have affected those controls subsequent to the date of the evaluation referred to in the previous paragraph, including any correction action with regard to deficiencies and material weakness.

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LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

WE HAVE LIMITED BUSINESS OPERATIONS AND A SINGLE MINING CLAIM. WE HAVE NOT IDENTIFIED ANY ALTERNATIVE BUSINESS OPPORTUNITIES. OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS WILL CONSIST OF EXECUTING OUR BUSINESS PLAN AND RESEARCHING NEW OPPORTUNITIES.

Our sole asset is our Bittern Lake Project.  The Bittern Lake Project (“Claim”) consists of one claim of 256 hectares. This claim was registered on March 18, 2009 in the name of Duncan Bain, 49 Midale Crescent, London, Ontario, Canada N5X 3C2. Title to the Claim was subsequently transferred to Nova in April 2009.  We have no experience in mining operations and it is not guaranteed that we will be able to locate diamonds in our claim, or that we will have the resources to capitalize on the Claim should we find commercially viable deposits.

WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL FINANCING.

For the year ended, February 28, 2011, we had cash on hand of $197,266 and a working capital deficit of $(166,641).

For the six months ended, August 31, 2011, we had cash on hand of $6,952 and a working capital deficit of $(320,356).

Currently, we are a development state enterprise; as such, our ability to obtain additional financing may be substantially limited. If sufficient financing is not available or obtainable as and when needed, we may not be able to continue as a going concern and investors may lose a substantial portion or all of their investment. We currently do not have any financing arrangements in place and there are no assurances that we will be able to acquire financing on acceptable terms or at all.

WE HAVE A SOLE OFFICER AND DIRECTOR.

Because management consists of only one person, Carmen Joseph Carbona, President and Principal Executive Officer of the Company and Secretary and Principal Financial Officer of the Company, he will be the only individual responsible in conducting the day-to-day operations of the Company while seeking a business combination.  We do not benefit from having access to multiple judgments that a greater number of directors or officers would provide, and we will rely completely on the judgment of our two officers and one director when selecting a target company.  We do not anticipate obtaining key man life insurance on Mr. Carbona. The loss of the services of Mr. Carbona would adversely affect the development of our business and our likelihood of continuing operations.

WE MAY CONDUCT FURTHER OFFERINGS IN THE FUTURE IN WHICH CASE INVESTORS' SHAREHOLDINGS WILL BE DILUTED.

We may conduct equity offerings in the future to finance any future business projects that we decide to undertake. If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock, investors' percentage interest in us will be diluted. The result of this could reduce the value of their stock.

BECAUSE OUR STOCK IS A PENNY STOCK, STOCKHOLDERS WILL BE MORE LIMITED IN THEIR ABILITY TO SELL THEIR STOCK.

The shares of our common stock constitute "penny stocks" under the Exchange Act. The shares will remain classified as a penny stock for the foreseeable future. The classification as a penny stock makes it more difficult for a broker/dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his or her investment. Any broker/dealer engaged by the purchaser for the purpose of selling his or her shares will be subject to rules 15g-1 through 15g-10 of the Exchange Act. Rather than having to comply with these rules, some broker-dealers will refuse to attempt to sell a penny stock.

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The "penny stock" rules adopted by the SEC under the Exchange Act subjects the sale of the shares of our common stock to certain regulations which impose sales practice requirements on broker/dealers. For example, brokers/dealers selling such securities must, prior to effecting the transaction, provide their customers with a document that discloses the risks of investing in such securities.

Legal remedies, which may be available to an investor in "penny stocks," are as follows:

(a) if "penny stock" is sold to an investor in violation of his or her rights listed above, or other federal or states securities laws, the investor may be able to cancel his or her purchase and get his or her money back.
(b) if the stocks are sold in a fraudulent manner, the investor may be able to sue the persons and firms that caused the fraud for damages.
(c) if the investor has signed an arbitration agreement, however, he or she may have to pursue his or her claim through arbitration.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED AND RESERVED]

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

EXHIBIT 31 Section 302 Certification of Chief Executive Officer and Chief Financial Officer

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

                                           NOVA MINING CORPORATION

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