U.S.SECURITIES AND EXCHANGE COMMISSION

Washington,D.C. 20549

 

FORM 10-QSB

 

QuarterlyReport under Section 13 or 15(d) of

TheSecurities Act of 1934

 

For theQuarterly Period ended March 31, 2007

CommissionFile Number 333-139660

 

DEERFIELDRESOURCES, LTD.

(Name ofsmall business issuer in its charter)

 

Nevada                                                98-0506246
                                                                                                      (State of                                               (IRS Employer

                                                                                                   Incorporation)                                           (ID Number)

 

513 MarinersWay

Collingwood,Ontario, Canada L9Y 5C7

(905)881-8920

(Address andtelephone number of principal executive offices)

Check whether the issuer (1) filed all reports required to befiled by Section 13 or 15 (d) of the Exchange Act during the past 12 months (orfor 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 _____ 
Check whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).

Yes X                    No _____ 
There were 3,000,000 shares of Common Stock issued andoutstanding as of March 31, 2007.

Transitional Small Business Disclosure Format: Yes        No __X__
**ITEM 1.**FINANCIAL STATEMENTS**
The Financial Statements of the Company required to be filedwith this 10-QSB Quarterly Report were prepared by management and commence onthe following page, together with the related Notes. In the opinion ofmanagement, these Financial Statements fairly present the financial condition ofthe Company, but should be read in conjunction with the Financial Statements ofthe Company for the period ended September 30, 2006, previously filed in a FormSB-2 with the Securities and Exchange Commission.
** 

 

 

 

 

 

DEERFIELD RESOURCES, LTD.
*(An Exploration Stage Company)*
INTERIM FINANCIAL STATEMENTS

MARCH 31, 2007
*Unaudited*
 

 

 

 **
 

 
**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Interim Balance    Sheet**

As at March 31,    2007
*(Unaudited)

**ASSETS
Current Assets
Cash 
$
10,169
Prepaid legal fees
1,320
Funds held in trust (note 3)
43,500
Total Current Assets
54,989
**TOTAL ASSETS
$
54,989

**LIABILITIES AND STOCKHOLDERS' EQUTIY

**LIABILITIES

Current Liabilities

Share subscriptions received in    advance (note 3)
$
43,500
Total Current Liabilities
43,500
**TOTAL LIABILITIES
$
43,500**STOCKHOLDERS' EQUITY (note 3)
Preferred stock, par value $0.001,    100,000,000 shares
authorized, none issued and    outstanding-
Common Stock, par value $0.001,    100,000,000 shares 
authorized, 3,000,000 shares issued    and outstanding3,000
Additional paid-in capital
22,000
Deficit accumulated during the    exploration stage    (13,511)
Total Stockholders' Equity
11,489**TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$54,989
 

 

 

 

 

 

 

 

The accompanying notesare an integral part of these financial statements.

 
**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Interim Statements    of Operations
*(Unaudited)**Cumulative**from Inception**Three Months**Six Months **(June 21, 2006)**Ended March 31,**Ended March 31, **to March 31,**2007** **2007**2007**Income
$                                -
$                          - 
$                            -**Expenses
Mineral property costs
-
5,000
5,000
Professional fees
1,733
7,221
7,965
Office and administrative
152
318 
546**Total Operating Expenses
1,885
12,539 
13,511**Other Income (Expense)
-
- 
-**Net Loss Applicable to Common Shares
$                        (1,885)
$                 (12,539)
$                 (13,511)**Basic and Diluted Loss per Common Share
$                        (0.001)
$                  (0.004) **Weighted Average Number of **Common Shares Outstanding
3,000,000
3,000,000 
 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notesare an integral part of these financial statements.

 

 
**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Interim Statement    of Changes in Stockholders' Equity**
For the Period of    Inception (June 21, 2006) to March 31, 2007 
Common Shares 
Additional Paid-In 
Deficit Accumulated During the Exploration 
Total Stockholders'
Shares
Amount
Capital
Stage
Equity
Balance, June 21, 2006 (Inception)
-
$
-
$
-
$
-
$
-

Common shares issued for cash at    $0.005 per share, June 27, 2006
1,000,000

1,000

4,000

-

5,000

Common shares issued for cash at    $.01 per share, August 1, 2006
2,000,000

2,000

18,000

-

20,000

Loss for the period
-

-

-

(972)

(972)
Balance, September 30, 2006 (audited)
3,000,000

3,000

22,000

(972)

24,028

Loss for the period
-

-

-

(10,654)

(10,654)
Balance, December 31, 2006 (unaudited)
3,000,000

3,000

22,000

(11,626)

13,374

Loss for the period
-

-

-

(1,885)

(1,885)
Balance, March 31, 2007 (unaudited)
3,000,000
$
3,000
$
22,000
$
(13,511)
$
11,489
 

 

 

The accompanying notes are an integral part of these financialstatements.

 

 
**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Interim Statements    of Cash Flows
*(Unaudited)**Cumulative**from Inception**Six Months **(June 21, 2006) to**Ended March 31, **March 31,**2007**2007**Operating Activities
Loss for the period
$                      (12,539)
$                    (13,511)
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expense
2,936 
(1,320)
**Net cash used in operating    activities**
(9,603)
(14,831)**Investing Activities
-
-
 
 **Net cash used in investing    activities
-
-**Financing Activities
Issuance of common stock for cash
- 
25,000
Share subscriptions received in advance
43,500
43,500**Net cash provided by financing    activities
43,500
68,500
Net Increase in Cash and Cash Equivalents
33,897
53,669
Cash and Cash equivalents - Beginning of period
19,772
-
Cash and Cash Equivalents - End of Period
$                           53,669    
$                        53,669    **Cash and Cash Equivalents Consists of:
Cash
$ 10,169
$ 10,169
Funds held in trust
43,500
43,500
$                           53,669
$                      53,669**Supplemental Cash Flow Disclosure:
Cash paid for interest
$                                    -    
$                                  -    
Cash paid for income taxes
$                                    -    
$                                  -    
 

 

 

 

 

 

The accompanying notes are an integral part of thesefinancials.
**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Notes to Interim    Financial Statements

March 31, 2007
 
 **1. Organization

Deerfield Resources, Ltd. (the "Company") was incorporated on  June 21, 2006 in the State of Nevada, U.S.A. It is based in Collingwood,  Ontario, Canada. The accounting and reporting policies of the Company conform  to accounting principles generally accepted in the United States of America,  and the Company's fiscal year end is September 30.

The Company is an exploration stage company that engages  primarily in the acquisition, exploration and development of resource  properties. The Company has the right to conduct exploration work on six  mineral mining claims in White Bay, Newfoundland, Canada and has not yet  determined whether these properties contain reserves that are economically  recoverable. To date, the Company's activities have been limited to its  formation and the raising of equity capital. 
**Exploration Stage Company**
The Company is considered to be in the exploration stage as  defined in Statement of Financial Accounting Standards (SFAS) No. 7, "*Accounting  and Reporting by Development Stage Enterprises,*" and interpreted by the  Securities and Exchange Commission for mining companies in Industry Guide 7.  The Company is devoting substantially all of its efforts to development of  business plans and the acquisition of mineral properties.**2. Significant Accounting Policies******Use of Estimates**
The preparation of the Company's financial statements in  conformity with accounting principles generally accepted in the United States  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 amount of  revenues and expenses during the reporting period. Actual results could differ  from those estimates. The Company's periodic filings with the Securities and  Exchange Commission include, where applicable, disclosures of estimates,  assumptions, uncertainties and markets that could affect the financial  statements and future operations of the Company.
**Cash and Cash Equivalents**
Cash and cash equivalents include cash in banks, money  market funds, and certificates of term deposits with maturities of less than  three months from inception, which are readily convertible to known amounts of  cash and which, in the opinion of management, are subject to an insignificant  risk of loss in value. The Company had $53,669 ($43,500 held in trust) in cash  and cash equivalents at March 31, 2007.
**Mineral Acquisition and Exploration Costs**
The Company has been in the exploration stage since its  formation on June 21, 2006 and has not yet realized any revenue from its  planned operations. It is primarily engaged in the acquisition, exploration  and development of mining properties. Mineral property acquisition and  exploration costs are expensed as incurred. When it has been determined that a  mineral property can be economically developed as a result of establishing  proven and probable reserves, the costs incurred to develop such property are  capitalized. Such costs will be amortized using the units-of-production method  over the estimated life of the probable reserve.

 

**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Notes to Interim    Financial Statements

March 31, 2007**2. Significant Accounting Policies - *Continued**Start-Up Costs**
In accordance with the American Institute of Certified Public  Accountant's Statement of Position 98-5, "*Reporting on the Costs of  Start-up Activities*", the Company expenses all costs incurred in  connection with the start-up and organization of the Company.
**Net Income or (Loss) Per Share of Common Stock**
The Company has adopted Financial Accounting Standards  Board ("FASB") Statement Number 128, *"Earnings per Share,"* ("EPS")  which requires presentation of basic and diluted EPS on the face of the income  statement for all entities with complex capital structures and requires a  reconciliation of the numerator and denominator of the basic EPS computation  to the numerator and denominator of the diluted EPS computation. In the  accompanying financial statements, basic earnings (loss) per share is computed  by dividing net income/loss by the weighted average number of shares of common  stock outstanding during the period.

The following table sets forth the computation of basic and  diluted earnings per share:

The Company has no potentially dilutive securities, such as  options or warrants, currently issued and outstanding.
**Foreign Currency Translations**
The Company's functional and reporting currency is the US  dollar. All transactions initiated in other currencies are translated into US  dollars using the exchange rate prevailing on the date of transaction.  Monetary assets and liabilities denominated in foreign currencies are  translated into the US dollar at the rate of exchange in effect at the balance  sheet date. Unrealized exchange gains and losses arising from such  transactions are deferred until realization and are included as a separate  component of stockholders' equity (deficit) as a component of comprehensive  income or loss. Upon realization, the amount deferred is recognized in income  in the period when it is realized.

No significant realized exchange gain or losses were  recorded for the period ended March 31, 2007.

 
**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Notes to Interim    Financial Statements

March 31, 2007
 
 **2. Significant Accounting Policies - *Continued***Concentrations of Credit Risk

The Company's financial instruments that are exposed to  concentrations of credit risk primarily consist of its cash and cash  equivalents and related party payables it will likely incur in the near  future. The Company places its cash and cash equivalents with financial  institutions of high credit worthiness. At times, its cash and cash  equivalents with a particular financial institution may exceed any applicable  government insurance limits. The Company's management plans to assess the  financial strength and credit worthiness of any parties to which it extends  funds, and as such, it believes that any associated credit risk exposures are  limited.
**Recent Accounting Pronouncements

In December 2004, the FASB issued Financial Accounting  Standards No. 123 (revised 2004) (SFAS 123R), *"Share-Based Payment."*  SFAS 123R replaces SFAS No. 123*, "Accounting for Stock-Based Compensation,"*and supersedes APB Opinion No. 25, *"Accounting for Stock Issued to  Employees*." SFAS 123R requires compensation expense, measured as the fair  value at the grant date, related to share-based payment transactions to be  recognized in the financial statements over the period that an employee  provides service in exchange for the award. SFAS 123R is effective in fiscal  periods that begin after December 15, 2005. 

In December 2004, FASB issued Financial Accounting  Standards No. 153, *"Exchanges of Non-monetary Assets, an amendment of APB  Opinion No. 29, Accounting for Non-Monetary Transactions (SFAS 153)."* This  statement amends APB Opinion 29 to eliminate the exception for non-monetary  exchanges of similar productive assets and replaces it with a general  exception for exchanges of non-monetary assets that do not have commercial  substance. Under SFAS 153, if a non-monetary exchange of similar productive  assets meets a commercial-substance criterion and fair value is determinable,  the transaction must be accounted for at fair value resulting in recognition  of any gain or loss. SFAS 153 is effective in fiscal periods that begin after  June 15, 2005. 

In May 2005, the FASB issued SFAS No. 154, *"Accounting  Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB  Statement No. 3."* This statement changes the requirements for the  accounting for and reporting of a change in accounting principle. Previously,  Opinion 20 required that most voluntary changes in accounting principle be  recognized by including in net income of the period of change the cumulative  effect of changing to a new principle. This statement requires retrospective  application to prior periods' financial statements of changes in accounting  principle, when practicable. 

In February 2006, FASB issued Financial Accounting  Standards No. 155,*"Accounting for Certain Hybrid Financial Instruments -  an amendment of FASB Statements No. 133 and 140.*" This Statement amends  FASB Statements No. 133, *Accounting for Derivative Instruments and Hedging  Activities,* and No. 140, *Accounting for Transfers and Servicing of  Financial Assets and Extinguishments of Liabilities.* This Statement  resolves issues addressed in Statement 133 Implementation Issue No. D1, *"Application of Statement 133 to Beneficial Interests in Securitized Financial  Assets."* SFAS 155 is effective for all financial instruments acquired or  issued after the beginning of an entity's first fiscal year that begins after  September 15, 2006.

 

 
**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Notes to Interim    Financial Statements

March 31, 2007
 
 **2. Significant Accounting Policies - ***Continued*
Recent Accounting Pronouncements - *Continued
In March 2006, FASB issued Financial Accounting Standards  No. 156, *"Accounting for Servicing of Financial Assets - an amendment of  FASB Statement No. 140."* This Statement amends FASB Statement No. 140,  Accounting for Transfers and Servicing of Financial Assets and Extinguishments  of Liabilities, with respect to the accounting for separately recognized  servicing assets and servicing liabilities. SFAS 156 is effective in the first  fiscal year that begins after September 15, 2006.

In September 2006, FASB issued Financial Accounting  Standards No. 157*, "Fair Value Measurements."* This Statement defines  fair value, establishes a framework for measuring fair value in generally  accepted accounting principles (GAAP), and expands disclosures about fair  value measurements. This Statement applies under other accounting  pronouncements that require or permit fair value measurements, the Board  having previously concluded in those accounting pronouncements that fair value  is the relevant measurement attribute. Accordingly, this Statement does not  require any new fair value measurements. However, for some entities, the  application of this Statement will change current practice. SFAS 157 is  effective in the first fiscal year that begins after November 15, 2007.

In September 2006, FASB issued Financial Accounting  Standards No. 158*, "Employers' Accounting for Defined Benefit Pension and  Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106,  and 132(R)."* This Statement improves financial reporting by requiring an  employer to recognize the overfunded or underfunded status of a defined  benefit postretirement plan (other than a multiemployer plan) as an asset or  liability in its statement of financial position and to recognize changes in  that funded status in the year in which the changes occur through  comprehensive income of a business entity or changes in unrestricted net  assets of a not-for-profit organization. This Statement also improves  financial reporting by requiring an employer to measure the funded status of a  plan as of the date of its year-end statement of financial position, with  limited exceptions. SFAS 158 is effective. An employer with publicly traded  equity securities is required to initially recognize the funded status of a  defined benefit postretirement plan and to provide the required disclosures as  of the end of the first fiscal year ending after December 15, 2006.

In February 2007, FASB issued Financial Accounting  Standards No. 159, "*The Fair Value Option for Financial Assets and  Financial Liabilities--Including an amendment of FASB Statement No. 115."*  This Statement permits entities to choose to measure many financial  instruments and certain other items at fair value. The objective is to improve  financial reporting by providing entities with the opportunity to mitigate  volatility in reported earnings caused by measuring related assets and  liabilities differently without having to apply complex hedge accounting  provisions. This Statement is expected to expand the use of fair value  measurement, which is consistent with the Board's long-term measurement  objectives for accounting for financial instruments. SFAS 159 is effective as  of the beginning of an entity's first fiscal year that begins after November  15, 2007.

None of the above new pronouncements has current  application to the Company, but will be implemented in the Company's future  financial reporting when applicable.

 
**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Notes to Interim    Financial Statements

March 31, 2007Stockholders' Equity

**Authorized Stock**
The Company has authorized 100,000,000 common shares and  100,000,000 preferred shares, both with a par value of $0.001 per share. Each  common share entitles the holder to one vote, in person or proxy, on any  matter on which action of the stockholders of the corporation is sought.
**Share Issuances**
On June 27, 2006 and August 1, 2006, the Company issued  1,000,000 common shares at $0.005 per share and 2,000,000 common shares at  $0.01 per share, respectively, resulting in total proceeds of $25,000 and  3,000,000 common shares issued and outstanding at March 31, 2007. These shares  were issued to directors and officers of the Company. 

There are no preferred shares outstanding. The Company has  issued no authorized preferred shares. The Company has no stock option plan,  warrants or other dilutive securities.
**Share subscriptions received in advance**
Prior to March 31, 2007 the Company has received  subscriptions for 1,087,500 shares from independent investors at $0.04 per  share for total amounts of $43,500. Since these funds are to be returned to  the subscribers if the minimum of 1,250,000 shares is not sold (for proceeds  of $50,000), the $43,500 is therefore classified as a liability (share  subscriptions received in advance) in the Company's records.
**4. Provision for Income Taxes**
The Company recognizes the tax effects of transactions in  the year in which such transactions enter into the determination of net  income, regardless of when reported for tax purposes. Deferred taxes are  provided in the financial statements under SFAS No. 109 to give effect to the  resulting temporary differences which may arise from differences in the bases  of fixed assets, depreciation methods, allowances, and start-up costs based on  the income taxes expected to be payable in future years. Minimal exploration  stage deferred tax assets arising as a result of net operating loss carry  forwards have been offset completely by a valuation allowance due to the  uncertainty of their utilization in future periods. Operating loss carry  forwards generated during the period from June 21, 2006 (date of inception)  through March 31, 2007 of approximately $13,511 will begin to expire in 2026.  Accordingly, deferred tax assets of approximately $4,700 were offset by a  valuation allowance, which increased by approximately $4,000 during the six  months ended March 31, 2007.
**5. Mineral Property Costs**
On October 10, 2006, the Company entered into a mineral  claim purchase agreement (the Agreement) to purchase an undivided interest in  six mining claims on property located in White Bay, Newfoundland Canada (the  Property) for $40,000. Payments on the Property are payable as follows:

Upon signing of the  agreement and transfer of title (paid)                                  $              5,000

On or before  October 10, 2007                                                                                     5,000

On or before  October 10, 2008                                                                                   10,000

On or before  October 10, 2009                                                                                   10,000 

On or before  October 10, 2010                                                                                   10,000
TOTAL                                                                                                         $            40,000\

 
**Deerfield    Resources, Ltd.***(An Exploration    Stage Company)***Notes to Interim    Financial Statements

March 31, 2007**
**5. Mineral Property Costs - *continued
In addition to the property payments, the Company is  required to incur $50,000 of exploration work on the property over four years  and to pay a 3% royalty on all mineral commodities sold from the property.  This royalty shall be reduced to 1.5% upon payment to the vendor of $1,000,000  USD at any time. The vendor has recommended a work program of $15,000, which  will be part of the expenditure commitment and must be completed in the first  year. The program consists of surveying a control grid, soil and rock chip  sampling and geological mapping. 

During the six months ended March 31, 2007, the Company  made total property option payments of $5,000 as outlined by the Agreement. As  of March 31, 2007, no exploration has been performed on the Property.

The Company is also responsible for maintaining the mineral  claims in good standing by paying all the necessary rents, taxes, and filing  fees associated with the Property. As of March 31, 2007, the Company met these  obligations.
Going Concern and Liquidity Considerations

The accompanying financial statements have been prepared  assuming that the Company will continue as a going concern, which  contemplates, among other things, the realization of assets and satisfaction  of liabilities in the normal course of business. As at March 31, 2007, the  Company has working capital of $11,489 and an accumulated deficit of $13,511.  The Company intends to fund operations through equity financing arrangements,  which may be insufficient to fund its capital expenditures, working capital  and other cash requirements for the next twelve months.

The ability of the Company to emerge from the exploration  stage is dependent upon, among other things, obtaining additional financing to  continue operations, explore and develop the mineral properties and the  discovery, development and sale of ore reserves.

In response to these problems, management intends to raise  additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about  the Company's ability to continue as a going concern. The accompanying  financial statements do not include any adjustments that might result from the  outcome of this uncertainty.
** 

 

 **** 

 

 

 

 

 **** 

 

ITEM 2.**MANAGEMENT'S DISCUSSION AND ANALYSIS ORPLAN OF OPERATION**
This report includes a number of forward looking statements thatreflect our current views with respect to future events and financialperformance. Forward looking statements are often identified by words like:believe, expect, estimate, anticipate, intend, project and similar expressions,or words which, by their nature, refer to future events. You should not placeundue certainty on these forward looking statements, which apply only as of thedate of this quarterly report. These forward looking statements are subject tocertain risks and uncertainties that could cause actual results to differmaterially from historical results or our predictions. 
**Results of Operations**
Our cash in the bank at March 31, 2007 was $53,669 (of which$43,500 is being held in trust). In order to satisfy our cash requirements weare required to complete our offering of up to 2,000,000 shares registeredpursuant to our SB-2 Registration Statement which became effective on January12, 2007. Prior to March 31, 2007, we received subscriptions totaling $43,500;these were classified as subscriptions received in advance liabilities, as weare required to raise a minimum of $50,000 from this offering. 

For the period from inception (June 21, 2006) to March 31, 2007,we had no revenues and incurred net operating losses of $13,511, consisting ofmineral property expenses for the property option and general and administrativeexpenses primarily incurred in connection with the preparation and filing of ourSB-2 Registration Statement.

Net cash provided by financing activities since inceptionthrough March 31, 2007 was $68,500, raised from the private sale of stock to ourofficers and directors and to subscriptions received under our SB-2 offering. Ofthis $68,500, $43,500 are being held in trust, by the Company, please refer toNote 3 of our financial statements.
**Plan of Operation**
We are a start-up, exploration stage company and have not yetgenerated or realized any revenues from our business operations.

There is substantial doubt that we can continue as an on-goingbusiness for the next twelve months unless we obtain additional capital to payour bills. This is because we have not generated any revenues and no revenuesare anticipated until we begin removing and selling minerals. There is noassurance we will ever reach this point. Accordingly, we must raise cash fromsources other than the sale of minerals found on the property. Our only othersource for cash at this time is investments by others. We must raise cash toimplement our project and stay in business. If we raise the amount of money inour offering under the SB-2 Registration Statement, we believe it, together withthe $25,000 cash received from the directors for the purchase of shares, willlast a minimum of twelve months. 

We will be conducting research in the form of exploration of theproperty. We are not going to buy or sell any plant or significant equipmentduring the next twelve months. 

The property is located in White Bay, Newfoundland, Canada andis called the "O'Sullivan Property." 

Our exploration target is to find an ore body containing gold.Our success depends upon finding mineralized material. This includes adetermination by our consultant if the property contains reserves. We have notselected a consultant as of March 31, 2007 and will not do so until our offeringis successfully completed, if that occurs, of which there is no assurance.Mineralized material is a mineralized body, which has been delineated byappropriate spaced drilling or underground sampling to support sufficienttonnage and average grade of metals to justify removal. If we don't findmineralized material or we cannot remove mineralized material, either because wedo not have the money to do it or because it is not economically feasible to doit, we will cease operations and you will lose your investment. 

In addition, we may not have enough money to complete ourexploration of the property. If it turns out that we have not raised enoughmoney to complete our exploration program, we will try to raise additional fundsfrom a second public offering, a private placement, or loans. At the presenttime, we have not made any plans to raise additional money and there is noassurance that we would be able to raise additional money in the future. If weneed additional money and can't raise it, we will have to suspend or ceaseoperations. 

We must conduct exploration to determine what amount ofminerals, if any, exist on our properties and if any minerals that are found canbe economically extracted and profitably processed. 

The property is undeveloped raw land. Exploration and surveyinghas not been initiated and will not be initiated until we raise money in ouroffering under the SB-2 Registration Statement. That is because we do not havemoney to start exploration. Once the offering is concluded, we intend to startexploration operations. To our knowledge, except as noted herein, the propertyhas never been mined. The only event that has occurred is the locating and therecording of the mining claims under the direction of ASK Prospecting andGuiding, Inc.

Before mineral retrieval can begin, we must explore for and findmineralized material. After that has occurred we have to determine if it iseconomically feasible to remove the mineralized material. Economically feasiblemeans that the costs associated with the removal of the mineralized materialwill not exceed the price at which we can sell the mineralized material. Wecan't predict what that will be until we find mineralized material. 

We do not know if we will find mineralized material. We believethat activities occurring on adjoining properties are not material to ouractivities, because whatever is located under adjoining property may or may notbe located under our property.

We do not claim to have any minerals or reserves whatsoever atthis time on any of the property.

We intend to implement an initial exploration program consistingof trenching around high-grade (AU) boulders to try and source mineralizedmaterial in bedrock. Approximately 100 rock chip samples will be taken. Allsamples will be boxed and shipped to Accurassay Laboratories for analysis. Weestimate the total time to complete the project would be approximately fourweeks including analysis. The objective of this work would be to determine ifthere is an economically recoverable gold resource that has been overlooked onthis property. This initial phase of work will provide enough information toallow the Company to decide whether or not to proceed to the next phase ofexploration.

Based upon the results of the exploration, Mr. McDonald and Mr.Ryan will determine, in consultation with our consultants, if the property is tobe dropped or further exploration on the Property is deemed necessary. Mr.McDonald and Mr. Ryan will not receive fees for their services. 

The proceeds from our offering under the SB-2 RegistrationStatement are designed to fund the costs of the initial exploration programrecommended by ASK Prospecting and Guiding, Inc. 

We estimate the cost of the proposed work program to be $15,000.This is comprised of $1,000 for mobilization and demobilization, $4,760 fortrenching, $2,700 for supervision, $1,000 for meals and lodging, $990 for truck& ATV expense, $2,700 for shipping and assays, and $1,850 for taxes. We estimateit will take up to four weeks to complete the program. We will begin the programafter the completion of the offering, weather permitting. 

We do not intend to interest other companies in the property ifwe find mineralized materials. We intend to try to develop the reservesourselves through the use of consultants. We have no plans to interest othercompanies in the property if we do not find mineralized material. 

If we are unable to complete any phase of exploration because wedon't have enough money, we will cease operations until we raise more money. Ifwe can't or don't raise more money, we will cease operations.

We do not intend to hire additional employees at this time. Allof the work on the property will be conducted by unaffiliated independentcontractors that we will hire. The independent contractors will be responsiblefor surveying, geology, engineering, exploration, and excavation. The geologistswill evaluate the information derived from the exploration and excavation andthe engineers will advise us on the economic feasibility of removing themineralized material.
**Limited Operating History; Need for Additional Capital

There is no historical financial information about us upon whichto base an evaluation of our performance. We are an exploration stagecorporation and have not generated any revenues from operations. We cannotguarantee we will be successful in our business operations. Our business issubject to risks inherent in the establishment of a new business enterprise,including limited capital resources, possible delays in the exploration of ourproperties, and possible cost overruns due to price and cost increases inservices.

To become profitable and competitive, we must conduct theresearch and exploration of our properties before we start production of anyminerals we may find. We are seeking equity financing to provide for the capitalrequired to implement our research and exploration phases. We believe that thefunds raised from our offering under the SB-2 Registration Statement will allowus to operate for one year. 

We have no assurance that future financing will be available tous on acceptable terms. If financing is not available on satisfactory terms, wemay be unable to continue, develop or expand our operations. Equity financingcould result in additional dilution to existing shareholders. 
**Liquidity and Capital Resources

To meet our need for cash we are attempting to raise money fromour offering under our Registration Statement on Form SB-2. We cannot guaranteethat we will be able to raise enough money through that offering to stay inbusiness. Whatever money we do raise, will be applied to the items set forth inthe Use of Proceeds section of our prospectus. If we find mineralized materialand it is economically feasible to remove the mineralized material, we willattempt to raise additional money through a subsequent private placement, publicoffering or through loans. If we do not raise the money we need from thisoffering to complete our exploration of the property, we will have to findalternative sources, like a second public offering, a private placement ofsecurities, or loans from our officers or others. 

At the present time, we have not made any arrangements to raiseadditional cash, other than under the SB-2 Registration Statement. If we needadditional cash and can't raise it we will either have to suspend operationsuntil we do raise the cash, or cease operations entirely. The funds raised inour offering under the SB-2 Registration Statement will allow the Company tooperate for a minimum of one year. Other than as described in this paragraph, wehave no other financing plans.

We acquired one property containing 6 claims. The property isstaked and we expect to start exploration operations after completion of theoffering under our SB-2 Registration Statement, weather permitting. As of March31, 2007 we have yet to begin operations and therefore we have yet to generateany revenues.

Since inception we have issued 3,000,000 shares of commonstock pursuant to the exemption from registration set forth in section 4(2) ofthe Securities Act of 1933. 1,000,000 common shares were sold in June 2006 and2,000,000 common shares were sold in August 2006. The purchase price of theshares was $25,000. Prior to March 31, 2007 we have received subscriptions for1,087,500 shares from independent investors at $0.04 per share for total amountsof $43,500. Since these funds are to be returned to the subscribers if theminimum of 1,250,000 shares are not sold (for proceeds of $50,000), the $43,500is therefore classified as a liability (share subscriptions received in advance)in the Company's records.

As of March 31, 2007, our total assets were $54,989 and ourtotal liabilities were $43,500. 
**Off-Balance Sheet Arrangements**
We have no off-balance sheet arrangements.
**Critical Accounting Policies****Use of Estimates**
The preparation of the Company's financial statements inconformity with accounting principles generally accepted in the United Statesrequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amount ofrevenues and expenses during the reporting period. Actual results could differfrom those estimates. The Company's periodic filings with the Securities andExchange Commission include, where applicable, disclosures of estimates,assumptions, uncertainties and markets that could affect the financialstatements and future operations of the Company.
**Cash and Cash Equivalents**
Cash and cash equivalents include cash in banks, money marketfunds, and certificates of term deposits with maturities of less than threemonths from inception, which are readily convertible to known amounts of cashand which, in the opinion of management, are subject to an insignificant risk ofloss in value. The Company had $53,669 ($43,500 held in trust) in cash and cashequivalents at March 31, 2007.
**Mineral Acquisition and Exploration Costs**
The Company has been in the exploration stage since itsformation on June 21, 2006 and has not yet realized any revenue from its plannedoperations. It is primarily engaged in the acquisition, exploration anddevelopment of mining properties. Mineral property acquisition and explorationcosts are expensed as incurred. When it has been determined that a mineralproperty can be economically developed as a result of establishing proven andprobable reserves, the costs incurred to develop such property are capitalized.Such costs will be amortized using the units-of-production method over theestimated life of the probable reserve.
**Start-Up Costs**
In accordance with the American Institute of Certified PublicAccountant's Statement of Position 98-5, "*Reporting on the Costs of Start-upActivities*", the Company expenses all costs incurred in connection with thestart-up and organization of the Company.
**Net Income or (Loss) Per Share of Common Stock**
The Company has adopted Financial Accounting Standards Board("FASB") Statement Number 128, *"Earnings per Share,"* ("EPS") whichrequires presentation of basic and diluted EPS on the face of the incomestatement for all entities with complex capital structures and requires areconciliation of the numerator and denominator of the basic EPS computation tothe numerator and denominator of the diluted EPS computation. In theaccompanying financial statements, basic earnings (loss) per share is computedby dividing net income/loss by the weighted average number of shares of commonstock outstanding during the period.

The following table sets forth the computation of basic anddiluted earnings per share:

The Company has no potentially dilutive securities, such asoptions or warrants, currently issued and outstanding.
**Foreign Currency Translations**
The Company's functional and reporting currency is the USdollar. All transactions initiated in other currencies are translated into USdollars using the exchange rate prevailing on the date of transaction. Monetaryassets and liabilities denominated in foreign currencies are translated into theUS dollar at the rate of exchange in effect at the balance sheet date.Unrealized exchange gains and losses arising from such transactions are deferreduntil realization and are included as a separate component of stockholders'equity (deficit) as a component of comprehensive income or loss. Uponrealization, the amount deferred is recognized in income in the period when itis realized.

No significant realized exchange gain or losses were recordedfor the period ended March 31, 2007.
**Concentrations of Credit Risk**
The Company's financial instruments that are exposed toconcentrations of credit risk primarily consist of its cash and cash equivalentsand related party payables it will likely incur in the near future. The Companyplaces its cash and cash equivalents with financial institutions of high creditworthiness. At times, its cash and cash equivalents with a particular financialinstitution may exceed any applicable government insurance limits. The Company'smanagement plans to assess the financial strength and credit worthiness of anyparties to which it extends funds, and as such, it believes that any associatedcredit risk exposures are limited.
**ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures**
Under the supervision and with the participation of ourmanagement, including our principal executive officer and principal financialofficer, we have conducted an evaluation of the effectiveness of the design andoperation of our disclosure controls and procedures, as defined in Rules13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of theend of the period covered by this report. Based on this evaluation, ourprincipal executive officer and principal financial officer concluded as of theevaluation date that our disclosure controls and procedures were effective suchthat the material information required to be included in our Securities andExchange Commission reports is recorded, processed, summarized and reportedwithin the time periods specified in SEC rules and forms relating to ourcompany, particularly during the period when this report was being prepared.

Additionally, there were no significant changes in our internalcontrols or in other factors that could significantly affect these controlssubsequent to the evaluation date. We have not identified any significantdeficiencies or material weaknesses in our internal controls, and thereforethere were no corrective actions taken.

Changes in Internal Controls

There were no significant changes in the Company's internalcontrols, or other factors, that could significantly affect the Company'scontrols subsequent to the date of the evaluations performed by the executiveofficers of the Company. No deficiencies or material weaknesses were found thatwould require corrective action.
**PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS**
Deerfield Resources, Ltd. is not a party to any material pendinglegal proceedings and, to the best of its knowledge, no such action by oragainst Deerfield Resources, Ltd. has been threatened.
**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OFPROCEEDS**
None.
**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**
None.
**ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**
None.
**ITEM 5. OTHER INFORMATION**
None.
**ITEM 6. EXHIBITS**
The following exhibits are included with this quarterlystatement filing.

Those marked with an asterisk and required to be filedhereunder, are incorporated by reference and can be found in their entirety inour original Form SB-2 Registration Statement, filed under SEC File Number333-137481, at the SEC website at www.sec.gov:

Exhibit

NumberDescription
3.1 Articles of Incorporation*

3.2 Bylaws*

31.1 Sec. 302 Certification of    Principal Executive Officer

32.1 Sec. 906 Certification of    Principal Executive Officer

*Previously filed
**SIGNATURES**
Pursuant to the requirements of Section 13(a) or 15(d) of theSecurities Exchange Act of 1934, the Registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized.

 

May 14, 2007                                                        Deerfield Resources, Ltd., Registrant

                                                                              By:   ***/s/ Paul McDonald***

                                                                              ______________________________

                                                                             Paul McDonald, Director, President, 

                                                                             Treasurer, Principal Executive Officer, 

                                                                             Principal Financial Officer 

 

In accordance with theExchange Act, this report has been signed below by the following person onbehalf of the registrant and in the capacities and on the date indicated.

 

May 14, 2007                                                        Deerfield Resources, Ltd., Registrant

                                                                              By:   ***/s/ Paul McDonald***

                                                                              ______________________________

                                                                              Paul McDonald, Director, President,    

                                                                              Treasurer, Principal Executive Officer,

                                                                              Principal Financial Officer**********************************************************************************************************************************