UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




FORM 10-Q/A


(Amendment No.1)




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


SECURITIES EXCHANGE ACT OF 1934




For the quarterly period ended March 31, 2010




OR




[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934




For the transition period from __________ to ____________




Commission file number 0-52725




NORTHERN EMPIRE ENERGY CORP.


(Exact name of registrant as specified in its charter)




Nevada                                                      20-4765268


(State of incorporation)                                                      (I.R.S. Employer ID No.)




118 8th Ave. NW, Calgary, Alberta, T2M 0A4, Canada


(Address of principal executive offices)(Zip Code)




Issuer’s telephone number, including area code: (403) 456-2333




Indicate by checkmark 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 past 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 checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.




Large Accelerated Filer
[   ]

Accelerated Filer
[   ]Non-accelerated Filer
[   ]

Smaller Reporting Company
[X](Do not check if smaller reporting company)




Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes [   ]   No [X]




As of November 23, 2009, the registrant’s outstanding common stock consisted of 20,276,547 shares, $0.001 Par Value. Authorized – 195,000,000 common voting shares authorized and 62,500 preferred issued, 5,000,000 authorized.
















EXPLANATORY NOTE






The purpose of this Amendment No. 1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, filed with the Securities and Exchange Commission on May 18, 2010, (the “Form 10-Q”) is to restate the financial statements of the Company to reflect a change in the additional paid in capital and accumulated deficit position of the Company at March 31, 2010 resulting from an adjustment to the beneficial conversion feature calculated on the Company’s preferred stock.




In addition, the purpose of this Amendment No. 1 to the Company’s Form 10-Q is to amend the disclosure under Item 4T – Controls & Procedures “Evaluation of Controls & Procedures” to provide the required conclusion of the Company’s principal executive and principal financial officer regarding the effectiveness of the Company’s disclosure controls and procedures.




Updated certifications pursuant to Section 302 of the Sarbanes –Oxley Act of 2002 have been included as Exhibits 31.1 and 32.1.




No other changes have been made to the Form 10-Q.




This Amendment No. 1 to the Form 10-Q continues to speak as of the original filing date of the Form 10-Q and does not reflect events that may have occurred subsequent to the original filing date.



























Table of  ContentsNorthern Empire Energy Corp.Index To Form 10-Q/AFor the Quarterly Period Ended March 31, 2010PagePART I
FINANCIAL INFORMATIONItem 1
Financial StatementsBalance Sheets as of March 31, 2010 and December 31, 2009
1Statements of Operations for the three months ended March 31, 2010 and 2009
2Statements of Stockholders’ Equity (Deficit)
3Statements of Cash Flows for the three months ended March 31, 2010 and 2009
5Notes to the Financial Statements
6Item 2
Management’s Discussion and Analysis of Financial Condition and Results of Operation
15Item 3
Quantitative and Qualitative Disclosures About Market Risk
20Item 4T
Controls and Procedures
20PART II
OTHER INFORMATION
21Item 1
Legal Proceedings
21Item 1A
Risk Factors
21Item 2
Unregistered Sales of  Equity Securities and Use of Proceeds
21Item 3
Defaults Upon Senior Securities
21Item 4
Submission of Matters to a Vote of Security Holders
21Item 5
Other Information
22Item 6
Exhibits
22Signatures

23













NORTHERN EMPIRE ENERGY CORP.(A Exploration Stage Company)Balance Sheetsas of


as ofMarch 31, 2010


December 31, 2009(unaudited)


(audited)(Restated)


(Restated)ASSETSCURRENT ASSETSCash and cash equivalents
$
9,362


$
35,855TOTAL CURRENT ASSETS

9,362



35,855PROPERTY AND EQUIPMENT, netDeposits

-



-Oil and gas properties

1



1TOTAL OTHER ASSETS

1



1TOTAL ASSETS
$
9,363


$
35,856LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)CURRENT LIABILITIESAccounts payable
$
25,180


$
19,969Accounts payable - related party

93,243



76,256TOTAL CURRENT LIABILITIES

118,423



96,225STOCKHOLDERS’ EQUITY (DEFICIT)Preferred Stock, $0.001 par value, 5,000,000 shares authorized, 62,500 shares issued and outstanding as of 3/31/10 and 12/31/09

63



63Common stock; $0.001 par value; 195,000,000 shares authorized; 20,827,216 shares issued and outstanding as of 3/31/10 and 12/31/09

20,827



20,827Stock payable; 615,347 shares

615



615Additional paid-in capital

659,427



659,427Deficit accumulated during exploration stage

(798,178
)


(752,991
)Accumulated other comprehensive income

8,187



11,690TOTAL STOCKHOLDERS’ DEFICIT

(109,059
)


(60,369
)TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
$
9,363


$
35,856






The accompanying notes are an integral part of these condensed financial statements




1




NORTHERN EMPIRE ENERGY CORP.(A Exploration Stage Company)Statements of OperationsThree Months


April 24, 2006Ended


Ended


(inception) toMarch 31,


March 31,


March 31, 20102010


2009


(Restated)REVENUES
$
-


$
-


$
19,491OPERATING EXPENSESGeneral and administrative

29,635



40,947



259,536Professional fees

15,500



13,425



74,996TOTAL OPERATING EXPENSES

45,135



54,372



334,532LOSS FROM OPERATIONS

(45,135
)


(54,372
)


(315,041
)OTHER EXPENSES:Foreign currency transaction gain (loss)

(52
)


(71
)


(11,615
)Loss on impairment of oil and gas rights

-



-



(471,523
)TOTAL OTHER EXPENSE

(52
)


(71
)


(483,137
)NET LOSS

(45,187
)


(54,443
)


(798,178
)OTHER COMPREHENSIVE INCOME (LOSS)Foreign currency translation adjustment

(3,503
)


(318
)


8,187COMPREHENSIVE LOSS
$
(48,690
)

$
(54,761
)

$
(789,991
)NET LOSS PER SHARE - BASIC
$
(0.00
)

$
(0.00
)WEIGHTED AVERAGE COMMON EQUIVALENTSHARES OUTSTANDING - BASIC AND DILUTED

20,827,216



18,636,481






The accompanying notes are an integral part of these condensed financial statements


2




NORTHERN EMPIRE ENERGY CORP.(An Exploration Stage Company)Restated Statement of Stockholders’ Equity (Deficit)DeficitAccumulated

Accumulated

TotalPreferred Stock

Common Stock

Common Stock

Stock

Additional

Paid- In

During The

Exploration

Other Comprehensive

Stockholders’ EquityShares

Amount

Shares

Amount

Issuable

Payable

Capital

Stage

Income

(Deficit)Balance, April 24,2006
-

$
-

-

$
-

-

$
-

$
-

$
-

$
-

$
-Shares issued for cash at $0.01 per

share
-


-

361,900


362

-


-


3,257


-


-


3,619Shares issued for equipment at

$0.10 per share
75,000


75

-


-

-


-


7,425


-


-


7,500Deemed interest from beneficial

conversion feature on preferred

stock
-


-

-


-

-


-


7,500


-


-


7,500Shares issued for cash at $0.10 per

share
-


-

61,200


61

-


-


6,059


-


-


6,120Net loss for the year ended

December 31, 2006
-


-

-


-

-


-


-


(1,543
)

-


(1,543
)Balance, December 31, 2006
75,000


75

423,100


423

-


-


24,241


(1,543
)

-


23,196Net loss for the year ended

December 31, 2007
-


-

-


-

-


-


-


(15,934
)

-


(15,934
)Balance, December 31, 2007
75,000


75

423,100


423

-


-


24,241


(17,477
)

-


7,262Shares issued for cash at $0.01 per

share
-


-

18,000,000


18,000

-


-


162,000


-


-


180,000Share cancelled from prior officer

for cash and assets of the

Company
-


-

(361,900
)

(362
)
-


-


(54,388


-


-


(54,750
)Foreign currency translation

adjustment
-


-

-


-

-


-


-


-


(514
)

(514
)Net loss for the year ended

December 31, 2008
-


-

-


-

-


-


-


(94,322
)

-


(94,322
)Balance, December 31, 2008
75,000


75

18,061,200


18,061

-


-


131,853


(111,799
)

(514
)

37,677






The accompanying notes are an integral part of these condensed financial statements




3




NORTHERN EMPIRE ENERGY CORP.(An Exploration Stage Company)RestatedStatement of Stockholders’ Equity (Deficit)DeficitAccumulated

Accumulated

TotalPreferred Stock

Common Stock

Common Stock

Stock

Additional

Paid- In

During The

Exploration

Other Comprehensive

Stockholders EquityShares

Amount

Shares

Amount

Issuable

Payable

Capital

Stage

Income

(Deficit)Contributed capital from officer
-


-

-


-

-


-


1,425


-


-


1,425Conversion of preferred shares

into common stock
(8,000
)

(8
)
1,600,000


1,600

-


-


(1,592
)

-


-


-Private Placement
-


-

-


-

615,347


615


368,593


-


-


369,208Private Placement
-


-

266,016


266

-


-


160,044


-


-


160,310Conversion of preferred shares

into common stock
(4,500
)

(5
)
900,000


900

-


-


(896
)

-


-


-Foreign currency translation

adjustment
-


-

-


-

-


-


-


-


12,203


12,203Net loss for the year ended

December 31, 2009
-


-

-


-

-


-


-


(641,192
)

-


(641,192
)Balance, December 31, 2009
62,500


63

20,827,216


20,827

615,347

$
615


659,427


(752,991
)

11,690


(60,369
)Foreign currency translation

adjustment
-


-

-


-

-


-


-


-


(3,503
)

(3,503
)Net loss for the period ended

March 31, 2010
-


-

-


-

-


-


-


(45,187
)

-


(45,187
)Balance, March 31, 2010
62,500

$
63

20,827,216

$
20,827

615,347

$
615

$
659,427

$
(798,178
)
$
8,187

$
(109,059
)






The accompanying notes are an integral part of these financial statements















4




NORTHERN EMPIRE ENERGY CORP.(A Exploration Stage Company)Statements of Cash FlowsApril 24, 2006Three Months Ended


(inception) toMarch 31,


March 31,


March 31, 20102010


2009


(Restated)CASH FLOW FROM OPERATING ACTIVITIES:Net loss
$
(45,187
)

$
(54,443
)

$
(798,178
)Adjustment to reconcile net loss to net cashused in operating activities:Depreciation

-



-



2,750Beneficial conversion feature

-



-



7,500Impairment of asset

-



-



471,523Changes in operating assets and liabilities:Increase in:Increase (decrease) in accounts payable and accrued expenses

22,198



(7,058
)


118,421Net cash used in operating activities

(22,990
)


(61,500
)


(197,984
)CASH FLOW FROM INVESTING ACTIVITIES:Cash paid for prior ownership

-



-



(50,000
)Deposits for purchase of oil and gas properties

-



40,920



(471,524
)Net cash used in investing activities

-



40,920



(521,524
)CASH FLOW FROM FINANCING ACTIVITIES:Contributed capital from officer

-



1,425



1,425Common stock issued for cash

-



-



719,257Net cash provided by financing activities

-



1,425



720,682NET INCREASE (DECREASE) IN CASH

(22,990
)


(19,155
)


1,175EFFECT OF FOREIGN CURRENCY TRANSLATION ADJUSTMENT

(3,503
)


(318
)


8,187CASH AND CASH EQUIVALENTS, Beginning of period

35,855



45,458



-CASH AND CASH EQUIVALENTS, End of period
$
9,362


$
25,985


$
9,362






The accompanying notes are an integral part of these condensed financial statements




5


NORTHERN EMPIRE ENERGY CORP.


(An Exploration Stage Company)


Notes to the Financial Statements






NOTE 1 – BUSINESS AND ORGANIZATION




Northern Empire Energy Corporation (The Company) was organized on April 24, 2006, under the laws of the State of Nevada. The Company is engaged in the acquisition with the intent to develop mineral properties. Pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 915-10 (“ASC 915-10”), “Development Stage Entities,” the Company is classified as an exploration stage company.






NOTE 2 - GOING CONCERN




These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of March 31, 2010, the Company has accumulated operating losses of approximately $798,178 since inception.  The Company’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations.  Management plans to raise equity capital to finance the operating and capital requirements of the Company.  Amounts raised will be used to further development of the Company’s products, to provide financing for marketing and promotion, to secure additional property and equipment, and for other working capital purposes.  While the Company is putting forth its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations.




These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  These financial statements do not include any adjustments that might arise from this uncertainty.






NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES




The Company’s financial statements are prepared using the accrual method of accounting.  The Company has elected a December 31 year-end.




Use of Estimates




The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America 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.




Revenue Recognition




The Company recognizes revenue on an accrual basis. Revenue is generally realized or realizable and earned when all of the following criteria are met:  1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured.








6


NORTHERN EMPIRE ENERGY CORP.


(An Exploration Stage Company)


Notes to the Financial Statements






NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)




Advertising




Advertising is expensed when incurred.  There has been no advertising during the period.




Income taxes




The Company accounts for its income taxes in accordance with FASB ASC Topic 740-10, “Income Taxes”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.




Net Loss Per Common Share




FASB ASC Topic 260-10, “Earnings per Share”, requires presentation of “basic” and “diluted” earnings per share on the face of the statements of operations for all entities with complex capital structures. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.




Oil and Gas Properties




The Company follows the full cost method of accounting for its oil and gas operations whereby all costs related to the acquisition of methane, petroleum, and natural gas interests are capitalized. Under this method, all productive and non-productive costs incurred in connection with the exploration for and development of oil and gas reserves are capitalized. Such costs include land and lease acquisition costs, annual carrying charges of non-producing properties, geological and geophysical costs, costs of drilling and equipping productive and non-productive wells, and direct exploration salaries and related benefits.  Proceeds from the disposal of oil and gas properties are recorded as a reduction of the related capitalized costs without recognition of a gain or loss unless the disposal would result in a change of 20 percent or more in the depletion rate.  The Company currently operates solely in the U.S.




Depreciation and depletion of proved oil and gas properties is computed on the units-of-production method based upon estimates of proved reserves, as determined by independent consultants, with oil and gas being converted to a common unit of measure based on their relative energy content.




The costs of acquisition and exploration of unproved oil and gas properties, including any related capitalized interest expense, are not subject to depletion, but are assessed for impairment either individually or on an aggregated basis. The costs of certain unevaluated leasehold acreage are also not subject to depletion. Costs not subject to depletion are periodically assessed for possible impairment or reductions in recoverable value. If a reduction in recoverable value has occurred, costs subject to depletion are increased or a charge is made against earnings for those operations where a reserve base is not yet established.




7


NORTHERN EMPIRE ENERGY CORP.


(An Exploration Stage Company)


Notes to the Financial Statements






NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)




Oil and Gas Properties (continued)




Estimated future removal and site restoration costs are provided over the life of proven reserves on a units-of-production basis.  Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards.  The charge is included in the provision for depletion and depreciation and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.




The Company applies a ceiling test to capitalized costs which limits such costs to the aggregate of the estimated present value, using a ten percent discount rate of the estimated future net revenues from production of proven reserves at year end at market prices less future production, administrative, financing, site restoration, and income tax costs plus the lower of cost or estimated market value of unproved properties.  If capitalized costs are determined to exceed estimated future net revenues, a write-down of carrying value is charged to depletion in the period.




Fixed Assets




Furniture, fixtures and equipment are stated at cost less accumulated depreciation. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on a straight-line basis.




Stock-Based Compensation




The Company has adopted FASB ASC Topic 718-10, “Compensation- Stock Compensation” (“ASC 718-10”) which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors. Under the fair value recognition provisions of ASC 718-10, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period.




Determining the fair value of stock-based awards at the grant date requires considerable judgment, including estimating the expected future volatility of our stock price, estimating the expected length of term of granted options and selecting the appropriate risk-free rate. There is no established trading market for our stock.




Financial instruments




The fair value of the Company’s financial assets and financial liabilities approximate their carrying values due to the immediate or short-term maturity of these financial instruments.






NOTE 4 – RELATED PARTY TRANSACTIONS




As of March 31, 2010 and December 31, 2009, a company affiliated with an officer of the Company and the officer was owed a total of $93,243 and $76,256, respectively, for consulting related fees and various expenses paid on the Company’s behalf. The unsecured obligations are due on demand and are non-interest bearing. The obligations are included in the accompanying financial statements as accounts payable – related party.




8


NORTHERN EMPIRE ENERGY CORP.


(An Exploration Stage Company)


Notes to the Financial Statements






NOTE 4 – RELATED PARTY TRANSACTIONS




On December 16, 2009, the Company entered into a purchase of petroleum and natural gas rights on nine sections of land in central Alberta, Canada. In the purchase and sale agreement both the buyer and the seller share the same address.




The seller is not a related party to Northern Empire Energy Corp. as defined in the ASC 804. Due to the Company’s minimal financial position, the Company is occasionally utilizing office space leased by the seller, at no charge. The principals of the buyer and seller are longtime associates but they are not affiliates. Neither can “significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.”






NOTE 5 – CONCENTRATION OF CREDIT RISK




Cash Balances




The Company maintains its cash in various financial institutions in both the United States and Canada.  Balances maintained in the United States are insured by the Federal Deposit Insurance Corporation (FDIC).  This government corporation insured balances up to $100,000 through October 13, 2008.  As of October 14, 2008 all non-interest bearing transaction deposit accounts at an FDIC-insured institution, including all business checking deposit accounts that do not earn interest, are fully insured for the entire amount in the deposit account.  This unlimited insurance coverage is temporary and will remain in effect for participating institutions until December 31, 2009.  All other deposit accounts at FDIC-insured institutions are insured up to at least $250,000 per depositor until December 31, 2013.  Balances maintained in Canada are insured by the Canada Deposit Insurance Corporation for balances up to $100,000 at each bank. As of March 31, 2010, the Company did not have any cash balances that were greater than the insured amount for both the FDIC and CDIC.






NOTE 6 – OIL AND GAS PROPERTIES




On December 16, 2009, the Company entered into a “Formal option to Purchase and Sale Agreement of Petroleum and Natural Gas Rights” with Angels Exploration Fund, Inc., and Alberta Corporation. The Company agreed to purchase certain petroleum and natural gas rights within the Province of Alberta for a total purchase price of $471,524 ($500,000 Canadian Dollars). The properties are not producing as of March 31, 2010 and have not yet been amortized on the balance sheet. As a part of the agreements, the Company has a minimum lease rental fee obligation of $8,064 per year for 5 years, starting December 18, 2009 an ending December 18, 2014.




The Company believes the property is located in a merited geological setting with complete infrastructures, pipelines within the area. The Company needs to be successful in raising additional capital in order to conduct exploration and drill wells on the property, until this happens we have no way of projecting cash flows without a test well. Therefore the property was written down/impaired to $1 as of December 31, 2009, and a loss was recognized in the financial statements in the amount of $471,523.










9


NORTHERN EMPIRE ENERGY CORP.


(An Exploration Stage Company)


Notes to the Financial Statements






NOTE 7 – STOCKHOLDER’S EQUITY




As of March 31, 2010 there were 20,827,216 shares of common stock issued and outstanding, 615,347 shares of common stock issuable and 62,500 shares of preferred stock issued and outstanding.




On April 24, 2006 (inception), the Company issued 361,900 shares of its common stock at $0.01 per share to its sole shareholder for $3,619.




On April 24, 2006, the Company issued 75,000 shares of its preferred stock in exchange for telephone calling equipment valued at $7,500.  Each share of the Convertible Preferred Stock can be exchanged for two hundred (200) shares of Common Stock of the corporation.  This Series A preferred stock was issued with a beneficial conversion feature totaling $7,500.  If the preferred stock were to be converted into common stock, the common stock would be increased by 15,000,000 shares.




On December 31, 2006, the Company issued 61,200 shares of its common stock at $0.10 per share pursuant to a regulation 504 offering for $6,120.




On November 17, 2008, the Company issued 18,000,000 shares of its common stock at $0.01 per share for $180,000 in cash to the CEO of the Company.




On January 30, 2008, the Company initiated a ten-for-one reverse stock split for its issued and outstanding common and preferred stock.  This reverse stock split had no effect on the authorized number of common shares or preferred shares, and did not affect the par value of the stock. The financial statements reflect the reverse stock split on a retroactive basis.




On November 17, 2008, David Gallagher, a former officer and director of the Company, returned his 361,900 restricted shares of common stock to the corporate treasury in exchange for $50,000 and the Company’s specialized phone equipment with a book value of $4,750.  The shares were then canceled by the Company’s transfer agent.




On February 27, 2009, 8,000 preferred shares of stock were converted into 1,600,000 shares of common stock at a conversion rate of 200 to 1.




On September 10, 2009, the Company conducted a private placement of 615,347 shares of common stock at $0.60 per share for a total of $369,208. As of December 31, 2009, the shares had not yet been issued by the transfer agent and are recorded as stock payable on the Statement of Stockholder’s Equity. The principal amount of each Unit of this offering includes a Unit which consists of one common share of the Company at $0.60 per share and one warrant to purchase a Common Share for two years at $1.00 per share.




On October 2, 2009, 4,500 preferred shares of stock were converted into 900,000 shares of common stock at a conversion rate of 200 to 1.










10


NORTHERN EMPIRE ENERGY CORP.


(An Exploration Stage Company)


Notes to the Financial Statements






NOTE 7 – STOCKHOLDER’S EQUITY (continued)




On December 15, 2009, the Company conducted a private placement of 266,016 shares of common stock at $0.60 per share for a total of $160,310. The principal amount of each Unit of this offering includes a Unit which consists of one common share of the Company at $0.60 per share and one warrant to purchase a Common Share for two years at $1.00 per share.






NOTE 8 – RECENT ACCOUNTING PRONOUNCEMENTS




In January 2010, the FASB issued Accounting Standards Update 2010-01, “Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force)”.  This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis.  The Company does not expect the provisions of ASU 2010-01 to have a material effect on the financial position, results of operations or cash flows of the Company.




In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-03 (ASU 2010-03), Extractive Activities—Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures.  This amendment to Topic 932 has improved the reserve estimation and disclosure requirements by (1) updating the reserve estimation requirements for changes in practice and technology that have occurred over the last several decades and (2) expanding the disclosure requirements for equity method investments.  This is effective for annual reporting periods ending on or after December 31, 2009.  However, an entity that becomes subject to the disclosures because of the change to the definition oil- and gas- producing activities may elect to provide those disclosures in annual periods beginning after December 31, 2009.  Early adoption is not permitted.  The Company does not expect the provisions of ASU 2010-03 to have a material effect on the financial position, results of operations or cash flows of the Company.




In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics—Technical Corrections to SEC Paragraphs.




In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-05 (ASU 2010-05), Compensation – Stock Compensation (Topic 718).  This standard codifies EITF Topic D-110 Escrowed Share Arrangements and the Presumption of Compensation.




In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.  This amendment to Topic 820 has improved disclosures about fair value measurements on the basis of input received from the users of financial statements.  This is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements.  Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  Early adoption is permitted.  The Company does not expect the provisions of ASU 2010-06 to have a material effect on the financial position, results of operations or cash flows of the Company.






11


NORTHERN EMPIRE ENERGY CORP.


(An Exploration Stage Company)


Notes to the Financial Statements






NOTE 8 – RECENT ACCOUNTING PRONOUNCEMENTS




In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-08 (ASU 2010-08), Technical Corrections to Various Topics.  This amendment eliminated inconsistencies and outdated provisions and provided the needed clarifications to various topics within Topic 815.  The amendments are effective for the first reporting period (including interim periods) beginning after issuance (February 2, 2010), except for certain amendments.  The amendments to the guidance on accounting for income taxes in reorganization (Subtopic 852-740) should be applied to reorganizations for which the date of the reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.  For those reorganizations reflected in interim financial statements issued before the amendments in this Update are effective, retrospective application is required.  The clarifications of the guidance on the embedded derivates and hedging (Subtopic 815-15) are effective for fiscal years beginning after December 15, 2009, and should be applied to existing contracts (hybrid instruments) containing embedded derivative features at the date of adoption.  The Company does not expect the provisions of ASU 2010-08 to have a material effect on the financial position, results of operations or cash flows of the Company.




In February 2010, the FASB issued Accounting Standards Update 2010-09 (ASU 2010-09), Subsequent Events (Topic 855), amending guidance on subsequent events to alleviate potential conflicts between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted these new requirements for the period ended March 31, 2010. The adoption of this guidance did not have a material impact on our financial statements.




In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-14 (ASU 2010-14), Accounting for Extractive Activities – Oil and Gas. This amendment makes amendments to paragraph 932-10-S99-1 due to SEC release No. 33-8995, Modernization of Oil and Gas Reporting. The Company does not expect the provisions of ASU 2010-14 to have a material effect on the financial position, results of operations or cash flows of the Company.




The company evaluated all of the other recent accounting pronouncements through ASU 2010-19 and deemed that they were immaterial.






NOTE 9 –RESTATEMENTS




The Company has restated its financial statements for the quarter ended March 31, 2010 in this amended Quarterly Report on Form 10-Q, as a result of re-evaluating the guidance in ASC 470-20-25-4 (and 5) relating to Convertible Preferred Stock and to the guidance in ASC 470-20-30-8, where it is explained that the intrinsic value of the beneficial conversion feature cannot be greater than the proceeds allocated to the convertible instrument.  In consideration of the guidance, the Company has determined that the beneficial conversion feature should be limited to $7,500 (total proceeds allocated to the preferred stock) resulting in the following adjustment:




Dr.

Cr.Additional Paid in Capital
$
1,485,000Retained Earnings (Accumulated Deficit)


$
1,485,000




12


NORTHERN EMPIRE ENERGY CORP.


(An Exploration Stage Company)


Notes to the Financial Statements




NOTE 9 –RESTATEMENTS (continued)




The effects of these restatements on the Company’s previously issued March 31, 2010 balance sheets and statements of stockholders’ equity are summarized as follows:




As of March 31, 2010

As of December 31, 2009Original

Restated

Change

Original

Restated

ChangeBALANCE SHEETTOTAL ASSETS

9,362


9,362


-


35,856


35,856


-TOTAL CURRENT LIABILITIES

118,423


118,423


-


96,225


96,225


-STOCKHOLDERS’ EQUITY (DEFICIT)Preferred stock

63


63


-


63


63


-Common stock

20,827


20,827


-


20,827


20,827


-Stock payable, 615,347 shares

615


615


-


615


615


-Additional paid-in capital

2,144,427


659,427


(1,485,000
)

2,144,427


659,427


(1,485,000
)Deficit accumulated during exploration

stage

(2,283,178
)

(798,178
)

1,485,000


(2,237,991
)

(752,991
)

1,485,000Accumulated other comprehensive

income

8,187


8,187


-


11,690


11,690


-TOTAL STOCKHOLDERS’ DEFICIT

(109,059
)

(109,059
)

-


(60,369
)

(60,369
)

-TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
$
9,363

$
9,363


-

$
35,856

$
35,856


-


























13


NORTHERN EMPIRE ENERGY CORP.


(An Exploration Stage Company)


Notes to the Financial Statements






NOTE 9 –RESTATEMENTS (continued)




STATEMENT OF STOCKHOLDERS’ EQUITY

(DEFICIT)
Additional Paid-In Capital

Deficit Accumulated During the

Exploration StageOriginal

Restated

Change

Original

Restated

ChangeDeemed interest from beneficial conversion feature

on preferred stock

1,492,500


7,500


(1,485,000
)

-


-


-Net loss for the year ended December 31, 2006

-


-


-


(1,486,543
)

(1,543
)

1,485,000Balance, December 31, 2006

1,509,241


24,241


(1,485,000
)

(1,486,543
)

(1,543
)

1,485,000Balance, December 31, 2007

1,509,241


24,241


(1,485,000
)

(1,502,477
)

(17,477
)

1,485,000Balance, December 31, 2008

1,616,853


131,853


(1,485,000
)

(1,596,799
)

(111,799
)

1,485,000Balance, December 31, 2009

2,144,427


659,427


(1,485,000
)

(2,237,991
)

(752,991
)

1,485,000Balance, March 31, 2010

2,144,427


659,427


(1,485,000
)

(2,283,178
)

(798,178
)

1,485,000






NOTE 10 – SUBSEQUENT EVENTS




None.






















14


ITEM 2. - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




Forward-Looking Information




The Company may from time to time make written or oral “forward-looking statements” including statements contained in this report and in other communications by the Company, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.




These forward-looking statements include statements of the Company’s plans, objectives, expectations, estimates and intentions, which are subject to change based on various important factors (some of which are beyond the Company’s control).  The following factors, in addition to others not listed, could cause the Company’s actual results to differ materially from those expressed in forward looking statements: the strength of the domestic and local economies in which the Company conducts operations, the impact of current uncertainties in global economic conditions and the ongoing financial crisis affecting the domestic and foreign banking system and financial markets, including the impact on the Company’s suppliers and customers, changes in client needs and consumer spending habits, the impact of competition and technological change on the Company, the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business which it might acquire, and currency fluctuations. All forward-looking statements in this report are based upon information available to the Company on the date of this report.  The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.




Critical Accounting Policies




There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in our Registration Statement for the fiscal year ended December 31, 2009.




Results of Operations




History and Organization




The Company was organized April 24, 2006 (Date of Inception) under the laws of the State of Nevada, as Political Calls, Inc.   The original business plan of the Company consisted of marketing telephone broadcasting messages for political campaigns.  On November 23, 2008, the Board of Directors and the majority vote of the Company’s shareholders voted and approved a name change of the Company from Political Calls, Inc. to Northern Empire Energy Corp., to better reflect the Company’s new business direction.




Our common stock is quoted for trading on the OTC Bulletin Board under the symbol NOEE. Our principal executive offices are located at 118 8th Ave. NW, Calgary, Alberta, T2M 0A4, Canada. Our telephone number is (403) 456-2333.




Our Business




Northern Empire Energy Corp. is an emerging oil and gas exploration company that focuses on the acquisition of oil and natural gas interests; including leases, wells, mineral rights, working interests, royalty interests, overriding royalty interests, net profits interests, and production payments in Canada.  We intend to pursue prospects in partnership with other companies with exploration, development and production expertise. We will also pursue alliances with partners in the areas of geological and geophysical services and prospect generation, evaluation and prospect leasing.  The acquisition, drilling and development of oil and gas is capital intensive and the level of performance and outcome attainable by an oil and gas company is proportional to the amount of available capital.  Therefore, a principal part of our plan of operations is to acquire the additional capital required to finance our future operations.


15


Business Strategy




In pursuing our operations strategy, our primary focus will be directed towards the following:




Exploration Activities




We intend to conduct exploration and development programs to grow proven reserves, production and cash flow. We participate by acquiring working interests in our projects and we continually review opportunities generated by industry partners




Strategic Acquisitions




We plan to review opportunities to acquire (i) producing properties in our target areas that contain proved reserve value as well as meaningful exploitation and exploration upside potential; and (ii) small to mid-size energy companies that, along with our current management expertise, would display profitability, strong revenue growth and significant cash flows.




We intend to use the services of independent consultants and contractors to perform various professional services, including reservoir engineering, land, legal, and environmental services. As a non-operator working interest owner, we intend to rely on the services private contractors to drill, produce and market our natural gas and oil.




Seasonality




The exploration for oil and natural gas reserves depends on access to areas where operations are to be conducted. Seasonal weather variations, including freeze-up and break-up affect access in certain circumstances.  Natural gas is used principally as a heating fuel and for power generation.  Accordingly, seasonal variations in weather patterns affect the demand for natural gas. Depending on prevailing conditions, the prices received for sales of natural gas are generally higher in winter than summer months, while prices are generally higher in summer than spring and fall months.




Our Exploration Property




We entered into an Option Agreement with Maguire Resources Ltd., a corporation having an office at 300-840 6th Ave SW T2P 3E5 in the City of Calgary, in the Province of Alberta, Canada.  Maquire has granted an option to the Registrant to earn a 40% interest in the Turin Project by incurring 100% of the drilling and completion costs up to a five well drilling program. This a non-operating working interest and/or royalty owner participation position in oil and gas project is located in the Turin area of south-east Alberta, Canada, specifically section 28, township 10, range 19 west of the 4th meridian.




The option interest consists of several potential hydrocarbon zones in the area including (starting from the shallowest formation), the Milk River, Second White Specks, Barons, Bow Island, Glauconite and the Lower Mannville sandstones plus the Livingston Carbonate.




The option, if exercised, will allow the Registrant to acquire up to a 40% non-operating working interest, subject to a 31% G.O.R. (Gross Overriding Royalty) by incurring expenditures of $2 million, 100% of the drilling and completion costs in a five well drilling program.  By drilling an initial well on the Turin Project the Company can earn 25% of a shut-in gas well subject to a 31% G.O.R. (Gross Overriding Royalty) by incurring 100% of completion and tie in costs, located in the land of interest.




Competition




The oil and natural gas industry is highly competitive.  This includes but is not limited to:




16


o
locating and acquiring exploratory drilling prospects,




o
locating and acquiring economically desirable producing properties; and




o
finding equipment and labor to operate and maintain their properties.




Properties in which we may acquire an interest will encounter strong competition from other oil and gas producers, including many that will possess substantially greater financial resources than us.  Competition could reduce the availability of properties of merit or increase the cost of acquiring the properties.




We will be competing with other oil and gas exploration companies for financing from a limited number of investors that are prepared to make investments in junior oil and gas exploration companies.  The presence of competing oil and gas exploration companies may impact our ability to raise the necessary capital to fund the acquisition and exploration programs if investors view investments in competitors as more attractive based on the merit of the oil and gas properties and the price of the investment offered to investors.




Northern Empire Energy Corp. Funding Requirements




We do not have sufficient capital to fully develop our business plan. Management anticipates the Company will need to raise at least $2,000,000.There is no assurance that we will have revenue in the future or that we will be able to secure the necessary funding to develop our business.  Without additional funding, it is most likely that our business model will not succeed, and we shall be forced to curtail or even cease our operations.




Future funding could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company’s business, results of operations and financial condition.




Results of Operations for the quarter ended March 31, 2010




During the three months ended March 31, 2010, the Company had a net loss of $(45,187) versus a net loss of $(54,443) for the same period last year.  For the three months ending March 31, 2010, the Company experienced general and administrative expenses of $29,635.




For the period since inception through March 31, 2010, we generated limited revenues of $19,491.  Since our inception on April 24, 2006 we experienced an accumulated net loss of $(798,178).  We anticipate our operating expenses will increase as we start to develop oil wells.  We also anticipate that our ongoing operating expenses will increase since we are a reporting company under the Securities Exchange Act of 1934.




Revenues




During the three month period ended March 31, 2010, the Company generated no revenues.  Since inception on April 24, 2006, the Company has generated limited revenues of $19,491.




Plan of Operation




Management does not believe that the Company will be able to generate any significant profit during the coming year.  Management believes that general and administrative costs and well as building its infrastructure will most likely curtail any significant profits.




Management believes the Company can sustain itself for the next twelve months. Management has agreed to keep the Company funded at its own expense, without seeking reimbursement for expenses paid.  The Company’s need for capital may change dramatically if it can generate additional revenues from its operations. In the event the Company requires additional funds, the Company will have to seek loans or equity placements to cover such cash needs.  There are no assurances additional capital will be available to the Company on acceptable terms.


17


Going Concern




Going Concern - The Company experienced operating losses since its inception on April 24, 2006 through the period ended March 31, 2010.  The financial statements have been prepared assuming the Company will continue to operate as a going concern which contemplates the realization of assets and the settlement of liabilities in the normal course of business.  No adjustment has been made to the recorded amount of assets or the recorded amount or classification of liabilities which would be required if the Company were unable to continue its operations (see Financial Footnote 2).




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.




Significant changes in the number of employees




As of March 31, 2010, we did not have any employees.  We are dependent upon our sole officer and director for our future business development.  As our operations expand we anticipate the need to hire additional employees, consultants and professionals; however, the exact number is not quantifiable at this time.




Liquidity and Capital Resources




The Company has limited financial resources available, which has had an adverse impact on the Company’s liquidity, activities and operations.  These limitations have adversely affected the Company’s ability to obtain certain projects and pursue additional business.  As of March 31, 2010, the company has current assets of $9,363 and currently liabilities of $118,423. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern.  In order for the Company to remain a Going Concern it will need to find additional capital.  Additional working capital may be sought through additional debt or equity private placements, additional notes payable to banks or related parties (officers, directors or stockholders), or from other available funding sources at market rates of interest, or a combination of these.  The ability to raise necessary financing will depend on many factors, including the nature and prospects of any business to be acquired and the economic and market conditions prevailing at the time financing is sought.  No assurances can be given that any necessary financing can be obtained on terms favorable to the Company, or at all.




Notwithstanding, management anticipates the Company will require additional capital of approximately $2,000,000 to further the Company’s business plan. Management plans to raise the monies by selling equity in the Company. There can be no assurance that additional capital will be available to the Company.




As a result of the Company’s current limited available cash, no officer or director received compensation through the three months ended March 31, 2010.  No officer or director received stock options or other non-cash compensation since the Company’s inception through March 31, 2010.  The Company has no employment agreements in place with its officers.  Nor does the Company owe its officers any accrued compensation, as the Officers agreed to work for company at no cost, until the company can become profitable on a consistent Quarter-to-Quarter basis.




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 or operations, liquidity, capital expenditures or capital resources that is material to investors.




18


Critical Accounting Policies and Estimates




Revenue Recognition:  We recognize revenue from product sales once all of the following criteria for revenue recognition have been met: pervasive evidence that an agreement exists; the services have been rendered; the fee is fixed and determinable and not subject to refund or adjustment; and collection of the amount due is reasonable assured.




New Accounting Standards




In January 2010, the FASB issued Accounting Standards Update 2010-01, “Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force)”.  This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis.  The Company does not expect the provisions of ASU 2010-01 to have a material effect on the financial position, results of operations or cash flows of the Company.




In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-03 (ASU 2010-03), Extractive Activities—Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures.  This amendment to Topic 932 has improved the reserve estimation and disclosure requirements by (1) updating the reserve estimation requirements for changes in practice and technology that have occurred over the last several decades and (2) expanding the disclosure requirements for equity method investments.  This is effective for annual reporting periods ending on or after December 31, 2009.  However, an entity that becomes subject to the disclosures because of the change to the definition oil- and gas- producing activities may elect to provide those disclosures in annual periods beginning after December 31, 2009.  Early adoption is not permitted.  The Company does not expect the provisions of ASU 2010-03 to have a material effect on the financial position, results of operations or cash flows of the Company.




In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics—Technical Corrections to SEC Paragraphs.




In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-05 (ASU 2010-05), Compensation – Stock Compensation (Topic 718).  This standard codifies EITF Topic D-110 Escrowed Share Arrangements and the Presumption of Compensation.




In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.  This amendment to Topic 820 has improved disclosures about fair value measurements on the basis of input received from the users of financial statements.  This is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements.  Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  Early adoption is permitted.  The Company does not expect the provisions of ASU 2010-06 to have a material effect on the financial position, results of operations or cash flows of the Company.




In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-08 (ASU 2010-08), Technical Corrections to Various Topics.  This amendment eliminated inconsistencies and outdated provisions and provided the needed clarifications to various topics within Topic 815.  The amendments are effective for the first reporting period (including interim periods) beginning after issuance (February 2, 2010), except for certain amendments.  The amendments to the guidance on accounting for income taxes in reorganization (Subtopic 852-740) should be applied to reorganizations for which the date of the reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.  For those reorganizations


19


reflected in interim financial statements issued before the amendments in this Update are effective, retrospective application is required.  The clarifications of the guidance on the embedded derivates and hedging (Subtopic 815-15) are effective for fiscal years beginning after December 15, 2009, and should be applied to existing contracts (hybrid instruments) containing embedded derivative features at the date of adoption.  The Company does not expect the provisions of ASU 2010-08 to have a material effect on the financial position, results of operations or cash flows of the Company.




In February 2010, the FASB issued Accounting Standards Update 2010-09 (ASU 2010-09), Subsequent Events (Topic 855), amending guidance on subsequent events to alleviate potential conflicts between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted these new requirements for the period ended March 31, 2010. The adoption of this guidance did not have a material impact on our financial statements.




In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-14 (ASU 2010-14), Accounting for Extractive Activities – Oil and Gas. This amendment makes amendments to paragraph 932-10-S99-1 due to SEC release No. 33-8995, Modernization of Oil and Gas Reporting. The Company does not expect the provisions of ASU 2010-14 to have a material effect on the financial position, results of operations or cash flows of the Company.




The company evaluated all of the other recent accounting pronouncements through ASU 2010-19 and deemed that they were immaterial.






ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.




Not applicable.






ITEM 4T. CONTROLS AND PROCEDURES




Evaluation of Disclosure Controls and Procedures




In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by our management, with the participation of our Principal Executive Officer who also serves as our Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of March 31, 2010. Based on that evaluation, our Principal Executive Officer and our Principal Financial Officer has concluded that, as of March 31, 2010, our disclosure controls and procedures were not effective to detect the inappropriate application of US GAAP rules. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.




Such material weaknesses include: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.




As of March 31, 2010 the deficiencies have not been remedied due to our lack of sufficient capital resources.  We are working to remedy our deficiencies.






20


Changes in Internal Control Over Financial Reporting




As of March 31, 2010, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the period ended March 31, 2010, that materially affected, or are reasonably likely to materially affect, our company’s 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




See Risk Factors set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and the discussion in Item 1, above, under “Liquidity and Capital Resources.”






ITEM 2 -- UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




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.










21


ITEM 6 -- EXHIBITS




Incorporated by referenceExhibit
Document Description
Form
Date
Number
Filed

herewith3.1
Articles of Incorporation, as currently in effect
SB-2
02/21/2007
3.13.2
Bylaws as currently in effect
SB-2
02/21/2007
3.23.3
Amended Articles of Incorporation
SB-2
02/21/2007
3.33.4
Amended Articles of Incorporation
8-K
11/19/2008
3.410.1
Option Agreement dated November 17, 2008
8-K
11/19/2008
10.231.1
Certification of Principal Executive Officer and Principal

Financial Officer pursuant to 15d-15(e), promulgated under

the Securities and Exchange Act of 1934, as amended



X32.1
Certification pursuant to 18 U.S.C. Section 1350, as

adopted pursuant to Section 906 of the Sarbanes-Oxley Act

of 2002 (Chief Executive Officer and Chief  Financial

Officer)



X






















22




SIGNATURES




Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned, hereunto duly authorized.




NORTHERN EMPIRE ENERGY CORP.RegistrantBY:
RANIERO CORSINIRaniero Corsini, Chief  Executive & Chief Financial OfficerDATED:
December 18, 2013




















23