UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)

of the Securities Exchange Act of 1934

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

For the quarterly period ended ~~May~~August 31, 2012

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

For the transition period from to

Commission file number 2-92261

WESTBRIDGE RESEARCH GROUP

(Exact name of registrant as specified in its charter)

California	95-3769474
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

1260 Avenida Chelsea

Vista, California 92081-8315

(Address of principal executive office) (Zip Code)

(760) 599-8855

(Registrant’s telephone number, including area code)

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

Indicate by check ~~mark~~ 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 [_ ] No [ X ]

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.

Large accelerated filer [_ ] Accelerated filer [_ ] Non-accelerated filer [_ ] 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]

The number of shares of of issuer’s Common Stock, no par value, outstanding as of ~~July~~October 1015, 2012 was 2,~~198~~223,438.

__________________________________________________________________

Westbridge Research Group

FORM 10-Q

FOR THE QUARTERLY ~~PERIOD~~ PERIOD ENDED ~~MAY~~AUGUST 31, 2012

Table of Contents

		Page
PART I	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Consolidated Condensed Balance Sheets as of May 31, 2012 (unaudited) and November 30, 2011 (audited)	3
	Consolidated Condensed Statements of Operations for the three and six months ended May 31, 2012 and May 31, 2011 (unaudited)	5
	Consolidated Condensed Statements of Cash Flows for the six months ended May 31, 2012 and May 31, 2011 (unaudited)	6
	Notes to Consolidated Condensed Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	18
PART II	OTHER INFORMATION	18
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	19
SIGNATURES		20

___________________________________________________________________

PART I	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

	Consolidated Condensed Balance Sheets as of August 31, 2012 (unaudited) and November 30, 2011 (audited)	3
	Consolidated Condensed Statements of Operations for the three and nine months ended August 31, 2012 and August 31, 2011 (unaudited)	5
	Consolidated Condensed Statements of Cash Flows for the nine months ended August 31, 2012 and August 31, 2011 (unaudited)	6
	Notes to Consolidated Condensed Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 4.	Controls and Procedures	14

PART II	OTHER INFORMATION	14

Item 1.	Legal Proceedings	14

Item 1A.	Risk Factors	14

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14

Item 3.	Defaults Upon Senior Securities	14

Item 4.	Mine Safety Disclosures	15

Item 5.	Other Information	15

Item 6.	Exhibits	15

SIGNATURES		16

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY

CONSOLIDATED CONDENSED BALANCE SHEETS

	MAY 31, 2012 (unaudited)		NOVEMBER 30, 2011 (audited)
	AUGUST 31,		NOVEMBER 30,
	2012		2011
	(unaudited)		(audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	21,~~118~~998,~~744~~619	$	1,319,648
Short term investments		1,000		1,000
Trade accounts receivable, less allowance for doubtful accounts of $13,600 and $3,600, respectively		~~822~~449,~~112~~648		194,785
Inventories		1,~~021~~091,~~778~~730		970,085
Deferred tax asset		76,000		76,000
Prepaid expenses and other current assets		~~208~~406,~~527~~659		232,261
TOTAL CURRENT ASSETS		4,~~248~~023,~~161~~656		2,793,779
PROPERTY AND EQUIPMENT, net		~~461~~500,~~382~~777		484,503
INTANGIBLE ASSET		151,600		151,600
DEFERRED TAX ASSET, net of current portion		75,000		75,000
TOTAL ASSETS	$	4,~~936~~751,~~143~~033	$	3,504,882

See accompanying notes to consolidated

condensed financial statements.

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY

CONSOLIDATED CONDENSED BALANCE SHEETS

(continued)

	MAY 31, 2012 (unaudited)			NOVEMBER 30, 2011 (audited)
	AUGUST 31,			NOVEMBER 30,
	2012			2011
	(unaudited)			(audited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	~~324~~110,~~194~~495		$	59,364
Accrued expenses		~~578~~442,~~700~~952			420,975
Current portion of capital leases		3,532			11,899
Current portion of note payable		4,178			–
TOTAL CURRENT LIABILITIES		906,426			492,238
Current portion of capital leases		–			11,899
TOTAL LIABILITIES		906,426			492,238
TOTAL CURRENT LIABILITIES		557,625			492,238
Note payable		20,322			–
TOTAL LIABILITIES		577,947			492,238
Commitments (Note 6)
SHAREHOLDERS' EQUITY
Preferred stock, no par value: Authorized 5,000,000 shares No shares issued and outstanding		—			—
Preferred stock, no par value:Authorized 5,000,000 shares, no shares issued and outstanding		–			–
Common stock, no par value: Authorized 37,500,000 shares Issued and outstanding 2,173,438 shares at May 31, 2012 and 2,148,438 at November 30, 2011		8,497,354			8,491,104
Common stock, no par value: Authorized 37,500,000 shares, issued and outstanding 2,223,438 shares at August 31, 2012 and 2,148,438 at November 30, 2011;		8,509,854			8,491,104
Paid in capital		247,902			243,769
Accumulated deficit		(4,~~715~~584,~~539~~670	)		(5,722,229	)
TOTAL SHAREHOLDERS' EQUITY		4,~~029~~173,~~717~~086			3,012,644
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	4,~~936~~751,~~143~~033		$	3,504,882

See accompanying notes to consolidated

condensed financial statements.

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

THREE MONTHS ENDED MAY 31,

SIX MONTHS ENDED MAY 31,

THREE MONTHS ENDED AUGUST 31,

NINE MONTHS ENDED AUGUST 31,

2012

2011

2012

2011

NET SALES

31,~~242~~554,~~949~~193

21,~~022~~171,~~994~~058

46,~~451~~005,~~028~~221

34,~~019~~190,~~663~~721

COST OF SALES

1681,~~310,611~~909

~~783~~562,~~932~~585

12,~~821~~503,~~752~~661

1,~~178~~740,~~413~~998

GROSS PROFIT

1872,~~932,338~~284

1608,~~239,062~~473

23,~~629~~501,~~276~~560

12,~~841~~449,~~250~~723

OPERATING EXPENSES

Research and development

~~121~~128,~~356~~775

64,~~968~~342

~~189~~318,~~397~~172

~~122~~186,~~270~~612

Selling

~~552~~401,~~205~~341

~~350~~291,~~828~~987

~~917~~1,~~576~~318,917

~~624~~916,~~460~~447

General and administration

~~218~~233,~~860~~072

~~227~~211,~~586~~493

~~438~~671,~~101~~173

~~449~~661,~~581~~074

TOTAL OPERATING EXPENSES

~~892~~763,~~421~~188

~~643~~567,~~382~~822

12,~~545~~308,~~074~~262

1,~~196~~764,~~311~~133

Operating income

1109,~~039,917~~096

~~595~~40,~~680~~651

1,~~084~~193,~~202~~298

~~644~~685,~~939~~590

OTHER INCOME (EXPENSE)

Interest expense

~~(1,383~~[22]

)

~~(3,364~~[84]

)

([2,~~202~~224]

)

([7,~~630~~714]

)

Interest income

~~418~~423

~~292~~249

~~590~~1,013

~~458~~707

Other income

1140,~~523~~059

~~215~~15,896

2464,~~100~~159

~~101~~117,~~735~~631

Income before income taxes

1149,~~050,475~~556

~~592~~56,~~823~~712

1,~~106~~256,~~690~~246

~~739~~796,~~502~~214

Provision for income taxes

~~(90~~18,~~000~~687

)

~~(38,000~~–

)

~~(100~~118,~~000~~687

)

(51,600

)

Net income

~~960~~130,~~475~~869

~~554~~56,~~823~~712

1,~~006~~137,~~690~~559

~~687~~744,~~902~~614

Basic earnings per common share

0.4406

0.2603

0.4752

0.3235

Basic weighted average shares outstanding

2,~~165~~206,~~105~~771

2,148,438

2,~~156~~173,~~771~~438

2,~~140~~143,~~938~~438

Diluted earnings per common share

0.4306

0.2503

0.4551

0.3133

Diluted weighted average shares outstanding

2,~~259~~264,~~149~~256

2,246,735

2,~~250~~230,~~170~~492

2,~~239~~241,~~235~~735

See accompanying notes to consolidated

condensed financial statements.

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

	SIX MONTHS ENDED
	NINE MONTHS ENDED
	MAY 31, 2012			MAY 31, 2011
	AUGUST 31,			AUGUST 31,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,~~006~~137,~~690~~559		$	~~687~~744,~~902~~614
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		71106,~~244~~866			66106,~~444~~878
Stock compensation expense		4,133			13,478
Increase in allowance for doubtful accounts		10,000			73,600
Changes in Operating Assets and Liabilities:
Increase in trade accounts receivable		(~~637~~264,~~327~~863	)		(~~350~~104,~~208~~929	)
Increase in inventories		(51121,~~693~~645	)		(~~240~~300,~~614~~726	)
Decrease in prepaid expenses		23,734			13,863
Increase in prepaid expenses		(174,398	)		(46,469	)
Increase in accounts payable		~~264~~51,~~830~~131			~~146~~28,~~217~~348
Increase [decrease] in accrued expenses		157,725			(74,392	)
Increase (decrease) in accrued expenses		21,977			(124,087	)
Net cash provided by operating activities		~~849~~770,~~336~~760			~~270~~320,~~290~~707
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(~~48,~~123,140	)		(54104,~~599~~274	)
Net cash used in investing activities		(~~48,~~123,140	)		(54104,~~599~~274	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations		(811,~~367~~899	)		(1015,~~428~~031	)
Proceeds from issuance of common stock		618,~~250~~750			11,250
Payments on long-term debt		—			(3,295	)
Proceeds from note payable		24,500			–
Net cash used in financing activities		(2,117	)		(2,473	)
Payments on long-term debt		–			(3,974	)
INCREASE IN CASH AND CASH EQUIVALENTS		799,096			213,218
Net cash provided by (used in) financing activities		31,351			(7,755	)
INCREASE IN CASH AND CASH EQUIVALENTS		678,971			208,678
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,319,648			1,493,142
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	21,~~118~~998,~~744~~619		$	1,~~706~~701,~~360~~820
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	2,~~202~~224		$	7,~~630~~714
Taxes	$	2968,~~637~~067		$	1,600

See accompanying notes to consolidated

condensed financial statements.

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

Westbridge Research Group and Subsidiary (the “Company”) was incorporated in California on April 12, 1982 for the acquisition, research, development, manufacturing, and marketing of biotechnological products in the agricultural and energy industries.

Basis of Presentation

The accompanying unaudited consolidated condensed interim financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments (which include only normal recurring adjustments except as noted in management's discussion and analysis of financial condition and results of operations) necessary to present fairly the financial position, results of operations and changes in cash flows have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the 2011 Annual Report on Form 10-K, filed March 14, 2012. The results of operations for the quarter and ~~six~~nine months ended ~~May~~August 31, 2012, are not necessarily ~~indicative~~ indicative of the operating results for the full year.

Revenue Recognition

The Company recognizes revenues from the sale of its products to customers at the time of shipping. Products are shipped from the Company’s facility to customers with FOB Vista, CA shipping terms at which time revenues are considered earned. The Company will replace product which is considered “substandard”, however this occurs infrequently and the Company records a warranty accrual for these anticipated replacements.

Principles of Consolidation

The accompanying financial statements consolidate the accounts of the Company and its wholly-owned subsidiary Westbridge Agricultural Products. All significant inter-company transactions have been eliminated in consolidation.

Seasonality

Agricultural product sales are typically seasonal in nature with heavier sales in the spring months. The Company is seeking to temper the seasonality of its agronomic sales by marketing its products in Latin American countries which typically produces sales in December, January and February of each year.

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounts Receivable and Allowances for Uncollectible Accounts

The Company extends unsecured credit to most of its customers. Accounts receivable are stated at the historical carrying amount net of write-offs and allowances for uncollectible accounts. The Company establishes an allowance for uncollectible accounts based on historical experience and any specific customer collection issues that the Company has identified. Uncollectible accounts receivable are written off when a settlement is reached for an amount that is less than the outstanding balance or when the Company has determined that balance will not be collected.

Use of Estimates

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

Revenue Recognition

Shipping and Handling Costs

The Company has historically classified income from freight charges to customers in “Net Sales”. The Company classifies shipping and handling costs in “Cost of Sales”.

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentrations

A majority of the Company’s domestic sales are concentrated in Washington, California and Minnesota. The majority of the Company’s foreign sales are concentrated in Peru and South Korea. As of ~~May~~August 31, 2012, ~~three~~one ~~customers~~customer represented 6349% of accounts receivable and as of ~~May~~August 31, 2011, three customers represented 5070% of accounts receivable. The Company’s ~~three~~two largest ~~customers~~ customers had combined purchases amounting to 3525% of the Company’s net sales for the ~~six~~nine months ended ~~May~~August 31, 2012. The Company’s ~~four~~three largest customers had combined purchases amounting to 4535% of the Company’s net sales for the ~~six~~nine months ended ~~May~~ August 31, 2011. Total international sales represent 79% and 1214% of total sales for the ~~six~~nine months ended ~~May~~August 31, 2012 and ~~May~~ August 31, 2011, respectively. The Company has no assets located in foreign countries.

Research and Development

It is the Company’s policy to expense research and development costs when incurred.

Advertising

Advertising expense is comprised of media, agency and promotion costs. Advertising expenses are charged to expense as incurred.

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Net Income Per Share

Basic income per common share is is based upon the weighted average number of common shares outstanding during the period. Diluted earnings per common share is ~~based~~ based upon the weighted average number of common shares outstanding adjusted for the assumed conversion of dilutive stock options ~~using~~ using the treasury stock method. The weighted average diluted shares outstanding for the periods ended ~~May~~August 31, 2012 and ~~May 31,~~ 2011 excludes the dilutive effect of approximately 147,500 and 192,500, respectively, of stock options since such options have an exercise price in excess of the average market value of the Company’s common stock during the respective periods.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the periods presented below:

	Three Months Ended May 31,				Six Months Ended May 31,
	Three Months Ended				Nine Months Ended
	August 31,				August 31,
	2012		2011		2012		2011
Net income	$	~~960~~130,~~475~~869	$	~~554~~56,~~823~~712	$	1,~~006~~137,~~690~~559	$	~~687~~744,~~902~~614
Denominator for basic earnings per common share		2,~~165~~206,~~105~~771		2,148,438		2,~~156~~173,~~771~~438		2,~~140~~143,~~938~~438
Effect of dilutive securities		9457,~~044~~485		98,297		9357,~~399~~054		98,297
Denominator for diluted earnings per common share		2,~~259~~264,~~149~~256		2,246,735		2,~~250~~230,~~170~~492		2,~~239~~241,~~235~~735
Net income per common share:
Basic	$	0.4406	$	0.2603	$	0.4752	$	0.3235
Diluted	$	0.4306	$	0.2503	$	0.4551	$	0.3133

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

The Company accounts for income taxes under the asset and liability approach. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company also makes a determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.

The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of ~~May~~August 31, 2012 and November 30, 2011, ~~the~~ the Company has no accrued interest or penalties related to uncertain tax positions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable and Allowances for Uncollectible Accounts

Long-Lived Assets

The Company investigates potential impairments of its long-lived assets on an individual basis when evidence exists that events or changes in circumstances may have made recovery of an asset’s carrying value unlikely. An impairment loss is recognized when the sum of the expected undiscounted future net cash flows is less than the carrying amount of the asset. No such losses have been identified.

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Intangible Assets

The Company does not amortize indefinite lived intangible assets, but tests these assets for impairment annually or whenever indicators of impairments arise. Intangible assets that have finite lives are amortized over their estimated useful lives and tested for impairment as described above for long-lived assets. The Company’s intangible assets with indefinite lives primarily consist of purchased formulas. Generally, the Company has determined that its formulas have indefinite useful lives due to the following:

Formulas and trade secret applications which are classified as pesticides or bio-pesticides are generally authorized by the United States Environmental Protection Agency subject to certain conditions, without substantial cost under a stable regulatory, legislative and legal environment;

Maintenance expenditures to obtain future cash flows are not significant;

The Soil TRIGGRR® and Foliar TRIGGRR® formulations are not technologically dependent; and

The Company intends to use these assets indefinitely.

The Company combines all its indefinite lived formulas which mainly consist of Soil TRIGGRR^® and Foliar TRIGGRR^® into a single unit of accounting. The analysis encompasses future cash flows from sales of Soil TRIGGRR^® and Foliar TRIGGRR^® product lines. In conducting the annual impairment test in 2011, the Company determined that the estimated fair value of the formulas, calculated using a discounted cash flow analysis, exceeded their carrying amounts. No changes have occurred since the impairment test that would require the Company to re-evaluate its formulas.

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements

~~Additionally,~~There ~~there~~ are no recently issued accounting standards with pending adoptions that the Company’s management currently anticipates will have any material impact upon its financial statements.

NOTE 2 – MEXICO PROPERTY

At November 30, 1989, the Company had an account receivable totaling $451,270 due from a foreign distributor. The account was collateralized by a perfected security interest in unimproved real property in Baja California, Mexico. The Company was unsuccessful in its efforts to collect the amounts due on this account and, accordingly, during fiscal 1993, retained Mexican legal counsel to initiate foreclosure proceedings on the property. On February 8, 2007, the real property was to be sold through a public auction. As there were no bids placed, the Company obtained the right to take title to the land. The Company is subject to certain ownership restrictions based on Mexican law and therefore formed a Mexican legal entity in order to take title to the property.

On August 15, 2008, the Company entered into an agreement to sell its rights to the property for a purchase price of $1,250,000 with a $300,000 deposit, and the balance of payment expected on December 15, 2008. There have been amendments to the agreement as the buyers needed additional time to complete the purchase.

In response to concerns raised by the buyers that there was a potential for claims to be brought against the Company and the property in Mexican courts, in January 2010 the Company and buyers entered into a new agreement whereby the Company transferred to buyers the right to the property in exchange for a promissory note in the amount of $550,000, which was the amount still owing under the August 15, 2008 agreement. This new agreement allows for the foreclosure of the property if the note is not paid in accordance with the scheduled payment terms. Because buyers continued to be late in making payments, in November 2010, the parties agreed to a new payment schedule. The buyers are continuing to make payments under this new agreement, although payments are usually delayed. There are penalties associated with late payments.

As of ~~May~~August 31, 2012, the Company has received payments from the buyers totaling $1,~~120~~160,000 and $4,000 in interest. Buyers have requested that the final payment be delayed further in exchange for favorable terms for the extended financing. ~~The~~As ~~Company~~of ~~agreed~~August to31, ~~delayed~~2012, ~~payment~~there ~~terms~~is ~~with~~ a principal ~~payment~~balance due of $7590,000 ~~due~~ ~~approximately~~plus ~~March~~penalties 1,and ~~2012,~~interest ~~and~~of ~~the~~an ~~remaining~~additional $7510,000. ~~due~~During ~~June~~September ~~30,~~and October 2012., ~~The~~ the Company has received athe ~~$20,000 payment on March 1, 2012 and there is a~~ balance ~~due~~ of $~~130~~100,000 ~~plus penalties and interest of an additional $15,500~~. The Company records the payments to other income in the accompanying consolidated condensed statements of operations as they are received, as collection is uncertain.

As part of the arrangement with its Mexican legal counsel and American broker, the Company is obligated to pay them a portion of any collection received. As of ~~May~~August 31, 2012, the Company has paid $332,508 and accrued $619,500 under the arrangements for the payments collected.

NOTE 3 – INVENTORIES

Inventories, consisting of agricultural products, is stated at the lower of cost (determined on a first-in, first-out basis) or market. The Company’s inventories increased as of May 31, 2012 as the Company is able to store additional raw materials that require longer lead times as well as utilizing forecasting tools to build inventory. Inventories consist of the following at:

			May 31, 2012			November 30, 2011
		August 31,			November 30,
	Raw materials		$	484,337		$	548,882
		2012			2011
	Finished goods			537,441			421,203
Raw materials		$	555,643		$	548,882
	Total inventories		$	1,021,778		$	970,085
Finished goods			536,087			421,203
Total inventories		$	1,091,730		$	970,085

There are a limited number of suppliers for certain raw materials used by the Company in its products.

NOTE 4 – PROPERTY AND EQUIPMENT, NET

Property and equipment are recorded at cost. Depreciation is calculated on the straight-line basis over the estimated useful lives of the depreciable assets, or related lease life, if shorter, which range from three to ten years. Machinery and equipment is depreciated over a five to ten year period, depending on the type of equipment. Office furniture and fixtures is depreciated over a five-year period and vehicles are depreciated over a three-year period. Leasehold improvements are amortized over the life of the lease and included in depreciation expense. Capital leases are amortized using the straight-line method over the estimated useful life or the remaining term of the related lease, whichever is less. Property and equipment consists of the following at:

				May 31, 2012				November 30, 2011
		August 31,				November 30,
	Machinery & equipment		$	812,945			$	779,304
		2012				2011
	Furniture & fixtures			183,920				173,779
Machinery & equipment		$	847,782			$	779,304
	Vehicles			55,442				55,442
Furniture & fixtures			184,728				173,779
	Leasehold improvements			376,829				372,488
Vehicles			89,941				55,442
	Total Property and Equipment			1,429,136				1,381,013
Leasehold improvements			381,702				372,488
	Less accumulated depreciation and amortization			(967,754	)			(896,510	)
Total Property and Equipment			1,504,153				1,381,013
	Property and Equipment, net		$	461,382			$	484,503
Less accumulated depreciation and amortization			(1,003,376	)			(896,510	)
Property and Equipment, net		$	500,777			$	484,503

NOTE 5 – ACCRUED EXPENSES

Accrued expenses consist of the following at:

	May 31, 2012		November 30, 2011
	August 31,		November 30,
Sales commissions	$	249,740	$	111,972
	2012		2011
Deferred rent		90,865		88,330
Sales commissions	$	100,527	$	111,972
Warranty		20,000		20,000
Deferred rent		91,902		88,330
Warranty		25,000		20,000
Accrued vacation		94,326		94,326
Accrued state income tax		9171,~~263~~520		20,900
Accrued payroll		1854,000		37,500
Other		145,~~506~~677		47,947
Total accrued expenses	$	~~578~~442,~~700~~952	$	420,975

NOTE 6 – COMMITMENTS

The Company has a $500,000 line of credit with a bank, secured by all the Company’s assets with usual banking covenants. As of ~~May~~August 31, 2012, the Company ~~has~~ has drawn $0 on the line of credit. Borrowings under the line of credit bear interest at the bank’s prime rate plus 1%, ~~but~~ but not less than 5% per annum. The interest rate as of ~~May~~August 31, 2012 is 5%. Interest is payable monthly.

~~NOTE~~The 7Company -purchased ~~SUBSEQUENT~~a ~~EVENT~~new truck during the quarter ended August 31, 2012 at a total cost of $34,500. The Company made a cash down payment of $10,000 and financed the remaining balance of $24,500 for a total of five years at an annual interest rate of 3.19%.

On June 8, 2012, Ms. Koenemann, the Company’s President, exercised an option granted in 2002 and purchased 25,000 shares of the Company’s common stock for $0.25 per share. Following a 2010 exercise, a March 2012 exercise, and this June 2012 exercise, Ms. Koenemann remains entitled to purchase 25,000 shares under the 2002 grant, which expires in July 2012.11

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain statements contained in this report that are not historical facts are forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933) that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. Westbridge Research Group and its wholly-owned subsidiary, Westbridge Agricultural Products may hereinafter be referred to collectively as “Westbridge,” the “Company,” “we,” “our,” “us,” and “our company”. When we use the words “anticipates”, “plans”, “expects”, “believes”, “should”, “could”, “may”, and similar expressions, we are identifying forward-looking statements. These risks and uncertainties include, but are not limited to, a slow-down in the domestic or international markets for the Company’s products; greater competition for customers from businesses who are larger and better capitalized; local, state, federal or international regulatory changes which adversely impact the Company’s ability to manufacture or sell its products, particularly its organic products; the reliance of the Company on limited sources of raw materials; an increase in the Company’s costs of raw materials. For a discussion of factors that could cause our actual results to differ from forward-looking statements contained herein, please see the discussion under the heading “Risk Factors” of our most recent Annual Report filed on Form 10-K.

Except as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we assume no obligation to update any forward looking statements contained in this Quarterly Report on Form 10-Q as a result of new information or future events or developments. You should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward looking statements. You should carefully review and consider the various disclosures we make in this report and our other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business. Results for any period should not be relied upon as being indicative of performance in future periods.

We are a manufacturer and seller of environmentally compatible products for the agricultural industry. Our products include, among others, both conventional and organic fertilizers and growth regulators. During the past several years, the Company has placed an emphasis on the sale of agricultural inputs that meet the organic requirements as defined under the USDA’s National Organic Program.

Results of Operations for the Three and Nine ~~Six~~ Month Periods Ending ~~May~~August 31, 2012 Compared to the Three and ~~Six~~Nine Month Periods Ending ~~May~~August 31, 2011

Net sales for the three month period ended ~~May~~August 31, 2012 were $31,~~242~~554,~~949~~193, representing an increase of 6033%, or $1383,~~219~~135,~~955,~~ from the same period in the prior year. For the ~~six~~nine month period ended ~~May~~August 31, 2012, sales were $46,~~451~~005,~~028~~221 which represents an increase of 47 43%, or $1,~~431~~814,~~365~~500, from the prior year’s sales of $34,~~019~~190,~~663~~721. The increase in sales is primarily due to increased sales in parts of the Midwest, along with the introduction of a new biological control product in the Pacific Northwestern region of the United States. In addition, the three and ~~six~~nine month increases are due to the Company’s sales and educational efforts over a number of years resulting in its products gaining acceptance with growers and distributors.

Cost of sales as a ~~percentage~~ percentage of net sales ~~increased~~decreased to 4044% for the quarter ended ~~May~~August 31, 2012 as compared with 3948% for the same period in the prior year. For the ~~six~~nine month period ended ~~May~~August 31, 2012, cost of sales as a percentage of net sales ~~increased~~remained toat 4142% aswhen compared with ~~39% for~~ the same period in the prior year. ~~These~~The ~~increases~~decrease ~~are~~for the quarter ended August 31, 2012 is primarily due to 76% of the ~~product~~sales ~~mix~~increase being derived from the Company’s high and mid margin products as well as the increase in sales without an increase in fixed production costs.

Research and development expenses for the three and ~~six~~nine month periods ended ~~May~~August 31, 2012 increased 87100%, or $5664,~~388~~433, and 5570%, or $67131,~~127~~560, respectively, compared with the same periods in the prior year. These increases are primarily due to the addition of research and development staff and increased trials of prospective products.

Selling expenses for the three and ~~six~~nine month periods ended ~~May~~August 31, 2012 increased 5737%, or $~~201~~109,~~377~~354, to $~~552~~401,~~205~~341 and increased 4744%, or $~~293~~402,~~116~~470, to $~~917~~1,~~576~~318, 917, respectively compared with the same periods in the prior year. These increases are primarily due to the hiring of additional selling staff, increased commission expense due to increased sales, and increased advertising and trade show expenses.

General and administrative expenses for the three and ~~six~~nine month periods ended ~~May~~August 31, 2012 ~~decreased~~increased $821,~~726~~579 or 410% and increased $1110,~~480~~099 or 32%, respectively, when compared with the same periods in the prior year. These ~~decreases~~increases are primarily due to aan ~~reduction~~increase in ~~outside~~salaries ~~financial~~and ~~consulting services~~related benefits.

1512

Other income for the ~~three~~ three and ~~six~~nine month periods ended ~~May~~August 31, 2012 increased $1124,~~308~~163 and decreased $7753,~~635~~472, respectively, compared to the same periods in the prior year. ~~This~~These ~~increase~~decreases and ~~decrease~~increases in other income primarily represent the net proceeds of installment payments from the sale of the Mexico property as discussed in Note 2 to the financial statements.

Net income for the ~~quarter~~ quarter ended ~~May~~August 31, 2012 was $~~960~~130,~~475~~869 as compared with net income of $~~554~~56,~~823~~712, for the same period in the prior year. Net income ~~for~~ for the ~~six~~nine month period ended ~~May~~August 31, 2012 was $1,~~006~~137,~~690~~559 as compared with net income of $~~687~~744,~~902~~614 in the prior year. As a result, basic earnings per share increased to $0.4752 for the ~~six~~nine months ended ~~May~~August 31, 2012 compared with $0.3235 per share for the ~~six months~~nine months ended ~~May~~August 31, 2011.

Federal income taxes ~~have~~ have not been provided for in the accompanying consolidated condensed statements of operations due to the net operating loss carryforwards generated in prior years that are available for carryforward against current year income. The Company has approximately $~~486~~704,000 of federal net operating loss carryforwards at November 30, 2011, which it is currently utilizing as offsets against current earnings to reduce or eliminate its income taxes. Management has provided for California state income taxes. In addition, management has assessed the recoverable value of its deferred tax assets at at $151,000 as the Company has been able to achieve its budgeted targets and the Company expects to utilize these benefits over ~~the~~ the next three years.

Results of Operations for the Three and Nine ~~Six~~ Month Periods Ending ~~May~~August 31, 2011 Compared to the Three and ~~Six~~Nine Month Periods Ending ~~May~~August 31, 2010

Net sales for the three month period ended ~~May~~August 31, 2011 were $21,~~022~~171,~~994~~058, representing aan ~~decrease~~increase of 828%, or $~~165~~256,~~155~~206, from the same period in the prior year. For the ~~six~~nine month period ended ~~May~~August 31, 2011, sales were $34,~~019~~190,~~663~~721 which represents an increase of 28%, or $44301,~~852~~058, from ~~the~~ the prior year’s sales of $23,~~974~~889,~~811~~663. ~~The~~These ~~three~~increases ~~month~~are ~~decrease is~~ primarily due to agreater ~~delay~~sales in the ~~growing~~mid-west ~~season~~and ~~due~~ to ~~extended~~growers of ~~cold~~vine ~~weather~~crops on the west coast. Additionally, in ~~California~~management’s ~~and~~view, the ~~Pacific~~Company’s ~~Northwest.~~sales ~~The~~and ~~six~~educational ~~month~~efforts ~~increase~~over a isnumber ~~due~~of toyears ~~increases~~have resulted in ~~sales~~its toproducts ~~the~~gaining ~~Mid~~acceptance ~~West~~with growers and ~~International sales~~distributors.

Cost of sales as a ~~percentage~~ percentage of net sales ~~increased~~decreased to 3948% for the quarter ended ~~May~~August 31, 2011 as compared with 3750% for the same period in the prior year. For the ~~six~~nine month period ended ~~May~~August 31, 2011, cost of sales as a percentage of net sales increased to 3942% as compared with ~~38%~~ 41% for the same period in the prior year. These ~~increases~~changes are primarily due to the product mix.

16Research and development expenses for the three and nine month periods ended August 31, 2011 decreased 5%, or $3,702, and 1%, or $1,144, respectively, compared with the same periods in the prior year. These decreases are primarily due to decreased travel and product trial expenses.

~~Research~~Selling ~~and development~~ expenses for the three and ~~six~~nine month periods ended ~~May~~August 31, 2011 increased 3%, or $17,~~788~~436, to $291,987 and 2decreased 4%, or $241,~~558~~596, ~~respectively~~to $916,447, respectively compared with the same periods in the prior year. ~~These~~The ~~increases~~three ~~are~~month increase is primarily due to ~~increases~~an increase in salaries related to the addition of sales and ~~wages~~marketing staff. The nine month decrease is primarily due to a reduction in advertising expenses as well as a reduction in commission expense associated with the customer mix.

~~Selling~~General and administrative expenses for the three and ~~six~~nine month periods ended ~~May~~August 31, 2011 decreased ~~20%~~$4,707 or ~~$88,654,~~2% toand increased $~~350~~90,~~828~~450 ~~and~~or ~~decreased 7~~16%, ~~or $49~~respectively,~~032,~~ towhen ~~$624,460, respectively~~ compared with the same periods in the prior year. ~~These decreases~~The ~~are~~three month decrease is primarily due to a ~~reduction~~timing difference in ~~advertising~~business personal ~~expenses~~property astaxes ~~well~~and as a reduction in ~~commission~~stock compensation expense ~~associated~~related ~~with~~ to no issuance of stock options to the ~~customer~~Director’s in ~~mix~~2011. The nine month increase is primarily due to the addition of a financial consultant in the third quarter of 2010 and a timing difference in expensing certain services performed.

~~General~~Other ~~and~~income ~~administrative expenses~~ for the three and ~~six~~nine month periods ended ~~May~~August 31, 2011 ~~increased~~decreased $2618,~~187~~979 ~~or 13%~~ and increased $952,~~157 or 27%~~444, respectively, ~~when~~ compared ~~with~~to the same periods in the prior year. ~~This~~These ~~increase~~decreases isand ~~primarily~~increases ~~due~~in toother ~~the~~income ~~addition~~primarily ofrepresent athe ~~financial~~net ~~consultant~~proceeds inof ~~the~~installment payments ~~third~~from ~~quarter~~the sale of ~~2010~~the ~~and~~Mexico aproperty ~~timing~~as ~~difference~~discussed in ~~expensing~~Note ~~certain~~2 ~~services~~to ~~performed~~the financial statements.

~~Other~~Net income for the ~~three~~ ~~and six month periods~~ quarter ended ~~May~~August 31, 2011 ~~decreased~~was $3456,~~240~~712 ~~and~~as ~~increased~~compared with net loss of $2159,~~422~~629, ~~respectively,~~for ~~compared to~~ the same ~~periods~~ period in the prior year. ~~These~~Net ~~decreases~~income ~~and~~for the ~~increases~~nine inmonth ~~other~~period ~~income~~ended ~~primarily~~August ~~represent~~31, ~~the~~2011 was $744,614 as compared with net ~~proceeds~~income of ~~installment~~$649,735 ~~payments from~~in the ~~sale~~prior ofyear. As a result, basic earnings per share increased to $0.35 for the ~~Mexico~~nine ~~property~~months asended ~~discussed~~August in31, ~~Note~~2011 2compared towith $0.31 per share for the ~~financial~~nine months ~~statements~~ended August 31, 2010.

~~Net~~Federal income ~~for~~taxes ~~the~~have ~~quarter~~not ~~ended~~been ~~May~~provided ~~31,~~for ~~2011~~in ~~was~~the ~~$554,823~~accompanying asconsolidated ~~compared~~condensed ~~with~~statements ~~net income~~ of ~~$654,135,~~operations ~~for~~due to the ~~same~~net ~~period~~operating inloss ~~the~~carryforwards generated in prior ~~year.~~years ~~Net~~that ~~income~~ are available for ~~the~~carryforward ~~six~~against ~~month~~current ~~period~~year ~~ended~~income. ~~May~~The ~~31,~~Company ~~2011~~had ~~was~~approximately $~~687~~959,~~902~~000 of asfederal ~~compared~~net ~~with~~operating ~~net~~loss ~~income~~carryforwards ofat ~~$709~~November 30,~~365~~ in2010, ~~the~~which ~~prior~~it ~~year.~~is Ascurrently ~~a result,~~utilizing ~~basic~~as ~~earnings~~offsets ~~per~~against ~~share~~current ~~decreased~~earnings to $0reduce or eliminate its income taxes.32 Management has provided for California state income taxes. In addition, management has assessed the ~~six~~recoverable ~~months~~value ~~ended~~of ~~May~~its 31deferred tax assets at $142,000 ~~2011~~as ~~compared~~the ~~with~~Company ~~$0.34~~has ~~per~~been ~~share~~able ~~for~~to achieve its budgeted targets and the ~~six~~Company ~~months~~expects to utilize these benefits over ~~ended~~the ~~May~~next ~~31,~~three ~~2010~~years.

Liquidity and Capital Resources:

Working capital was $3,~~341~~466,~~735~~ 031 at ~~May~~August 31, 2012, an increase of $1,~~040~~164,~~194~~490, from $2,301,541 at November 30, 2011. Working capital was $2,~~670~~715,~~110~~816 at ~~May~~ August 31, 2011, an increase of $~~714~~760,~~341~~047, from $1,955,769 at November 30, 2010. These increases as of ~~May~~August 31, 2012 and 2011 are primarily due to increased trade receivables and collections, resulting in higher cash balances, as the second ~~quarter~~and isthird quarter’s are consistently the Company’s busiest time of the year. Agricultural product sales are typically seasonal in nature with heavier sales in the spring months, resulting in increased cash flow during the spring and summer months while normally reducing cash flow significantly during the fall and winter months.

During the period ended August ~~May~~ 31, 2012, the Company had cash provided by operating activities of approximately $~~849~~771,000 as opposed to approximately $~~270~~321,000 for the period ended ~~May~~August 31, 2011 which is primarily the result of the increase in net income for 2012 over 2011. Cash ~~used~~ used in investing activities was approximately $48123,000 and $55104,000 for the periods ended ~~May~~August 31, 2012 and 2011, respectively. Cash provided by financing activities was approximately $31,000 for the period ended August 31, 2012 and cash used in financing activities was approximately $28,000 for ~~each~~the period ended ~~May~~August 31, 2011 which is primarily the result of proceeds from a note payable to purchase a truck.

The Company has secured a $500,000 line of credit available to be drawn down if required, of which, $0 has been drawn as of ~~May~~August 31, 2012. This line of of credit is secured by all the assets of the Company.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide this information under this item.

ITEM 4. Controls and Procedures

The Company's management with the participation of the Company's principal executive and principal financial officers, has evaluated the effectiveness of of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange ~~Act~~ Act of 1934, as amended (the "Exchange Act")), as of ~~May~~August 31, 2012, the end of the quarterly fiscal period covered by this quarterly report. Based on this evaluation, the Company's principal executive and principal financial officers concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits ~~under~~ under the Exchange Act and are effective in ensuring that information required to be disclosed by the Company in the reports that it it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company's fiscal quarter ended ~~May~~August 31, 2012, that has materially affected, or is reasonably likely to to materially affect, the Company's internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 1A RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended November 30, 2011, which could materially affect our business, financial condition or operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

A. EXHIBITS

31.1 Certification of the Principal Executive Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of the Principal Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 XBRL exhibits

B. REPORTS ON FORM 8-K

Form 8-K was filed on ~~June~~July 1916, 2012 regarding ~~continuation~~vote results of annual shareholder meeting.

1915

WESTBRIDGE RESEARCH GROUP AND SUBSIDIARY

SIGNATURES

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

WESTBRIDGE RESEARCH GROUP

	WESTBRIDGE RESEARCH GROUP



Dated: October 15, 2012	/s/ Christine Koenemann
	Christine Koenemann, President
	Principal Executive Officer




Dated: October 15, 2012	/s/ Richard Forsyth
	Richard Forsyth, Chief Financial Officer
	Principal Financial Officer

~~Dated: July 10, 2012~~ 16

/s/ Christine Koenemann

Christine Koenemann, President

Principal Executive Officer

/s/ Richard Forsyth

Richard Forsyth, Chief Financial Officer

Principal Financial Officer

Filing Compare · WESTBRIDGE RESEARCH GROUP