Attached files
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EX-10.3 - HK BATTERY TECHNOLOGY INC | v193833_ex10-3.htm |
EX-32.1 - HK BATTERY TECHNOLOGY INC | v193833_ex32-1.htm |
EX-31.1 - HK BATTERY TECHNOLOGY INC | v193833_ex31-1.htm |
EX-10.1 - HK BATTERY TECHNOLOGY INC | v193833_ex10-1.htm |
EX-10.2 - HK BATTERY TECHNOLOGY INC | v193833_ex10-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark One)
x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
quarterly period ended June 30, 2010.
or
¨ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period
from to
Commission
File Number: 333-140148
Nevada
Gold Holdings, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
|
20-3724068
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification
No.)
|
1640
Terrace Way, Walnut Creek, CA
|
94597
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(925)
930-0100
(Registrant’s
telephone number, including area code)
N.A.
(Former
name, former address and former fiscal year, if changed since last
report)
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x
No ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ¨ No
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
¨
|
Accelerated
filer ¨
|
|
Non-accelerated filer
¨
|
Smaller
reporting company x
|
|
(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 ¨ No
x
As of
August 9, 2010, there were 72,910,476 shares of the registrant’s common stock,
par value $0.001 per share, outstanding.
NEVADA
GOLD HOLDINGS, INC.
Form
10-Q
TABLE
OF CONTENTS
Page
|
||
AVAILABLE
INFORMATION
|
3
|
|
FORWARD-LOOKING
STATEMENTS
|
4
|
|
PART
I—FINANCIAL INFORMATION
|
5
|
|
Item
1.
|
Financial
Statements
|
5
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
13
|
Item
3.
|
Quantitative and Qualitative Disclosures About Market Risk |
13
|
Item
4T.
|
Controls
and Procedures
|
13
|
PART
II—OTHER INFORMATION
|
14
|
|
Item
1.
|
Legal
Proceedings
|
14
|
Item
1A.
|
Risk
Factors
|
14
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
14
|
Item
3.
|
Defaults
upon Senior Securities
|
14
|
Item
4.
|
(Removed
and Reserved)
|
14
|
Item
5.
|
Other
Information
|
14
|
Item
6.
|
Exhibits
|
15
|
SIGNATURE
|
17
|
2
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
212-400-6900
Facsimile
212-400-6901
3
FORWARD-LOOKING
STATEMENTS
This
Quarterly Report contains forward-looking statements, including, without
limitation, in the section captioned “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
our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as
amended (the “2009 From 10-K”) 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.
You
should read this Report in conjunction with the discussion under the caption
“Risk Factors” in the 2009 Form 10-K, the audited consolidated financial
statements and notes thereto in the 2009 Form 10-K, the unaudited consolidated
financial statements and notes thereto in this Report, and other documents which
we may file from time to time with the SEC.
4
PART
I—FINANCIAL INFORMATION
Item
1. Financial
Statements.
NEVADA
GOLD HOLDINGS, INC.
(An
Exploration Stage Company)
Consolidated
Balance Sheets
(Unaudited)
June 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$ | 34,034 | $ | 158,398 | ||||
Prepaid
expenses
|
3,000 | - | ||||||
Total
Current Assets
|
37,034 | 158,398 | ||||||
OTHER
ASSETS
|
||||||||
Mining
reclamation bond
|
15,444 | 15,444 | ||||||
Total
Other Assets
|
15,444 | 15,444 | ||||||
TOTAL
ASSETS
|
$ | 52,478 | $ | 173,842 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$ | 157,761 | $ | 70,480 | ||||
Accrued
interest payable
|
6,250 | - | ||||||
Notes
payable
|
150,000 | 100,000 | ||||||
Total
Current Liabilities
|
314,011 | 170,480 | ||||||
TOTAL
LIABILITIES
|
314,011 | 170,480 | ||||||
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; 72,910,476 and
72,631,946 shares issued and outstanding, respectively
|
72,910 | 72,632 | ||||||
Additional
paid-in capital
|
955,666 | 817,944 | ||||||
Deficit
accumulated during the exploration stage
|
(1,290,109 | ) | (887,214 | ) | ||||
Total
Stockholders' Equity (Deficit)
|
(261,533 | ) | 3,362 | |||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | 52,478 | $ | 173,842 |
The
accompanying notes are an integral part of these consolidated financial
statements.
5
NEVADA
GOLD HOLDINGS, INC.
(An
Exploration Stage Company)
Consolidated
Statements of Operations
(Unaudited)
From Inception
|
||||||||||||||||||||
on October 2,
|
||||||||||||||||||||
For the Three Months Ended
|
For the Six Months Ended
|
2008 Through
|
||||||||||||||||||
June 30,
|
June 30,
|
June 30,
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
||||||||||||||||
(Restated)
|
(Restated)
|
|||||||||||||||||||
REVENUES
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
OPERATING
EXPENSES
|
||||||||||||||||||||
General
and administrative
|
156,471 | 210,433 | 336,085 | 229,977 | 952,096 | |||||||||||||||
Exploration
costs
|
- | 22,955 | 60,560 | 197,159 | 286,181 | |||||||||||||||
Total
Operating Expenses
|
156,471 | 233,388 | 396,645 | 427,136 | 1,238,277 | |||||||||||||||
OTHER
INCOME (EXPENSES)
|
||||||||||||||||||||
Interest
income (expense)
|
8,477 | - | (6,250 | ) | - | (164,332 | ) | |||||||||||||
Gain
on settlement of derivative liability
|
- | - | - | - | 112,500 | |||||||||||||||
Total
Other Income (Expenses)
|
8,477 | - | (6,250 | ) | - | (51,832 | ) | |||||||||||||
LOSS
BEFORE INCOME TAXES
|
(147,994 | ) | (233,388 | ) | (402,895 | ) | (427,136 | ) | (1,290,109 | ) | ||||||||||
INCOME
TAX EXPENSE
|
- | - | - | - | - | |||||||||||||||
NET
LOSS
|
$ | (147,994 | ) | $ | (233,388 | ) | $ | (402,895 | ) | $ | (427,136 | ) | $ | (1,290,109 | ) | |||||
BASIC
AND DILUTED LOSS PER COMMON SHARE
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND
DILUTED
|
72,910,476 | 72,686,946 | 72,828,917 | 72,686,946 |
The accompanying notes are an integral
part of these consolidated financial statements.
6
NEVADA
GOLD HOLDINGS, INC.
(An
Exploration Stage Company)
Consolidated
Statement of Stockholders' Equity
(Unaudited)
Deficit
|
||||||||||||||||||||
Accumulated
|
Total
|
|||||||||||||||||||
Additional
|
During the
|
Stockholders'
|
||||||||||||||||||
Common Stock
|
Paid-In
|
Exploration
|
Equity
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
(Deficit)
|
||||||||||||||||
Balance
at inception on October 2, 2008
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Common
stock issued to founders for cash on October 2, 2008
|
30,480,000 | 30,480 | (30,480 | ) | - | - | ||||||||||||||
Recapitalization
pursuant to reverse merger
|
39,393,946 | 39,394 | (220,372 | ) | - | (180,978 | ) | |||||||||||||
Common
stock issued for debt issuance costs on December 31, 2008
|
300,000 | 300 | 37,200 | - | 37,500 | |||||||||||||||
Common
stock issued for cash on December 31, 2008, net of $31,540 of direct
issuance costs
|
828,000 | 828 | 71,132 | - | 71,960 | |||||||||||||||
Net
loss for the period from inception on October 2, 2008 through December 31,
2008
|
- | - | - | (20,896 | ) | (20,896 | ) | |||||||||||||
Balance,
December 31, 2008
|
71,001,946 | 71,002 | (142,520 | ) | (20,896 | ) | (92,414 | ) | ||||||||||||
Common
stock issued for cash, net of $4,130 of direct issuance
costs
|
3,330,000 | 3,330 | 787,920 | - | 791,250 | |||||||||||||||
Common
stock issued for services rendered
|
300,000 | 300 | 74,700 | - | 75,000 | |||||||||||||||
Common
shares cancelled
|
(2,000,000 | ) | (2,000 | ) | 2,000 | - | - | |||||||||||||
Contributed
services
|
- | - | 75,000 | - | 75,000 | |||||||||||||||
Stock-based
compensation
|
- | - | 20,844 | - | 20,844 | |||||||||||||||
Net
loss for the year ended December 31, 2009
|
- | - | - | (866,318 | ) | (866,318 | ) | |||||||||||||
Balance,
December 31, 2009
|
72,631,946 | 72,632 | 817,944 | (887,214 | ) | 3,362 | ||||||||||||||
Common
shares issued for exploration services rendered
|
278,530 | 278 | 21,968 | - | 22,246 | |||||||||||||||
Contributed
services
|
- | - | 50,000 | - | 50,000 | |||||||||||||||
|
||||||||||||||||||||
Stock-based
compensation
|
- | - | 65,754 | - | 65,754 | |||||||||||||||
Net
loss for the six months ended June 30, 2010
|
- | - | - | (402,895 | ) | (402,895 | ) | |||||||||||||
Balance,
June 30, 2010
|
72,910,476 | $ | 72,910 | $ | 955,666 | $ | (1,290,109 | ) | $ | (261,533 | ) |
The accompanying notes are an integral
part of these consolidated financial statements.
7
NEVADA
GOLD HOLDINGS, INC.
(An Exploration Stage
Company)
Consolidated
Statements of Cash Flows
(Unaudited)
From Inception
|
||||||||||||
on October 2,
|
||||||||||||
For the Six Months Ended
|
2008 Through
|
|||||||||||
June 30,
|
June 30,
|
|||||||||||
2010
|
2009
|
2010
|
||||||||||
(Restated)
|
||||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
loss
|
$ | (402,895 | ) | $ | (427,136 | ) | $ | (1,290,109 | ) | |||
Adjustments
to Reconcile Net Loss to Net Cash Used in Operating
Activities:
|
||||||||||||
Stock
based compensation
|
65,754 | - | 86,598 | |||||||||
Common
stock issued for services
|
22,246 | 62,500 | 97,246 | |||||||||
Contributed
services
|
50,000 | - | 125,000 | |||||||||
Gain
on change in derivative liability
|
- | - | (112,500 | ) | ||||||||
Changes
in Operating Assets and Liabilities:
|
||||||||||||
Prepaid
expenses
|
(3,000 | ) | - | (3,000 | ) | |||||||
Accounts
payable and accrued interest payable
|
93,531 | (148,415 | ) | 133,033 | ||||||||
Net
Cash Used in Operating Activities
|
(174,364 | ) | (513,051 | ) | (963,732 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Change
in cash held in trust
|
- | 253,440 | - | |||||||||
Net
Cash Provided by (Used in) Investing Activities
|
- | 253,440 | (15,444 | ) | ||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Proceeds
from issuance of common stock, net of issuance costs
|
- | 541,250 | 863,210 | |||||||||
Proceeds
from notes payable
|
250,000 | - | 350,000 | |||||||||
Payments
on notes payable
|
(200,000 | ) | - | (200,000 | ) | |||||||
Net
Cash Provided by Financing Activities
|
50,000 | 541,250 | 1,013,210 | |||||||||
NET
(DECREASE) INCREASE IN CASH
|
(124,364 | ) | 281,639 | 34,034 | ||||||||
CASH
AT BEGINNING OF PERIOD
|
158,398 | - | - | |||||||||
CASH
AT END OF PERIOD
|
$ | 34,034 | $ | 281,639 | $ | 34,034 | ||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||||||
CASH
PAID FOR:
|
||||||||||||
Interest
|
$ | - | $ | - | $ | 8,082 | ||||||
Income
taxes
|
$ | - | $ | - | $ | - |
The
accompanying notes are an integral part of these consolidated financial
statements.
8
NEVADA
GOLD HOLDINGS, INC.
(An
Exploration Stage Company)
Notes to
the Consolidated Financial Statements
June 30,
2010
NOTE 1 –
ORGANIZATION, DESCRIPTION OF BUSINESS AND SIGNFICANT ACCOUNTING
POLICIES
Nevada
Gold Holdings, Inc. (the “Company”) was incorporated under the laws of the State
of Delaware on April 16, 2004. Nevada Gold Enterprises, Inc., a
Nevada corporation, was incorporated under the laws of the State of Nevada on
October 2, 2008. On December 31, 2008, Nevada Gold Acquisition Corp.,
a Nevada corporation formed on December 18, 2008, and a wholly owned subsidiary
of Nevada Gold Holdings, Inc., merged with and into Nevada Gold Enterprises,
Inc. Nevada Gold Enterprises, Inc. was the surviving corporation in the Merger.
As a result of the Merger, Nevada Gold Enterprises, Inc., became a wholly-owned
subsidiary of Nevada Gold Holdings, Inc. The Company is engaged in the
exploration and development of gold mines.
The
accompanying consolidated financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which
include normal recurring adjustments and the correction of an error for the
prior period – see Note 5) necessary to present fairly the consolidated
financial position, consolidated results of operations, and consolidated cash
flows at June 30, 2010, and for all periods presented herein, have been
made.
Certain
information and footnote disclosures normally included in consolidated financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is
suggested that these consolidated financial statements be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's December 31, 2009 audited financial statements. The results
of operations for the three and six month periods ended June 30, 2010 is not
necessarily indicative of the operating results for the full year.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
Recent Accounting
Pronouncements
The
Company has evaluated recent accounting pronouncements and their adoption has
not had or is not expected to have a material impact on the Company’s financial
position, results of operations or cash flows.
Basic and Diluted Net Income
(Loss) Per Share.
Basic EPS
is computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all dilutive potential common
shares outstanding during the period using the treasury stock method and
convertible preferred stock using the if-converted method. In computing Diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of stock options or warrants.
Diluted EPS excludes all dilutive potential shares if their effect is
anti-dilutive. For the three months and six months ended June 30, 2010, fully
diluted earnings per share excludes the dilutive effect of 4,470,000 common
stock equivalents from options and warrants and 11,190,477 common stock
equivalents from convertible debt (1,666,667 common stock equivalents from the
bridge loan and 9,523,810 common stock equivalents from the convertible
promissory notes), because their inclusion would be anti-dilutive. For the
three months and six months ended June 30, 2009, fully diluted earnings per
share excludes the dilutive effect of 600,000 common stock equivalents from
convertible debt, because their inclusion would be anti-dilutive.
9
NEVADA
GOLD HOLDINGS, INC.
(An
Exploration Stage Company)
Notes to
the Consolidated Financial Statements
June 30,
2010
NOTE 2 -
GOING CONCERN
The
Company's consolidated financial statements are prepared using generally
accepted accounting principles in the United States of America applicable to a
going concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern and has accumulated losses
since inception. The ability of the Company to continue as a going concern is
dependent on the Company obtaining adequate capital to fund operating losses
until it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease operations. These factors raise
substantial doubt about the Company’s ability to continue as a going
concern.
In order
to continue as a going concern, the Company will need, among other things,
additional capital resources. Management's plan is to obtain such resources for
the Company by obtaining capital from management and significant shareholders
sufficient to meet its minimal operating expenses and seeking equity and/or debt
financing. However management cannot provide any assurances that the Company
will be successful in accomplishing any of its plans.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying consolidated financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as
a going concern.
NOTE 3 –
SIGNIFICANT TRANSACTIONS
Contribution of Capital
- On February 17, 2010, a shareholder of the Company transferred
1,000,000 shares of the Company’s common stock from his personal account to an
unrelated entity as a payment for investor relations and corporate communication
services for the Company. The Company valued these shares at $0.05 per share
based on the quoted market price of the shares, resulting in a total value of
the shares transferred of $50,000. Accordingly, the Company recorded
general and administrative expense and a corresponding contribution of capital
in the amount of $50,000 during the six months ended June 30, 2010.
Convertible Promissory
Notes - On February 5, 2010, the Company entered into a financing
arrangement with JMJ Financial (“JMJ”), pursuant to which JMJ would lend the
Company up to $3,200,000. The Company received $200,000 from JMJ
pursuant to these notes. The notes bore interest of 8% and
matured three years from the date of issuance. Under the terms of the
notes, JMJ was entitled, at its option, to convert all or part of the principal
amount and accrued interest into shares of the Company’s 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. On May 6, 2010 the Company
repaid the outstanding amount owed of $200,000 and cancelled the financing
agreement with JMJ. No significant gain or loss was recognized on the
settlement of the debt.
10
NEVADA
GOLD HOLDINGS, INC.
(An
Exploration Stage Company)
Notes to
the Consolidated Financial Statements
June 30,
2010
On May
24, 2010, the Company issued a $50,000 Secured Convertible Promissory Note to
MLF Group, LLC, an unrelated third-party entity. The Note accrues
interest at a rate of 10% per annum, and is due in full on or before May 14,
2011. The Note is mandatorily convertible upon the closing of any
securities or other financing resulting in gross cash proceeds to the Company in
excess of $500,000 (“Contingent Event”). In the event a Contingent
Event is consummated, the note will convert into shares of the Company’s common
stock at a conversion price equal to the price per share paid by investors in
the financing. Since the conversion is contingent upon a Contingent Event, the
Company is unable to compute the number of shares that the holder would receive
if the contingent event occurs. As such, the Company will wait until a
contingent event occurs and then compute the resulting number of shares that
will be issued pursuant to the then determined conversion price.
NOTE 4 –
SUBSEQUENT EVENTS
Bridge Financing – In
August 2010, the Company entered into a promissory note with three unrelated
third-party lenders whereby the Company borrowed a total of $125,000 from the
lenders. The note accrues interest at a rate of 10% per annum, and is
due in full one year from the note date. The note is mandatorily
convertible upon the closing of any securities or other financing resulting in
gross cash proceeds to the Company in excess of $500,000 (“Contingent
Event”). In the event a Contingent Event is consummated, the note
will convert into shares of the Company’s common stock at a conversion price
equal to the price per share paid by investors in the
financing. Since the conversion is contingent upon a Contingent
Event, the Company is unable to compute the number of shares that the holder
would receive if the contingent event occurs. As such, the Company will wait
until a contingent event occurs and then compute the resulting number of shares
that will be issued pursuant to the then determined conversion
price.
In
accordance with ASC 855-10 Company management reviewed all material events
through the date of this report and aside from the event described in the
preceding paragraph, there are no material subsequent events to
report.
NOTE 5
– CORRECTION OF AN ERROR
The
Company has restated the consolidated statements of
operations for the three month and six month periods ended June 30,
2009 and the consolidated statements of cash flows for the six month period
ended June 30, 2009 for matters related to the following errors: (i) an
overstatement of general and administrative expenses, (ii) the
incorrect classification of the cost of the Tempo Mineral Prospect.
Following
is a description of the error related to the overstatement of general and
administrative expenses for the period from inception through June 30,
2009: The Company overstated general and administrative expenses by
$38,307, as certain expense payments were incorrectly recorded as accruals
of liabilities.
Following
is a description of the error related to the incorrect classification of the
cost of the Tempo Mineral Prospect: The asset was originally
classified as an asset and valued at the predecessor owner’s cost of
$35,465. In accordance with SEC Staff guidance, since there has not
been a final or bankable feasibility study and the designation of proven and
probable reserves, the Tempo Mineral Prospect was considered to be an
exploration cost for the six month period ended June 30, 2009. Additionally, the
Company previously reported its exploration costs totaling $197,159 (including
the aforementioned $35,465) as part of general and administrative
expenses.
11
NEVADA
GOLD HOLDINGS, INC.
(An
Exploration Stage Company)
Notes to
the Consolidated Financial Statements
June 30,
2010
The
effects on the Company’s previously issued consolidated financial statements for
the six month period ended June 30, 2009, of the aforementioned errors are
summarized as follows:
For the Six Month Period Ended June 30,
2009
|
As
Reported
|
As Restated
|
Change
|
|||||||||
General
and administrative expense
|
388,829 | 229,977 | (158,852 | ) | ||||||||
Exploration
costs
|
- | 197,159 | 197,159 | |||||||||
Net
loss
|
(388,829 | ) | (427,136 | ) | (38,307 | ) | ||||||
Net
loss per share, basic and diluted
|
(0.01 | ) | (0.01 | ) | (0.00 | ) | ||||||
Cash
provided by (used in) operating activities
|
(393,448 | ) | (393,448 | ) | - | |||||||
Cash
provided by (used in) investing activities
|
238,440 | 238,440 | - | |||||||||
Cash
provided by (used in) financing activities
|
436,647 | 436,647 | - |
For the Three Month Period Ended June 30,
2009
|
As Reported
|
As Restated
|
Change
|
|||||||||
General
and administrative expense
|
233,388 | 210,433 | (22,955 | ) | ||||||||
Exploration
costs
|
- | 22,955 | 22,955 | |||||||||
Net
loss
|
(233,388 | ) | (233,388 | ) | (38,307 | ) | ||||||
Net
loss per share, basic and diluted
|
(0.00 | ) | (0.00 | ) | (0.00 | ) |
12
Item
2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
Results
of Operations
Three
months ended June 30, 2010 compared to the three months ended June 30,
2009
From
inception (October 2, 2008) through June 30, 2010, we have generated no
revenues. During the three months ended June 30, 2010, we incurred general and
administrative expenses of $156,471, compared to $210,433 in general and
administrative expenses incurred during the three months ended June 30,
2009. These expenses were primarily legal, accounting and other
professional fees incurred in connection with our fundraising
efforts. Additionally, we incurred exploration costs of $-0- and
22,955 during the three month periods ended June 30, 2010 and 2009,
respectively.
Six
months ended June 30, 2010 compared to the six months ended June 30,
2009
From
inception (October 2, 2008) through June 30, 2010, we have generated no
revenues. During the six months ended June 30, 2010, we incurred general and
administrative expenses of $336,085, compared to $229,977 in general and
administrative expenses incurred during the six months ended June 30,
2009. These expenses were primarily legal, accounting and other
professional fees incurred in connection with our fundraising
efforts. Additionally, we incurred exploration costs of $60,560 and
197,159 during the six month periods ended June 30, 2010 and 2009,
respectively.
Liquidity
and Capital Resources
At June
30, 2010, we had $37,034 in current assets, of which $34,034 was cash, and
$314,011 in current liabilities. We used $174,364 and $393,448 of cash in our
operating activities during the six months ended June 30, 2010 and 2009,
respectively.
The
Company’s cash requirements were satisfied primarily though the issuance of
convertible promissory notes. We received $250,000 and $-0- as proceeds from
debt financing during the six months ended June 30, 2010 and 2009,
respectively. In August 2010, the Company entered into a promissory note
with three unrelated third-party lenders whereby the Company borrowed a total of
$125,000. We estimate that we will require approximately $375,000 of
additional capital for our operating requirements in the next 12 months. We
presently have not identified any source for those funds and there is no
guarantee that we will be successful in obtaining the funds we
require.
Item
3. Quantitative and Qualitative Disclosures
About Market Risk
As a
smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are
not required to provide disclosure under this Item 3.
Item
4T. Controls and
Procedures.
Under the
supervision and with the participation of our sole 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 June 30, 2010 (the “Evaluation Date”). Based on
this evaluation, our sole 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 sole officer, as appropriate to allow timely
decisions regarding required disclosure.
13
We are a
small organization with limited personnel. We were unable to implement an
effective system of disclosure controls and procedures as of the Evaluation
Date. We expect to develop a system of disclosure controls and procedures during
the remainder of 2010 as we expand our business and develop our mining
claims.
With the
participation of our sole officer, we evaluated any change in our internal
control over financial reporting that occurred during the fiscal quarter covered
by this Report that has materially affected, or is reasonably likely to
materially affect, our internal control over financial
reporting. There has been no such change in our internal control over
financial reporting identified in connection with that evaluation.
PART
II—OTHER INFORMATION
Item
1. 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
1A. Risk Factors.
There
have been no material changes from Risk Factors as previously disclosed in our
2009 Form 10-K.
Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds.
None,
other than as previously reported.
Item
3. Defaults
upon Senior Securities.
None.
Item
4. (Removed and
Reserved).
Item
5. Other
Information.
None.
14
Item
6. Exhibits.
The
following Exhibits are being filed with this Quarterly Report on Form
10-Q.
In
reviewing the agreements included or incorporated by reference as exhibits to
this Quarterly Report on Form 10-Q, 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 us 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 us may be found elsewhere in this Quarterly Report on Form
10-Q and our other public filings, which are available without charge through
the SEC’s website at http://www.sec.gov.
15
Exhibit
|
||
Number
|
Description
|
|
10.1*
|
Securities
Purchase Agreement, dated as of May 14, 2010, among the Registrant and the
Buyer party thereto
|
|
10.2*
|
10%
Secured Convertible Promissory Note dated May 14, 2010
|
|
10.3*
|
Security
Agreement dated as of May 14, 2010, by and among the Registrant, Nevada
Gold Enterprises, Inc., and the Buyer party thereto
|
|
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 (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.)
|
* Filed
herewith
16
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
NEVADA
GOLD HOLDINGS, INC.
|
||
Dated:
August 16, 2010
|
By:
|
/s/ David Rector
|
David
Rector
|
||
President
and Chief Executive Officer
|
17
EXHIBIT
INDEX
Exhibit
|
||
Number
|
Description
|
|
10.1
|
Securities
Purchase Agreement, dated as of May 14, 2010, among the Registrant and the
Buyer party thereto
|
|
10.2
|
10%
Secured Convertible Promissory Note dated May 14, 2010
|
|
10.3
|
Security
Agreement dated as of May 14, 2010, by and among the Registrant, Nevada
Gold Enterprises, Inc., and the Buyer party thereto
|
|
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 (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.)
|