UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended ~~September~~March 3031, ~~2011~~2012

. 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: 0-19620

[f10q033112_10q002.gif]

AMERICA WEST RESOURCES, INC.

(Exact name of registrant as specified in its charter)


Nevada		84-1152135
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

57 West 200 South, Suite 400

Salt Lake City, Utah 84101

(Address of principal executive offices)

(801) 521-3292

(Registrant's telephone number)

Check whether the registrant (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 check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X . No .

Yes . No .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):


Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~Yes . No X .~~

Yes . No X .

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ~~Yes X . No .~~

Yes X . No .

APPLICABLE ONLY TO CORPORATE REGISTRANTS

The number of shares of common stock issued and outstanding as of ~~November~~May 2011, ~~2011~~2012, is 6468,~~656~~451,~~675~~191.

America West Resources, Inc.

Table of Contents

			Page No.
Part I	Financial Information
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1512
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2117
	Item 4T.	Controls and Procedures	2117
Part II	Other Information
	Item 1.	Legal Proceedings	2218
	Item 1A.	Risk Factors	2218
	Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	2218
	Item 3.	Defaults Upon Senior Securities	2318
	Item 4.	Submission of Matters to a Vote of Security Holders	2318
	Item 5.	Other Information	2418
	Item 6.	Exhibits	2419

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

America West Resources, Inc. and Subsidiary

INDEX TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

	Page
Condensed Consolidated Balance Sheets (Unaudited)	4
Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011 (Unaudited)	4
Condensed Consolidated Statements of Operations (Unaudited)	5
Condensed Consolidated Statements of Operations for the three months ended March 31, 2012 and 2011 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows (Unaudited)	6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011 (Unaudited)	6
Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Notes to Condensed Consolidated Financial Statements as of March 31, 2012 (Unaudited)	7

America West Resources, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
		September 30, 2011		December 31, 2010
		March 31, 2012		December 31, 2011
Assets
Current assets:
Cash and cash equivalents	$	~~118~~33,~~779~~280	$	6597,~~003~~533
Restricted cash		204,012		4,010
Accounts receivable		35,827		9,958
Accounts receivable		259,176		466,871
Deferred financing costs		-		1,897
Inventory		-		136,037
Prepaid expenses		77,956		473,222
Deferred financing costs		140,633		543,291
Total current assets		147,063		582,610
Prepaid expenses		145,927		115,115
Deposits		496,272		807,272
Total current assets		868,527		1,330,327
Long-term restricted cash		204,035		204,024
Deposits		814,272		804,148
Property and equipment:
Property and equipment		1415,~~942~~129,~~784~~695		1115,~~150~~075,~~980~~804
Land and mineral properties		2526,~~842~~473,~~401~~342		1926,~~627~~424,~~847~~721
Less: accumulated depreciation and depletion		(10,995,120)		(9,439,156)
Total property and equipment		41,603,037		41,500,525
Net property and equipment		29,790,065		21,339,671
Less: accumulated depreciation and depletion		(11,687,098)		(11,504,505)
Total assets	$	31,472,864	$	23,474,146
Net property and equipment		29,915,939		29,996,020
Total assets	$	30,763,309	$	31,589,926
Liabilities and Stockholders’ Deficit
Current liabilities:
Bank overdraft	$	98201,~~460~~974	$	~~180,733~~-
Accounts payable		3,~~116~~677,~~087~~495		3,~~077~~347,~~428~~028
Accounts payable - related party		~~361~~418,~~071~~050		~~521~~398,~~506~~386
Accrued expenses		3,~~267~~913,~~017~~566		43,~~567~~616,~~572~~678
Deferred revenue		500,000		500,000
Short-term debt – related party, net of unamortized discounts of $1,376,977 and $58,897		3,674,129		8,120,599
Short-term debt – related party, net of unamortized discounts of $30,889 and $0, respectively
Current maturities of long-term debt, net of unamortized discount of $28,225 and $2,197,251		5,425,311		12,772,358
		9,313,240		8,144,611
Current maturities of related party convertible debt net of unamortized discount of $1,794,357 and $0		5,602,197		-
Current maturities of long-term debt, net of unamortized discount of $15,905 and $17,587, respectively
Capital lease obligation		105,161		-
		4,831,108		5,192,956
Derivative liabilities		490,727		1,594,370
Short-term convertible debt-related party net of unamortized discount of $0 and $17,857, respectively
Total current liabilities		22,640,160		31,334,566
		7,489,160		7,489,160
Long-term debt, net of unamortized discount of $6,976 and $0		347,297		1,114,450
Derivative liabilities		105,857		109,711
Asset retirement obligation		134,969		134,969
Total current liabilities		30,450,450		28,798,530
Total liabilities		23,122,426		32,583,985
Long-term debt:
Stockholders’ equity (deficit):
Long term debt net of unamortized discount of $0 and $2,512, respectively
Preferred stock, $0.0001 par value; 2,500,000 shares authorized; none issued and outstanding		-		-
		-		164,541
Common stock, $0.0001 par value; 300,000,000 shares authorized;63,266,675 and 33,459,440 shares issued and outstanding, respectively		6,326		3,346
Asset retirement obligation		218,550		213,220
Additional paid-in capital		63,811,188		29,994,056
Total liabilities		30,669,000		29,176,291
Accumulated deficit		(55,467,077)		(39,107,241)
Stockholders’ deficit:
Total stockholders’ equity (deficit)		8,350,437		(9,109,839)
Preferred stock, $0.0001 par value; 2,500,000 shares authorized; none issued and outstanding
Total liabilities and stockholders’ equity (deficit)	$	31,472,863	$	23,474,146
		-		-
Common stock, $0.0001 par value; 300,000,000 shares authorized; 68,251,191 and 66,414,175 shares issued and outstanding, respectively
		6,825		6,641
Additional paid-in capital		65,371,219		64,974,535
Accumulated deficit		(65,283,735)		(62,567,541)
Total stockholders’ deficit		94,309		2,413,635
Total liabilities and stockholders’ deficit	$	30,763,309	$	31,589,926
The accompanying notes are an integral part of these condensed consolidated financial statements.

America West Resources, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		2011		2010		2011		2010
		2012		2011
Coal sales	$	34,~~591~~031,~~604~~470	$	23,~~820~~463,~~318~~239	$	~~11,060,347~~	$	~~7,280,835~~
Machine repair services		232,~~248~~228		722,~~776~~705		~~27,704~~		~~32,241~~
Total revenue		34,~~593~~063,~~852~~698		23,~~828~~485,~~094~~944		~~11,088,051~~		~~7,313,076~~
Operating expenses:
Cost of revenue:
Operating costs and expenses		3,390,330		2,231,904		9,255,140		4,730,266
Coal production costs		4,817,464		2,423,174
Depreciation, depletion and accretion		~~576~~603,~~156~~593		1428,~~136,305~~629		~~1,555,964~~		~~3,768,777~~
General and administrative expenses		1,532,333		2,839,854		5,573,141		6,483,395
Machine repair costs		6,808		2,599
Total operating expenses		5,498,819		6,208,063		16,384,245		14,982,438
Total cost of revenue		5,427,865		2,854,402
Loss from operations		(1,904,967)		(3,379,969)		(5,296,194)		(7,669,362)
Gross profit (loss)		(1,364,167)		631,542
Other income (expenses):
Operating expenses:
Gain on derivative liabilities		324,232		965,228		1,103,643		1,141,602
General and administrative		955,357		2,057,702
Interest income		3		-		505		-
Loss from operations		(2,319,524)		(1,426,160)
Amortization of debt discount		(1,409,408)		(548,850)		(5,852,972)		(1,706,409)
Other income (expenses):
Amortization of deferred finance costs		(284,825)		(38,933)		(1,551,742)		(95,972)
Gain on derivative liabilities		3,854		430,043
Interest expense		(677,036)		(882,434)		(1,735,459)		(1,844,709)
Loss on sale of asset		(133)		-
Loss on extinguishment of debt		(2,215,189)		-		(3,027,617)		(3,047,313)
Interest income		12		1
Total other expenses, net		(4,262,223)		(504,989)		(11,063,642)		(5,552,801)
Other income		104,921		-
Net Loss	$	(6,167,190)	$	(3,884,958)	$	(16,359,836)	$	(13,222,163)
Gain on settlement of property tax		183,359		-
Basic and Diluted Loss Per Share	$	(0.11)	$	(0.14)	$	(0.41)	$	(0.55)
Interest expense		(688,684)		(4,967,101)
Weighted Average Shares Outstanding
Loss on extinguishment of debt		-		(566,357)
Basic and Diluted		58,418,800		26,930,434		40,256,462		24,196,316
Other expenses, net		(396,671)		(5,103,414)
The accompanying notes are an integral part of these condensed consolidated financial statements.
Net Loss	$	(2,716,195)	$	(6,529,574)
Basic and Diluted Loss Per Share	$	(0.04)	$	(0.19)
Weighted Average Shares Outstanding Basic and Diluted
		67,088,490		34,646,063
The accompanying notes are an integral part of these condensed consolidated financial statements.

America West Resources, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Nine Months Ended
		Three Months Ended
		September
		March 31,
		2011		2010
		2012		2011
Cash Flows from Operating Activities:
Net loss	$	(162,~~359~~716,~~836~~195)	$	(136,~~222~~529,~~163~~574)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and depletion		1,555,964		3,768,777
Depreciation, depletion and accretion		603,593		428,629
Amortization of debt discounts		5251,~~852,972~~238		13,~~706~~494,~~409~~700
Amortization of deferred financing costs		1,~~551,742~~897		95846,~~972~~985
Accretion of asset retirement obligation		-		36,000
Common stock issued for services		9,313		77,821
Common stock issued for services		437,189		364,310
Warrant expense		-		130,000
Common stock issued for interest		-		280,011
Stock-based compensation		-		270,087
Warrant expense		130,000		1,552,736
Loss on extinguishment of debt		-		566,357
Option expense		270,087		799,249
Loss on asset disposal		133		-
Impairment of mineral rights		-		222,000
Gain on settlement of property tax		(183,359)		-
Loss on debt extinguishment		3,027,617		3,047,313
Gain on derivative liabilities		(3,854)		(430,043)
Loss on write-off of property and equipment		-		50,093
Loss (gain) on derivative liabilities		(1,103,643)		(1,141,602)
Changes in current assets and liabilities:
Accounts receivable		~~207~~(25,~~695~~869)		~~661~~(122,~~006~~718)
Inventory		136,037		(541,195)
Accounts receivable-related party		-		(84,416)
Prepaid expenses		179,544		(34,311)
Inventory		-		(100,726)
Accounts payable		38,659		(133,541)
Prepaid expenses		395,266		(35,011)
Accounts payable-related party		(160,435)		71,500
Accounts payable		330,467		185,496
Deferred revenue		-		500,000
Accounts payable-related party		19,664		(216,435)
Accrued liabilities		~~481~~590,~~782~~139		2768,~~652,586~~386
Net cash provided by (used in) operating activities		(3,754,626)		735,150
Net cash used in operating activities		(727,567)		(750,462)
Cash Flows from Investing Activities:
Purchase of property and equipment		(2469,~~707,276~~694)		(~~261~~1,~~773~~947,977)
Capital expenditures for land and mineral properties		(648,~~924,945~~620)		(42,~~042~~336,~~048~~150)
Restricted cash		(~~200,002~~11)		~~611,773~~-
Deposits		~~(10~~311,~~124)~~000		~~(267~~499,~~000)~~011
Net cash used in investing activities		(9207,~~842,347~~325)		(3,~~959~~785,~~048~~116)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock, net of issuance costs		~~5,573,688~~-		-2,799,967
Proceeds from exercise of warrants		~~168~~-		-42
Net payments on revolving credit		-		(34,500)
Replenish bank overdraft		201,974		(180,733)
Bank overdraft (replenish bank overdraft)		(82,273)		(504,502)
Payment for deferred financing costs		-		(44,850)
Payment for deferred financing costs		(44,850)		(261,950)
Proceeds from related party debt and common stock		1,199,516		184,380
Proceeds from related party debt		10,379,154		1,507,111
Proceeds from debt		-		1,000,000
Payments on related party debt		(145,000)		(35,000)
Proceeds from convertible debt		-		2,000,000
Proceeds from debt		495,356		3,723,686
Payments on debt		(530,851)		(954,519)
Payments on debt		(2,256,518)		(1,205,121)
Payments made on capital lease obligations		-		(53,163)
Payments made on capital lease obligations		(268,976)		-
Net cash provided by financing activities		870,639		4,751,124
Net cash provided by financing activities		13,650,749		3,189,724
Net increase (decrease) in cash and cash equivalents		(64,253)		215,546
Net increase (decrease) in cash and cash equivalents		53,776		(34,174)
Cash and cash equivalents at beginning of period		97,533		65,003
Cash and cash equivalents at beginning of period		65,003		44,660
Cash and Cash Equivalents at End of Period	$	33,280	$	280,549
Cash and Cash Equivalents at End of Period	$	118,779	$	10,486
Supplemental cash flow information
Cash paid for interest	$	~~417~~70,~~127~~027	$	~~594~~106,~~829~~420
Cash paid for income taxes		-		-
Noncash Investing and Financing Activities
Equipment acquired through capital lease	$	180,302	$	-
Equipment acquired through a capital lease	$	-	$	180,302
Equipment acquired through issuance of notes payable		168,835		-
Debt and interest converted to common shares		-		5,034,822
Debt and interest converted to common shares		16,350,665		-
Accrued interest converted to common shares		-		2,127,408
Accrued interest converted to convertible debt		2,127,408		-
Debt discount due to beneficial conversion feature		-		5,966,580
Debt discount due to common stock issued with debt		2,367,980		5,491,194
Warrants issued for debt issuance costs		-		1,123,979
Warrants issued for debt issuance costs		1,123,979		-
Debt issuance costs accrued		-		257,500
Debt financing costs accrued		257,500		-
Common shares issued for settlement of accrued liabilities		109,892		299,000
Common shares issued for liabilities		299,000		-
Financed insurance premiums		210,356		-
Accrued interest converted to debt		-		94,088
Accrued taxes converted to debt		-		1,419,450
Warrants cancelled for common stock and resolution of associated derivative liabilities		-		1,390,600
Derivative liabilities		-		827,528
Resolution of derivative liabilities		-		744,026
The accompanying notes are an integral part of these condensed consolidated financial statements.

America West Resources, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 –BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements as of ~~September~~March 3031, ~~2011~~2012, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the ~~2010’s~~2011 Annual Report filed with the SEC on Form 10-K/A on ~~April~~May 1531, ~~2011~~2012. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for fiscal ~~2010~~2011 as reported in the Form 10-K/A on ~~April~~May 1531, ~~2011~~2012 have been omitted.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the financial information of America West Resources, Inc., and its wholly owned subsidiaries, Hidden Splendor Resources, Inc. (“Hidden Splendor”), America West Services, Inc., and America West Marketing, Inc. (collectively “America West”). All significant inter-company accounts and transactions have been eliminated.

Reclassifications

Certain amounts for ~~2010~~2011 have been reclassified to conform to the ~~2011~~2012 presentation. The reclassifications had no effect on the net loss for 2011.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, America West believes that the impact of recently issued accounting pronouncements that are not yet effective will not have a material impact on ~~America~~our ~~West’s~~ financial position or results of operations upon adoption.

NOTE 2 – GOING CONCERN

As shown in the accompanying ~~condensed~~ consolidated financial statements, America West has incurred continual losses and an accumulated deficit of $5565,~~467~~283,~~077~~735 as of ~~September~~March 31, 2012. At March 31, 2012 current liabilities exceeded current assets by $30,303,387. During ~~2011~~the three months ended March 31, 2012 the company used $727,567 of cash in its operating activities. These conditions raise substantial doubt as to America West’s ability to continue as a going concern. Management is attempting to raise additional capital through sales of stock and enhance the operations of Hidden Splendor to achieve cash-positive operations. The unaudited consolidated financial statements do not include any adjustments that might be necessary if America West is unable to continue as a going concern.

NOTE 3 – DEBT

During the nine months ended September 30, 2011, America West borrowed an aggregate of $495,356 from third parties. The notes bear interest at 10% per annum and mature between March 15, 2011 and January 9, 2012. A ~~total~~summary of ~~335,000 common shares were issued in connection with~~ the ~~debt. The~~third ~~relative~~party ~~fair value of these shares was $208,266 and was recorded as a~~ debt ~~discount. The debt discount is amortized~~ and ~~recorded~~third asparty ~~interest~~convertible ~~expense over the term of the~~ debt ~~using~~activity ~~the effective interest method. Amortization and extinguishment of discounts~~ for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 ~~was~~is ~~$2,234,848~~as .follows:

On June 4, 2011, America West borrowed $208,250 to pay for insurance. The note bears interest at 3.25% per annum and matures on April 4, 2012. $105,701 has been repaid during the nine months ended September 30, 2011.


Balance, net at December 31, 2011	$	5,357,497
Principal payments		(530,851)
Discounts amortized		4,462
Balance, net at March 31, 2012		4,831,108
Less: current maturities, net		(4,831,108)
Long term, net debt at March 31, 2012	$	-0-

A summary of the third party debt and convertible debt activity for the nine months ended September 30, 2011 is as follows:

Balance, net at December 31, 2010	$	10,472,188
Borrowings		495,356
Principal payments		(2,256,518)
Interest converted to principal		-
Principal converted to common stock		(4,965,000)
Debt discounts		(208,266)
Debt discounts amortized and extinguished		2,234,848
Balance, net at September 30, 2011		5,772,608
Less: current maturities, net		(5,425,311)
Long term portion, net at September 30, 2011	$	347,297

NOTE 4 – RELATED PARTY TRANSACTIONS

Debt Owed to Related Parties

During the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, America West borrowed an aggregate of $~~184~~1,~~380~~170,000 from ~~an entity controlled by~~ a ~~Director~~major ~~of America West~~shareholder. The notes bear interest at 108% per annum. Of these notes $970,000 matured on March 31, 2012 and $200,000 of these notes mature ~~between~~on ~~January~~June 2030, ~~2011~~2012. ~~and~~America ~~July~~West has defaulted on the loans that matured on March 31, ~~2011~~2012. A total of ~~117~~1,~~079~~170,000 common shares were issued in connection with the debt. The ~~relative~~Company ~~fair~~allocated ~~value~~$271,388 of ~~these~~the proceeds to the common shares ~~was~~issued ~~$87~~based on their relative fair value,~~428~~ ~~and~~which ~~was~~resulted ~~recorded~~in asthe recognition of a ~~debt~~$271,388 discount on the notes payable. The debt discount ~~will~~is be amortized and recorded as interest expense over the term of the debt using the effective interest method. Amortization for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 was $21240,~~860~~499. ~~while~~The ~~$65,568~~unamortized ~~was~~discount ~~recorded as a loss~~ on ~~the~~these ~~extinguishment~~notes ofas ~~debt during the nine months ended September 30, 2011, due to the modification~~ of ~~various loans on~~ March 31, ~~2011~~2012 ~~as discussed below. The unamortized discount on these notes~~ was $~~0 as of September~~ 30, ~~2011~~889.

~~Through~~During ~~multiple~~the ~~amendments~~three ~~between~~months ~~February~~ended ~~11, 2011 and~~ March 31, ~~2011~~2012, ~~all debt and interest owed to an entity controlled by a Director of~~ America West ~~was~~issued ~~modified~~a ~~and consolidated into two convertible loans amounting to~~ $229,~~215,118~~516 promissory note and $129,~~574,309. The~~516 ~~new~~common ~~loans~~shares ~~include~~to ~~$3,302,770~~the Chairman of ~~principal~~the ~~and~~board ~~$486,657~~ of ~~accrued~~directors ~~interest~~in ~~converted~~order to ~~principal. The~~reimburse ~~modified~~him ~~notes~~for ~~bear~~settling ~~interest~~$29,516 ~~at the rate~~ of 8%liabilities ~~per annum and mature~~ on ~~June~~behalf 1,of ~~2014.~~the Company. The ~~modified~~Company ~~notes~~did ~~require~~not ~~monthly~~receive ~~principal~~any ~~and~~other ~~interest~~unstated ~~payments~~rights ofor ~~$8,531~~services ~~and~~from ~~$7,693~~the ~~beginning~~Chairman onin ~~July~~exchange 1,for ~~2011~~the ~~with~~issuance ~~a final payment upon maturity~~ of the ~~unpaid~~promissory ~~principal~~note and ~~interest~~the common shares. The ~~notes~~amount ~~are secured by essentially all~~ of ~~the~~liabilities ~~assets~~settled ofwas ~~America~~allocated ~~West, subject to~~ the ~~Hidden~~promissory ~~Splendor~~note ~~bankruptcy~~and ~~security requirements. As part of~~ the ~~loan~~common ~~agreements,~~shares ~~the~~based ~~Company~~on ~~must~~their ~~comply~~relative ~~with~~fair ~~certain~~values ~~covenants~~and ~~which,~~resulted ~~among~~in ~~other~~allocating ~~matters~~$23,241 ~~include~~to ~~restrictions in~~ the ~~amounts~~promissory ofnote ~~capital stock~~ and ~~stock~~$6,275 ~~options~~to ~~that~~the ~~can~~common beshares. ~~issued~~The ~~for~~allocation ~~each~~resulted ofin ~~the~~a ~~years 2011~~$6,275 ~~2012~~discount ~~and~~to ~~2013.~~the ~~America~~note ~~West~~payable. The isdebt ~~also~~discount ~~not~~was ~~allowed~~amortized toand ~~incur~~recorded oras ~~assume~~interest ~~any~~expense ~~debt~~during orthe ~~contingent~~three ~~liabilities~~months ~~not~~ended ~~provided~~March ~~for~~31, ~~in the loan agreement~~2012.

~~America~~A ~~West~~summary evaluated the modification under FASB ASC 470-50 and determined that the modification was substantial due to a substantive conversion option being added and the revised terms constituted a debt extinguishment. At any time prior to the full payment of the ~~notes,~~related ~~the~~party ~~creditors have the option to convert all or any portion of the unpaid balance of the notes into shares of common stock. The first $3,000,000 of the~~ debt ~~is convertible at $1.00 per share. After the first $3,000,000, 50% of the remaining debt is convertible at $1.00 per share, the next 25% is convertible at $1.25 per share~~ and ~~the~~related ~~last~~party ~~25% is~~ convertible at $1.50 per share. If the entire principal balance was converted, 3,684,170 shares of America West’s common stock would be issued. America West evaluated the terms of the modified note under FASB ASC 815-15 and determined that the note did not require derivative treatment. America West then evaluated the note under FASB ASC 470-20 and determined that the note contained a beneficial conversion feature. The intrinsic value of the beneficial conversion feature was determined to be $1,736,828 and was recorded as a discount. The discount is amortized and recorded as interest expense over the term of the debt ~~using~~activity the effective interest method. On March 31, 2011, $3,000,000 of the modified notes was converted into 3,000,000 common shares. The related discount of $1,500,000 was fully amortized to interest expense during the nine months ended September 30, 2011. On July 14, 2011, $482,106 of the modified notes and $17,894 of accrued interest were converted into 500,000 common shares. The related discount of $20,501 was fully amortized to interest expense during the nine months ended September 30, 2011 and $119,774 was recorded as a loss on extinguishment of debt. Total amortization of these discounts for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 ~~was~~is ~~$1,540,448 and the unamortized discount on the modified notes~~ as offollows: ~~September 30, 2011 totaled $76,606.~~

On February 11, 2011 America West borrowed $2,000,000 through the issuance of a convertible promissory note. The note bears interest at 10% per annum and matured on March 15, 2011. At any time subsequent to fulfilling certain conditions, the creditor has the option to convert all or any portion of the unpaid balance of the note into shares of common stock at a conversion price equal to $1.00 per share. America West evaluated the terms of the note under FASB ASC 815-15 and determined that the note did not require derivative treatment. America West then evaluated the note under FASB ASC 470-20 and determined that the note contained a beneficial conversion feature. The intrinsic value of the beneficial conversion feature was determined to be $1,000,000 and was recorded as a discount on the debt. The discount was fully amortized to interest expense during the three months ended March 31, 2011 due to the entire note and related interest of $34,822 being converted into 2,000,000 common shares on March 31, 2011.


Balance, net at December 31, 2011	$	15,633,771
Borrowings		921,853
Discounts amortized		246,776
Balance, net at March 31, 2012	$	16,802,400

8The balance at March 31, 2012 consists of $9,313,240 of short-term debt - related party, net of $30,889 of unamortized discount and $7,489,160 of short-term convertible debt – related party.

America West incurred cash commissions associated with these notes of $302,350 which were recorded as deferred financing costs. During the nine months ended September 30, 2011, $274,460 of these new costs and $290,540 of financing costs from 2010 were amortized to interest expense. In addition, $277,245 of the financing costs was expensed to loss on extinguishment of debt when the loan associated with these deferred costs were converted to equity on July 14, 2011. The total unamortized cash deferred financing costs were $3,396 as of September 30, 2011.

Through multiple amendments between February 11, 2011 and March 31, 2011, all debt and interest owed to a related party was modified and consolidated into one convertible loan with a principal amount of $10,765,839. This loan includes $9,125,088 of principal and $1,640,751 of accrued interest converted to principal. The modified note bears interest at the rate of 8% per annum and matures on June 1, 2014. The modified note requires monthly principal and interest payments of $221,259 beginning on July 1, 2011 with a final payment upon maturity of the unpaid principal and interest. The note is secured by essentially all of the assets of America West, subject to the Hidden Splendor bankruptcy security requirements. As part of the loan agreement, the Company must comply with certain covenants which, among other matters, include restrictions in the amounts of capital stock and stock options that can be issued for each of the years 2011, 2012 and 2013. America West is also not allowed to incur or assume any debt or contingent liabilities not provided for in the loan agreement.

America West evaluated the modification under FASB ASC 470-50 and determined that the modification was substantial due to a substantive conversion option being added and the revised terms constituted a debt extinguishment. At any time prior to the full payment of the note, the creditor has the option to convert all or any portion of the unpaid balance of the note into shares of common stock. The first 50% of the debt is convertible at $1.00 per share, the next 25% is convertible at $1.25 per share and the last 25% is convertible at $1.50 per share. If the entire principal balance was converted, 9,330,394 shares of America West’s common stock would be issued. America West evaluated the terms of the modified note under FASB ASC 815-15 and determined that the note did not require derivative treatment. America West then evaluated the note under FASB ASC 470-20 and determined that the note contained a beneficial conversion feature. The intrinsic value of the beneficial conversion feature was determined to be $3,229,752 and was recorded as a discount. The discount will be amortized and recorded as interest expense over the term of the debt using the effective interest method. Amortization for the nine months ended September 30, 2011 was $551,608 and was recorded as interest expense while $883,787 was recorded as a loss on the extinguishment of debt due to the conversion of $3,600,000 of principal to 3,600,000 common shares. The unamortized discount on these notes was $1,794,357 as of September 30, 2011. The remaining principal balance was $7,165,839 as of September 30, 2011.

In connection with this loan modification, the vesting of certain common stock warrants previously issued to this note holder was accelerated. A total of 250,000 common stock warrants that originally vested monthly through May 2011 were modified whereby they vested in full on February 11, 2011. The total fair value associated with these warrants of $390,000 was included in the loss on extinguishment of debt. The total loss on extinguishment of debt associated with this loan modification during the nine months ended September 30, 2011 was $449,789 consisting of the expense related to these modified warrants and the unamortized discounts on the extinguished debt.

On April 20, 2011, $500,000 of debt that was not originally issued as a convertible promissory note and $21,875 of accrued interest was converted into 550,000 shares of common stock at $1.10 per share. The fair value of the common stock issued was determined to be $605,000. As a result, $162,946 of unamortized debt discount and the $83,125 excess fair value of the common stock were recorded as loss on extinguishment of debt.

On May 24, 2011, debt owed to a related party was modified. The original debt terms required monthly payments of $21,360 from February 5, 2011 through January 5, 2013. The monthly payments under the note were modified to be payable as follows:

May 2011		$10,000
June 2011		$10,000
September 2011 – December 2012		$21,360 per month
January 2013		$108,163

In connection with this loan modification, America West issued the note holder 25,000 shares of common stock. America West evaluated the modification under FASB ASC 470-50 and determined that the modification was not substantial and therefore did not constitute a debt extinguishment. The fair value of the common shares issued was determined to be $31,250 and was recorded as a debt discount. The discount will be amortized to interest expense over the term of the debt using the effective interest method. Amortization for the nine months ended September 30, 2011 was $6,417 and the unamortized discount on this note was $24,833 as of September 30, 2011.

In June 2011, America West borrowed a total of $1,928,000 through the issuance of convertible promissory notes. The notes are secured by essentially all of the assets of America West, subject to the Hidden Splendor bankruptcy security requirements, bear interest at 8% per annum and mature on July 15, 2011. At any time prior to the full payment of the note, the creditor has the option to convert all or any portion of the unpaid balance of the note into shares of common stock. The first 50% of the debt is convertible at $1.00 per share, the next 25% is convertible at $1.25 per share and the last 25% is convertible at $1.50 per share. If the entire principal balance was converted, 1,670,933 shares of America West’s common stock would be issued. America West evaluated the terms of the notes under FASB ASC 815-15 and determined that the notes do not require derivative treatment. America West then evaluated the notes under FASB ASC 470-20 and determined that the notes contain beneficial conversion features. The intrinsic value of the beneficial conversion features was determined to be $547,000 and was recorded as a discount. The discount is being amortized and recorded as interest expense over the term of the debt using the effective interest method. Amortization for the nine months ended September 30, 2011 was $547,000 and the unamortized discount on these notes was $0 as of September 30, 2011. The entire balance of the notes was converted on July 14, 2011 to 1,670,933 shares of common stock.

On July 8 and 14, 2011, America West borrowed a total of $762,130 through the issuance of convertible promissory notes. The notes are secured by essentially all of the assets of America West, subject to the Hidden Splendor bankruptcy security requirements, bear interest at 8% per annum and mature on July 15, 2011. At any time prior to the full payment of the note, the creditor has the option to convert all or any portion of the unpaid balance of the note into shares of common stock. The first 50% of the debt is convertible at $1.00 per share, the next 25% is convertible at $1.25 per share and the last 25% is convertible at $1.50 per share. If the entire principal balance was converted, 660,513 shares of America West’s common stock would be issued. America West evaluated the terms of the notes under FASB ASC 815-15 and determined that the notes do not require derivative treatment. America West then evaluated the notes under FASB ASC 470-20 and determined that the notes contain beneficial conversion features. The intrinsic value of the beneficial conversion features was determined to be $21,160 and was recorded as a discount. The discount is being amortized and recorded as interest expense over the term of the debt using the effective interest method. Amortization for the nine months ended September 30, 2011 was $21,160. The entire balance of the notes was converted on July 14, 2011 to 660,513 shares of common stock.

On July 14, 2011, $4,465,000 of debt that was not originally issued as convertible promissory notes and $330,744 of accrued interest were converted into 4,911,500 shares of common stock at $1.00 per share. The original debt was issued between October and December 2010. The fair value of the common stock issued was determined to be $4,911,500. As a result, $316,383 of unamortized debt discount and the $115,756 excess fair value of the common stock were recorded as loss on extinguishment of debt. $100,000 of this issuance of debt remains after the July 14, 2011 conversion and has $10,386 of unamortized debt discount as of September 30, 2011. No principal or interest is due prior to December 31, 2011.

During June 2011, America West repaid $5,000 of related party debt owed to an entity controlled by a Director of America West.

In July 2011, America West borrowed a total of $800,000 from a major shareholder. The notes bear interest at 8% per annum and mature on December 31, 2011. The notes have no specific repayment schedule.

During August and September 2011, America West borrowed an aggregate of $4,200,000 from a major shareholder. The notes bear interest at 8% per annum and mature on December 31, 2011. A total of 4,200,000 common shares were issued in connection with the debt. The relative fair value of these shares was $1,727,129 and was recorded as a debt discount. The debt discount is amortized and recorded as interest expense over the term of the debt using the effective interest method. Amortization for the nine months ended September 30, 2011 was $350,152. The unamortized discount on these notes as of September 30, 2011 was $1,376,977.

A summary of the related party debt and related party convertible debt activity for the nine months ended September 30, 2011 is as follows:

Balance, net at December 31, 2010	$	11,535,219
Borrowings		10,589,510
Principal payments		(145,000)
Interest converted to principal		2,127,408
Principal converted to common stock		(11,772,236)
Debt discounts		(8,694,456)
Debt discounts amortized and extinguished		5,640,881
Balance, net at September 30, 2011		9,281,326
Less: current maturities, net		(4,256,313)
Long term portion, net at September 30, 2011	$	5,025,013

Other Related Party Transactions

America West leases office space from an entity owned by certain stockholders of America West. In addition, Hidden Splendor leases certain water rights from the entity. As of ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011, the total accrued liability for these items was $~~299~~363,600 and $~~243~~345,600, respectively.

America West receives transfer agent services from an entity controlled by a director of America West. The payable to this entity totaled $6154,~~471~~450 and $~~35,971~~0 as of ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011, respectively.

Hidden Splendor ships a portion of its coal utilizing a trucking company owned by America West's Chief Executive Officer. For the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011, Hidden Splendor incurred trucking fees amounting to $1422,~~681,637~~982 and $~~587~~520,~~000~~979, respectively which is included in ~~general~~coal ~~and~~production ~~administrative~~costs ~~expenses~~ in the consolidated statements of operations. The amount payable to this trucking company as of ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011 totaled $03,687 and $~~241~~0,~~935,~~ respectively.

NOTE 5 – ~~CAPITAL~~STOCKHOLDERS’ ~~LEASE~~EQUITY ~~OBLIGATIONS~~

During February 2011, America West entered into a capital lease for the acquisition of equipment for $180,302. The lease requires 8 monthly payments of $18,163 through October 2011. The lease contains a bargain purchase option whereby the Company may purchase the equipment for $1 at the end of the lease term. The unpaid balance on the lease as of September 30, 2011, was $105,161.

NOTE 6 – STOCKHOLDERS’ EQUITY

Common Stock

During the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, America West issued ~~200~~600,000 common shares to repay an accrued liability of $~~299~~109,~~000~~892. The fair value of the shares was determined to be $~~350~~109,~~000~~892 ~~resulting~~based inon athe ~~loss~~market onvalue of the ~~extinguishment~~common ofstock ~~liabilities~~on ofthe ~~$51,000~~date issued.

During the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, America West issued ~~435~~the Chairman of the board of directors 29,~~500~~516 common shares to compensate him in part for ~~services~~paying ~~rendered~~a ~~valued~~liability atof $~~437~~29,~~180~~516.

During the ~~nine~~three months ended ~~September~~March 3031, 2011, America West issued 637,~~798,078~~500 common shares for ~~$6,798,078~~services ~~cash,~~rendered ~~net~~valued ofat $~~924~~9,~~733 of cash issuance costs~~313. In connection with the sale of these shares, America West granted 585,000 common stock warrants to an entity controlled by a Director of America West as additional stock issuance costs. The fair value of the warrants was determined to be $805,199 (see Warrants section below).

During the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, America West issued 51,~~058~~199,~~745~~516 common shares with debt payable to related parties. The relative fair value of the shares was determined to be $2277,~~367,981 and was recorded as a discount on the debt~~663. ~~See Notes 3 and 4 for details.~~

During the nine months ended September 30, 2011, America West issued 17,298,245 common shares for the conversion of $16,737,237 of principal and $417,127 of accrued interest. See Notes 3 and 4 for details.8

During the nine months ended September 30, 2011, America West issued 16,667 common shares for the exercise warrants and received cash of $168.

Options

A summary of option transactions for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 is as follows:

	Options		Wtd. Avg Exercise Price
Outstanding at December 31, 2010	1,250,625	$	2.93
Outstanding at December 31, 2011	1,250,625	$	2.93
Granted	-		-
Outstanding at March 31, 2012	1,250,625	$	2.93
Exercised	-		-
Exercisable at March 31, 2012	1,250,625	$	2.93
Forfeited	-		-
Expired	-		-
Outstanding at September 30, 2011	1,250,625	$	2.93
Exercisable at September 30, 2011	1,250,625	$	2.93

11At March 31, 2012, the range of exercise prices and the weighted average remaining contractual life of the options outstanding were $0.12 to $5.40 and 1.72 years, respectively. The intrinsic value of the exercisable options outstanding at March 31, 2012 was $5,000.

During the nine months ended September 30, 2011, the remaining fair value of the outstanding options of $270,087 was expensed.

At September 30, 2011, the range of exercise prices and the weighted average remaining contractual life of the options outstanding were $0.12 to $5.40 and 2.22 years, respectively. The intrinsic value of the exercisable options outstanding at September 30, 2011 was $63,000.

Warrants

OnA ~~January~~summary ~~21, 2011, America West granted 548,708 common stock warrants to an entity controlled by a Director~~ of ~~America~~warrant ~~West~~transactions with an exercise price of $1.20. The warrants vest immediately and have a term of five years. The fair value of the warrants was determined to be $1,123,979 using the Black Scholes stock option valuation model. The significant assumptions used in the valuation were: the exercise price noted above, the market value of America West’s common stock on January 21, 2011, $2.05, expected volatility of 291.71%, risk free interest rate of 3.4% and an expected term of five years. The warrants were issued as a commission for ~~various debt raises and~~ the ~~fair~~three ~~value of the warrants was recorded as deferred financing costs. During the nine~~ months ended ~~September~~March 3031, ~~2011,~~2012 ~~$986,742~~is ~~of these costs was amortized to interest expense. The unamortized deferred financing costs associated with these warrants totaled $137,237~~ as ~~of September 30, 2011.~~follows:

On June 10, 2011, America West granted 585,000 common stock warrants to an entity controlled by a Director of America West with an exercise price of $1.00. The warrants vest immediately and have a term of five years. The fair value of the warrants was determined to be $805,199 using the Black Scholes stock option valuation model. The significant assumptions used in the valuation were: the exercise price noted above, the market value of America West’s common stock on June 10, 2011, $1.39, expected volatility of 223.17%, risk free interest rate of 3.4% and an expected term of five years. The warrants were issued as a commission for various equity raises.


	Options		Wtd. Avg Exercise Price
Outstanding at December 31, 2011	3,568,985	$	1.47
Outstanding at March 31, 2012	3,568,985	$	1.47
Exercisable at March 31, 2012	3,568,985	$	1.47

InAt ~~addition~~March 31, 2012, the ~~remaining~~range ~~fair~~of ~~value~~exercise ofprices ~~warrants~~and ~~issued~~the inweighted ~~October~~average ~~2009~~remaining ~~was~~contractual ~~expensed~~life ~~during~~of the ~~nine~~warrants ~~months~~outstanding ~~ended~~were ~~September 30, 2011~~$0.12 Ato ~~total of~~ $~~130,000~~3.60 ~~was recorded as warrants expense~~ and ~~$390~~4.20 years,~~000~~ ~~was~~respectively. ~~included~~The inintrinsic ~~the~~value ~~loss on extinguishment~~ of ~~debt~~the ~~due~~warrants toexercisable ~~the~~at ~~loan~~March ~~modification~~31, ~~discussed~~2012 inwas ~~Note 3~~$65,910.

ANOTE ~~summary~~6 of– ~~warrant transactions for the nine months ended September 30, 2011 is as follows:~~DERIVATIVES

	Warrants		Wtd. Avg Exercise Price
Outstanding at December 31, 2010	2,485,276	$	1.66
Granted	1,133,708		1.10
Exercised	(16,667)		0.01
Forfeited	-		-
Expired	-		-
Outstanding at September 30, 2011	3,602,317		1.49
Exercisable at September 30, 2011	3,602,317	$	1.49

As of March 31, 2012, America West has an aggregate of 911,564 outstanding warrants containing exercise price reset provisions which requires derivative treatment under FASB ASC 815-15.

AtThe ~~September~~fair ~~30,~~value ~~2011,~~of ~~the~~these ~~range~~liabilities as of ~~exercise~~March ~~prices~~31, 2012 totaled $105,857 and was calculated using the ~~weighted~~Black ~~average~~Scholes ~~remaining~~stock ~~contractual~~option ~~life~~valuation ofmodel. The significant assumptions used in the ~~warrants~~March ~~outstanding~~31, 2012 valuation were: the exercise prices ranging from $0.0112 to $53.0460; ~~and~~the ~~4.65~~market ~~years, respectively. The intrinsic~~ value of ~~the~~America ~~warrants~~West’s ~~exercisable~~common atstock ~~September~~on 30March 31, ~~2011~~2012, ~~was~~ $~~784,137~~.17; ~~The~~expected ~~weighted~~volatilities ~~average~~between ~~grant~~233.05% ~~date~~and ~~fair~~310.76%; ~~value~~risk offree ~~the~~interest ~~warrants~~rates ~~granted~~of ~~during~~.33%; ~~the~~and ~~nine~~remaining ~~months~~contract ~~ended~~terms ~~September~~between ~~30,~~1.59 ~~2011~~and ~~was $~~1.7078 years.

~~NOTE 7 –~~Fair ~~DERIVATIVES~~value measurement

As of September 30, 2011, America West has an aggregate of 911,564 outstanding warrants containing exercise price reset provisions which requires derivative treatment under FASB ASC 815-15.

The fair value of these liabilities as of September 30, 2011 totaled $490,727 and was calculated using the Black Scholes stock option valuation model. The significant assumptions used in the September 30, 2011 valuation were: the exercise prices ranging from $0.12 to $3.60; the market value of America West’s common stock on September 30, 2011, $0.75; expected volatilities between 190.01% and 193.93%; risk free interest rate of 0.25%, and remaining contract terms between 2.09 and 2.28 years.

Fair Value Measurement

America West values its derivative instruments under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). America West utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. America West classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

America West uses Level 3 to value its derivative instruments.

The following table sets forth by level with the fair value hierarchy the Company’s financial ~~assets and~~ liabilities measured at fair value on ~~September~~March 3031, ~~2011~~2012.

	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative financial instruments	$	-	$	-	$	490,727	$	490,472
Derivative Financial instruments	$	-	$	-	$	105,857	$	105,857

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments measured at fair value on a recurring basis using significant unobservable inputs:

	Warrants
Fair value at December 31, 2010	$	1,594,370
Balance at December 31, 2011	$	109,711
Unrealized gain included in other income (expense)		(13,~~103,643~~854)
Fair value at September 30, 2011	$	490,727
Balance at March 31, 2012	$	105,857

NOTE 8 7 – COMMITMENTS & CONTINGENCIES

~~Mining~~The ~~operations~~Company ~~are~~has ~~subject~~an toexisting ~~conditions~~coal ~~that~~lease ~~can~~agreement ~~impact~~with the ~~safety~~U.S. Bureau of ~~America~~Land ~~West’s~~Management ~~workforce~~(“BLM”). orRental ~~delay~~payments ~~coal~~of ~~deliveries~~$3,867 orare ~~increase~~payable to the ~~cost~~BLM ofby ~~mining~~the ~~for~~first ~~varying~~of ~~lengths~~September ofeach ~~time~~year. ~~These~~In ~~conditions~~addition, ~~include~~a ~~mine~~royalty ~~collapses;~~payment ~~fires~~of ~~and~~eight ~~explosions~~percent ~~from~~of ~~methane~~gross ~~gas~~sales orfor ~~coal~~production ~~dust;~~up ~~accidental~~to ~~mine~~900,000 ~~water~~tons ~~discharges;~~is ~~weather,~~due ~~flooding~~to ~~and~~the ~~natural~~BLM ~~disasters;~~each ~~unexpected~~month. ~~maintenance~~The ~~problems;~~Company ~~key~~is ~~equipment~~also ~~failures;~~required ~~variations~~to inmake ~~coal~~payments ~~seam~~each ~~thickness;~~quarter ~~variations~~to in the ~~amount~~Bureau of ~~rock~~Land ~~and~~Reclamation. ~~soil~~The ~~overlying~~payment ~~the~~is ~~coal~~equal ~~deposit;~~to ~~variations~~$0.15 inper ~~rock~~ton ~~and~~of ~~other~~coal ~~natural materials and variations in geologic conditions~~mined.

~~Coal~~Mining ~~mining,~~operations ~~especially~~are ~~underground~~subject ~~coal mining, is inherently dangerous and great care must be taken~~ to ~~assure~~conditions ~~safe, continued operations. Past experiences of others in the industry indicate~~ that ~~lapses in safety practices~~ can ~~result~~impact in the ~~catastrophic~~safety ~~collapse~~ of aour ~~coal~~workforce ~~mining~~or ~~operation.~~delay ~~Even when best mining practices are strictly observed, natural disasters such as an earthquake could possibly destroy a~~ coal ~~mine’s~~deliveries ~~operations.~~or ~~Any~~increase ~~catastrophic event at~~ the ~~coal~~cost ~~mine~~of ~~which~~mining ~~would close the mine~~ for anvarying ~~extended~~lengths ~~period~~ of time. ~~likely~~These ~~would~~conditions ~~cause~~include ~~the~~mine ~~failure~~collapses; offires ~~operations.~~and ~~The~~explosions ~~Company~~from ~~maintains~~methane ~~insurance~~gas ~~policies~~or ~~that~~coal ~~provide~~dust; ~~limited~~accidental ~~coverage~~mine ~~for~~water ~~some~~discharges; ~~of these risks~~weather, ~~although~~flooding ~~there~~and ~~can~~natural bedisasters; nounexpected ~~assurance~~maintenance ~~that~~problems; ~~these~~key ~~risks~~equipment ~~would~~failures; bevariations ~~fully~~in ~~covered~~coal byseam ~~these~~thickness; ~~insurance~~variations ~~policies.~~in ~~Despite~~ the ~~Company’s~~amount ~~efforts,~~of ~~significant~~rock ~~mine accidents could occur~~ and ~~have~~soil aoverlying ~~substantial impact. Such impact resulting from accidents could take~~ the ~~form~~coal ofdeposit; ~~increased~~variations ~~premiums~~in onrock ~~insurance~~and ~~policies,~~other ~~litigation,~~natural ~~fines~~materials and ~~penalties~~variations ~~imposed~~in bygeologic ~~regulating agencies~~conditions.

13Coal mining, especially underground coal mining, is inherently dangerous and great care must be taken to assure safe, continued operations. Past experiences of others in the industry indicate that lapses in safety practices can result in catastrophic collapse of a coal mining operation. Even when best mining practices are strictly observed, natural disasters such as an earthquake could possibly destroy a coal mine’s operations. Any catastrophic event at the coal mine which would close the mine for an extended period of time likely would cause the failure of operations. The Company maintains insurance policies that provide limited coverage for some of these risks, although there can be no assurance that these risks would be fully covered by these insurance policies. Despite the Company’s efforts, significant mine accidents could occur and have a substantial impact. Such impact resulting from accidents could take the form of increased premiums on insurance policies, litigation, fines and penalties imposed by regulating agencies.

In ~~September~~connection ~~2010,~~with ~~Kenneth Rushton,~~ the ~~Chapter~~Hidden 7Splendor ~~Trustee~~Plan ~~for~~of ~~C.W.~~Reorganization, ~~Mining~~which ~~Company~~became ~~dba~~effective ~~Co-Op~~on ~~Mining~~December ~~Company~~19, in2008, ~~the~~Hidden ~~Chapter~~Splendor 7is ~~bankruptcy~~obligated ~~action~~to onmake ~~file~~payments into ~~the~~creditors ~~United~~over ~~States~~time ~~District Bankruptcy Court~~ in ~~the District of Utah, brought~~ an ~~adversarial~~aggregate ~~proceeding~~principal ~~naming~~amount ~~Hidden~~of ~~Splendor~~not ~~Resources,~~less ~~Inc.~~than asapproximately ~~a defendant. In this action~~$10,000,000 ~~the~~and ~~trustee~~up ~~alleges~~to ~~that~~approximately a $4010,700,000 ~~payment~~over ~~the~~a ~~debtor~~period ~~made~~not toexceeding ~~Hidden~~seven ~~Splendor~~years infrom ~~2007~~the iseffective ~~avoidable~~date ~~under~~of 11the UPlan.~~S.C.~~ ~~Section~~Under ~~548~~the ~~and~~Plan, ~~alleges~~America ~~that~~West ~~the~~must ~~Trustee~~pay ~~may~~all ~~recover~~of ~~from~~ Hidden Splendor’s ~~the~~post-petition ~~value~~liabilities of that ~~payment.~~ Hidden Splendor ~~denies~~cannot ~~that~~pay, ~~the~~in ~~trustee is entitled to~~ the ~~relief~~ordinary hecourse ~~seeks~~of ~~and~~business, ~~will~~in ~~file~~ an ~~answer~~amount tonot ~~the complaint. America West believes the probability of incurring any losses associated with this claim~~ to beexceed ~~minimal. As such~~$1, ~~no expenses have been accrued~~560,000.

In September 2010, Kenneth Rushton, the Chapter 7 Trustee for C.W. Mining Company dba Co-Op Mining Company in the Chapter 7 bankruptcy action on file in the United States District Bankruptcy Court in the District of Utah, brought an adversarial proceeding naming Hidden Splendor Resources, Inc. as a defendant. In this action, the trustee alleges that a $40,000 payment the debtor made to Hidden Splendor in 2007 is avoidable under 11 U .S.C. Section 548 and alleges that the Trustee may recover from Hidden Splendor the value of that payment. Hidden Splendor denies that the trustee is entitled to the relief he seeks and will file an answer to the complaint. America West believes the probability of incurring any losses associated with this claim to be minimal. As such, no expenses have been accrued.

In September 2010, Kenneth Rushton, the Chapter 7 Trustee for C.W. Mining Company dba Co-Op Mining Company in the Chapter 7 bankruptcy action on file in the United States District Bankruptcy Court in the District of Utah, brought an adversarial proceeding naming America West Marketing, Inc. as a defendant. In this action, the trustee alleges that during 2009, America West Marketing purchased 5,795 tons of coal that was either: (1) mined by a third party under the authority of the debtor's operating permit and in violation of the automatic stay in the pending bankruptcy action; (2) mined by the debtor; or (3) purchased by a third party with coal sale proceeds generated by coal previously mined by the Debtor, and claims trustee is entitled to a judgment against America West Marketing in the amount of $204,077 in connection with the transfer of that coal. America West Marketing denies that the trustee is entitled to the relief he seeks and will file an answer to the complaint. America West believes the probability of incurring any losses associated with this claim to be minimal. As such, no expenses have been accrued.

Occasionally, Hidden Splendor is issued citations by the Mine Safety and Health Administration in connection with regular inspections of the Horizon Mine. ~~Management~~At ~~is unable to predict the outcome of these pending administrative actions. If America West is not successful in eliminating or significantly reducing such proposed penalties~~times, ~~such result could adversely affect the company’s financial condition and operations. When appropriate,~~ Hidden Splendor challenges citations ~~and order written by MSHA~~, resulting in reductions to proposed penalties or administrative adjudications with no penalties. ~~According~~As toof ~~MSHA’s~~March ~~Data~~31, ~~Retrieval System~~2012, ~~during the third quarter of 2011~~ Hidden Splendor ~~was~~has ~~issued~~challenges apending ~~total~~in ofseveral 69administrative ~~citations and order~~actions. ~~The~~ ~~Company~~Such ~~was~~actions ~~issued~~cover ~~58 citations of which 10 were written as “S&S” citations. The Company was issued~~ a total of 11approximately ~~orders~~$1,200,000 ~~during that same period. With regard dollar amount~~ of ~~the~~ proposed, assessed penalties. ~~associates~~Management ~~with~~is ~~those~~unable ~~orders~~to ~~and~~predict ~~citations,~~ the ~~Data~~outcome ~~Retrieval System shows that as~~ of ~~November~~these ~~15,~~pending ~~2011,~~administrative ~~MSHA~~actions. ~~has~~If ~~proposed~~America ~~penalties~~West ~~associated~~is ~~with~~not ~~the~~successful ~~citations and orders written~~ in ~~the~~eliminating ~~third~~or ~~quarter~~significantly ~~which~~reducing ~~total $3,519. Historically, the Company has challenged~~ such proposed ~~assessments~~penalties, ~~were~~such ~~appropriate.~~result Ascould ofadversely ~~November~~affect ~~15, 2011,~~ the ~~Company~~company’s ~~has~~financial ~~143~~condition ~~administrative~~and ~~proceedings which have not been finalized~~operations. ~~Proposed~~Management ~~penalties in those 143 proceedings total $1,162,494. The Company also~~ has 13determined ~~administrative~~that ~~proceedings~~of ~~which have been settled, but are not final because~~ the ~~administrative law judges in those proceedings have not issued orders approving the settlements. In these settled, but not yet finalized proceedings, MSHA proposed penalties which~~ total ~~$32~~amount,~~445,~~ ~~while~~ the ~~amounts~~probable onliability ~~which~~arising ~~MSHA~~from ~~and~~these ~~Hidden~~citations ~~Splendor~~is ~~have~~approximately ~~settled total~~ $17771,~~843.~~800 ~~The Company also has 268 administrative proceedings in~~ which ~~some~~was ofaccrued ~~MSHA’s~~at ~~proposed~~December ~~penalties have been settled and the agreed upon amounts have been approved by the administrative law judges. In those cases~~31, ~~MSHA’s~~2011and ~~proposed~~remains ~~penalties~~accrued ~~total~~at ~~$554,130~~March ~~and the amounts of the approved settlements total $227~~31,~~028~~ 2012.

In December 2010, the Company agreed to serve as guarantor on $250,000 of debt payments owed by Wild West Trucking, a trucking company owned by ~~the spouse of~~ America West's Chief Executive Officer, to its secured creditor Zions Bank. ~~The Company agreed to increase its limited guarantee to $350,000 in July 2011. The balance of the notes has paid in full as of the date of this report.~~

NOTE 9 8 – SUBSEQUENT EVENTS

~~During~~In ~~October~~April 2012, the Company borrowed $1200,~~365,~~000 from a related party ~~lender. The~~and ~~Company~~ issued ~~the~~a ~~lender 1~~$200,~~365,~~000 ~~shares~~promissory ofnote ~~common~~and ~~stock~~200,000 ascommon ~~additional~~shares ~~consideration~~in exchange for the ~~loans~~proceeds. ~~The notes carry an interest rate of 8% per annum and mature on December 31, 2011.~~

~~During October the Company issued 25,000 shares in exchange for service rendered by Uptick.~~11

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

This Management’s Discussion and Analysis should be read in conjunction with the unaudited consolidated financial statements of America West Resources, Inc. and its wholly-owned subsidiaries, Hidden Splendor Resources, Inc. (“Hidden Splendor”), America West Services and America West Marketing (collectively, the “Company”) and notes thereto set forth herein. Our auditor's report on our consolidated financial statements contained in our Annual Report filed on Form 10-K for the fiscal year ended December 31, ~~2010~~2011, expressed an opinion that substantial doubt exists as to whether we can continue as an on-going business. This means that there is substantial doubt that we can continue as an on-going business. The consolidated financial statements of the Company do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Forward-Looking Statement Notice When used in this report, the words "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," and similar expressions are intended to identify forward-looking statements regarding events, conditions, and financial trends that may affect the Company's future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and those actual results may differ materially from those included within the forward-looking statements as a result of various factors.

Overview

The Company is an established domestic coal producer engaged in the mining of clean and compliant (low-sulfur) coal. The majority of our coal is sold to utility companies for use in the generation of electricity. During fiscal 2010, we derived approximately 99% of our total coal revenues from sales to our four largest customers . We expect these customers to collectively account for the majority of our revenues during 2012 as well. We have entered into contracts with ~~four~~these customers to deliver a certain quantity of coal at fixed prices, subject to other terms and conditions that are standard in the industry. With respect to customers not subject to long-term contracts, we have short-term or market delivery and price contracts that we negotiate and perform on a continuous basis. Our strategy is to have a combination of long-term and short-term delivery contracts. We operate the Horizon Mine located in Carbon County, Utah, and we plan to expand mining operations in this mine, and acquire ~~and develop~~ additional mining properties.

The Horizon Mine is operated through our wholly-owned subsidiary Hidden Splendor Resources, Inc. Hidden Splendor’s only business is the coal mining operation at the Horizon Mine located approximately eleven miles west of Helper, Utah in Carbon County. This mine produces what is commonly known as “steam coal,” that is, coal used to heat water to create steam which, in turn, is used to turn turbine engines to produce electricity. While steam coal primarily is sold to power companies for use in coal-fired power plants, steam coal also can be used in the production process for concrete and often is sold in the western United States for this purpose. Since 2003, the market for the coal mined from the Horizon Mine has been sold to local utilities, other coal mining operations, a concrete producer and a coal broker.

Coal mined from the Horizon Mine is loaded into trucks which haul the coal either directly to end users of the coal or to distribution facilities known as loadouts where the coal is loaded into rail cars and transported via rail to customers. The Horizon Mine is located approximately eight miles from the nearest loadout facility (which we acquired during the 3rd quarter of 2011) and approximately sixteen miles from the loadout facility previously most commonly used to ship our coal to end users. Hidden Splendor sells the coal mined at the Horizon Mine on a “FOB the mine” or “FOB the railcar” basis. For the “FOB the mine” basis, Hidden Splendor earns payment for the coal mined from the Horizon Mine as that coal is loaded into trucks at the mine site. Once the coal is loaded into those trucks, the coal belongs to our customers. For the “FOB the railcar” basis, Hidden Splendor earns payment for the coal mined from the Horizon Mine as that coal is loaded into the railcar at the railroad loadout facility. Once the coal is loaded into those railcars, the coal belongs to our customers.

Hidden Splendor Bankruptcy & Plan of Reorganization

On October 15, 2007, Hidden Splendor filed a Chapter 11 Petition in the United States Bankruptcy Court for the District of Nevada as a debtor in possession. ~~Hidden Splendor’s operations have continued since the petition, and the company has operated as a Debtor in Possession.~~ On December 8, 2008, Hidden Splendor’s Plan of Reorganization (the “Plan”) in that matter was formally confirmed by the U.S. Bankruptcy Court for the District of Nevada to emerge from Chapter 11 bankruptcy protection. The Plan became effective on December 19, 2008, at which time ~~the~~Hidden ~~subsidiary~~Splendor officially emerged from bankruptcy. In connection with the Plan, the Company paid an initial $500,000 “administrative earmark contribution” payment and an initial $2,250,000 “Plan Funding Contribution” payment, which were allocated to the payment of professional fees, taxes, and initial settlement payments to various creditors. Additionally, the Plan provides for payments to creditors over time in an aggregate principal amount of not less than approximately $10,000,000 and up to approximately $10,700,000 over a period not exceeding seven years from the effective date of the Plan. Thereafter, Hidden Splendor made payments under the terms of the Plan. As of this filing, the following Plan obligations remain:

151.

~~After~~Zions ~~all~~Bank, ~~payments under~~ the ~~Plan are made, certain classified creditors will receive a total principal amount of approximately $8,300,000 as follows: (i)~~ secured ~~creditors~~creditor ~~will~~receives ~~receive an aggregate principal amount of approximately $6,000,000 amortized~~ in equal monthly installments of $94,879 ~~per~~with ~~month, maintaining~~ a ~~lien~~balance ~~on the Horizon Mine as collateral for the obligations; (ii) the Internal Revenue Service and certain State~~ of ~~Utah~~approximately ~~tax authorities will collectively receive an aggregate principal amount~~ $13,~~800~~312,~~000~~652 ~~amortized~~still in equal quarterly payments of $162,156 to be paid over a period continuing to the earlier of sixty months from the petition date or forty-six months from the effective date of the Plan; and (iii) the Howard Kent, Inc. Profit Sharing Plan will receive an aggregate principal amount of $475,000 to be paid (A) in interest only payments at 8.1% for the first 24 months immediately following the effective date of the Plan, and (B) after 24 months of interest only payments, commencing in the 25th month immediately following the effective date of the Plan, in payments of both principal and interest fully amortizing for a period of an additional 24 months. owed:

Hidden Splendor’s general unsecured creditors were owed approximately $3,400,000 as of the date of the Plan. Under the Plan, general unsecured creditors will receive no less than 50% and up to 70% of their respective allowed claims, or a minimum principal amount of approximately $1,700,000 and a maximum principal amount of approximately $2~~,380,000~~. On the effective date of the Plan, general unsecured creditors received an initial distribution of 10% of their respective allowed claims from the Plan Funding Contribution, or approximately $340,000. Thereafter, assuming the general unsecured creditors receive 70% of their respective allowed claims, the general unsecured creditors will receive semi-annual payments from a disbursing agent continuing for the duration of the Plan term. Hidden Splendor has paid the disbursing agent in equal quarterly installments of approximately $190,000 per quarter over the Plan term. If, however, Hidden Splendor pays the general unsecured creditors 60% of the allowed general unsecured creditor claims within twenty-four months following the effective date of the Plan, then no additional payments will be due and owing to the general unsecured creditors. Hidden Splendor has not made any payments to general unsecured creditors in excess of the aforementioned required quarterly payments as of the date of this Report. Insider claims will receive no distributions. As of September 30, 2011, the balance owed to the general unsecured creditors under the Plan has been paid in full.

InThe ~~May~~Internal ~~2011,~~Revenue ~~Hidden~~Service ~~Splendor~~and ~~entered~~certain ~~into~~State an agreement with Howard Kent, Inc. Profit Sharing Plan, whereby the Howard Kent, Inc. Profit Sharing Plan agreed to suspend monthly bankruptcy payments until September 2011 in exchange for 25,000 shares of ~~the~~Utah ~~Company’s~~tax ~~common~~authorities ~~stock. As~~are ~~of the date of this Report, the balance~~ owed ~~to the Howard Kent Profit Sharing Plan under the Plan was approximately~~ $~~323~~878,~~000~~964. Hidden Splendor is delinquent on the $162,156 quarterly payments due March 31, 2010, ~~and~~ June 30, 2010, ~~and~~ September 30, 2010, ~~and~~ December 31, 2010, March 31, 2011, June 30, 2011, ~~and~~ September 30, 2011 ~~to the priority unsecured creditors (the Internal Revenue Service and the State of Utah tax authorities) as of the date of this Report. As of the date of this Report~~, ~~the~~December ~~balance owed to the priority unsecured creditors under the Plan was approximately $879~~31,~~000. As~~ of2011 ~~the~~and ~~date~~March ~~of this Report~~31, no2012 ~~party~~ to the ~~Plan~~Internal ~~has~~Revenue ~~filed~~Service ~~a notice of default under the Plan with the bankruptcy court.~~ and

~~Company Obligations under the Plan~~3. Under the Plan, America West must pay all of Hidden Splendor’s post-petition liabilities that Hidden Splendor cannot pay, in the ordinary course of business, in an amount not to exceed $1,560,000. In the event the Company borrows money or otherwise incurs a liability to fund capital expenditures after Hidden Splendor’s Plan becomes effective, Hidden Splendor may make payments to service such debt up to $13,500 for every $1,000,000 dollars borrowed and made available to Hidden Splendor. Hidden Splendor may make additional payments to the Company provided certain Plan repayment benchmarks are achieved.

16The Howard Kent, Inc. Profit Sharing Plan is owed $232,569 and receives monthly payments. Hidden Splendor is current on the payment to the Howard Kent, Inc. Profit Sharing Plan as of the date of this Report.

~~Results~~The delinquency on payments of ~~Operations~~other ~~for~~loans ~~the~~to ~~Three~~third ~~Months~~parties ~~Ended~~and ~~September~~as 30outlined herein result in Hidden Splendor being in default on its secured creditor loan, ~~2011~~the ~~Compared~~Company has received no notice of default in this regard. The Company is currently working to ~~September~~remedy 30the aforementioned defaults. As of the date of this Report, ~~2010~~no parties had provided the Company an uncured notice default, nor has any party to the Plan filed a notice of default under the Plan with the bankruptcy court.

As of September 30, 2011, the balance owed to the general unsecured creditors under the Plan was paid in full.

Company Obligations under the Plan Under the Plan, America West must pay all of Hidden Splendor’s post-petition liabilities that Hidden Splendor cannot pay, in the ordinary course of business, in an amount not to exceed $1,560,000. Additionally, America West must make capital expenditures in connection with the operations of the Horizon Mine by making available at least $2,000,000 in new equipment within 180 days of the effective date of the Plan. In the event the Company borrows money or otherwise incurs a liability to fund capital expenditures, Hidden Splendor may make payments to service such debt up to $13,500 for every $1,000,000 dollars borrowed and made available to Hidden Splendor. Hidden Splendor may make additional payments to the Company provided certain Plan repayment benchmarks are achieved. Since the Plan was initiated and through the date of this Report, Hidden Splendor has been in compliance with the capital expenditure and associated debt service requirements set forth herein.

Default under the Plan. In the event Hidden Splendor (i) fails to pay fully any payments when due, or (ii) fails to comply with any provision of the Plan, and its creditors file a default under the Plan with the bankruptcy court, then (A) 100% (reduced only by the amounts actually paid and received by creditors) of all allowed claims of general unsecured creditors shall be immediately due and accelerated and (B) Hidden Splendor must immediately list its assets for sale. As stated above, Hidden Splendor is in default in payments to various creditors under the Plan. The Company is working to remedy the aforementioned defaults.

Results of Operations for the Three Months Ended March 31, 2012 Compared to March 31, 2011

Material changes in financial statement line items

The following table presents statements of operations data for each of the periods indicated and presents the percentage of change in each line item from one period to the next.

	Three Months Ended				Percentage
	September 30,				Increase
	March 31,				Increase
	2011		2010		(Decrease)
	2012		2011		(Decrease)
Coal sales	$	34,~~591~~031,~~604~~470	$	23,~~820~~463,~~318~~239	2716%
Machine repair services		232,~~248~~228		722,~~776~~705	~~(71~~42%)
Total revenue		34,~~593~~063,~~852~~698		23,~~828~~485,~~094~~944	2717%
Coal production costs		4,817,465		2,423,174	99%
Depreciation, depletion and accretion		603,593		428,629	39%
Machine repair costs		6,808		2,599	162%
Total cost of revenue		5,427,865		2,854,402	90%
Gross profit (loss)		(1,364,167)		631,542	(315%)
Operating expenses:
Operating costs and expenses		3,390,330		2,231,904	52%
General and administrative expenses		955,357		2,057,702	(54%)
Depreciation, depletion and accretion		576,156		1,136,305	(49%)
Loss from operations		(2,312,124)		(1,426,160)	61%
General and administrative expenses		1,532,333		2,839,854	(46%)
Total operating expenses		5,498,819		6,208,063	(11%)
Loss from operations		(1,904,967)		(3,379,969)	(44%)
Other income (expenses):
Gain on derivative liabilities		324,232		965,228	(65%)
Interest income		12		1	-
Interest income		3		-	-
Interest expense		(688,684)		(4,967,101)	(91%)
Amortization of debt discount		(1,409,408)		(548,850)	157%
Other income		104,921		-	-
Amortization of deferred finance costs		(284,825)		(38,933)	632%
Loss on sale of asset		(133)		-	-
Interest expense		(677,036)		(882,434)	(23%)
Loss on extinguishment of debt		-		(566,357)	(132%)
Loss on extinguishment of debt		(2,215,189)		-	-
Gain on derivative liabilities		3,854		430,043	(99%)
Total other income (expenses)		(4,262,223)		(504,989)	744%)
Other expenses, net		(396,671)		(5,103,414)	(96%)
Net loss	$	(62,~~167~~716,~~190~~195)	$	(36,~~884~~529,~~958~~574)	59(62%)

We had revenue for the three months ended ~~September~~March 3031, ~~2011~~2012 of approximately $34.61 million, ana ~~approximate 27~~17% increase from revenues of ~~approximately~~ $23.85 million for the same three month period in ~~2010~~2011. The increase in revenues was attributable to an ~~approximate 23%~~ increase in coal production in ~~2011~~2012 compared to ~~2010. Coal production during the 3rd quarter of~~ 2011 ~~was approximately 92,000 tons, compared to approximately 75,000 tons at an average price of $37 per ton in the 3rd quarter of 2010. The increase in production in 2011 is primarily~~ due to 1) the Company ~~deploying a second continuous miner in the first quarter of 2011, and 2) the Company~~ intermittently idling the mine in the first quarter of ~~2010~~2011 due to lower demand for coal at that time. All coal sales revenue during the ~~third~~first quarter of 2011 was related to coal produced from our Horizon coal mine operations by our wholly-owned subsidiary, Hidden Splendor Resources, Inc.

Our production costs during the three months ended ~~September~~March 3031, ~~2011~~2012 were approximately $3.4.8 million, an increase of ~~approximately $1.2 million, or 52~~99%, over the production costs of approximately $2.24 million reported for the three months ended ~~September~~March 3031, ~~2010~~2011. The 99% increase in production costs was due to approximately 22% higher production volume, 87% increase in ~~2011~~royalties, and 200% increase in maintenance in the first quarter of 2012 compared to ~~2010~~the ~~was~~same ~~due~~period ~~to:~~in 2011.

~~1) approximately~~We ~~22%~~had ~~higher~~a ~~production~~gross ~~volume~~loss inof approximately $1.4 million for the ~~third~~three months ~~quarter~~ended ofMarch ~~2011~~31, ~~compared~~2012, toprimariarly from the ~~same~~increase ~~period~~ in ~~2010~~coal productin costs discussed above.

~~2) an~~Operating ~~increase~~expenses for the three months ended March 31, 2012 totaled approximately $1 million, a decrease of approximately $~~848~~1.19 million,~~000~~ inor ~~mine~~54% ~~supplies~~decrease, from operating expenses of approximately $2.1 million in ~~2011~~the ~~compared~~prior year’s comparable three month period. The decrease is primarily attributed to ~~2010~~an asapproximate $0.5 million decrease in MSHA compliance legal expenses in the ~~Company~~first ~~prepared~~quarter ~~for~~of ~~one~~2012 compared to 2011, decrease in workers compensation expense of ~~its~~approximately ~~mining~~$100,000 ~~sections~~as towell ~~begin~~as a ~~production~~$100,000 ~~phase~~decrease in finance charges.

~~Our~~Loss ~~depreciation,~~from ~~depletion~~operations ~~and~~increased ~~accretion costs during the three months ended September 30, 2011 were~~ approximately $~~0.5 million~~900,000 ~~a decrease of approximately $0.6 million,~~ or 4961%, from the depreciation, depletion and accretion costs costs of approximately $1.1 million reported for the three months ended September 30, 2010. The decrease in depreciation, depletion and accretion costs in 2011 compared to 2010 was due to ~~a change in accounting estimate in regards to~~ the ~~depletion~~aforementioned ~~method~~increase ~~mine development costs (labor and labor-related costs and supply costs used~~ in ~~developing~~revenues ~~the~~offset ~~Horizon~~by ~~Mine), as it relates to~~ the ~~amount~~increase ofin ~~proven~~operating ~~coal reserves the depletion is amortized over~~expenses.

1714

~~General~~Net ~~and~~other ~~administrative~~ expenses totaled approximately $500,000 for the first three months ~~ended~~of ~~September 30~~2012, ~~2011~~compared ~~totaled~~to ~~approximately~~net ~~$1.5~~other ~~million,~~expenses ~~an decrease~~ of ~~approximately~~ $15.31 million, orfor ~~46%,~~the ~~from~~first ~~general~~three ~~and~~months ~~administrative expenses~~ of ~~approximately $2~~2011.8 ~~million~~The inpositive ~~the~~variance ~~prior~~between ~~year’s~~periods ~~comparable~~of ~~three~~approximately ~~month period~~$4.6 ~~The~~million ~~decrease~~was is primarily ~~attributed~~due to an approximate $4.043 million decrease in ~~coal~~interest ~~excise~~expense. Interest ~~tax~~ expense of ~~due~~approximate to$2.5 amillion ~~change~~ in ~~the~~2011 ~~method~~included ~~of calculating the tax and~~ a ~~decrease~~one-time incharge ~~tax~~associated ~~penalties~~with ofthe ~~$0.5~~amortization ~~million due to payments~~ of ~~taxes~~debt ondiscount ~~timely~~in ~~basis~~relation into the ~~third~~restructure ~~quarter~~ of ~~2011~~loans ~~compared~~with ~~to 2010~~shareholders.

~~Loss~~We ~~from~~incurred ~~operations~~an ~~decreased~~approximate ~~approximately~~$2.8 million net loss for the three months ended March 31, 2012, compared to an approximate $16.5 million net loss for the three months ended March 31, 2011. The positive variance between the periods of $3.7 million, or 4462%, is primarily ~~due~~attributed to the ~~aforementioned~~$4.6 ~~decrease~~million variance in ~~general~~net ~~and~~other ~~administrative~~ expenses as described in detail above.

~~Total~~Of ~~net~~the ~~other expenses totaled approximately~~ $46.35 million ~~for the third quarter of 2011, compared to~~ net ~~other~~loss ~~expenses of $0.5 million~~ for the ~~third~~three ~~quarter~~months ofended ~~2010.~~March ~~The~~31, ~~increase in net other expenses in~~ 2011, ~~compared~~approximately ~~to 2010 is primarily due to a~~ $24.25 million ~~increase~~is inassociated ~~loss~~with onexpenses ~~extinguishment~~that ofare ~~debt~~one-time ~~partially~~charges ~~offset~~and/or bynon-cash ~~approximately~~items, ~~$0.2~~composed ~~million~~of inthe ~~lower~~following: ~~interest expense.~~

We incurred an approximate $6.2 million net loss for the three months ended September 30, 2011, compared to an approximate $3.9 million net loss for the three months ended September 30, 2010. The negative variance between the periods of approximately $2.3 million, or 57%, is primarily attributed to the $3.8 million negative variance in net other expenses, partially offset by the approximate $1.5 million positive variance in loss from operations as described in detail above.

Of the approximate $6.2 million net loss for the nine months ended September 30, 2011, approximately $3.8 million is associated with expenses that are one-time charges and/or non-cash items, composed of the following:

$0.2.5 million ~~–legal~~- ~~expenses~~one-time ~~related~~non-cash tocharge ~~MSHA compliance which are not expected~~ to beinterest ~~recurring~~expense inassociated with the ~~latter~~restructure ~~part~~ of ~~2011~~shareholder loans

$20.26 million - ~~non-cash~~legal ~~charge~~expenses onrelated ~~extinguishment~~to ofMSHA ~~debt~~compliance ~~associated~~which ~~with~~are ~~extension~~not ofexpected ~~loans~~to ~~and~~be ~~issuance of stock for liabilities~~ recurring

$10.46 million –- non-cash charge ~~for~~on ~~the~~extinguishment ~~amortization~~ of ~~deferred~~debt ~~financing costs~~ associated with ~~warrants~~extension ~~issued~~of inloans ~~relation~~and toissuance aof ~~previous~~stock ~~financing~~for liabilities

Results of Operations for the Nine Months Ended September 30, 2011 Compared to September 30, 2010

Material changes in financial statement line items

The following table presents statements of operations data for each of the periods indicated and presents the percentage of change in each line item from one period to the next.

	Nine Months Ended				Percentage
	September 30,				Increase
	2011		2010		(Decrease)
Coal sales	$	11,060,347	$	7,280,835	52%
Machine repair services		27,704		32,241	(14%)
Total revenue		11,088,051		7,313,076	52%
Operating expenses:
Operating costs and expenses		9,255,140		4,730,266	96%
Depreciation, depletion and accretion		1,555,964		3,768,777	(59%)
General and administrative expenses		5,573,141		6,483,395	(14%)
Total operating expenses		16,384,245		14,982,438	9%
Loss from operations		(5,296,194)		(7,669,362)	(31%)
Other income (expenses):
Gain on derivative liabilities		1,103,643		1,141,602	(3%)
Interest income		505		-	-
Amortization of debt discount		(5,852,972)		(1,706,409)	243%
Amortization of deferred finance costs		(1,551,742)		(95,972)	152%
Interest expense		(1,735,459)		(1,844,709)	(6%)
Loss on extinguishment of debt		(3,027,617)		(3,047,313)	(1%)
Total other income (expenses)		(11,063,642)		(5,552,801)	99%)
Net loss	$	(16,359,836)	$	(13,222,163)	24%

We had revenue for the nine months ended September 30, 2011 of approximately $11 million, an approximate 52% increase from revenues of approximately $7.3 million for the same nine month period in 2010. The increase in revenues was attributable to an approximate 38% increase in coal production in 2011 compared to 2010. Coal production during the first nine months of 2011 was approximately 292,000 tons, compared to approximately 212,000 tons in the first nine months of 2010. The increase in production in 2011 is primarily due to 1) the Company deploying a second continuous miner in the first quarter of 2011, and 2) the Company intermittently idling the mine in the first five months of 2010 due to lower demand for coal at that time. All coal sales revenue during 2011 were related to coal produced from our Horizon coal mine operations by our wholly-owned subsidiary, Hidden Splendor Resources, Inc.

Our operating costs and expenses during the nine months ended September 30, 2011 were approximately $9.3 million, an increase of approximately $4.6 million, or 96%, over the operating costs and expenses of approximately $4.7 million reported for the nine months ended September 30, 2010. The increase in production costs in 2011 compared to 2010 was due to:

1) approximately 38% higher production volume in the first six months of 2011 compared to the same period in 2010.

2) an increase of approximately $1,000,000 in equipment repairs in 2011 compared to 2010 as the Company repaired equipment to prepare for one of its mining sections to begin a production phase.

3) an increase of approximately $2,665,00 in mine supplies for the first nine months of 2011 compared to 2010, primarily attributable to the ramp up of a second section of the Horizon Mine, and one section of the mine beginning a pillar extraction production phase in May 2011.

Our depreciation, depletion and accretion costs during the nine months ended September 30, 2011 were approximately $1.6 million, a decrease of approximately $2.2 million, or 59%, from the depreciation, depletion and accretion costs costs of approximately $3.8 million reported for the nine months ended September 30, 2010. The decrease in depreciation, depletion and accretion costs in 2011 compared to 2010 was due to a change in accounting estimate in regards to the depletion method mine development costs (labor and labor-related costs and supply costs used in developing the Horizon Mine), as it relates to the amount of proven coal reserves the depletion is amortized over.

Operating expenses for the nine months ended September 30, 2011 totaled approximately $16.4 million, an increase of approximately $1.5 million, or 9%, from operating expenses of approximately $14.9 million in the prior year’s comparable three month period. The increase is primarily attributed to an approximate $1.0 million increase in MSHA compliance legal expenses in the first nine months of 2011 compared to 2010, partially offset by an approximate $0.4 million decrease in royalty expense associated with the cancellation of royalties previously accrued, which are no longer due to third parties, as well as lower stock compensation expense in 2011. The Company’s higher legal expenses in 2011 are fees related to MSHA compliance and are expected to be significantly lower during the latter part of 2011.

Loss from operations decreased approximately $2.4 million or 31%, primarily due to the aforementioned increase in operating costs.

Total net other expenses totaled approximately $11 million for the first nine months of 2011, compared to net other expenses of $5.6 million for the first nine months of 2010. The increase in net other expenses in 2011 compared to 2010 is primarily due to an approximate $4.1 million increase in amortization of debt discount in 2011, and a $1.4 million increase in amortization of deferred finance costs.

We incurred an approximate $16 million net loss for the nine months ended September 30, 2011, compared to an approximate $13 million net loss for the nine months ended September 30, 2010. The negative variance between the periods of approximately $3 million, or 23%, is primarily attributed to the $5.5 million negative variance in net other expenses, partially offset by the approximate $2.4 million positive variance in loss from operations as described in detail above.

Of the approximate $16 million net loss for the nine months ended September 30, 2011, approximately $7.9 million is associated with expenses that are one-time charges and/or non-cash items, composed of the following:

$50.84 million ~~– one~~-~~time~~ non-cash charge tofor the amortization of ~~debt~~deferred ~~discount~~financing ~~expense~~costs associated with ~~the~~warrants ~~restructure~~issued ofin ~~shareholder~~relation ~~loans~~to a previous financing

$1.0 million – higher legal expenses related to MSHA compliance which are not expected to be recurring in the latter part of 2011

$3 million - non-cash charge on extinguishment of debt associated with extension of loans and issuance of stock for liabilities

$1.5 million – non-cash charge for the amortization of deferred financing costs associated with warrants issued in relation to a previous financing

$0.4 - non-cash charge associated with previous issuance of stock options to management and employees, as well as warrants previously issued to third parties for services

Liquidity and Capital Resources.

Our current liquidity position has allowed us to meet our ongoing Plan payment obligations and nominal working capital requirements to date. Due to delinquency of payments to certain creditors by our Company in ~~2011~~2012 and through the date of this Report, certain debts to both related and third parties are in default. As a result, a total of approximately $54 million associated with Hidden Splendor’s Bankruptcy Plan of Reorganization is in default and due upon demand, ofand ~~which approximately~~ $316.78 ~~million~~of ~~was~~related ~~previously~~party ~~scheduled~~short toterm ~~mature~~debt ~~subsequent~~is toin ~~2011~~default. The Company is working to remedy these defaults and, as of the date of this Report, no creditors have filed a ~~default under the Plan with the bankruptcy court~~defaultt. The Company has not received a notice of default of any of the aforementioned debt as of the date of this Report. In addition, we have accrued unpaid federal taxes of approximately $0.9 million related to 2009 and 2010, which is subject to a payment plan of $50,000 per month over the next approximate three years.

Our cash flows from operations during ~~2011~~2012 and through the date of this Report have not been sufficient to meet all our obligations. Historically, we have funded the Company’s cash shortfalls with ad hoc loans from related parties and third parties. However, these loans have not been enough to fund our expansion plans to the point of achieving cash positive operations, nor refinance our debt. As a result, we will likely be required to either continue borrowing funds from shareholders or raise additional capital to meet the aforementioned obligations and fund expected working capital to expand our mining operation in ~~2011~~2012. Management’s plan is to complete a financing to deploy additional equipment, which we expect to escalate our rate of production and, as a result, our cash flows from operations. Should the Company receive a notice of default and demand for immediate payment on any of the aforementioned debts, we will likely be required to raise up to a total of approximately $1321 million. Our inability to obtain immediate financing from third parties will negatively impact our ability to fund operations and execute our business plan. Any failure to obtain such financing could force us to abandon or curtail our operations. There is no assurance that we can raise additional capital from external sources, the failure of which could cause us to sell assets or curtail operations. We have no credit facilities in place, and as the Company has no debt or equity funding commitments, we will need to rely upon best efforts financings. Accordingly, we cannot identify or predict what external sources may provide financing, nor what terms any prospective financing may have. Our auditors have issued a going concern opinion for our consolidated financial statements due to the substantial doubt about our ability to continue as a going concern.

Trends, events or uncertainties which could impact either liquidity or revenues.

Several of the matters discussed in this report contain forward-looking statements that involve risks, trends and uncertainties. Factors associated with the forward-looking statements that could cause actual results to differ materially from those projected or forecast are included in the statements below. In addition to other information contained in this report, readers should carefully consider the cautionary statements contained in Item 1 of Part I above.

Off-Balance Sheet Arrangements

As of ~~September~~March 3031, ~~2011~~2012, the Company had no off-balance sheet arrangements.

Critical Accounting Policies

Use of Estimates –- The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Property and Equipment –- Property and equipment are carried at cost and include expenditures for new facilities and those expenditures that substantially increase the productive lives of existing equipment. ~~The Company accounts for equipment exchanges in accordance with FASB ASC 845-10.~~ Maintenance and repair costs are expensed as incurred. ~~Mineral~~Mine ~~rights and~~ development costs are ~~amortized~~capitalized ~~based~~and ~~upon~~depleted by the units of production method over estimated total recoverable proven and probable reserves.

Property and equipment are depreciated on a straight-line basis over the assets’ estimated useful lives. Fully depreciated property and equipment still in use are not eliminated from the accounts.

The Company assesses the carrying value of its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing estimated undiscounted cash flows expected to be generated from such assets to their net book value. If net book value exceeds estimated cash flows, the asset is written down to its fair value. When an asset is retired or sold, its cost and related accumulated depreciation and amortization are removed from the accounts. The difference between the net book value of the asset and proceeds on disposition is recorded as a gain or loss.

Asset Retirement Obligations - FASB ASC 410-20 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company’s asset retirement obligation (“ARO”) liabilities primarily consist of estimated costs related to reclaiming mines and related facilities in accordance with federal and state reclamation laws as defined by each mining permit.

~~Mine~~The ~~development~~Company ~~costs~~estimates ~~are~~its ~~capitalized~~ARO liabilities for final reclamation and ~~amortized~~mine byclosure based upon detailed engineering calculations of the ~~units~~amount and timing of ~~production~~the ~~method~~future ~~over~~costs ~~estimated~~for ~~total~~a ~~developed~~third ~~recoverable~~party ~~proven~~to perform the required work. Cost estimates are escalated for inflation, and ~~probable~~then ~~reserves~~discounted at the credit-adjusted risk-free rate. ~~Amortization~~The ofCompany ~~mineral~~records ~~rights~~an ARO asset associated with the initial recorded liability. When the liability is ~~provided~~initially recorded, the offset is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is amortized based on the units of production method over the estimated proved ~~total recoverable proven~~ and probable reserves at the related mine. Accretion expense is included in coal production costs. To the extent there is a difference between the liability recorded and the cost incurred, a gain or loss upon settlement is recognized.

Asset Retirement Obligations – FASB ASC 410-20 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company’s asset retirement obligation (“ARO”) liabilities primarily consist of estimated costs related to reclaiming mines and related facilities in accordance with federal and state reclamation laws as defined by each mining permit.

The Company estimates its ARO liabilities for final reclamation and mine closure based upon detailed engineering calculations of the amount and timing of the future costs for a third party to perform the required work. Cost estimates are escalated for inflation, and then discounted at the credit-adjusted risk-free rate. The Company records an ARO asset associated with the initial recorded liability.

When the liability is initially recorded, the offset is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is amortized based on the units of production method over the estimated recoverable and probable reserves at the related mine. Accretion expense is included in the cost of produced coal. To the extent there is a difference between the liability recorded and the cost incurred, a gain or loss upon settlement is recognized.

The reclamation plan calls for a bonding and insurance requirement. The bond is the deed to residential property owned personally by the shareholders.

Revenue Recognition – - Hidden Splendor’s revenues are generated under a long-term sales ~~contracts~~contract with ~~three~~a single coal ~~customers~~brokerage company. The terms of the contract are “FOB the mine” or “FOB the railcar”. Revenues from coal sales are recognized when the coal is loaded onto the delivery truck at the mine or the railcar at the railroad loadout facility, both of which are contracted by the ~~customers~~customer. At the end of each month, the amount of coal delivered to the coal brokerage is estimated. In addition, the customer may apply a penalty against invoices relating to deviations in delivered coal quality per the contract terms. Variances between estimated revenue and actual payment are recorded in the month the payment is received; however, differences have been minimal.

Share-Based Payments - The Company accounts for share-based payments in accordance with the authoritative guidance issued by the FASB on stock compensation, which establishes the accounting for transactions in which an entity exchanges its equity instruments for goods or services. Under the provisions of the authoritative guidance, share-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period). The Company estimates the fair value of share-based payments using the Black-Scholes option-pricing model. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Cash and Cash Equivalents

WeNot ~~have historically invested our cash and cash equivalents in short-term, fixed rate, highly rated and highly liquid instruments which are reinvested when they mature throughout the year~~required. Although our existing investments are not considered at risk with respect to changes in interest rates or markets for those instruments, our rate of return on short-term investments could be affected at the time of reinvestment as a result of intervening events.

WeITEM do4T: CONTROLS ~~not~~AND ~~issue~~PROCEDURES or invest in financial instruments or their derivatives for trading or speculative purposes. Our operations are conducted primarily in the United States and are not subject to material foreign currency exchange risk. Although we have outstanding debt and related interest expense, market risk of interest rate exposure in the United States is currently not material.

ITEM 4T : CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls Procedures.

WeThe ~~maintain~~Company’s ~~disclosure~~management, ~~controls~~with ~~and~~the ~~procedures~~participation ~~that~~of ~~are~~the ~~designed~~chief toexecutive ~~ensure~~officer ~~that~~and ~~information~~chief ~~required~~financial toofficer, becarried ~~disclosed~~out byan usevaluation inof the ~~reports~~effectiveness ~~that~~of wethe ~~file~~Company's orinternal ~~submit~~controls toover financial reporting, using the ~~SEC~~criteria ~~under~~set forth by the ~~Securities~~Committee ~~Exchange~~of ~~Act~~Sponsoring Organizations of ~~1934~~the ~~(“Exchange~~Treadway ~~Act”~~Commission (COSO), isin ~~recorded,~~Internal ~~processed,~~Control-Integrated ~~summarized~~Framework, ~~and~~(as ~~reported~~defined ~~within~~in the ~~time~~Exchange ~~periods~~Act) ~~specified~~Rules by13a-15(3) ~~the~~and ~~SEC’s~~15-d-15(3) ~~rules~~as ~~and~~of ~~forms,~~the ~~and~~end ~~that~~of ~~information~~the isperiod ~~accumulated~~covered ~~and~~by ~~communicated~~this toreport ~~our~~(the ~~management,~~“Evaluation ~~including~~Date”). ~~our~~The ~~principal~~following ~~executive~~material ~~and~~weaknesses ~~principal~~were ~~financial~~noted ~~officers,~~in asthe ~~appropriate~~evaluation toof ~~allow~~our ~~timely~~internal ~~decisions~~controls ~~regarding~~over ~~required~~financial ~~disclosure.~~ reporting:

The Company’s management, with the participation of the chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of the Company's “disclosure, controls and procedures” (as defined in the Exchange Act) Rules 13a-15(3) and 15-d-15(3) as of the end of the period covered by this report (the “Evaluation Date”)1. Based upon that evaluation, the chief executive officer and chief financial officer concluded that, as of the Evaluation Date, the Company’s disclosure, controls and procedures are not effective at providing them with material information relating to the Company as required to be disclosed in the reports the Company files or submits under the Exchange Act on a timely basis. The following material weaknesses were noted in the evaluation of our disclosure controls and procedures:

21There are inadequate controls over the creation and posting of journal entries to ensure they are authorized, accurate, and complete. In addition, there are no controls to ensure that all authorized journal entries have been posted and that the postings reflected the authorized journal entry.

~~1) There are inadequate controls over the creation and posting of journal entries to ensure they are authorized, accurate, and complete~~2. ~~In addition, there are no controls to ensure that all authorized journal entries have been posted and that the postings reflected the authorized journal entry.~~

2) The Company has not established an Audit Committee independent of management.

3~~) There are inadequate controls to ensure that subjective analyses (e~~.~~g. impairment analysis of assets) are prepared and reviewed by appropriate personnel.~~

4)Consolidation ~~The~~and ~~Company~~preparation ~~does~~of ~~provide~~the ~~access~~financial tostatements aand ~~technical~~SEC ~~accounting~~documentswere ~~research~~well ~~database~~behind ~~for~~schedule ~~personnel~~throughout ~~involved~~the closingt process, which resulted in ~~financial~~the ~~reporting.~~late filing..

There are inadequate controls to ensure that subjective analyses (e.g. impairment analysis of assets) are prepared and reviewed by appropriate personnel.

The Company had significant debt activity during the year, which resulted in complex debt transactions that were not accounted for correctly.

These material weaknesses have been disclosed to our Board of Directors and we are continuing our efforts to improve and strengthen our control processes and procedures. Our management and directors will continue to work with our auditors to ensure that our controls and procedures are adequate and effective.

As a result of the existence of these material weaknesses as of December 31, 2011, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2011, based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (bCOSO) ~~Changes~~ in Internal ~~Controls.~~Control-Integrated Framework.

~~There~~This ~~were~~annual noreport ~~changes~~does innot include an attestation report of the Company’s registered public accounting firm regarding internal ~~controls~~control over financial reporting,. ~~known~~Management’s toreport ~~the~~was ~~chief~~not ~~executive~~subject ~~officer or~~ to the ~~chief~~attestation ~~financial~~by ~~officer~~the ~~that~~Company’s ~~occurred~~registered ~~during~~public ~~the~~accounting ~~period~~firm ~~covered~~pursuant byto ~~this~~temporary ~~report~~rules ~~that~~of ~~have~~the ~~materially~~SEC ~~affected,~~that orpermit ~~are~~the ~~reasonably~~Company ~~likely~~ to ~~materially~~provide ~~affect,~~only ~~the Company'~~management’s ~~internal~~report ~~control~~in ~~over~~this ~~financial~~annual ~~reporting~~report.

(c) Changes in Internal Controls.

There were no changes in the Company’s internal controls over financial reporting, known to the chief executive officer or to the chief financial officer that occurred during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material changes in the status of legal proceedings previously reported in the Company’s ~~2010~~2011 Annual Report on Form 10-K, excepted as noted in this Item 1 under Part II. In that regard, there have been no new proceeding that involves primarily a claim for damages if the amount which, exclusive of interest and costs, exceeds 10 percent of the current assets of America West Resources, Inc. and its subsidiaries on a consolidated basis. Occasionally, Hidden Splendor is issued citations by the Mine Safety and Health Administration in connection with regular inspections of the Horizon Mine. Management is unable to predict the outcome of these pending administrative actions. If America West is not successful in eliminating or significantly reducing such proposed penalties, such result could adversely affect the company’s financial condition and operations. When appropriate, Hidden Splendor challenges citations and orders written by MSHA, resulting in reductions to proposed penalties or administrative adjudications with no penalties. According to MSHA’s Data Retrieval System, during the third quarter of 2011 Hidden Splendor was issued a total of 69 citations and order. We were issued 58 citations of which 10 were written as “S&S” citations. We were issued a total of 11 orders during that same period. With regard to dollar amount of the proposed penalties associated with those orders and citations, the Data Retrieval System shows that as of November 15, 2011MSHA has proposed penalties associated with the citations and orders written in the third quarter which total $3,519. Historically, we have challenged such proposed assessments were appropriate. As of November 15, 2011, we have 143 administrative proceedings which have not been finalized. Proposed penalties in those 143 proceedings total $1,162,494. We also have 13 administrative proceedings which have been settled, but not final because the administrative law judges in those proceedings have not issued orders approving the settlements. In these settled, but not yet finalized proceedings, MSHA proposed penalties which total $32,445, while the amounts on which MSHA and Hidden Splendor have settled total $17,843. We also have 268 administrative proceedings in which some of MSHA’s proposed penalties have been settled and the agreed upon amounts have been approved by the administrative law judges. In those cases, MSHA’s proposed penalties total $554,130 and the amounts of the approved settlements total $227,028.

Occasionally, Hidden Splendor is issued citations by the Mine Safety and Health Administration in connection with regular inspections of the Horizon Mine. At times, Hidden Splendor challenges citations, resulting in reductions to proposed penalties or administrative adjudications with no penalties. As of March 31, 2011, Hidden Splendor has challenges pending in several administrative actions. Such actions cover a total of approximately $1,200,000 of proposed, assessed penalties. We are unable to predict the outcome of these pending administrative actions. If the Company is not successful in eliminating or significantly reducing such proposed penalties, such result could adversely affect our financial condition and operations.

ITEM 1A. RISK FACTORS

This Report should be read in conjunction with “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2010~~2011.

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

Set forth below is certain information concerning issuances and pending obligations of issuances of common stock that were not registered under the Securities Act of 1933 (“Securities Act”) that occurred, but were not reported in the Form 10-K filed with the SEC on ~~April~~May 1516, ~~2011~~ 2012 for the fiscal year ended December 31, ~~2010~~2011, during the first, ~~second~~quarter ~~and third quarters~~ of fiscal ~~2011~~2012 and to date:

In ~~April~~March ~~2011~~2012, we entered into a debt settlement agreement with a third party pursuant to which we issued ~~Uptick~~the ~~Capital~~third ~~LLC~~party 25lender a total of 600,000 shares of the Company’s Common Stock ~~pursuant~~as tosettlement ~~the extension~~ of a ~~consulting~~total ~~agreement. Such~~of ~~shares were valued at~~ $28109,~~750.~~894 accounts payable.

22In April 2012, the Company borrowed $200,000 from a related party and issued 200,000 common shares in connection with the debt.

In April 2011, we issued Riverstone Wealth Management and certain of its affiliates an aggregate of 200,000 shares of the Company’s Common Stock pursuant to the settlement of a finder’s fee agreement associated with funds invested in the Company by Denly Utah Coal LLC. Such shares were valued at $350,000.

In April 2011, we entered into a debt settlement agreement with a third party lender pursuant to which we issued the third party lender a total of 550,000 shares of the Company’s Common Stock as settlement of a total of $521,875 principal and accrued interest.

During April 2011, we issued a total of 1,190,000 shares of the Company’s Common Stock for cash consideration aggregating $1,035,300. A commission of $154,700 was paid to John Thomas Financial Inc. in connection with the sales of these shares.

In June 2011, we issued Uptick Capital LLC 12,500 shares of the Company’s Common Stock pursuant to the extension of a consulting agreement. Such shares were valued at $17,375.

In June 2011, we issued our former chief financial officer 100,000 shares of the Company’s Common Stock pursuant to the settlement of $100,000 in deferred compensation. Such shares were valued at $133,000.

In June 2011, we issued Howard Kent Profit Sharing Plan 25,000 shares of the Company’s Common Stock as consideration for the suspension of payments to the bankruptcy creditor until September 2011. Such shares were valued at $31,250.

In July 2011, we entered into debt settlement agreements third party lenders pursuant to which we issued the third party lenders a total of 4,911,500 shares of the Company’s Common Stock as settlement of a total of $4,465,000 short-term debt. John Thomas Financial was paid $580,450 in sales commissions with respect to this settlement of debt.

In July 2011, we issued Denly Utah Coal LLC, a major shareholder, a total of 6,301,923 shares of the Company’s Common Stock as settlement of $6,301,923 in debt and accrued interest.

In July 2011, we issued Uptick Capital LLC 25,000 shares of the Company’s Common Stock pursuant to the extension of a consulting agreement. Such shares were valued at $18,250.

During July 2011, we issued a total of 2,000,000 shares of the Company’s Common Stock for cash consideration aggregating $2,000,000. In connection with this financing, John Thomas Financial was paid cash sales commissions of $260,000, and was issued a warrant to purchase 200,000 shares of the Company’s Common Stock at a purchase price of $1.00 per share.

In July 2011, we entered into debt settlement agreement John Thomas Bridge and Opportunity Fund LP and John Thomas Bridge and Opportunity Fund II LP, both managed by George R. Jarkesy, Jr., a director of our Company. Pursuant to the debt settlement agreement, we issued the related parties a total of 500,000 shares of the Company’s Common Stock as settlement of a total of $500,000 short-term debt. John Thomas Financial was paid $65,000 in sales commissions with respect to this settlement of debt.

In August 2011, we borrowed $600,000 from Denly Utah Coal, LLC. We issued Denly 600,000 shares of common stock as additional consideration for the loan.

During September and October we borrowed $2,365,000 from Denly Utah Coal, LLC. We issued 2,365,000 shares of common stock as additional consideration.

During July to September we issued 99,500 shares for services.

The issuance of these equity securities were consummated pursuant to Section 4(2) of the Securities Act and the rules and regulations promulgated thereunder on the basis that such transactions did not involve a public offering and the offerees were sophisticated, accredited investors with access to the kind of information that registration would provide. The recipient of these securities represented its intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the share certificates and other instruments issued in such transactions. Unless otherwise noted, no sales commissions were paid.

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

Exhibits


Exhibit	Description	Location of Exhibit

31.1	Chief Executive Officer Section 302 Certification pursuant to Sarbanes-Oxley Act.	Included with this filing.

31.2	Chief Financial Officer Section 302 Certification pursuant to Sarbanes-Oxley Act.	Included with this filing.

32.1	Chief Executive Officer Section 906 Certification pursuant to Sarbanes-Oxley Act.	Included with this filing.

32.2	Chief Financial Officer Section 906 Certification pursuant to Sarbanes-Oxley Act.	Included with this filing

SIGNATURES

In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMERICA WEST RESOURCES, INC.
Dated: November 21, 2011	By:	/s/ Dan R. Baker
Dated: June 11, 2012	By:	/s/ Dan R. Baker
		Dan R. Baker
		Chief Executive Officer
	By:	/s/ Brent M. Davies
		Brent M. Davies
		Chief Financial Officer

2519

EXHIBIT INDEX


Exhibit Number		Description

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

2620

Filing Compare · AMERICA WEST RESOURCES, INC.