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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.)