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

FORM 10-K 
(Mark One)
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended: December 31, 2009
 
OR
 
o
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:  333-140148
 
  
Nevada Gold Holdings, Inc.
 
 
(Exact name of registrant as specified in its charter)
 

 
Nevada
 
20-3724068
 
 
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer Identification No.)
 

 
1640 Terrace Way
Walnut Creek, California
 
 
94597
 
 
(Address of principal executive offices)
 
(Postal Code)
 
 
Registrant’s telephone number, including area code:  (775) 835-6177
 
Securities registered under Section 12(b) of the Act:  None  
 
Securities registered under Section 12(g) of the Act:  Common Stock, Par Value of $0.001 Per Share  
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes o   No x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes o   No x
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 o
 
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes o   No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company.  See the definitions of the “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.   (Check one):
 
Large Accelerated Filer o                                                    Accelerated Filer o
Non-Accelerated Filer o                                                      Smaller reporting company x
                       (Do not check if a smaller reporting company)
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes o No x
 
On June 30, 2009, the last business day of the registrant’s most recently completed second fiscal quarter, 48,121,946 shares of its Common Stock, $0.001 par value per share (its only class of voting or non-voting common equity) were held by non-affiliates of the registrant.  The market value of those shares was $10,586,828, based on the last sale price of $0.22 per share of the Common Stock on that date.  For this purpose, shares of Common Stock beneficially owned by each executive officer and director of the registrant [and each beneficial owner of 10% or more of the Common Stock outstanding] have been excluded because such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
 
As of April 14, 2010, there were 76,430,476 shares of the registrant's common stock, par value $0.001, issued and outstanding.
 
 
DOCUMENTS INCORPORATED BY REFERENCE
None 
 



 
TABLE OF CONTENTS
 
Item
 
Page
     
Available Information
 
2
     
Forward-Looking Statements
 
3
     
PART I
 
4
       
1.
Business
 
4
1A.
Risk Factors
 
12
2.
Properties
 
20
3.
Legal Proceedings
 
27
4.
Submission of Matters to a Vote of Security Holders
 
27
     
PART II
 
28
       
5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 
28
6.
Selected Financial Data
 
32
7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
33
8.
Financial Statements and Supplemental Data
 
35
9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
35
9A.[T]
Controls and Procedures
 
38
     
PART III
 
39
       
10.
Directors, Executive Officers, and Corporate Governance
 
39
11.
Executive Compensation
 
41
12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
44
13.
Certain Relationships and Related Transactions, and Director Independence
 
45
14.
Principal Accountant Fees and Services
 
46
     
PART IV
 
47
     
 
15.
Exhibits and Financial Statement Schedules
 
47
 

 
AVAILABLE INFORMATION
 
We file annual, quarterly and current reports, proxy statements and other information with the United States Securities and Exchange Commission (“SEC”). You may read and copy any document we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549, U.S.A. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330 (or 1-202-551-8090). The SEC maintains an internet site that contains annual, quarterly and current reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. Our electronic SEC filings are available to the public at http://www.sec.gov.
 
Our public internet site is http://www.nevadagoldholdings.com. We  make available free of charge through our internet site, via a link to the SEC’s internet site at http://www.sec.gov, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically files such material with, or furnish it to, the SEC. We also make available through our internet site, via a link to the SEC’s internet site, statements of beneficial ownership of our equity securities filed by our directors, officers, 10% or greater shareholders and others under Section 16 of the Exchange Act.
 
These documents are also available in print without charge to any person who requests them by writing or telephoning:
 
Nevada Gold Holdings, Inc.
c/o Gottbetter & Partners, LLP
488 Madison Avenue
New York, New York 10022-5718
Telephone: 212-400-6900
Facsimile: 212-400-6901

2

 
FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements, including, without limitation, in the sections captioned “Description of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere. Any and all statements contained in this Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future,” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this Report may include, without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to exploration programs, (ii) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iii) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the SEC, and (iv) the assumptions underlying or relating to any statement described in points (i), (ii) or (iii) above.
 
The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, our inability to obtain adequate financing, insufficient cash flows and resulting illiquidity, our inability to expand our business, government regulations, lack of diversification, volatility in the price of gold, increased competition, results of arbitration and litigation, stock volatility and illiquidity, and our failure to implement our business plans or strategies. A description of some of the risks and uncertainties that could cause our actual results to differ materially from those described by the forward-looking statements in this Report appears in the section captioned “Risk Factors” and elsewhere in this Report.
 
Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. We disclaim any obligation to update the forward-looking statements contained in this Report to reflect any new information or future events or circumstances or otherwise.
 
Readers should read this Report in conjunction with the discussion under the caption “Risk Factors,” our financial statements and the related notes thereto in this Report, and other documents which we may file from time to time with the SEC.
 
3

 
PART I

ITEM 1.
BUSINESS

This Report contains summaries of the material terms of various agreements executed in connection with the transactions described herein. The summaries of these agreements are subject to, and are qualified in their entirety by, reference to these agreements, all of which are incorporated herein by reference.

Historical Development

We were incorporated as Nano Holdings International, Inc., in Delaware on April 16, 2004.  Prior to the Merger (as defined below), our business was to sell party and drinking supplies, including gelatin shot mixes, shot glasses, flavored sugar and salts, and various other drinking containers and paraphernalia.

Name Change and Capital Increase

On November 3, 2008, we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware, which (i) changed our name from Nano Holdings International, Inc., to Nevada Gold Holdings, Inc., and (ii) increased our authorized capital stock from 75,000,000 shares of common stock, par value $0.001, to 300,000,000 shares of common stock, par value $0.001, and 10,000,000 shares of preferred stock, par value $0.001.

As used in this Report, unless otherwise stated or the context clearly indicates otherwise, the term “Nano Holdings” refers to Nevada Gold Holdings, Inc., before giving effect to the Merger (defined below), the term “NGE” refers to Nevada Gold Enterprises, Inc., a Nevada corporation formed on October 7, 2008, before giving effect to the Merger, the term “NGHI” refers to Nevada Gold Holdings, Inc., after giving effect to the Merger, and the terms “Company,” “we,” “us,” and “our” refer to Nevada Gold Holdings, Inc., and its wholly-owned subsidiary, NGE, after giving effect to the Merger.

Stock Splits

Our Board of Directors authorized a 30.30303-for-1 forward split of our common stock, par value $0.001 per share (“Common Stock”), in the form of a stock dividend (the “2008 Stock Split”), which was paid on November 21, 2008, to Holders of record on November 19, 2008.  Our Board of Directors authorized a 2-for-1 forward split of our Common Stock, in the form of a stock dividend (the “2009 Stock Split”), which was paid on May 12, 2009, to Holders of record on May 8, 2009. All share and per share numbers in this Report relating to the Common Stock have been adjusted to give effect to these stock splits, unless otherwise stated.

Merger

On December 31, 2008, pursuant to a Merger Agreement entered into on the same date, Nevada Gold Acquisition Corp., a Nevada corporation formed on December 18, 2008, and a wholly owned subsidiary of Nano Holdings (“Acquisition Sub”), merged with and into NGE, with NGE being the surviving corporation (the “Merger”). As a result of the Merger, NGE became a wholly-owned subsidiary of the NGHI.

Pursuant to the Merger, we ceased operating as a distributor of party and drinking supplies and acquired the business of NGE to engage in the exploration and eventual development of gold mines and have continued NGE’s existing business operations as a publicly-traded company under the name Nevada Gold Holdings, Inc.  See “Split-Off Agreement” below.

At the closing of the Merger, each of the 200 shares of NGE’s common stock issued and outstanding immediately prior to the closing of the Merger was converted into 80,000 shares of our Common Stock. As a result, an aggregate of 16,000,000 shares of our Common Stock were issued to the holders of NGE’s common stock. NGE did not have any stock options or warrants to purchase shares of its capital stock outstanding at the time of the Merger.
 
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The Merger Agreement contains a post-closing adjustment to the number of shares of Company Common Stock issued to the former NGE stockholders, in an amount up to 500,000 shares of Company Common Stock, to be issued to the former NGE stockholders on a pro rata basis for any breach of the Merger Agreement by Nevada Gold Holdings, Inc., discovered during the two-year period following the Closing Date. In order to secure the indemnification obligations of NGE under the Merger Agreement, 5% of the shares of Company Common Stock to which the principal former NGE stockholder (David Mathewson, who was also subsequent to the Merger our sole director, Chief Executive Officer and President, and who is now still a director of the Company) is entitled in exchange for his shares of NGE in connection with the Merger will be held in escrow for a period of two years pursuant to an escrow agreement.

The Merger Agreement contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions. Breaches of the representations and warranties will be subject to customary indemnification provisions.

The Merger was treated as a recapitalization of the Company for financial accounting purposes. NGE is considered the acquirer for accounting purposes, and the historical financial statements of Nano Holdings before the Merger have been replaced with the historical financial statements of NGE before the Merger in all subsequent filings with the Securities and Exchange Commission (the “SEC”).

The parties have taken all actions necessary to ensure that the Merger is treated as a tax-free exchange under Section 368(a) of the Internal Revenue Code of 1986, as amended.

The issuance of shares of Common Stock to holders of NGE’s capital stock in connection with the Merger was not registered under the Securities Act, in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act and Regulation D promulgated by the SEC under that section, which exempt transactions by an issuer not involving any public offering. These securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement.

Split-Off Agreement

Upon the closing of the Merger, under the terms of a Split-Off Agreement, the Company transferred all of its pre-Merger operating assets and liabilities to its wholly-owned subsidiary, Sunshine Group, Inc., a Delaware corporation (“Sunshine”) formed on December 18, 2008, including, without limitation, the Company’s equity interests in Sunshine Group, LLC, a Florida limited liability company (“Sunshine LLC”). Thereafter, pursuant to the Split-Off Agreement, the Company transferred all of the outstanding shares of capital stock of Sunshine to Marion R. “Butch” Barnes, William D. Blanchard and Robert Barnes, pre-Merger stockholders of Nano Holdings (the “Split-Off”), in consideration of and in exchange for (i) the surrender and cancellation of an aggregate of 100,000,000 shares of the Company’s Common Stock held by those stockholders and (ii) certain representations, covenants and indemnities.

Private Placements

On December 31, 2008, NGHI closed a private placement (the “Bridge PPO”) of (a) 414,000 shares of Common Stock, at a purchase price of $0.25 per share, and (b) $150,000 principal amount of its 10% Secured Convertible Promissory Note (the “2008 Bridge Note”), at a purchase price of par, for aggregate gross proceeds of $253,500, before deducting expenses related to the offerings.  Upon the closing of the Merger, the purchaser of the 2008 Bridge Note also received 150,000 shares of Common Stock under the terms of the 2008 Bridge Note.  (The 2008 Bridge Note has subsequently been repaid; see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – 2008 Bridge Note” for more information.)
 
5

 
On March 9, 2009, NGHI held a second closing of the Bridge PPO for 165,000 shares of Common Stock, at a purchase price of $0.25 per share. 

As an inducement to certain investors to purchase Common Stock in the Bridge PPO, the principal former NGE stockholder (David Mathewson, who was then our Chief Executive Officer, President and sole director and is now our director) agreed to transfer to those investors in private transactions an aggregate of 3,210,000 shares of the Company Common Stock that he received in the Merger.

On June 24, 2009, we closed a private placement (the “2009 PPO”) of 2,000,000 units of our securities, at a purchase price of $0.25 per unit, each unit consisting of one share of Common Stock and a warrant to purchase one share of Common Stock for a period of five years, at an exercise price of $0.50 per share, for gross proceeds of $500,000.

On September 18, 2009, we held a second closing of the 2009 PPO for 1,000,000 of the same units on the same terms, for gross proceeds of $250,000.

On December 10, 2009, we borrowed $100,000 under a bridge loan note (the “2009 Bridge Note”) from a private institution. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – 2009 Bridge Note” for more information.

On February 5, 2010, we entered into a financing arrangement with JMJ Financial (the “Investor”), pursuant to which the Investor may lend us up to $3,200,000.  We issued convertible promissory notes to the Investor in an aggregate principal amount of $3,200,000 (the “2010 Notes”).  We received $200,000 from the Investor on February 5, 2010.  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – 2010 Notes” for more information.

These offerings and issuances were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The Bridge PPO and the 2009 PPO were exempt in reliance upon Regulation D and Regulation S promulgated by the SEC under the Act and were sold only to “accredited investors,” as defined in Regulation D and non-“U.S. persons” as defined in Regulation S.  The issuances of the 2008 Bridge Note, the 2009 Bridge Note and of the 2010 Notes were exempt from registration under Section 4(2) of the Act as not involving any public offering.  These securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. Additional information concerning the Bridge PPO, the 2008 Bridge Note, the 2009 PPO, the 2009 Bridge Note and the 2010 Notes is presented below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Investor Relations Agreement and Warrants

In the Merger Agreement, we agreed to enter into an agreement with an investor relations firm to be identified (the “IR Consultant”) to provide investor relations services to the Company, pursuant to which we will agree to issue to the IR Consultant warrants to purchase an aggregate of 1,000,000 shares of Common Stock, exercisable for a period of five years, at an exercise price of $1.00 per share.

2008 Equity Incentive Plan

Before the Merger, Nano Holdings’ Board of Directors adopted, subject to stockholder approval, the 2008 Equity Incentive Plan (the “2008 Plan”), which provides for the issuance of up to 4,000,000 shares of Common Stock as incentive awards granted to executive officers, key employees, consultants and directors.
 
6

 
Lock-up Agreements and Other Restrictions

In connection with the Merger, David Mathewson, the then sole officer, director and employee of the Company, and the two other former stockholders of NGE entered into lock-up agreements, whereby they are restricted for a period of 24 months (in the case of Mr. Mathewson) or 12 months (in the case of the other two stockholders) from certain sales or dispositions of the Common Stock acquired by them in the Merger. In addition, the Common Stock issued to the former NGE stockholders in the Merger is not permitted to be included in a registration statement for a period of 24 months after the closing. In addition, for a period of 12 months after the closing, former NGE stockholders agreed to be subject to restrictions on engaging in certain transactions, including effecting or agreeing to effect short sales, whether or not against the box, establishing any “put equivalent position” with respect to the Common Stock, borrowing or pre-borrowing any shares of Common Stock, or granting other rights (including put or call options) with respect to the Common Stock or with respect to any security that includes, relates to or derives any significant part of its value from the Common Stock, or otherwise seeks to hedge their position in the Common Stock.

Directors and Officers

Our Board of Directors consists of three members. On the Closing Date of the Merger, David Rector, the sole director of Nano Holdings before the Merger, resigned his position as a director, and David Mathewson was appointed to fill the vacancy on the Board of Directors. Also on the Closing Date, Mr. Rector, the President and sole officer of Nano Holdings, resigned and Mr. Mathewson was appointed CEO, President, Secretary and Treasurer by the Board. On November 5, 2009, Mr. Mathewson resigned as CEO, President, Secretary and Treasurer (but remained on the Board of Directors), and Mr. Rector was appointed a director and CEO, President and Secretary.  On November 13, 2009, John N. Braca was appointed to the Board of Directors.  See “Management – Directors and Executive Officers.”

Accounting Treatment; Change of Control
 
The Merger was accounted for as a “reverse merger,” and NGE was deemed to be the acquirer in the reverse merger. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements prior to the Merger will be those of NGE and will be recorded at the historical cost basis of NGE, and the consolidated financial statements after completion of the Merger will include the assets and liabilities of NGE, historical operations of NGE and operations of the Company and its subsidiary from the closing date of the Merger. As a result of the issuance of the shares of Common Stock pursuant to the Merger, a change in control of the Company occurred as of the date of consummation of the Merger. Except as described in this Report, no arrangements or understandings exist among present or former controlling stockholders with respect to the election of members of our Board of Directors and, to our knowledge, no other arrangements exist that might result in a change of control of the Company.
 
We continued to be a “smaller reporting company,” as defined under the Exchange Act.

Overview of Our Business

We are engaged in the highly speculative business of exploring for gold. We currently hold a lease on one property in northern Nevada, on which we have the right to explore, and if warranted, mine for gold. Our current plan is to explore for gold at our one property and to determine if it contains gold deposits which can be mined at a profit. Our property is not known to contain gold which can be mined at a profit.  We have commenced initial exploration activities. We also plan to acquire future exploration prospects, but have not identified any specific future prospects at this time. Our exploration staff consists solely of our Geological Advisor, David Mathewson. We plan to engage independent engineers, contractors and consultants on an as-needed basis. We cannot assure you that a commercially exploitable gold deposit will be found on our property.
 
7

 
In Nevada, there are five property categories that can be available for exploration and eventual development and mining: public lands, private fee lands, unpatented mining claims, patented mining claims, and tribal lands. Our property consists of unpatented mining claims on federal lands. The primary sources of land for exploration and mining activities are land owned by the United States federal government through the Bureau of Land Management and the United States Forest Service, land owned by state governments, tribal governments and individuals, or land obtained from entities which currently hold title to or lease government or private lands.
 
We currently have rights to explore for gold on one property, known as Tempo Mineral Prospect, all of which we lease from Gold Standard Royalty Corporation, a subsidiary of Golden Predator Mines Inc., which acquired its rights to this property from the Lyle F. Campbell Trust of Reno, Nevada, which acquired its rights to this property from the Federal Bureau of Land Management by staking. We acquired our interest in the lease from KM Exploration, Ltd., a Nevada limited liability company in which our director and Geological Advisor (and former CEO and President), David Mathewson, had a 50% ownership interest prior to its dissolution. (See “Certain Relationships and Related Transactions, and Director Independence” below.)  More details about our property may be found in the section captioned “Properties.” Below is a map indicating the location of our property in Nevada.
 
 
8

 
See Part I, Item 2, “Properties,” below for more detailed information about the Tempo Mineral Prospect and our exploration program.

Although mineral exploration is a time consuming and expensive process with no assurance of success, the process is straightforward. We first acquire the rights to explore for gold. We then explore for gold by examining the soil, the rocks on the surface, and by drilling into the ground to retrieve underground rock samples, which can then be analyzed for their mineral content. This exploration activity is undertaken in phases, with each successive phase built upon the information previously gained in prior phases. If our exploration program discovers what appears to be an area which may be able to be profitably mined for gold, we will focus most of our activities on determining whether that is feasible, including further delineation of the location, size and economic feasibility of any such potential ore body.

In the event that we discover gold deposits on our property which can be mined at a profit, we will need to raise substantial additional financing in order for the deposits to be developed. In such event, we may seek to enter into a joint-venture agreement with another entity in order to mine our property or enter into other arrangements. Any gold that is mined from our property will be refined and eventually sold on the open market to dealers.
 
Competition
 
We compete with other exploration companies, many of which possess greater financial resources and technical abilities than we do. Our main areas of competition are acquiring exploration rights and engaging qualified personnel. The gold exploration industry is highly fragmented, and we are a very small participant in this sector. Many of our competitors explore for a variety of minerals and control many different properties around the world. Many of them have been in business longer than we have and have probably established more strategic partnerships and relationships and have greater financial accessibility than we do.
 
There is significant competition for properties suitable for gold exploration. As a result, we may be unable to continue to acquire interests in attractive properties on terms that we consider acceptable.
 
Market for Gold

In the event that gold is produced from our property, we believe that wholesale purchasers for the gold would be readily available. Readily available wholesale purchasers of gold and other precious metals exist in the United States and throughout the world. Among the largest are Handy & Harman, Engelhard Industries and Johnson Matthey, Ltd. Historically, these markets are liquid and volatile. Wholesale purchase prices for precious metals can be affected by a number of factors, all of which are beyond our control, including but not limited to:
 
 
fluctuation in the supply of, demand and market price for gold;
 
 
mining activities of our competitors;
 
 
sale or purchase of gold by central banks and for investment purposes by individuals and financial institutions;
 
 
interest rates;
 
 
currency exchange rates;
 
 
inflation or deflation;
 
 
fluctuation in the value of the United States dollar and other currencies; and
 
 
political and economic conditions of major gold or other mineral-producing countries.
 
9

 
10-Year Gold Prices
 
 
If we find gold that is deemed of economic grade and in sufficient quantities to justify removal, we may seek additional capital through equity or debt financing to build a mine and processing facility, or find some other entity to mine our property on our behalf, or sell our rights to mine the gold. Upon mining, the ore would be processed through a series of steps that produces a rough concentrate. This rough concentrate is then sold to refiners and smelters for the value of the minerals that it contains, less the cost of further concentrating, refining and smelting. Refiners and smelters then sell the gold on the open market through brokers who work for wholesalers including the major wholesalers listed above. Based upon the current demand for gold, we believe that we will not have any difficulty in selling any gold that we may recover. However, we have not found any gold as of today, and there is no assurance that we will find any gold in the future.
 
Hedging Transactions
 
We do not currently engage in hedging transactions and we have no hedged mineral resources.
 
Compliance with Government Regulation
 
Various levels of governmental controls and regulations address, among other things, the environmental impact of mineral exploration and mineral processing operations and establish requirements for decommissioning of mineral exploration properties after operations have ceased. With respect to the regulation of mineral exploration and processing, legislation and regulations in various jurisdictions establish performance standards, air and water quality emission standards and other design or operational requirements for various aspects of the operations, including health and safety standards. Legislation and regulations also establish requirements for decommissioning, reclamation and rehabilitation of mineral exploration properties following the cessation of operations and may require that some former mineral properties be managed for long periods of time after exploration activities have ceased.

Our exploration activities are subject to various levels of federal and state laws and regulations relating to protection of the environment, including requirements for closure and reclamation of mineral exploration properties. Some of the laws and regulations include the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Emergency Planning and Community Right-to-Know Act, the Endangered Species Act, the Federal Land Policy and Management Act, the National Environmental Policy Act, the Resource Conservation and Recovery Act, and all related state laws in Nevada. Additionally, our property is subject to the federal General Mining Law of 1872, which regulates how mineral claims on federal lands are obtained.
 
10

 
In 1989, the State of Nevada adopted the Mined Land Reclamation Act (the “Nevada MLR Act”), which established design, operation, monitoring and closure requirements for all mining operations in the state. The Nevada MLR Act has increased the cost of designing, operating, monitoring and closing new mining facilities and could affect the cost of operating, monitoring and closing existing mining facilities. New facilities are also required to provide a reclamation plan and financial assurance to ensure that the reclamation plan is implemented upon completion of operations. The Nevada MLR Act also requires reclamation plans and permits for exploration projects that will result in more than five acres of surface disturbance.
 
We plan to secure all necessary permits for our exploration activities and we will file for the required permits to conduct our exploration programs as necessary. These permits are usually obtained from either the Bureau of Land Management or the United States Forest Service. Obtaining such permits usually requires the posting of small bonds for subsequent remediation of trenching, drilling and bulk-sampling. Delays in the granting of permits are not uncommon, and any delays in the granting of permits may adversely affect our exploration activities. Additionally, necessary permits may be denied, in which case we will be unable to pursue our exploration activities. It may be possible to appeal any denials of permits, but any such appeal will result in additional delays and expense, which may cause you to lose all or part of your investment.
 
We do not anticipate discharging water into active streams, creeks, rivers, lakes or any other bodies of water without an appropriate permit. We also do not anticipate disturbing any endangered species or archaeological sites or causing damage to our property. Re-contouring and re-vegetation of disturbed surface areas will be completed pursuant to the applicable permits. The cost of remediation work varies according to the degree of physical disturbance. It is difficult to estimate the cost of compliance with environmental laws since the full nature and extent of our proposed activities cannot be determined at this time.

Employees
 
We currently have one employee. In the future, if our activities grow, we may hire personnel on an as-needed basis. For the foreseeable future, we plan to engage freelance geologists, engineers and other consultants as necessary.

Research and Development Expenditures

We are not currently conducting any research and development activities other than those relating to the possible acquisition of new gold properties or projects. As we proceed with our exploration programs we may need to engage additional contractors and consider the possibility of adding permanent employees, as well as the possible purchase or lease of equipment. Our planned exploration activities are described in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Subsidiaries
 
Nevada Gold Enterprises, Inc. (“NGE”) is our only subsidiary.  The Company owns 100% of the stock of NGE.
 
11

 
Patents/Trademarks/Licenses/Franchises/Concessions/Royalty Agreements or Labor Contracts
 
We do not own any patents or trademarks. Also, we are not a party to any license or franchise agreements, concessions, or labor contracts. In the event that gold is produced from our property, we will have to pay royalties as disclosed in the section captioned “Properties.”


ITEM 1A.
RISK FACTORS

THIS ANNUAL REPORT ON FORM 10-K CONTAINS CERTAIN STATEMENTS RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF OUR COMPANY. YOU ARE CAUTIONED THAT SUCH STATEMENTS ARE ONLY PREDICTIONS AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS, YOU SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS ANNUAL REPORT ON FORM 10-K, INCLUDING THE MATTERS SET FORTH BELOW, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

Risks Related to the Business and Financial Condition

Our business is exploring for gold, which is a highly speculative activity. An investment in our securities involves a high degree of risk. You should not invest in our securities if you cannot afford to lose your entire investment. In deciding whether you should invest in our securities, you should carefully consider the following information together with all of the other information contained in this Current Report. Any of the following risk factors can cause our business, prospects, financial condition or results of operations to suffer and you to lose all or part of your investment.

[The loss of David Mathewson would adversely affect our business because his expertise is indispensable; we do not carry any key-man insurance. [Discuss how to revise]

Our business depends upon the continued active involvement of our Geological Advisor, David Mathewson. The loss of Mr. Mathewson’s services would materially adversely affect our business and prospects. We relied solely upon Mr. Mathewson’s judgment and expertise in deciding to lease the Tempo property. We did not independently visit, survey or examine the property before leasing it. We are relying upon Mr. Mathewson’s familiarity with the property in implementing our exploration program, which was designed by Mr. Mathewson. We plan to rely upon Mr. Mathewson’s expertise in planning our future activities, including the acquisition of exploration prospects. We do not believe that we will be able to operate as planned in the event that Mr. Mathewson ceases to be involved with us. You should carefully consider our reliance upon Mr. Mathewson’s involvement and judgment before deciding whether to invest in our securities.]

We plan to engage independent engineers, contractors and consultants on an as-needed basis.

Exploring for gold is an inherently speculative business.

Exploring for gold is a business that by its nature is very speculative. There is a strong possibility that we will not discover any gold which can be mined at a profit. Even if we do discover gold deposits, the deposit may not be of the quality or size necessary for us to make a profit from actually mining it. Few properties that are explored are ultimately developed into producing mines. Unusual or unexpected geological formations, geological formation pressures, fires, power outages, labor disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are just some of the many risks involved in mineral exploration programs and the subsequent development of gold deposits.
 
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We need to obtain additional financing to fund our exploration program.

We do not have sufficient capital to fund our exploration program as it is currently planned or to fund the acquisition and exploration of new properties. We estimate that we will need to raise approximately $750,000 to pay for our exploration program through December 31, 2010, as it is currently planned and described in this Report  [where?], and our estimated administrative expenses, lease payments and estimated claim maintenance costs.  We will likely require additional funding after that date. We may be unable to secure additional financing on terms acceptable to us, or at all, at times when we need such financing. Our inability to raise additional funds on a timely basis could prevent us from achieving our business objectives and could have a negative impact on our business, financial condition, results of operations and the value of our securities.  If we raise additional funds by issuing additional equity or convertible debt securities, the ownership percentages of existing stockholders will be reduced and the securities that we may issue in the future may have rights, preferences or privileges senior to those of the current holders of our Common Stock. Such securities may also be issued at a discount to the market price of our Common Stock, resulting in possible further dilution to the book value per share of Common Stock. If we raise additional funds by issuing debt, we could be subject to debt covenants that could place limitations on our operations and financial flexibility.

The global financial crisis may have an impact on our business and financial condition in ways that we currently cannot predict.

The continued credit crisis and related turmoil in the global financial system may have an impact on our business and financial position. The recent high costs of fuel and other consumables may negatively impact production costs at our operations. In addition, the financial crisis may limit our ability to raise capital through credit and equity markets. As discussed further below, the prices of the metals that we may produce are affected by a number of factors, and it is unknown how these factors will be impacted by a continuation of the financial crisis.

Our management has conflicts of interest.

One of our directors David Mathewson, has private mining interests and also may serve as a director of other gold exploration companies. Consequently, his personal interests may come into conflict with our interests. Situations may arise where Mr. Mathewson is presented with business opportunities which may be desirable not only for us, but also to the other companies with which he is affiliated. In addition to competition for suitable business opportunities, we also compete with these other gold exploration companies for investment capital, technical resources, key personnel and other things. You should carefully consider these potential conflicts of interest before deciding whether to invest in our securities.

Mr. Mathewson previously held a 50% ownership interest in KM Exploration, Ltd., a Nevada limited liability company, from which we acquired the lease for our Tempo property. See “Certain Relationships and Related Transactions, and Director Independence” below. The lease agreement relating to our property is described in greater detail in the section captioned “Properties.”

We do not know if our property contains any gold that can be mined at a profit.

The property on which we have the right to explore for gold is not known to have any deposits of gold which can be mined at a profit. Whether a gold deposit can be mined at a profit depends upon many factors. Some but not all of these factors include: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; operating costs and capital expenditures required to start mining a deposit; the availability and cost of financing; the price of gold, which is highly volatile and cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land use, importing and exporting of minerals and environmental protection.
 
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We are an exploration stage company with no mining operations and we may never have any mining operations in the future.

Our business is exploring for gold. In the unlikely event that we discover commercially exploitable gold deposits, we will not be able to make any money from them unless the gold is actually mined. We will need to either mine the gold ourselves, find some other entity to mine our properties on our behalf, or sell our rights to mine the gold. Mining operations in the United States are subject to many different federal, state and local laws and regulations, including stringent environmental, health and safety laws. If we assume any operational responsibility for mining on our property, it is possible that we will be unable to comply with current or future laws and regulations, which can change at any time. It is possible that changes to these laws will be adverse to any potential mining operations. Moreover, compliance with such laws may cause substantial delays and require capital outlays in excess of those anticipated, adversely affecting any potential mining operations. Our future mining operations, if any, may also be subject to liability for pollution or other environmental damage. It is possible that we will choose to not be insured against this risk because of high insurance costs or other reasons.

We are a new company with a short operating history and have only lost money.

NGE, our sole operating subsidiary, was formed on October 7, 2008. Our operating history consists of starting our preliminary exploration activities. We have no income-producing activities. We have already lost money because of the expenses we have incurred in recruiting personnel, acquiring the rights to explore on our property, and starting our preliminary exploration activities. Exploring for gold is an inherently speculative activity. There is a strong possibility that we will not find any commercially exploitable gold deposits on our property. Because we are a gold exploration company, we may never achieve any meaningful revenue.

We may not be able to follow our internal procedures relating to the authorization and reporting of our financial transactions, or such procedures may not function as intended.

We are a small company with limited resources. We have no full-time employees. This may cause us not to comply with our internal procedures designed to assure that our financial information is properly gathered and reported. In the event that we do not follow these internal procedures, or if they do not function as intended, we could publish materially incorrect financial statements. This could cause investors to lose confidence in the accuracy of our reported financial information, impair our ability to secure additional financing, and result in a loss of your investment.

Our business is subject to extensive environmental regulations which may make exploring for or mining gold prohibitively expensive, and which may change at any time.

All of our operations are subject to extensive environmental regulations which can make exploring for gold expensive or prohibit it altogether. We may be subject to potential liabilities associated with the pollution of the environment and the disposal of waste products that may occur as the result of our exploring for gold on our properties. We may have to pay to remedy environmental pollution, which may reduce the amount of money that we have available to use for exploring for gold. This may adversely affect our financial position, which may cause you to lose your investment. If we are unable to fully remedy an environmental problem, we might be required to suspend operations or to enter into interim compliance measures pending the completion of the required remedy. If a decision is made to mine our Tempo property and we retain any operational responsibility for doing so, our potential exposure for remediation may be significant, and this may have a material adverse effect upon our business and financial position. We have not purchased insurance for potential environmental risks (including potential liability for pollution or other hazards associated with the disposal of waste products from our exploration activities) because we currently have no intention of mining our property. However, if we change our business plan to include the mining of our property and assuming that we retain operational responsibility for mining, then such insurance may not be available to us on reasonable terms or at a reasonable price. All of our exploration and, if warranted, development activities may be subject to regulation under one or more local, state and federal environmental impact analyses and public review processes. It is possible that future changes in applicable laws, regulations and permits or changes in their enforcement or regulatory interpretation could have significant impact on some portion of our business, which may require our business to be economically re-evaluated from time to time. These risks include, but are not limited to, the risk that regulatory authorities may increase bonding requirements beyond our financial capability. Inasmuch as posting of bonding in accordance with regulatory determinations is a condition to the right to operate under all material operating permits, increases in bonding requirements could prevent operations even if we are in full compliance with all substantive environmental laws.
 
14

 
We may be denied the government licenses and permits which we need to explore for gold on our property. In the event that we discover commercially exploitable gold deposits, we may be denied the additional government licenses and permits which we will need to mine gold on our property.

Exploration activities usually require the granting of permits from various governmental agencies. For example, exploration drilling on unpatented mineral claims requires a permit to be obtained from the United States Bureau of Land Management, which may take several months or longer to grant the requested permit. Depending on the size, location and scope of the exploration program, additional permits may also be required before exploration activities can be undertaken. Prehistoric or Indian grave yards, threatened or endangered species, archeological sites or the possibility thereof, difficult access, excessive dust and important nearby water resources may all result in the need for additional permits before exploration activities can commence. As with all permitting processes, there is the risk that unexpected delays and excessive costs may be experienced in obtaining required permits. The needed permits may not be granted at all. Delays in or our inability to obtain necessary permits will result in unanticipated costs, which may result in serious adverse effects upon our business.

The value of our property is subject to volatility in the price of gold.

Our ability to obtain additional and continuing funding, and our profitability should we ever commence mining operations, will be significantly affected by changes in the market price of gold. Gold prices fluctuate widely and are affected by numerous factors, all of which are beyond our control. Some of these factors include the sale or purchase of gold by central banks and financial institutions; interest rates; currency exchange rates; inflation or deflation; fluctuation in the value of the United States dollar and other currencies; speculation; global and regional supply and demand, including investment, industrial and jewelry demand; and the political and economic conditions of major gold or other mineral-producing countries throughout the world, such as Russia and South Africa. The price of gold or other minerals have fluctuated widely in recent years, and a decline in the price of gold could cause a significant decrease in the value of our property, limit our ability to raise money, and render continued exploration and development of our property impracticable. If that happens, then we could lose our rights to our property and be compelled to sell some or all of these rights. Additionally, the future development of our mining property beyond the exploration stage is heavily dependent upon the level of gold prices remaining sufficiently high to make the development of our property economically viable. You may lose your investment if the price of gold decreases. The greater the decrease in the price of gold, the more likely it is that you will lose money.

Our property title may be challenged. We are not insured against any challenges, impairments or defects to our mineral claims or property title. We have not verified title to our property.

Our property is comprised of an unpatented lode claim created and maintained in accordance with the federal General Mining Law of 1872. Unpatented lode claims are unique U.S. property interests and are generally considered to be subject to greater title risk than other real property interests because the validity of unpatented lode claims is often uncertain. This uncertainty arises, in part, out of the complex federal and state laws and regulations under the General Mining Law. We have not conducted a title search on our Tempo Mineral Prospect property. The uncertainty resulting from not having a title search on the property leaves us exposed to potential title suits. Defending any challenges to our property title will be costly, and may divert funds that could otherwise be used for exploration activities and other purposes. In addition, unpatented lode claims are always subject to possible challenges by third parties or contests by the federal government, which, if successful, may prevent us from exploiting our discovery of commercially extractable gold. Challenges to our title may increase our costs of operation or limit our ability to explore on certain portions of our property. We are not insured against challenges, impairments or defects to our property title, nor do we intend to carry title insurance in the future. Potential conflicts to our mineral claims are discussed in detail in the section captioned “Properties.”
 
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Possible amendments to the General Mining Law could make it more difficult or impossible for us to execute our business plan.

The U.S. Congress has considered proposals to amend the General Mining Law of 1872 that would have, among other things, permanently banned the sale of public land for mining. The proposed amendment would have expanded the environmental regulations to which we are subject and would have given Indian tribes the ability to hinder or prohibit mining operations near tribal lands. The proposed amendment would also have imposed a royalty of 4% of gross revenue on new mining operations located on federal public land, which would have applied to all of our property. The proposed amendment would have made it more expensive or perhaps too expensive to recover any otherwise commercially exploitable gold deposits which we may find on our property. While at this time the proposed amendment is no longer pending, this or similar changes to the law in the future could have a significant impact on our business model. Senator Harry Reid of Nevada, Senate Majority Leader, has announced that because of other priorities, there will be no consideration to deal with the General Mining Law of 1872 issue “this year.”

Market forces or unforeseen developments may prevent us from obtaining the supplies and equipment necessary to explore for gold.

Gold exploration is a very competitive business. Competitive demands for contractors and unforeseen shortages of supplies and/or equipment could result in the disruption of our planned exploration activities. Current demand for exploration drilling services, equipment and supplies is robust and could result in suitable equipment and skilled manpower being unavailable at scheduled times for our exploration program. Fuel prices are extremely volatile as well. We will attempt to locate suitable equipment, materials, manpower and fuel if sufficient funds are available. If we cannot find the equipment and supplies needed for our various exploration programs, we may have to suspend some or all of them until equipment, supplies, funds and/or skilled manpower become available. Any such disruption in our activities may adversely affect our exploration activities and financial condition.

We may not be able to maintain the infrastructure necessary to conduct exploration activities.

Our exploration activities depend upon adequate infrastructure. Reliable roads, bridges, power sources and water supply are important factors which affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect our exploration activities and financial condition.

Our exploration activities may be adversely affected by the local climate, which prevents us from exploring our property year-round.

The local climate makes it impossible for us to conduct exploration activities on our properties year-round. Because of their rural location and the lack of developed infrastructure in the area, our properties are generally impassible during the muddy season, which lasts roughly from December through May. During this time, it may be difficult or impossible for us to access our property, make repairs, or otherwise conduct exploration activities on them. Earthquakes, heavy rains, snowstorms, and floods could result in serious damage to or the destruction of facilities, equipment or means of access to our property, or may otherwise prevent us from conducting exploration activities on our property.
 
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We do not carry any property or casualty insurance and do not intend to carry such insurance in the future.

Our business is subject to a number of risks and hazards generally, including but not limited to adverse environmental conditions, industrial accidents, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to our property, equipment, infrastructure, personal injury or death, environmental damage, delays, monetary losses and possible legal liability. You could lose all or part of your investment if any such catastrophic event occurs. We do not carry any property or casualty insurance at this time, nor do we intend to carry this type of insurance in the future (except that we will carry all insurance that we are required to by law, such as motor vehicle insurance). Even if we do obtain insurance, it may not cover all of the risks associated with our operations. Insurance against risks such as environmental pollution or other hazards as a result of exploration is generally not available to us or to other companies in our business on acceptable terms. Should any events against which we are not insured actually occur, we may become subject to substantial losses, costs and liabilities which will adversely affect our financial condition.

We must make annual lease payments and claim maintenance payments or we will lose our rights to our property.

We are required under the terms of our property lease to make annual lease payments. We are also required to make annual claim maintenance payments to Federal Bureau of Land Management and to the county in which our property is located in order to maintain our rights to explore and, if warranted, to develop our property. Our annual claim maintenance payments currently total approximately $32,256. If we fail to meet these obligations, we will lose the right to explore for gold on our property. Our property lease is described in greater detail in the section captioned “Properties.”

There is a limited public market for our securities and they will not be listed on a widely traded market in the foreseeable future.

There is currently a limited public market for shares of our Common Stock and one may never develop. Our Common Stock is quoted on the OTC Bulletin Board operated by the National Association of Securities Dealers, Inc. The OTC Bulletin Board is a thinly traded market and lacks the liquidity of certain other public markets with which some investors may have more experience. We may not ever be able to satisfy the listing requirements for our Common Stock to be listed on an exchange or Nasdaq, which are often a more widely-traded and liquid market. Some, but not all, of the factors which may delay or prevent the listing of our Common Stock on a more widely-traded and liquid market include the following: our stockholders’ equity may be insufficient; the market value of our outstanding securities may be too low; our net income from operations may be too low; our Common Stock may not be sufficiently widely held; we may not be able to secure market makers for our Common Stock, and we may fail to meet the rules and requirements mandated by the several exchanges and markets to have our Common Stock listed.

We cannot assure you that the Common Stock will become liquid or that it will be listed on a securities exchange.

We expect our Common Stock to remain eligible for quotation on the OTC Bulletin Board, or on another over-the-counter quotation system. In those venues, however, an investor may find it difficult to obtain accurate quotations as to the market value of our Common Stock. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our Common Stock, which may further affect the liquidity of our Common Stock.  This would also make it more difficult for us to raise additional capital. While we intend eventually to apply to list the Common Stock on the Nasdaq Stock Market, there can be no assurance that such listing will be successful or that the Common Stock will ever be listed on a national securities exchange.
 
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“Penny Stock” rules will initially make buying or selling our Common Stock difficult because the broker-dealers selling our Common Stock will be subject to certain limitations.

Trading in our securities is subject to certain regulations adopted by the Securities Exchange Commission, commonly known as the “penny stock” rules and which apply to stocks selling below $5.00 per share. Our shares of Common Stock qualify as “penny stocks” and are covered by Section 15(g) of the Exchange Act, which imposes additional practice requirements on broker-dealers who sell shares of such stocks in the market. “Penny stock” rules govern how broker-dealers can deal with their clients and with “penny stocks.” For sales of our securities, including the sale of any Common Stock by the selling shareholders, the broker-dealer must make a special suitability determination and receive from you a written agreement prior to making a sale of stock to you. The additional burdens imposed upon broker-dealers by the “penny stock” rules may discourage broker-dealers from effecting transactions in our securities, which could severely affect their market price and liquidity. This could prevent you from easily reselling your shares or warrants when they become freely tradable and could cause the price of our securities to decline.

Compliance with U.S. securities laws, including the Sarbanes-Oxley Act, will be costly and time-consuming.

We are a reporting company under U.S. securities laws, and we are obliged to comply with the provisions of applicable U.S. laws and regulations, including the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002 and the related rules of the SEC, and the rules and regulations of the relevant U.S. market. Preparing and filing annual and quarterly reports and other information with the SEC, furnishing audited reports to stockholders and other compliance with these rules and regulations will involve a material increase in regulatory, legal and accounting expenses and the attention of management, and there can be no assurance that we will be able to comply with the applicable regulations in a timely manner, if at all.

We do not plan to pay any dividends in the foreseeable future.

We have never paid a dividend and we are unlikely to pay a dividend in the foreseeable future, if ever. Whether any dividends are distributed in the future, as well as the specific details of any such dividends, will be decided by our Board of Directors based upon a number of factors, including but not limited to our earnings, financial requirements and other conditions prevailing at the time. We may never pay dividends. You should carefully consider this before deciding whether to purchase our securities.
 
Securities analysts may not initiate coverage or continue to cover our Common Stock, and this may have a negative impact on its market price.

The trading market for our Common Stock will depend, in part, on the research and reports that securities analysts publish about our business. We do not have any control over these analysts. There is no guarantee that securities analysts will cover the Common Stock. If securities analysts do not cover the Common Stock, the lack of research coverage may adversely affect its market price. If we are covered by securities analysts, and our stock is the subject of an unfavorable report, our stock price would likely decline. If one or more of these analysts ceases to cover our Company or fails to publish regular reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline. In addition, because we became public through a “reverse triangular merger,” we may have further difficulty attracting the coverage of securities analysts.
 
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You may experience dilution of your ownership interests because of the future issuance of additional shares of our Common Stock.

Any future issuance of our equity or equity-backed securities may dilute then-current stockholders’ ownership percentages and could also result in a decrease in the fair market value of our equity securities, because our assets would be owned by a larger pool of outstanding equity. As described above, we may need to raise additional capital through public or private offerings of our common or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock. We may also issue such securities in connection with hiring or retaining employees and consultants (including stock options issued under our equity incentive plans), as payment to providers of goods and services, in connection with future acquisitions or for other business purposes. Our Board of Directors may at any time authorize the issuance of additional common or preferred stock without common stockholder approval, subject only to the total number of authorized common and preferred shares set forth in our articles of incorporation. The terms of equity securities issued by us in future transactions may be more favorable to new investors, and may include dividend and/or liquidation preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect. Also, the future issuance of any such additional shares of common or preferred stock or other securities may create downward pressure on the trading price of the common stock. There can be no assurance that any such future issuances will not be at a price (or exercise prices) below the price at which shares of the common stock are then traded.

Any failure to maintain effective internal control over our financial reporting could materially adversely affect us.

Section 404 of the Sarbanes-Oxley Act of 2002 will require us to include in our annual reports on Form 10-K, beginning with the Form 10-K for the fiscal year ending December 31, 2010, an assessment by management of and an auditor attestation report on the effectiveness of our internal control over financial reporting. In addition, in future periods our independent auditors will be required to attest to and report on management’s assessment of the effectiveness of such internal control over financial reporting. While we intend to diligently and thoroughly document, review, test and improve our internal control over financial reporting in order to ensure compliance with Section 404, management may not be able to conclude that our internal control over financial reporting is effective. Furthermore, even if management were to reach such a conclusion, if our independent auditors are not satisfied with the adequacy of our internal control over financial reporting, or if the independent auditors interpret the requirements, rules or regulations differently than we do, then they may decline to attest to management’s assessment or may issue a report that is qualified. Any of these events could result in a loss of investor confidence in the reliability of our financial statements, which in turn could negatively impact the price of our common stock.

In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404. Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. We currently do not have an internal audit group, and we will need to retain the services of additional accounting and financial staff or consultants with appropriate public company experience and technical accounting knowledge to satisfy the ongoing requirements of Section 404. We intend to review the effectiveness of our internal controls and procedures and make any changes management determines appropriate, including to achieve compliance with Section 404 by the date on which we are required to so comply. However, any significant deficiencies in our control systems may affect our ability to comply with SEC reporting requirements and any applicable listing standards or cause our financial statements to contain material misstatements, which could negatively affect the market price and trading liquidity of our common stock and cause investors to lose confidence in our reported financial information, as well as subject us to civil or criminal investigations and penalties.
 
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Our principal stockholders have the power to control the Company because they hold a majority of our outstanding shares of Common Stock.

Under certain circumstances, our director and Geological Advisor and former CEO and President, David Mathewson, as the holder of [____]% of our outstanding shares of Common Stock, may have the ability to substantially influence or control our business and affairs. This includes the election and removal of directors and officers, mergers, consolidations, or the sale of all or substantially all of our assets. This concentration of ownership may have the effect of delaying, deferring or preventing a change in control of the company, impeding a merger, consolidation, takeover or other business combination involving the company, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the company. This may adversely affect the value of your investment, and you should carefully consider this concentration of ownership before deciding whether to invest in our Company. Other stockholders who beneficially own more than 5% of our outstanding shares of Common Stock are identified in “Security Ownership of Certain Beneficial Owners and Management.”

We are a holding company that depends on cash flow from our subsidiaries to meet our obligations and pay dividends.

We are a holding company with no material assets other than the stock of our wholly-owned subsidiary, NGE. Accordingly, we anticipate that all of our operations will be conducted by NGE (and any additional subsidiaries we may form or acquire). We currently expect that the earnings and cash flow of our subsidiaries will primarily be retained and used by them in their operations, including servicing any debt obligations they may have now or in the future. Therefore, our subsidiaries may not be able to generate sufficient cash flow to distribute funds to us in order to allow us to pay our obligations as they become due or, although we do not anticipate paying any dividends in the foreseeable future, pay future dividends on, or make any distributions with respect to, our common or other stock. Additionally, our ability to participate as an equity holder in any distribution of assets of any subsidiary upon liquidation is generally subordinate to the claims of creditors of the subsidiaries.


ITEM 2.
PROPERTIES

Executive Offices

Our business office is located at 1640 Terrace Way, Walnut Creek, CA 94597. Our office is located in the residence of our President, David Rector.  It contains office furniture and equipment sufficient to administer our current business.  Mr. Rector donates the use of this office space to us.

Tempo Mineral Prospect (“Tempo”)
 
We have the right to explore for gold on a property located in Austin, Nevada, known as Tempo Mineral Prospect. We acquired our original exploration rights to the Tempo Mineral Prospect pursuant to a lease with Gold Standard Royalty Corporation, a subsidiary of Golden Predator Mines Inc. (the “Lessor”), which acquired its rights to this property from the Lyle F. Campbell Trust of Reno, Nevada, an entity with which we are not affiliated and which acquired its rights to Tempo Mineral Prospect from the Federal Bureau of Land Management by staking. The lease covers 206 contiguous unpatented lode claims, totaling 2,920 acres. We may terminate our lease of the Tempo Mineral Prospect at any time. Our property is not known to contain gold that can be mined at a profit, although the area in which our property is located has a history of mining activity by others.  Our current property was selected by our director and Geological Advisor, and former CEO and President, David Mathewson.

In October 2009, we located an additional 60 unpatented mining claims, in three groups, as shown on the map below. These claims are contiguous with and lie within the area of interest (AOI) of the Tempo lease.
 
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Property Description, Location and Access
 
Tempo is located in the southern Ravenswood Mountains 14 miles northwest of Austin, Nevada, within the north-south trending Rabbit Creek Gold Trend.  Tempo is a Carlin-style sediment-hosted gold exploration target. The property consists of 206 unpatented mining claims totaling approximately 4,000 acres, in a contiguous block approximately 6.5 miles north to south and up to 1.8 miles east to west, covering approximately 6.5 square miles.

Tempo is accessible through good roads as well as cross-country. Access is generally available from May through December. Between December and May is the muddy season, during which wet weather and poor road conditions will generally prevent us from accessing the property. We know of no environmental or archeological issues related to this property.
 
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Map of Tempo Mineral Prospect
 
 
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Tempo Geology
 
 
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Title Report
 
We have not conducted a title survey on Tempo, and have no immediate plans to do so in the future.
 
Geology and History
 
We believe that Tempo’s geology, geochemistry and alteration are typical of those in the Rabbit Creek gold trend. The central target is defined by a gold and arsenic soil anomaly approximately 5,000 feet in strike length. Both upper-plate and permissive lower-plate rocks are present. Rock samples indicate a high of 20 gm/t for gold and 300 gm/t for silver. The central portion of the property covers approximately one square mile of lower plate carbonate rock intruded by Laramide diorites with associated gold-bearing skarn. The northern third of the property includes numerous exposures of lower-plate carbonate rocks within a large expanse of non-permissive upper-plate rocks. Jasperoids are common and contain anomalous to very anomalous gold and arsenic values.

Previous work at Tempo by numerous companies includes geologic mapping; extensive rock chip and soil sampling; IP, resistivity, air and ground magnetic, and gravity geophysical surveys; and close and wide spaced reverse circulation drilling.  Results of much of this work are in a digital archive that constitutes an important database for continued evaluation of the property.

Synthesis of mapped faults and structures interpreted from gravity, magnetic, and resistivity geophysical surveys defines four regions of relatively complex structural intersections. These areas are candidates for enhanced flow of potential ore-forming hydrothermal fluids.

Compilation of archive rock chip and soil geochemical data defines seven areas 1,500 to 6,000 feet long of robust, combined anomalous gold, arsenic, antimony, mercury and silver in both rocks and soils. These anomalies coincide with or are adjacent to regions of complex structural intersections and deserve adequate drill tests through the Roberts Mountains Formation.

Based on review of historical drill information, we believe that the targeted Roberts Mountains Formation is poorly tested by past drilling.  Of the approximately 123 holes (with known collar coordinates) previously drilled by others in and adjacent to the Tempo claim block, 64 bottom in Tertiary volcanic units or in the upper plate of the Roberts Mountains Thrust and do not reach the potential host rocks.  Of the 58 holes that do intersect the Roberts Mountains Formation, only 13 are deeper than 600 feet, and only five,  including NGT-01 and NGT-02 drilled by us, test the bottom contact of the Roberts Mountains Formation, an important ore horizon at the Jerritt Canyon mine in the Independence Range, Elko Co., Nevada.

With respect to drill tests of the seven areas of robust geochemical anomalies, only two contain drill holes that intersect the Roberts Mountains Formation, three contain holes that do not reach the target unit, and two have not been drill tested.

The southern-most geochemical anomaly is 6,000 feet long and contains at least seven drill holes with maximum grades between 0.03 and 0.3 gold ounces per ton in a narrow trend 3,500 feet long. Host rock to the drilled mineralization is the Ordovician Vinini Formation of the upper plate of the Roberts Mountains Thrust. No holes in this zone intersect the favored Roberts Mountains Formation.

Two areas of known mineralization are within the claim block.  The old Maloy mine consists of an abandoned shaft and prospect diggings developed on a north trending bull quartz vein associated with granodiorite pods intruding the Roberts Mountains Formation.  In the south end of the claim block and hosted in upper plate Vinini Formation is a small, shallow, low grade gold resource calculated by Digger Resources (Digger Resources, 1996; Dave Mathewson, pers. comm., 2009) that coincides with the southern multi-element geochemical anomaly.  About 2,000 feet northwest of the claim block, an abandoned 100-foot deep open pit developed a barite orebody in upper plate rocks.
 
24

 
We believe that multiple high-quality gold targets in Tempo remain to be identified, qualified and assessed by drilling.

The exploration model at Tempo is that of the sediment-hosted, fine-grained, disseminated Carlin-type gold deposit. In this setting micron to sub-micron size gold is disseminated in silty calcareous host rocks (silty limestone and dolomite, calcareous and dolomitic siltstone). The gold generally occurs in or on very fine grained pyrite, arsenical pyrite, or fine carbonaceous material in the host rock. The mineralizing fluid also deposits a characteristic suite of “pathfinder” elements with and near the gold. Besides gold, arsenic is most important in this group that also includes antimony, mercury and silver.

Faults, stratigraphic discontinuities and intrinsic host-rock porosity and permeability provide critical channelways for the ore-forming hydrothermal fluids to access the host rocks.  These fluids characteristically alter the rock by silicification (jasperoid), decarbonatization, dolomitization, argillization and formation of calcite and barite veins.  Decarbonatization can cause collapse breccias that further increase permeability. Except for silicification, the products of alteration are not erosionally resistant and consequently are not well exposed at the surface. Decarbonatization and argillization generally reduce the density of the host rock and this effect may be measurable in gravity surveys.

Deposit shapes are variable and controlled by rock porosity and permeability as affected by faulting, brecciation, and alteration. Deposits range from tabular to pipe-like with attitudes from horizontal to vertical. Changes in gold grades at the margins of deposits can be abrupt or gradational. Ore grades depend on mining economics and can range from about 0.02 oz/ton (~700 parts per billion (ppb)) to +1 oz/ton (+ 34,000 ppb) of gold. Underground mining grades of gold are commonly above 0.2 oz/ton.

Exploration Program

We initiated drilling on the Tempo property in October 2009.  Ten sites across the property were permitted and prepared for drilling.  The sites were located to test new geophysical and resultant structural and alteration interpretations based largely on additional gravity data collected in 2007.  Three widely spaced sites were drilled.  The holes are all reverse circulation, range in depth from 1,140 to 1,330 feet, and total 3,750 feet.  Hole NGT-01 in the north end of the property drilled through the targeted potential host rocks. NGT-02 and NGT -03 were collared in the central part of the property about 2 ½ miles to the south. The second hole drilled into potential host rocks and was terminated due to poor drilling conditions. The third hole did not reach the depth of the potential host rocks and was terminated because of excessive ground water.

All three holes intersected anomalous gold and the indicator elements arsenic, antimony, and mercury and further confirm that one or more Carlin-style sediment-hosted gold deposits likely remains undiscovered at Tempo.

2010 Program

In 2010, we intend to complete the remaining seven drill hole program designed, permitted and bonded in 2009. Additional surface work and target synthesis conducted in 2009 identified several additional targets that will be further evaluated and considered for addition to the 2010 drill program. The 2010 program will involve a minimum of approximately 9,000 feet in the 7 holes and is projected to have an all-in including assays cost of about $500,000. It is believed that the results of one or more of these holes will be sufficiently encouraging to design and launch a phase two drilling program, perhaps in late 2010. Gold exploration in Nevada is typically iterative and subject to ongoing adjustments in drill programs leading to discovery of these commonly enigmatically obscured, but often very economically lucrative, Nevada Carlin-type gold deposits.
 
25

 
Environmental [and Safety]
 
We are not aware of any specific environmental issues at Tempo; of indicator, threatened or endangered plant or animal species; or of significant archeology sites that would affect exploration or development of the Tempo property.  [The abandoned Maloy mine shaft could be considered a safety hazard and a candidate for abandoned mine closure. [Whose responsibility is this?? (not an issue of immediate concern, but someting to look into.  The state has a fund to take care of some of the expense)] It is not known if bats use the underground workings. Closing of the shaft may have to take bats into consideration.]

Tempo Mineral Prospect Lease
 
Our lease for 206 of the Tempo lode claims is with Gold Standard Royalty Corporation, a subsidiary of Golden Predator Mines Inc., which acquired its rights to this property from the Lyle F. Campbell Trust of Reno, Nevada, an entity with which we are not affiliated and which acquired its rights to this property from the Federal Bureau of Land Management by staking its lode claims.

The Tempo lease was originally between the Lessor and Gold Run, Inc., a Delaware corporation (“Gold Run”) as lessee.  The Lease was assigned by Gold Run to KM Exploration Ltd., a Nevada limited liability company (“KM”), on August 14, 2008, and was subsequently assigned to NGE as of December 15, 2008.
 
NGE acquired its interest in the Tempo lease prior to the Merger pursuant to a reassignment of the lease from KM Exploration, Ltd. In connection with the reassignment, we reimbursed KM Exploration for claim fees ($19,503) and preparation cost ($961.50), totaling $20,464.50. Also in connection with the reassignment, Mr. Mathewson, then the sole stockholder of NGE, assigned five shares of NGE (which converted into 400,000 shares each of Company Common Stock upon the Merger) to each of two individuals (one of whom was the owner of the other 50% interest in KM Exploration prior to its dissolution).  (See “Certain Relationships and Related Transactions, and Director Independence” below.)
 
Our lease is for an initial period of ten years from May 2007 and may be extended in five year increments for up to a total term of 99 years. We may terminate this lease at any time. Until production is achieved, our lease payments (deemed “advance minimum royalties”) consist of an initial payment of $5,000, which we made upon the effectiveness of our lease, followed by annual payments according to the following schedule:

Due Date of Advance
Minimum Royalty Payment
 
Amount of Advance
Minimum Royalty Payment
 
       
January 15, 2008 (paid)
 
$
10,000
 
         
January 15, 2009 (paid)
 
$
15,000
 
         
January 15, 2010 (paid)
 
$
30,000
 
         
January 15, 2011
 
$
45,000
 
         
January 15, 2012 and annually thereafter during the term of the lease
 
The greater of $60,000 or the dollar equivalent of 90 ounces of gold
 

In the event that we produce gold or other minerals from the leased Tempo claims, our lease payments will be the greater of (i) the advance minimum royalty payments according to the table above, or (ii) a production royalty equal to 4% of the gross sales price of any gold, silver, platinum or palladium that we recover plus 2% of the gross sales price of any other minerals that we recover. Our lease expressly states that we have no rights to any oil, gas, hydrocarbons and geothermal resources that may be found on the property. Under certain conditions, the Lessor may elect to take its production royalty in cash rather than in kind. In the event that we produce gold or other minerals from Tempo and pay the Lessor a production royalty, then, within any one calendar year, we may use 100% of that year’s advance royalty payment as a credit against our royalties payable for that year. If our royalty payments payable for that year are greater than our advance royalty payment paid for that year, then we can credit all advance minimum royalty payments made in previous years against 50% of the production royalty payable for that year.
 
26

 
In the event that we pay the Lessor a production royalty, we have the option to repurchase up to two points of the royalty payable on gold, silver, platinum or palladium, which would have the effect of thereafter permanently reducing the Lessor’s production royalty on gold, silver, platinum or palladium from 4% to 2% of our gross sales price for those minerals. The purchase price for each royalty “point” shall be according to the following schedule:

Royalty Point Purchased
 
Price
 
         
First 1%
 
$
1,500,000
 
         
Second 1%
 
$
3,000,000
 

We cannot purchase the remaining 2% production royalty on gold, silver, platinum or palladium or the 2% production royalty applicable to all other minerals.

Our lease requires us to perform $50,000 worth of physical work on the property for 2009. Starting in 2010 and thereafter, we must perform a minimum of $50,000 worth of work annually on the property, of which at least $25,000 is physical work.

Claim Maintenance Payments
 
We are required to make annual claim maintenance payments to the Bureau of Land Management and to the counties in which our property is located. If we fail to make these payments, we will lose our rights to our property. As of the date of this Report, our annual maintenance payments are $133.50 per claim, consisting of payments to the Bureau of Land Management and to the counties in which our properties are located. Our property consists of an aggregate of 206 lode claims. Our aggregate annual claim maintenance costs are currently $32,256.


ITEM 3.
LEGAL PROCEEDINGS

From time to time we may be involved in claims arising in connection with our business. There can be no assurance as to the ultimate outcome of any such claim. The amount of reasonably possible losses in connection with any actions that may be brought against us could be material to our consolidated financial condition, operating results and/or cash flows.

As of the date of this Report, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental authorities.
 

ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this Report.
 
27

 
PART II

ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Since May 8, 2007, our Common Stock is quoted on the OTC Bulletin Board (the “OTCBB”) under the symbol “NGHI.OB”.

The following table sets forth the high and low closing bid prices for our Common Stock for the fiscal quarters indicated as reported on the OTCBB. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. Our Common Stock is very thinly traded, and therefore pricing of our Common Stock on the OTCBB does not necessarily represent its fair market value.

Period
 
High (1)
   
Low (1)
 
             
Fiscal Year Ended December 31, 2008: 
           
First Quarter
 
$
   
$
 
Second Quarter
   
     
 
Third Quarter
   
     
 
Fourth Quarter
   
     
 
                 
Fiscal Year Ending December 31, 2009: 
               
First Quarter (from February 17, 2009)
 
$
     
$
   
Second Quarter
   
0.4900 
     
0.2000 
 
Third Quarter
   
0.2810 
     
0.1300 
 
Fourth Quarter
   
0.1370 
     
0.0710 
 
                 
Fiscal Year Ending December 31, 2010: 
               
First Quarter
 
$
0.0790 
   
$
0.0315 
 
Second Quarter (through April __, 2010)
               
 

*
There was no bid price information for our Common Stock prior to February 17, 2009.
(1)
All quotations give retroactive effect to the 30.30303-for-1 forward stock split that was effected on November 21, 2008, and to the 2-for-1 forward stock split that was effected on May 12, 2009.

Holders
 
As of April 13, 2010, there were [76,151,946] shares of our Common Stock issued and outstanding held by [___] shareholders of record.

Dividends

We have never declared any cash dividends with respect to our Common Stock.  Future payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors.  Although there are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our Common Stock, we presently intend to retain future earnings, if any, for use in our business and have no present intention to pay cash dividends on our Common Stock.
 
28

 
Recent Sales of Unregistered Securities

On December 31, 2008, the Company sold in connection with the Bridge PPO (a) an aggregate of 414,000 shares of its common stock to a total of 13 investors, for aggregate consideration of $103,500, or $0.25 per share and (b) $150,000 principal amount of the 2008 Bridge Note, for consideration of $150,000, in each case before deducting expenses related to the offerings.  Upon the closing of the Merger, the purchaser of the Bridge Note also received 300,000 shares of Common Stock under the terms of the 2008 Bridge Note.  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations–2008 Bridge Note” for more information on the 2008 Bridge Note, which is incorporated herein by reference.
 
On March 9, 2009, NGHI held a second closing of the Bridge PPO for 165,000 shares of Common Stock, at a purchase price of $0.25 per share. 

As an inducement to certain investors to purchase Common Stock in the Bridge PPO, the principal former NGE stockholder (David Mathewson, who was then our Chief Executive Officer, President and sole director and is now our director) agreed to transfer to those investors in private transactions an aggregate of 3,210,000 shares of the Company Common Stock that he received in the Merger.

The Company entered into a consulting agreement as of May 11, 2009, with respect to the provision of investor relations and corporate communications services, pursuant to which it agreed to issue to the consultant an aggregate of 100,000 shares of Common Stock, with 50,000 shares due on signing and 50,000 due after 90 days.

On June 24, 2009, we had a first closing of the 2009 PPO for 2,000,000 units of our securities, at a purchase price of $0.25 per unit, each unit consisting of one share of Common Stock and a warrant to purchase one share of Common Stock for a period of five years, at an exercise price of $0.50 per share, for gross proceeds of $500,000.

From the proceeds of the first closing of the 2009 PPO, $100,000 principal amount of the 2008 Bridge Note was repaid, together with $4,602.74 of accrued interest thereon.  Further, the Company agreed with the holder of the Bridge Note that in consideration of this prepayment, and the issuance to the holder of the 2008 Bridge Note of an additional 200,000 shares of Common Stock, no adjustment under the 2008 Bridge Note would be made to the conversion price therein as a result of the issuance and sale by the Company of shares of Common Stock for a consideration per share of $0.125 on December 31, 2008, and March 9, 2009, nor as a result of the 2009 PPO closing on June 24, 2009, or any subsequent issuance of units, up to a maximum of 8,000,000 units in the aggregate, nor as a result of any other events that had occurred up to that time.

On September 18, 2009, we held a second closing of the 2009 PPO for 1,000,000 of the same units on the same terms, for gross proceeds of $250,000.

In connection with the 2009 PPO, the Company entered into a Placement Agency Agreement with Gottbetter Capital Markets, LLC (the “Placement Agent”), in which the Company agreed (i) to pay a cash fee to the Placement Agent equal to 10% of the gross proceeds from the sale of units to investors introduced to the Company by the Placement Agent and 2% of the gross proceeds from the sale of units to any other investors, and (ii) to issue to the Placement Agent warrants to purchase a number of shares of Common Stock equaling 10% of the units sold to investors introduced to the Company by the Placement Agent and 2% of the units sold to any other investors, exercisable for a period of five years at an exercise price of $0.50 per share.  In connection with the closing on June 24, 2009, the Placement Agent earned a cash fee of $10,000 and warrants to purchase 200,000 shares of Common Stock; and in connection with the closing on September 18, 2009, the Placement Agent earned a cash fee of $[15,000] and warrants to purchase [______] shares of Common Stock.
 
29

 
From the proceeds of the second closing of the 2009 PPO, we repaid the balance of $50,000 of, plus accrued interest of $3,479.45 on, the 2008 Bridge Note.

On November [___], 2009, we issued 2,500,000 shares of Common Stock to a consultant pursuant to a consulting agreement under which the consultant would provide the Company with services for management consulting, business advisory, shareholder information and public relations.  The Consultant also paid the Company $500.00 in cash.  In February 2010, that consulting agreement was terminated and the 2,500,000 shares were returned and cancelled.

On December 10, 2009, we borrowed $100,000 under the 2009 Bridge Note from a private institution. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—2009 Bridge Note” for more information on the 2009 Bridge Note, which is incorporated herein by reference.

On February 5, 2010, we entered into a financing arrangement with JMJ Financial (the “Investor”), pursuant to which the Investor may lend us up to $3,200,000.  We issued convertible promissory notes to the Investor in an aggregate principal amount of $3,200,000 (the “2010 Notes”).  We received $200,000 from the Investor on February 5, 2010.  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations–2010 Notes” for more information on the 2010 Notes, which is incorporated herein by reference.

On February 19, 2009, we issued 1,000,000 shares of Common Stock to a consultant pursuant to a consulting agreement under which the consultant will provide the Company with public rel;ations, communications and other services.  [Shares transferred from Butch Barnes?]

These offerings and issuances were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) The Bridge PPO and the 2009 PPO were exempt in reliance upon Regulation D and Regulation S promulgated by the SEC under the Act and were sold only to “accredited investors,” as defined in Regulation D and non-“U.S. persons” as defined in Regulation S.  The issuances of the 2008 Bridge Note, the 2009 Bridge Note, the 2010 Notes and the shares of Common Stock issued to consultants were exempt from registration under Section 4(2) of the Act as not involving any public offering.  These securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement.
 
Stock Splits
 
The Company effected a 30.30303-for-one forward split of its Common Stock in the form of a stock dividend, which was paid on November 21, 2008, to Holders of record on November 19, 2008. The Company effected a 2-for-1 forward split of its Common Stock, in the form of a stock dividend, which was paid on May 12, 2009, to Holders of record on May 8, 2009. All share and per share numbers in this Report relating to the Common Stock have been adjusted to give effect to these stock splits, unless otherwise stated.
 
Issuances by NGE
 
In October 2008, NGE issued 200 shares of common stock of NGE to David Mathewson, our director and Geological Advisor, in consideration for his formation of NGE and for his services as its sole officer and director; in connection with the reassignment of the Tempo lease to NGE, Mr. Mathewson, assigned five shares of NGE to each of two individuals (one of whom was the owner of the other 50% interest in KM Exploration prior to its dissolution). These transactions were exempt from registration pursuant to Section 4(2) of the Securities Act, since the foregoing issuance did not involve a public offering, the recipient took the shares for investment and not resale and NGE took appropriate measures to restrict transfer. No underwriters or agents were involved in the foregoing issuance and no underwriting discounts or commissions were paid by NGE.
 
30

 
Shares Issued in Connection with the Merger
 
On the closing date of the Merger, the holders of common stock of NGE surrendered all of their 200 issued and outstanding shares and received an aggregate of 16,000,000 shares of the Company’s Common Stock.
 
The Company’s stockholders retained 19,696,973 shares of Common Stock in the Merger.
 
Upon the closing of the Merger, the purchaser of the 2008 Bridge Note also received 150,000 shares of Common Stock under the terms of the 2008 Bridge Note.
 
The transactions described above were exempt from registration under Section 4(2) of the Securities Act and Rule 506 of Regulation D as promulgated by the SEC. None of the securities were sold through an underwriter and, accordingly, there were no underwriting discounts or commissions involved.
 
Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Except in connection with the issuances described above, during the fourth quarter of the fiscal year covered by this Report, no purchases were made by or on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, of shares or other units of any class of the Company’s equity securities.

Securities Authorized for Issuance under Equity Compensation Plans
 
The following table sets forth, as of December 31, 2009, information with respect to compensation plans (including individual compensation arrangements) under which equity securities of the Company are authorized for issuance:

Equity Compensation Plan Information
   
Plan category
 
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
 
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
 
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a))
(c)
 
               
Equity compensation plans approved by security holders
                 
                   
Equity compensation plans not approved by security holders
   
1,250,000
       
2,750,000
 
                   
Total
   
1,250,000
       
2,750,000
 

On December 30, 2008, the Board of Directors of the Company adopted[, subject to stockholder approval,] the 2008 Equity Incentive Plan (the “2008 Plan”) which provided for incentive award grants of up to 4,000,000 shares of our Common Stock.   If an incentive award granted under the 2008 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2008 Plan.

In addition, the number of shares of Common Stock subject to the 2008 Plan, any number of shares subject to any numerical limit in the 2008 Plan, and the number of shares and terms of any incentive award are expected to be adjusted in the event of any change in our outstanding Common Stock by reason of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction.
 
31

 
Administration

The compensation committee of the Board, or the Board in the absence of such a committee, will administer the 2008 Plan.  Subject to the terms of the 2008 Plan, the compensation committee has complete authority and discretion to determine the awards under the 2008 Plan.

Grants
 
The 2008 Plan authorizes the grant to participants of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Internal Revenue Code (as amended, the “Code”) and stock appreciation rights, as described below:
 
 
Options granted under the 2008 Plan entitle the grantee, upon exercise, to purchase a specified number of shares from us at a specified exercise price per share. The exercise price for shares of Common Stock covered by an option cannot be less than the fair market value of the Common Stock on the date of grant unless agreed to otherwise at the time of the grant.

 
Restricted stock awards and restricted stock units may be awarded on terms and conditions established by the compensation committee, which may include performance conditions for restricted stock awards and the lapse of restrictions on the achievement of one or more performance goals for restricted stock units.
 
 
The compensation committee may make performance grants, each of which will contain performance goals for the award, including the performance criteria, the target and maximum amounts payable, and other terms and conditions.
 
 
The 2008 Plan authorizes the granting of stock awards. The compensation committee will establish the number of shares of Common Stock to be awarded and the terms applicable to each award, including performance restrictions.
 
 
Stock appreciation rights (“SARs”) entitle the participant to receive a distribution in an amount not to exceed the number of shares of Common Stock subject to the portion of the SAR exercised multiplied by the difference between the market price of a share of Common Stock on the date of exercise of the SAR and the market price of a share of Common Stock on the date of grant of the SAR.
 
Duration, Amendment, and Termination
 
The Board has the power to amend, suspend or terminate the 2008 Plan without stockholder approval or ratification at any time or from time to time. No change may be made that increases the total number of shares of Common Stock reserved for issuance pursuant to incentive awards or reduces the minimum exercise price for options or exchange of options for other incentive awards, unless such change is authorized by our stockholders within one year. Unless sooner terminated, the 2008 Plan will terminate ten years after it was adopted.
 
 
ITEM 6.
SELECTED FINANCIAL DATA

Not applicable.
 
32

 
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See “Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk Factors” and elsewhere in this report.

The following discussion and analysis of the Company’s financial condition and results of operations is based on the preparation of our financial statements in accordance with U.S. generally accepted accounting principles. You should read this discussion and analysis together with such financial statements and the related notes thereto.
 
Results of Operations

Fiscal Year Ended December 31, 2009, compared to Fiscal Year Ended December 31, 2008

Revenues and Other Income

During the twelve month period ended December 31, 2009, the Company remained in the exploration stage and we did not realize any revenues from operations.  Similarly, we did not realize any revenues from operations during the period from inception through December 31, 2008.

Expenses

General and administrative expenses totaled $615,580 in the year ended December 31, 2009, an increase of $615,149 from the $431 of general and administrative expenses incurred in the period from inception on October 2, 2008 through December 31, 2008.  This increase is due primarily to increases in legal and accounting fees associated with our two private placement offerings consummated during the 2009 fiscal year.  Exploration costs totaled $205,156 for the year ended December 31, 2009, an increase of $184,691 from the $20,465 in exploration costs incurred during the year ended December 31, 2008.  This increase is due primarily to increased activity with respect to our drilling activities. During the year ended December 31, 2009 the Company also recognized interest expense of $158,082, and a gain on the settlement of a derivative liability in the amount of $112,50.0

Net Losses

As a result of the foregoing, the Company incurred a net loss of $866,318, or ($0.01) per share, in the year ended December 31, 2009, compared to a net loss of $20,896, or ($0.00) per share, for the period from inception on October 2, 2008 through December 31, 2008.  Our increase in net loss in the later period is largely due to the increase of general and administrative expense and exploration costs incurred during the 2009 fiscal year.

2008 Bridge Note

The 2008 Bridge Note issued in the Bridge PPO had a principal amount of $150,000, had a term of one year (or earlier upon certain events of default) and bore interest at 10% per annum, payable at maturity.  Upon the closing by the Company of any financing, merger or acquisition, or any other business combination, resulting in gross cash proceeds to the Company in excess of $500,000 (a “Financing”), the Company was required to redeem the 2008 Bridge Note in full, provided that upon the closing of a Financing, the holder was entitled, at its option, to convert all or any part of the principal amount of the 2008 Bridge Note into  shares of the Company’s Common Stock at a price of $1.00 per share, subject to adjustment in certain circumstances.  The 2008 Bridge Note was secured pursuant to security agreement by all of the assets of NGHI and NGE.  From the proceeds of the first closing of our 2009 PPO, $100,000 principal amount of the 2008 Bridge Note was repaid, together with $4,602.74 of accrued interest thereon.  Further, the Company agreed with the holder of the Bridge Note that in consideration of this prepayment, and the issuance to the holder of the 2008 Bridge Note of an additional 200,000 shares of Common Stock, no adjustment under the 2008 Bridge Note would be made to the conversion price therein as a result of the issuance and sale by the Company of shares of Common Stock for a consideration per share of $0.125 on December 31, 2008, and March 9, 2009, nor as a result of the 2009 PPO closing on June 24, 2009, or any subsequent issuance of units, up to a maximum of 8,000,000 units in the aggregate, nor as a result of any other events that had occurred up to that time.  From the proceeds of the second closing of the 2009 PPO, we repaid the balance of $50,000 of, plus accrued interest of $3,479.45 on, the 2008 Bridge Note.
 
33

 
2009 Bridge Note

On December 10, 2009, we borrowed $100,000 under a bridge loan note (the “2009 Bridge Loan”) from a private institution. The 2009 Bridge Loan matures on June 4, 2010, unless extended by Lender and Borrower in writing, and bears interest at 10% per annum, payable at maturity; provided, however, that no interest shall be payable on the Loan if the Company, on or before the maturity date, closes a private placement of its Common Stock and the outstanding principal amount of the 2009 Bridge Note is converted into Common Stock as provided below. Upon the closing of a private placement of its Common Stock on or before the maturity date, the outstanding principal amount of the 2009 Bridge Note will automatically be converted into shares of Common Stock, at a price per share equal to the price per share of Common Stock paid by investors in the private placement.

2010 Notes

On February 5, 2010, we entered into a financing arrangement with JMJ Financial (the “Investor”), pursuant to which the Investor may lend us up to $3,200,000.  We issued convertible promissory notes to the Investor in an aggregate principal amount of $3,200,000 (the “2010 Notes”).  We received $200,000 from the Investor on February 5, 2010.  The 2010 Notes bear a one-time interest of 8% and mature three years from the date of issuance.  Prepayment under the 2010 Notes is not permitted, unless approved by the Investor.

Under the terms of the 2010 Notes, the Investor is entitled, at its option, to convert all or part of the principal amount and accrued interest into shares of our Common Stock at a conversion price equal to 70% of the lowest trade price of the Common Stock in the twenty (20) trading days immediately prior to the conversion, subject to adjustment in certain circumstances.  The 2010 Notes contain a standard “blocker” provision so that the Investor does not have the right to convert any portion of the 2010 Notes to the extent that, after giving effect to such conversion, the Investor and its affiliates would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion.

In consideration of our issuing the 2010 Notes, the Investor issued to us six secured and collateralized promissory notes in an aggregate principal amount of $3,000,000 (the “Investor Notes”).  The Investor Notes bear a one-time interest of 8% and mature in three years from the date of issuance.  No interest or principal payments are required until the maturity date, but both principal and interest may be prepaid prior to maturity.  The Investor Notes are secured by $3,000,000 worth of money market fund (or similar equivalent) or other assets (the “Collateral”).  On each Investor Note, the Investor has agreed to pay down the principal in a minimum amount of $100,000 per month, commencing 210 days after the original date of issuance.  However, the Investor may adjust the payment schedule within its sole discretion.  In the event that the Investor defaults on the Investor Notes, the Company may take possession of the Collateral.
 
34

 
Liquidity and Capital Resources

We presently have approximately $258,000 of cash on hand.  We estimate our general and administrative direct costs will require $245,000 for the balance of the 2010 calendar year.  This covers all lease, licensing and claim fees due by the Company.  The Company is positioned to resume drilling operations in May 2010 and has prepared sites for the balance of the initial ten targeted holes, an additional seven holes.  We estimate that completing the seven holes will require approximately $400,000.  Additional planned field operations are targeting to drill ten more holes by 2010 year-end, at an estimated cost of $600,000, including all supporting mineral analysis and geophysical reports and analysis.  Base on these estimates, we will need to raise an additional $1 million in capital in 2010.
 
We may be unable to secure additional financing on terms acceptable to us, or at all, at times when we need such financing. Our inability to raise additional funds on a timely basis could prevent us from achieving our business objectives and could have a negative impact on our business, financial condition, results of operations and the value of our securities.

If we raise additional funds by issuing additional equity or convertible debt securities, the ownership percentages of existing stockholders will be reduced and the securities that we may issue in the future may have rights, preferences or privileges senior to those of the current holders of our Common Stock. Such securities may also be issued at a discount to the market price of our Common Stock, resulting in possible further dilution to the book value per share of Common Stock. If we raise additional funds by issuing debt, we could be subject to debt covenants that could place limitations on our operations and financial flexibility.

 
ITEM 8. 
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

Our audited financial statements as of, and for the years ended, December 31, 2009 and 2008, are included beginning on page F-1 immediately following the signature page to this Report.  See Item 15 for a list of the financial statements included herein.


ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

(a)           On August 10, 2009, Moore & Associates, Chartered, resigned as the Company’s independent registered public accountants, and the Board of Directors of the Company acknowledged the resignation of Moore & Associates, Chartered. The Board of Directors of the Company approved the engagement of Seale and Beers, CPAs, to serve as the Company’s independent registered public accountants for the fiscal year 2009, and engaged them on August 12, 2009.

Moore & Associates, Chartered, issued its auditors’ report on our financial statements for the year ended December 31, 2008, which included an explanatory paragraph as to the Company’s ability to continue as a going concern.

Other than the going concern uncertainty described above, the auditors’ report of Moore & Associates, Chartered, on the financial statements of the Company for the period ended December 31, 2008, contained no adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principle.

During the two fiscal years ended December 31, 2008, and through the date of the resignation of Moore & Associates, Chartered, there were no disagreements with Moore & Associates, Chartered (as defined in Item 304(a)(1)(iv) of Regulation S-K) on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Moore & Associates, Chartered, would have caused them to make reference thereto in their report on financial statements for such years.
 
35

 
During the two fiscal years ended December 31, 2008, and through the date of the resignation of Moore & Associates, Chartered, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

The Company requested Moore & Associates, Chartered to furnish it with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements.  Moore & Associates, Chartered, informed us that, on the advice of counsel, it will not provide the requested letter.
  
On August 31, 2009, the Company was informed by letter from the SEC that the Public Company Accounting Oversight Board (“PCAOB”) revoked the registration of Moore & Associates, Chartered, on August 27, 2009, because of violations of PCAOB rules and auditing standards in auditing the financial statements, PCAOB rules and quality controls standards, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and noncooperation with a PCAOB investigation.

During the two fiscal years ended December 31, 2008, and through the date the engagement of Seale and Beers, CPAs, neither the Company nor anyone on its behalf has consulted with Seale and Beers, CPAs, regarding either:

·  
The application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither was a written report provided to the Company nor was oral advice provided that Seale and Beers, CPAs, concluded was an important factor considered by the Company in reaching a decision as to an accounting, auditing, or financial reporting issue; or

·  
Any matter that was either the subject of a disagreement or a reportable event, as each term is defined in Items 304(a)(1)(iv) or (v) of Regulation S-K, respectively.

(b)           Subsequently the Board of Directors of the Company dismissed Seale and Beers, CPAs, as the Company’s independent registered public accountants, and the Board of Directors approved the engagement of GBH CPAs, PC, to serve as the Company’s independent registered public accountants for fiscal year 2009. GBH CPAs, PC, was engaged on August 24, 2009.

Seale and Beers, CPAs has issued no reports on the financial statements of the Company for any period.

During the two fiscal years ended December 31, 2008, and through the date of the dismissal of Seale and Beers, CPAs, there were no disagreements with Seale and Beers, CPAs (as defined in Item 304(a)(1)(iv) of Regulation S-K) on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Seale and Beers, CPAs, would have caused them to make reference thereto in any report on financial statements for such years, except as follows:

In a letter dated September 9, 2009, to the Office of the Chief Accountant of the SEC, Seale and Beers, CPAs, stated that there were two instances where they were concerned the Company was incorrectly applying Generally Accepted Accounting Principles:

 
 
(1)
Seale and Beers, CPAs, stated that the Company “did not provide documentation for transferring $257,028 of accrued interest, notes payable and accounts payable from Nano Holdings International to a wholly owned subsidiary, Sunshine Group, prior to divesting itself of Sunshine Group during the quarter ending December 31, 2008. These liabilities (and retained loss) are not included in the Company’s financial statements.”

 
 
(2)
Seale and Beers, CPAs, stated that the Company “did not provide documentation supporting the $20,465 initial value it placed on its Tempo Mineral Prospect which was acquired in a related party transaction during the quarter ending December 31, 2008.”
 
36

 
A copy of said letter of Seale and Beers, CPAs, is filed as Exhibit 16.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 17, 2009.
 
Our Board of Directors has discussed the matters raised in said letter of Seale and Beers, CPAs, with our independent registered public accounting firm, GBH CPAs, PC, and has reached the following conclusions:

(1)         In its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, the Company reported $268,365 of total current liabilities, consisting of accounts payable and accrued expenses of $20,932 and notes payable and accrued interest of $247,433.

On October 30, 2008, these notes payable and accrued interest through that date were settled, paid off and released by agreement with the note holders for the aggregate sum of $5,000, which did not result in a gain on forgiveness of debt for the Company because it relates to operations for a period prior to the Merger.  Documentation thereof has been provided to Seale and Beers, CPAs.

At December 31, 2008, immediately prior to the Merger between Nevada Gold Acquisition Corp., a wholly owned subsidiary of the Company into Nevada Gold Enterprises, Inc. (in which Nevada Gold Enterprises, Inc., was the surviving corporation), the Company’s accounts payable and accrued expenses totaled $156,745, and were carried over to the continuing entity.

 (2)         As a result of the Merger, the Company acquired the Tempo Mineral Prospect.  The lease had been acquired by NGE prior to the Merger pursuant to a reassignment of the lease from KM Exploration, Ltd.  In connection with the reassignment, NGE reimbursed KM Exploration for claim fees ($19,503) and preparation cost ($962), totaling $20,465, and David Mathewson, then the sole stockholder of NGE and now our sole director and officer, assigned five shares of NGE common stock (which converted into 400,000 shares each of the Company’s Common Stock upon the Merger) to each of two individuals (one of whom was the owner of a 50% interest in KM Exploration).  In the Company’s Current Report on Form 8-K filed with the SEC on January 7, 2009, and subsequent reports, the Tempo Mineral Prospect was capitalized as an asset with a value of $20,465, and we did not recognize any impairment of the mining claims.  In conjunction with the restatements referred to in Item 4.02 below, the mining claim is expected to be assigned no fair value because there has not been a final or bankable feasibility study and the designation of proven and probable reserves.

During the two fiscal years ended December 31, 2008, and through the date of the dismissal of Seale and Beers, CPAs, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

During the two fiscal years ended December 31, 2008, and through the date of the engagement of GBH CPAs, PC, neither the Company nor anyone on its behalf has consulted with GBH CPAs, PC, regarding either:

·  
The application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither was a written report provided to the Company nor was oral advice provided that GBH CPAs, PC, concluded was an important factor considered by the Company in reaching a decision as to an accounting, auditing, or financial reporting issue; or

·  
Any matter that was either the subject of a disagreement or a reportable event, as each term is defined in Items 304(a)(1)(iv) or (v) of Regulation S-K, respectively.

37


ITEM 9A.[T]
CONTROLS AND PROCEDURES

Evaluation of Our Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer (our principal executive and principal financial officer), we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2009 (the “Evaluation Date”).  Based on this evaluation, our Chief Executive Officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective to ensure that the information relating to us, including our consolidated subsidiaries, required to be disclosed by us in the reports filed or submitted by us under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

We are a small organization with limited personnel during 2009. We were unable to implement a system of disclosure controls and procedures as of the Evaluation Date. [We expect to create a system of disclosure controls and procedures in 2010 as we expand our business and develop our mining claims.] [Accurate?]  Nevertheless, management believes that this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.  Internal control over financial reporting is a process designed by, or under the supervision of, an issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by its board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles (GAAP). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Management has conducted, with the participation of our Chief Executive Officer (our principal executive and principal financial officer), an assessment, including testing of the effectiveness, of our internal control over financial reporting as of December 31, 2009. In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth in Internal Control over Financial Reporting – Guidance for Smaller Public Companies issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weakness: We were unable to implement a system of segregation of duties necessary to establish an effective system of internal controls as of the Evaluation Date.
 
38

 
We are a small organization with limited personnel during 2008. We expect to create a system of internal controls in 2009 as we expand our business and develop our mining claims.  To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this Report have been prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows as of the dates and for the periods presented.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2009, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.


PART III

ITEM 10. 
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Executive Officers and Directors
 
Below are the names and certain information regarding the Company’s current executive officers and directors:
 
Name
 
Age
 
Title
 
Date First Appointed
             
David Rector
 
63
 
Chief Executive Officer, President, Secretary and Treasurer
 
November 5, 2009
             
John N. Braca
     
Director
 
November 13, 2009
             
David C. Mathewson
 
65
 
Director and Geological Advisor
 
December 31, 2008

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified.  Officers are elected by the Board of Directors and serve until their successors are appointed by the Board of Directors.

The principal occupation and business experience during the past five years for our current officer and director is as follows:

David Rector, Chief Executive Officer, President, Secretary and Director.  Mr. Rector has served as our Chief Executive Officer, President, Secretary and Director since November 5, 2009. Mr. Rector does not have an employment agreement with us but receives $6,000 per month in compensation for his services to us. Mr. Rector has also served as our Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director from April, 2004 through December 31, 2008, as President and CEO of Standard Drilling, Inc. since November 2007. Mr. Rector previously served as President, Chief Executive Officer and Chief Operating Officer of Nanoscience [_________] from June 2004 to December 2006.  Since June 1985, Mr. Rector has been the principal of the David Stephen Group, which provides enterprise consulting services to emerging and developing companies in a variety of industries. From January 1995 until June 1995, Mr. Rector served as the General Manager of the Consumer Products Division of Bemis-Jason Corporation. Mr. Rector was employed by Sunset Designs Inc., a manufacturer and marketer of consumer product craft kits from June 1980 until June 1985. From June 1983 until June 1985, Mr. Rector served as President and General Manager of Sunset, from August 1981 until May 1985, Mr. Rector served as an Administrative and International Director of Sunset, and from June 1980 until August 1981, Mr. Rector served as Group Product Manager for Sunset.
 
39

 
Additionally, Mr. Rector currently serves on the Board of Directors of the following public companies:
 
Name
 
Director Since
     
Senesco Technologies, Inc. (AMEX:SNT)
 
February 2002
Dallas Gold & Silver Exchange (AMEX:DSG)
 
May 2003
Nevada Gold Holdings, Inc. (OTCBB:NGHI)
 
April 2004
US Uranium Inc. (OTCBB:USUI)
 
June 2007
Standard Drilling, Inc. (STDR.PK)
 
November 2007
Li3 Energy, Inc. (OTCBB:LIEG)
 
June  2008
 
As a result, the amount of time that Mr. Rector has to devote to our activities may be limited.
 
Mr. Rector obtained his Bachelor’s Degree in Business Administration from Murray State University in 1969.
 
David C. Mathewson, Director and Geological Advisor.  Mr. Mathewson was the Chief Executive Officer, President, Secretary, Treasurer, Chief Geologist and sole director of NGE from its inception on October 7, 2008, and became Chief Executive Officer, President, Secretary, Treasurer, Chief Geologist and sole direct of the Company upon the Merger.  He resigned as Chief Executive Officer, President, Secretary, Treasurer and Chief Geologist on November 5, 2009, but remains as our director and Geological Advisor.  Mr. Mathewson has more than 30 years of hands-on gold exploration experience on the Carlin gold trend in north-central Nevada.  Between August 2006 and August 2008, Mr. Mathewson was President, Chief Geologist and director of Gold Run, Inc., a public company.  Between June 2002 and June 2006, Mr. Mathewson was the Vice President of Exploration for Tone Resources, Ltd., a Canadian corporation, where he managed that company’s gold exploration program (Mr. Mathewson remained a director of Tone Resources until his resignation on March 23, 2007).  Between May 2001 and June 2002, Mr. Mathewson staked claims and evaluated business opportunities both as an individual and through his 50%-owned company, KM Exploration, Ltd (which has since been dissolved).  Between January 1995 and May 2001, he was the Regional Manager of Exploration for Newmont Mining Company, where he was responsible for managing that company’s exploration activities in the Great Basin and Carlin gold trends.  Prior to that, he was engaged as Newmont Mining Company’s Senior Exploration Geologist from April 1989 through December 1995.

John N. Braca, Director. Mr. Braca became a director of the Company on November 13, 2009.  Mr. Braca has served as a director and board observer for several service, technology and biotechnology companies over the course of his career.  He continues to work with both investors and management of companies in both exit and business development scenarios.  From April 2006, Mr. Braca has been the managing director of Fountainhead Venture Group, a healthcare information technology venture fund based in the Philadelphia area. From May 2005 through March 2006, Mr. Braca was a consultant and advisor to GlaxoSmithKline management in their research operations. From 1997 to April 2005, Mr. Braca was a general partner and director of business investments for S.R. One, Limited, or S.R. One, the venture capital subsidiary of GlaxoSmithKline. In addition, from January 2000 to July 2003, Mr. Braca was a general partner of Euclid SR Partners Corporation, an independent venture capital partnership. Prior to joining S.R. One, Mr. Braca held various finance and operating positions of increasing responsibility within several subsidiaries and business units of GlaxoSmithKline. Mr. Braca is a licensed Certified Public Accountant in the state of Pennsylvania and is affiliated with the American Institute of Certified Public Accountants and the Pennsylvania Institute of Certified Public Accountants. Mr. Braca received a Bachelor of Science in Accounting from Villanova University and a Master of Business Administration in Marketing from Saint Joseph’s University.
 
40

 
Board Committees
 
Our Board of Directors c has not established an audit committee, a compensation committee, a nominating committee or any other committee.  The Board of Directors currently acts in the capacity of an audit committee.
 
Although we do not have an audit committee, the Board of Directors has determined that Mr. Braca meets the definition of an “audit committee financial expert,” as defined in Item 407 of Regulation S-K.
 
Shareholder Recommendations of Nominees to the our Board of Directors
 
Currently, we do not have a policy with regard to procedures by which security holders may recommend nominees to our Board of Directors.

Code of Ethics
 
The Company currently has not adopted a written code of ethics.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the Company under  Rule 16a-3(e) under the Exchange Act during its most recent fiscal year and Forms 5 and amendments thereto furnished to the Company with respect to its most recent fiscal year, and any written representation to the Company from the reporting person that no Form 5 is required, no person who, at any time during the fiscal year, was a director, officer, beneficial owner of more than ten percent of the Company’s Common Stock, or any other person known to the Company to be subject to section 16 of the Exchange Act with respect to the Company, failed to file on a timely basis, as disclosed in the above Forms, reports required by section 16(a) of the Exchange Act during the most recent fiscal year or prior fiscal years, except as described below:

Name
 
Number of late reports
 
Number of transactions that were not reported on a timely basis
 
Failure to file a required Form
             
David Rector
           
David C. Mathewson
           
John N. Braca
           
 
 
ITEM 11. 
EXECUTIVE COMPENSATION

The following table sets forth information concerning the total compensation paid or accrued by us during the last three fiscal years ended December 31, 2009, to (i) all individuals that served as our principal executive officer or acted in a similar capacity for us at any time during the fiscal year ended December 31, 2009; (ii) all individuals that served as our principal financial officer or acted in a similar capacity for us at any time during the fiscal year ended December 31, 2009; and (iii) all individuals that served as executive officers of ours at any time during the fiscal year ended December 31, 2009, that received annual compensation during the fiscal year ended December 31, 2009, in excess of $100,000.
 
41

 
Summary Compensation Table
 
Name and
Principal Position
   
Year
   
Salary
($)
   
Bonus
($)
   
Stock
Awards
($)
   
Option
Awards
($)
   
Non-
Equity
Incentive
Plan
Compen-
sation ($)
   
Change
in
Pension
Value
and Non-
qualified
Deferred
Compen-
sation
Earnings
($)
   
All Other
Compensation
($)
   
Total ($)
 
David Rector
   
2009
    $ 12,000                 $
[____]
                      $ [____]  
CEO, President, CFO,
   
2008
                                                   
Secretary, Treasurer, and Director(1)
   
2007
                                                             
                                                                         
David Mathewson(2)    
2009
    $ 15,000                                                     $  15,000  
Geological Advisor
   
2008
                                                                 
and Director
   
2007
                                                                 
 

(1)
Mr. Rector was our sole officer and director until December 31, 2008, when he resigned all positions with the Company; on November 5, 2009, he became our Chief Executive Officer, President, Secretary and director.

(2) 
Mr. Mathewson became our sole officer and director on December 31, 2008; he resigned his officer positions on November 5, 2009.
 
On November 5, 2009, our Board of Directors granted under our 2008 Plan to David Rector, in connection with his appointment as our Chief Executive Officer, President, Secretary and director, incentive stock options to purchase 1,000,000 shares of Common Stock at a purchase price of $0.135 per share (the closing bid price quoted on the OTCBB on the date of grant), vesting 100% on December 31, 2010, and expiring November 4, 2014.

On November 16, 2019, our Board of Directors granted under our 2008 Plan to John N. Braca, in connection with his appointment as our director, non-qualified stock options to purchase 250,000 shares of Common Stock at a purchase price of $0. 127 per share (the closing bid price quoted on the OTCBB on the date of grant), vesting 100% on December 31, 2010, and expiring November 15, 2014.

Except as described above, we have not issued any stock options, nor have we maintained any stock option or other incentive plans other than our 2008 Plan. (See “Item 5, Market for Common Equity and Related Stockholder Matters – Securities Authorized for Issuance under Equity Compensation Plans” above.) We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.
 
42

 
Employment Agreements with Executive Officers

The Company entered into an employment agreement effective as of January 1, 2009 (the “Effective Date”) with David Mathewson, pursuant to which Mr. Mathewson served as our Chief Executive Officer, President and Chief Geologist.  The term of the employment agreement commenced on the Effective Date and was to end on the first anniversary of the Effective Date, unless sooner terminated as provided in employment agreement (the “Term”); thereafter, the Term would have automatically renewed for successive periods of one year, unless either party gave to the other at least thirty (30) days’ prior written notice of their intention not to renew the employment agreement prior to the end of the Term or the then applicable renewal Term, as the case may be. Pursuant to the employment agreement, Mr. Mathewson’s annual base salary was $120,000; provided, however, that for the first year of the term, the base salary was $105,000 per annum, with $5,000 payable for the months of January, February and March of 2009, and $10,000 payable for the remaining months of 2009.  Mr. Mathewson received a total of $15,000 in salary in 2009.  The employment agreement contained no provisions relating to a bonus.

The Board of Directors would have determined whether and to what extent Mr. Mathewson would participate in any stock or option plan of the Company. During the Term, Mr. Mathewson was entitled to participate in the Company’s insurance programs and any ERISA benefit plans that may be adopted.

Mr. Mathewson was entitled to receive reimbursement of all expenses reasonably incurred by him in performing his services, including all travel and living expenses while away from home on business or incurred at the specific request or direction of the Company. The Company advanced to Mr. Mathewson, on a fully accountable basis, an allowance for reimbursable expenses of $5,000 per month (or, if reimbursable expenses for the prior month did not equal or exceed $5,000, then an amount equal to $5,000 less the unused portion of the prior month’s advance).

The Company was to grant Mr. Mathewson a 1% net smelter return royalty (“NSR”) for all prospects generated by him that were acquired by staking for the Company. The Company was to grant Mr. Mathewson a 1/2% percent NSR for all prospects generated by him that are subsequently leased by the Company, exclusive of the “Tempo” property, provided that (i) such lease carries a total maximum NSR of 4% percent (inclusive of the 1/2% percent NSR to Mr. Mathewson), and (ii) such lease does not adjoin a claim from which Mr. Mathewson is otherwise entitled to receive participation in an NSR. The Company was to have the right to purchase all of such 1/2% percent NSRs respecting leased prospects in the aggregate at any time for $500,000.

On November 5, 2009, the Company and Mathewson agreed to terminate the employment agreement, and Mr. Mathewson resigned as Chief Executive Officer, President, Secretary, Treasurer and Chief Geologist of the Company.  Mr. Mathewson waived the right to receive any base salary accrued to the termination date but not yet paid. The Company is not obligated to pay Mr. Mathewson any severance.  No NSRs have accrued under the agreement, and the Company is not obligated to grant any NSRs to Mr. Mathewson.  Mr. Mathewson agreed that he will not, directly or indirectly, own, manage, operate, finance, control or participate in the ownership, management, operation, financing, or control of, be employed by, associated with, or in any manner connected with, lend any credit to, or render services or advice to any business, firm, corporation, partnership, association, joint venture or other entity that engages in or conducts the business of gold exploration, anywhere within the Tempo property located in Lander County, Nevada, or within two miles of the current outside boundary of the Tempo property, for a period of three years or for as long as the Company maintains ownership control or a participatory involvement in the Tempo property (whichever is longer), or unless otherwise agreed upon by the Company’s Board of Directors.  Mr. Mathewson also surrendered to the Company, without payment therefor, two million (2,000,000) shares of the Company’s Common Stock, which were cancelled and returned to authorized but unissued shares.
 
43

 
Director Compensation
 
Directors are elected by the vote of a majority in interest of the holders of voting stock and hold office until the expiration of the term for which they are elected and until successors  are qualified and elected.

A majority of the authorized number of directors constitutes a quorum of the Board of Directors for the transaction of business.  The directors must be present at the meeting to constitute a quorum.  However, any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all members of the Board of Directors individually or collectively consent in writing to the action.

At this time directors do not receive compensation for their services.


ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
The following table sets forth information with respect to the beneficial ownership of our common stock known by us as of April [__], 2010:
 
 
each person or entity known by us to be the beneficial owner of more than 5% of our common stock;

 
each of our directors;

 
each of our executive officers; and

 
all of our directors and executive officers as a group.
 
Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent such power may be shared with a spouse.
 
There are no securities, options or warrants exercisable within sixty days and, which if exercised, would result in the holder becoming the beneficial owner of 5% or more of our Common Stock.
 
44

 
Name and Address
of Beneficial Owner
 
Title of Class
 
Amount and Nature
of Beneficial Ownership(1)
 
Percent of Class (2)
 
               
David C. Mathewson
1265 Mesa Drive
Fernley, NV 89408
 
Common Stock
       
%
               
David Rector
 
Common Stock
       
%
               
John N. Braca
 
Common Stock
       
%
               
All directors and executive officers as a group (3 persons)
 
Common Stock
       
%
               
Gibraltar Global Securities
 
Common Stock
       
%
               
Tillerman Securities
 
Common Stock
       
%
               
Marion R. “Butch” Barnes
 
Common Stock
       
%
 

(1)
All named parties have, to our knowledge, sole investment and voting control of the shares set forth in this table.
(2)
Percentages based upon shares of common stock outstanding as of March ____, 2010; percentages are rounded.

 
ITEM 13. 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Prior to the Merger, NGE acquired the leasehold interest in the Tempo property from KM Exploration, Ltd., a Nevada limited liability company in which our CEO, President, Chief Geologist and sole director, David Mathewson, had a 50% ownership interest prior to its dissolution.  In consideration of the transfer of the lease to NGE, NGE reimbursed KM Exploration for claim fees ($19,503) and preparation cost ($961.50), totaling $20,464.50. Also in connection with the reassignment, Mr. Mathewson, then the sole stockholder of NGE, assigned five shares of NGE (which converted into 400,000 shares each of Company Common Stock upon the Merger) to each of two individuals (one of whom was the owner of the other 50% interest in KM Exploration prior to its dissolution).
 
On December 31, 2008, in connection with the Merger, David Mathewson received 15,200,000 shares of our Common Stock in exchange for 190 shares of NGE common stock owned by Mr. Mathewson.  Subsequent to the closing of the Merger, Mr. Mathewson transferred to certain investors in the Bridge PPO, in private transactions, an aggregate of 3,060,000 of his shares.  In connection with the Merger, Mr. Mathewson entered into a lock-up agreement, pursuant to which he is prohibited from certain sales or dispositions of any other shares of our Common Stock received in the Merger for a period of two years from December 31, 2008, without the prior written consent of the Company.

See “Business—Historical Development—Split-Off Agreement” for a description of certain transactions involving Marion R. “Butch” Barnes in connection with the Merger.
 
45

 
Nano Holdings recorded the value of uncompensated services provided by its officer and director, David Rector, and the President of Sunshine, Marion “Butch” Barnes, as a contribution of capital during the year ended December 31, 2008. However, as a result of the “reverse merger” accounting, with NGE deemed to be the accounting acquirer in the reverse merger, these amounts do not appear on our statements of stockholders’ equity at December 31, 2009 or 2008.

Director Independence

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent.”  Nevertheless, our Board of Directors has determined that one of our three directors, John N. Braca, is “independent” within the definition of independence provided in the Marketplace Rules of The Nasdaq Stock Market.


ITEM 14. 
PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees
 
The aggregate fees billed to us by our principal accountant for services rendered during the fiscal years ended December 31, 2009 and 2008, are set forth in the table below:
 
Fee Category
 
Fiscal year ended
December 31, 2009
   
Fiscal year ended
December 31, 2008
 
Audit fees (1)
 
$
19,100
   
$
8,000
 
Audit-related fees (2)
 
$
0
   
$
0
 
Tax fees (3)
 
$
0
   
$
0
 
All other fees (4)
 
$
0
   
$
0
 
Total fees
 
$
19,100
   
$
8,000
 
 
(1)
Audit fees consist of fees incurred for professional services rendered for the audit of consolidated financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements.

(2)
Audit-related fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements, but are not reported under “Audit fees.”

(3)
Tax fees consist of fees billed for professional services relating to tax compliance, tax planning, and tax advice.

(4)
All other fees consist of fees billed for all other services.

46


PART IV

ITEM 15. 
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The consolidated financial statements of the Company are listed on the Index to Financial Statements on this annual report on Form 10-K beginning on page F-1.

Financial Statements
 
Page
     
Report of Independent Registered Public Accounting Firm
 
F-3
     
Consolidated Balance Sheets as of December 31, 2009 and 2008
 
F-4
     
Consolidated Statements of Operations for the years ended December 31, 2009 and 2008
 
F-5
     
Statements of Changes in Stockholders’ Equity (Deficit) for the period from June 9, 2006 to December 31, 2009
 
F-6
     
Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008
 
F-7
     
Notes to Financial Statements
 
F-8 – F-13

Financial Statement Schedules

All financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

Exhibits

The following Exhibits are being filed with this Annual Report on Form 10-K.
 
In reviewing the agreements included as exhibits to this Form 10-K, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:
 
 
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
 
 
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
 
 
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
 
 
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
 
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Form 10-K and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov. See “Available Information.”
 
47

 
Exhibit
Number
 
Description
2.1*
 
Agreement and Plan of Merger and Reorganization, dated as of December 31, 2008, by and among Nevada Gold Holdings, Inc., Nevada Gold Acquisition Corp. and Nevada Gold Enterprises, Inc.
     
2.2*
 
Certificate of Merger
     
3.1
 
Certificate of Incorporation of the Registrant (incorporated by reference from Exhibit 3.1 to the Registrant’s Form SB-2 Registration Statement filed with the SEC on August 1, 2006)
     
3.2
 
Certificate of Amendment to Certificate of Incorporation of the Registrant (incorporated by reference from Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on November 6, 2008)
     
3.3
 
Bylaws of the Registrant (incorporated by reference from Exhibit 3.1 to the Registrant’s Form SB-2 Registration Statement filed with the Commission on August 1, 2006)
     
10.1*
 
Form of Subscription Agreement by and between Nevada Gold Holdings, Inc., and the investors party thereto
     
10.2*
 
Form of Addendum to Subscription Agreement by and between Nevada Gold Holdings, Inc., and the investors party thereto
     
10.3*†
 
Lock-Up Agreement, dated as of December 31, 2008, between Nevada Gold Holdings, Inc., and David Mathewson
     
10.4*
 
Split-Off Agreement, dated as of December 31, 2008, by and among Nevada Gold Holdings, Inc., Sunshine Group, Inc., and Marion R. “Butch” Barnes, William D. Blanchard and Robert Barnes
     
10.5*
 
General Release Agreement, dated as of December 31, 2008, by and among Nevada Gold Holdings, Inc., Sunshine Group, Inc., and Marion R. “Butch” Barnes, William D. Blanchard and Robert Barnes
     
10.6*
 
Form of Agreement and Release between David Mathewson and the subscribers thereto
     
10.7*
 
Tempo Mineral Lease dated May 18, 2007, by and between Gold Standard Royalty (Nevada) Inc., successor in interest to Bertha C. Johnson, Trustee of the Lyle F. Campbell Trust, as Lessor, and NGE, as successor to KM Exploration LTD., as successor to Gold Run, Inc.
     
10.8*
 
Amendment to Tempo Mineral Lease dated January 6, 2009, between Gold Standard Royalty (Nevada) Inc., successor in interest to Bertha C. Johnson, Trustee of the Lyle F. Campbell Trust, as Lessor, and NGE, as successor to KM Exploration LTD., as successor to Gold Run, Inc.
     
10.9*
 
Form of Securities Purchase Agreement dated December 31, 2008, between Nevada Gold Holdings, Inc., and the Buyers party thereto
     
10.10*
 
Form of 10% Secured Convertible Promissory Note
 
48

 
10.11*
 
Form of Security Agreement dated December 31, 2008, among Nevada Gold Holdings, Inc., Nevada Gold Enterprises, Inc., and the Buyers party thereto
     
10.12*†
 
Nevada Gold Holdings, Inc., 2008 Equity Incentive Plan
     
10.13**
 
Form of amended Subscription Agreement between Nevada Gold Holdings, Inc., and the investors party thereto
     
10.14 †
 
Employment Agreement dated as of January 1, 2009, between Nevada Gold Holdings, Inc., and David Mathewson (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on March 24, 2009)
     
10.15†
 
Letter agreement dated November [    ], 2009, between Nevada Gold Holdings, Inc., and David Mathewson re resignation and termination of Employment Agreement
 
   
   
[Add 2009 material contracts, if any]
     
     
     
21.1**
 
Subsidiaries of the Registrant
 
   
31.1**
 
Certification of principal executive and principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a)
     
32.1** §
 
Certification of principal executive and principal financial officer pursuant to 18 U.S.C. Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002
 
*
Incorporated by reference to identically numbered exhibit to the registrant’s Current Report on Form 8-K filed with the SEC on January 7, 2009.

**
Filed herewith

Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K pursuant to Item 15(b) of Form 10-K.

§
This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.
 
49

 
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
NEVADA GOLD HOLDINGS, INC.
   
Dated:  April 15, 2010
By:
/s/ David Rector                                                      
   
David Rector
   
Chief Executive Officer, President, Secretary and Treasurer

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
SIGNATURE
 
TITLE
 
DATE
         
/s/ David Rector                                           
 
Director; Chief Executive Officer, President, Secretary and Treasurer
 
April 15, 2010
David Rector
       
         
/s/ John N. Braca
 
Director
 
April 15, 2010
John N. Braca
       
         
/s/ David C. Mathewson
 
Director
 
April 15, 2010
David C. Mathewson
       
 
50

 
FINANCIAL STATEMENTS

   
Page
     
Report of Independent Registered Public Accounting Firm
 
 
     
Consolidated Balance Sheets as of December 31, 2009 and 2008
 
F-2
     
Consolidated Statements of Operations for the years ended December 31, 2009 and 2008
 
F-3
     
Statements of Changes in Stockholders’ Equity (Deficit) for the period from June 9, 2006 to December 31, 2009
 
F-5
     
Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008
 
F-5
     
Notes to Financial Statements
 
F-6
 
F-1

 
NEVADA GOLD HOLDINGS, INC.
(An Exploration Stage Company)
Consolidated Balance Sheet
 
ASSETS
             
 
December 31,
   
December 31,
 
 
2009
   
2008
 
         
(Restated)
 
CURRENT ASSETS
           
             
Cash
  $ 158,398     $ -  
Cash held in trust
 
  -       253,440  
                 
Total Current Assets
    158,398       253,440  
                 
OTHER ASSETS
               
                 
Mining reclamation bond
    15,444       -  
                 
Total Other Assets
    15,444       -  
                 
TOTAL ASSETS
  $ 173,842     $ 253,440  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 
CURRENT LIABILITIES
               
                 
Accounts payable
  $ 70,480     $ 233,354  
Derivative liability
    -       112,500  
Note payable
    100,000       -  
                 
Total Current Liabilities
    170,480       345,854  
                 
STOCKHOLDERS' EQUITY (DEFICIT)
               
                 
Preferred stock:$0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding
    -       -  
Common stock:$0.001 par value, 300,000,000 shares authorized; 72,631,946 and 71.001.946 shares issued and outstanding, respectively
    72,632       71,002  
Additional paid-in capital (deficit)
    817,944       (142,520 )
Deficit accumulated during the exploration stage
    (887,214 )     (20,896 )
                 
Total Stockholders' Equity (Deficit)
    3,362       (92,414 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  $ 173,842     $ 253,440  
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
F-2

 
NEVADA GOLD HOLDINGS, INC.
(An Exploration Stage Company)
Consolidated Statement of Operations
 
         
From Inception
   
From Inception
 
   
For the Year
   
on October 2,
   
on October 2,
 
   
Ended
   
2008 Through
   
2008 Through
 
   
December 31,
   
December 31,
   
December 31,
 
   
2009
   
2008
   
2009
 
                   
REVENUES
  $ -     $ -     $ -  
                         
EXPENSES
                       
                         
General and administrative
    615,580       431       616,011  
Exploration costs
    205,156       20,465       225,621  
                         
Total Expenses
    820,736       20,896       841,632  
                         
OTHER INCOME (EXPENSE)
                       
                         
Interest expense
    (158,082 )     -       (158,082 )
Gain on settlement of derivative liability
    112,500       -