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EX-32.1 - EXHIBIT 32.1 SECTION 906 CERTIFICATION - HK BATTERY TECHNOLOGY INCf10q033113_ex32z1.htm
EX-31.1 - EXHIBIT 31.1 SECTION 302 CERTIFICATION - HK BATTERY TECHNOLOGY INCf10q033113_ex31z1.htm
EX-32.2 - EXHIBIT 32.2 SECTION 906 CERTIFICATION - HK BATTERY TECHNOLOGY INCf10q033113_ex32z2.htm
EX-31.2 - EXHIBIT 31.2 SECTION 302 CERTIFICATION - HK BATTERY TECHNOLOGY INCf10q033113_ex31z2.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 March 31, 2013

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:  000-52636


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.)


800 E. Colorado Blvd., Suite 888

 

Pasadena, CA

91101

(Address of principal executive offices)

(Zip Code)


626-683-7330

(Registrant’s telephone number, including area code)


______________________________________________________________

(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  X . 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

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .


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


As of May 20, 2013, there were 43,844,054 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.

7

Item 3. Quantitative and Qualitative Disclosures About Market Risk

13

Item 4.

Controls and Procedures.

14

PART II—OTHER INFORMATION

15

Item 1.

Legal Proceedings.

15

Item 1A.

Risk Factors.

16

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

16

Item 3.

Defaults upon Senior Securities.

16

Item 4.

Mine Safety Disclosures.

16

Item 5.

Other Information.

16

Item 6.

Exhibits.

16

SIGNATURE

18




2




AVAILABLE INFORMATION

 

Nevada Gold Holdings, Inc. (“Nevada Gold,” the “Company,” “we,” “us,” or “our”) files 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 York10022-5718

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, 2012 (the “2012 Form 10-K”) in the section captioned “Risk Factors” and elsewhere in the 2012 Form 10-K; in our subsequent Quarterly Reports on Form 10-Q; in our subsequent Current Reports on Form 8-K; and 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 2012 Form 10-K, the audited consolidated financial statements and notes thereto in the 2012 Form 10-K, the unaudited consolidated financial statements and notes thereto in this Report, and other documents which we have filed or may file from time to time with the SEC.




4




PART I—FINANCIAL INFORMATION


Item 1.

Financial Statements.


NEVADA GOLD HOLDINGS, INC.

(A Development Stage Company)

CONDENSED CONSOLIDATED BALANCE SHEET

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

 

2013

 

2012

 

 

 

(Unaudited)

 

 

ASSETS

 

 

 

 

Current assets

 

 

 

 

 

 Cash and cash equivalents

$

61,584

$

7,412

 

 Prepaid expense

 

-

 

-

 

 Notes receivable - related party

 

200,000

 

200,000

 

 Accrued interest receivable - related party

 

8,552

 

7,052

 

 Other current assets

 

-

 

-

Total current assets

 

270,136

 

214,464

 

 

 

 

 

 

 

Mining reclamation bond

 

-

 

-

 

 

 

 

 

 

 Total assets

$

270,136

$

214,464

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

$

20,451

$

26,647

 

Note payable - ACI

 

1,218,898

 

784,316

 

Other payables

 

20,531

 

15,529

 

Accrued expenses and other liabilities

 

15,240

 

78,958

Total current liabilities

 

1,275,120

 

905,450

 

 

 

 

 

 

Total liabilities

$

1,275,120

$

905,450

 

 

 

 

 

 

Stockholders' (deficit) equity

 

 

 

 

 

Preferred stock, $.001 par value; 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2012 and December31, 2011

 

-

 

-

 

Common stock, $.001par value; 300,000,000 shares authorized, 43,844,054 shares issued and outstanding as of December 31, 2012 and December31, 2011

 

43,844

 

43,844

 

Additional paid-in capital

 

5,286,323

 

5,286,323

 

Accumulated deficit

 

(6,335,151)

 

(6,021,153)

Total stockholders' (deficit) equity

 

(1,004,984)

 

(690,986)

 

 

 

 

 

 

 Total liabilities and stockholders' (deficit) equity

$

270,136

$

214,464

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements




5




NEVADA GOLD HOLDINGS, INC.

(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

 

 

Three months ended

 

From Inception

on October 2,

2008 Through

March 31, 2013

 

March 31,

 

 

2013

 

2012

 

 

 

 

 

 

 

 

Revenues

$

-

$

-

$

-

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

Research and development

 

-

 

35,000

 

653,988

General and administrative

 

308,565

 

530,519

 

5,313,905

Total operating expenses

 

308,565

 

565,519

 

5,967,893

 

 

 

 

 

 

 

Loss from operations

 

(308,565)

 

(565,519)

 

(5,967,893)

 

 

 

 

 

 

 

Interest income (expense)

 

 

 

 

 

 

Interest income  

 

1,506

 

1,710

 

27,374

Other income

 

-

 

-

 

2,367

Gain on settlement of derivative liability

 

-

 

-

 

112,500

Interest expense

 

(6,938)

 

-

 

(509,499)

Total interest income (expense)

 

(5,432)

 

1,710

 

(367,258)

 

 

 

 

 

 

 

Loss before income taxes

 

(313,998)

 

(563,809)

 

(6,335,151)

 

 

 

 

 

 

 

Provision for income taxes

 

-

 

-

 

-

 

 

 

 

 

 

 

Net loss

$

(313,998)

$

(563,809)

$

(6,335,151)

 

 

 

 

 

 

 

Net loss per share of common stock:

 

 

 

 

 

 

Basic

$

(0.01)

$

(0.01)

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

43,844,054

 

43,844,054

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements




6





NEVADA GOLD HOLDINGS, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

 

 

Three months ended

 

From Inception

on October 2,

2008 Through

March 31, 2013

 

March 31,

 

 

2013

 

2012

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income

$

(313,998)

$

(563,809)

$

(6,335,151)

Adjustments to reconcile net income to net cash used by operating activities:

 

 

 

 

 

 

Stock based compensation

 

-

 

-

 

131,508

Common stock issued for services

 

-

 

-

 

290,590

Contributed services or common stock contributed for services

 

-

 

-

 

125,000

Gain on change in derivative liability

 

-

 

-

 

(112,500)

Interest expense related to intrinsic value of converted promissory notes

 

-

 

-

 

300,000

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses

 

-

 

(118,191)

 

-

Accrued interest receivable - related party

 

(1,500)

 

13,172

 

(8,552)

Other assets

 

-

 

-

 

-

Accounts payable and accrued interest payable

 

(1,194)

 

-

 

73,341

Other payable

 

-

 

(5,490)

 

-

Accrued expenses and other liabilities

 

(63,718)

 

(71,178)

 

15,241

Net cash provided (used) by operating activities

 

(380,410)

 

(745,496)

 

(5,520,523)

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Purchase of mining reclamation bond

 

-

 

-

 

-

Notes receivables - related parties

 

-

 

1,120,000

 

(200,000)

Change in cash held in trust

 

-

 

-

 

-

Net cash provided (used) by investing activities

 

-

 

1,120,000

 

(200,000)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

 

-

 

-

 

4,313,210

Proceeds from notes payable

 

434,582

 

148,441

 

1,668,897

Payments on notes payable

 

-

 

-

 

(200,000)

Issuance of common stock

 

-

 

-

 

-

Net cash provided (used) by financing activities

 

434,582

 

148,441

 

5,782,107

 

 

 

 

 

 

 

Net change in cash and cash equivalent

 

54,172

 

522,945

 

61,586

 

 

 

 

 

 

 

Cash and cash equivalent at the beginning of year

 

7,412

 

9,276

 

-

 

 

 

 

 

 

 

Cash and cash equivalent at the end of year

$

61,584

$

532,221

$

61,584

 

 

 

 

 

 

 

Supplemental disclosures of cash flow Information:

 

 

 

 

 

 

Cash paid for interest

$

-

$

-

$

8,082

Cash paid for taxes

$

-

$

-

$

89,705

 

 

 

 

 

 

 

Supplemental non-cash investing and financing activities:

 

 

 

 

 

 

Common stock issued for promissory notes

$

-

$

-

$

313,337

Cancellation of common stock

$

-

$

-

$

133

Common stock issued for debt issuance costs

$

-

$

-

$

37,500

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements




7



NEVADA GOLD HOLDINGS, INC.

Notes to the Unaudited Consolidated Financial Statements

(A Development Stage Company)

For the three month ended March 31, 2013 and 2012


NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Organization, Nature of Business and Trade Name


Nevada Gold Holdings, Inc. (the “Company”), a development stage 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 Merger was treated as a reverse merger and recapitalization for financial accounting purposes. As a result of the merger, the Company recorded an aggregate stock issuance of 2,626,263 shares of common stock with a net value of $(180,978). The negative recapitalization net value recognized was the result of the Company restating the equity structure of the legal subsidiary using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent issued in the reverse acquisition.  Nevada Gold Enterprises, Inc. was considered the acquirer for accounting purposes, and Nevada Gold Holdings, Inc. is considered the surviving company for legal purposes. Accordingly, the accompanying financial statements present the historical financial statements of Nevada Gold Enterprises, Inc., as the historical financial statements of Nevada Gold Holdings, Inc., i.e. a reverse merger. The Company had been engaged in the acquisition, exploration and development of gold mining claims in Nevada.


As of February 15, 2013, the Company is no longer engaged in the business of exploring for gold, holds no mineral exploration or mining rights and does not intend to acquire any.  See Note 6 below.  The Company intends to seek, investigate and, if such investigation warrants, engage in a business combination with a private entity whose business presents an opportunity for the Company’s shareholders.  The Company’s objectives are extremely general and are not intended to restrict discretion of its Board of Directors to search for and enter into potential business opportunities or to reject any such opportunities.


Basis of Presentation


The preparation of consolidated 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 reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.


Use of Estimates


The preparation of consolidated financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred.


Actual results could differ from those estimates. The Company’s consolidated financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.


Principles of Consolidation


The accompanying consolidated financial statements include the accounts of Nevada Gold Holdings, Inc. and its wholly owned subsidiary Nevada Gold Enterprises, Inc.  All significant intercompany transactions have been eliminated.


The accompanying consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial positions, results of operations, and cash flows at March 31, 2013, and for all periods presented herein, have been made.



8



NEVADA GOLD HOLDINGS, INC.

Notes to the Unaudited Consolidated Financial Statements

(A Development Stage Company)

For the three month ended March 31, 2013 and 2012


Certain information and footnote disclosures normally included in the 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 condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2012 audited consolidated financial statements. The results of operations for the periods ended  March 31, 2013 and 2012 are not necessarily indicative of the operating results for the full years.


Earnings Per Share


Basic earnings (loss) per share are 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 ended March 31, 2013 and 2012, fully diluted earnings per share excludes the dilutive effect of 43,844,054 common stock equivalents from options and warrants, because their inclusion would be anti-dilutive.  


The following is a reconciliation of basic earnings per share for 2013 and 2012:


  

 

Three months ended

March 31, 2013,

 

Historical net loss per share:

 

2013

 

 

2012

 

  

 

 

 

 

 

 

Net income (loss)

 

$

(313,998)

 

 

$

(563,809)

 

Shares used in computing basic per share amounts (weighted average)

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

43,844,054

 

 

 

43,844,054

 

Basic

 

$

(0.01)

 

 

$

(0.01)

 


NOTE 2 - GOING CONCERN


The Company's financial statements are prepared using accounting principles generally accepted 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. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.


Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.


The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.  


During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The Company may experience a cash shortfall and be required to raise additional capital.


Historically, it has mostly relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.  




9



NEVADA GOLD HOLDINGS, INC.

Notes to the Unaudited Consolidated Financial Statements

(A Development Stage Company)

For the three month ended March 31, 2013 and 2012



NOTE 3 – NOTES RECEIVABLE – RELATED PARTIES


On January 26, 2011, the Company made a loan of $200,000 to Hybrid Kinetic Motors Corporation, a related party.  The loan is unsecured and due on demand with 3% interest per annum. As of March 31, 2013, total notes receivable plus accrued interest were $208,552.


NOTE 4 – NOTES PAYABLE


In December 2009, a $100,000 note was issued to Theory Capital Corp. with an interest of 10% per annum until paid in full. The note was due on June 4, 2010 but it was not paid and it is now in default.  According to Theory Capital Agreement, upon closing of the private placement offering (“PPO”) on or before the due date, June 4, 2010, the outstanding principal amount of the Note shall automatically, without any action by lender or borrower, be converted into shares of Common Stock, at a price per share (the “Conversion Price”) equal to the price per share of Common Stock paid by investors in the PPO.  Even though the convertible note has not been paid, the agreement required the $100,000 need to be automatically converted to common stock when due on June 4, 2010. Currently the common stocks have not been issued as of December 31, 2011; however, the shareholders have the right to claim the common stocks. The Company reclassified the $100,000 Theory convertible notes from notes payable to equity as of December 31, 2010.


The Company converted the old payables to American Compass Inc. with the amount of $784,316 to a new Note at the end of 2012. There is additional Note from American Compass Inc. for this period. As of March 31 2013, the balance of Note to ACI was $1,218,898.  The Note is an unsecured loan with no interest. The note is payable on demand and there is no maturity date. American Compass Inc. and NGHI are related because they both have common major shareholder.


NOTE 5 – CAPITAL STOCK


A summary of warrant activity as of March 31, 2013, and changes during the year then ended is presented below:

 

Warrants

  

Shares

Outstanding at December 31, 2012

 

 

39,966,653

Granted

  

  

-

Exercised

  

  

-

Forfeited or expired

  

  

 

Outstanding at March 31, 2013

  

  

39,966,653

Exercisable at March 31, 2013

  

  

39,966,653


NOTE 6 – TERMINATION OF TEMPO MINERAL LEASE


On February 15, 2013, Gold Standard Royalty terminated the lease on the Tempo Mineral Prospect with the Company. Currently, the Company does not hold any mineral lease. There is no financial impact on the Consolidated Balance Sheet and Consolidated Statements of Operation for the three months ended March 31, 2013.




10



NEVADA GOLD HOLDINGS, INC.

Notes to the Unaudited Consolidated Financial Statements

(A Development Stage Company)

For the three month ended March 31, 2013 and 2012


NOTE 7 – INCOME TAX


Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.  Deferred tax assets are reduced by a valuation  allowance when, in the opinion of management,  it is more likely than not that some  portion or all of the deferred tax assets will to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


 Net deferred tax assets consist of the following components as of March 31, 2013 and 2012:

 

  

 

 

2013

 

 

 

2012

 

Deferred tax assets:

 

 

 

 

 

 

 

 

NOL carryover

 

$

1,889,802

 

 

$

1,837,084

 

Valuation allowance                        

 

 

(1,889,802

)

 

 

(1,837,084

)

Net deferred tax asset

 

$

-

 

 

$

-

 


The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 39% to pretax income from continuing operations for the years ended March 31, 2013 and 2012 due to the following:


  

 

2013

 

 

2012

 

Income tax benefit at statutory rate

 

$

(737,023

)

 

$

(716,463

)

Valuation allowance

 

 

737,023

 

 

 

716,463

 

  

 

$

-

 

 

$

-

 

 

At March 31, 2013, the Company had net operating loss carry forwards of approximately $6 million that may be offset against future taxable income through 2032. No tax benefit has been reported in the March 31, 2013 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations.


NOTE 8 – COMMITMENTS AND CONTINGENCIES


The Company is not currently a party to any legal action.  The suit brought by Viewpoint Securities LLC was settled in May, 2012. The Company also reached a settlement with a group of minority shareholders in March, 2012.


The Company is in a lease agreement for the office space it is using. Lease term is 69 month starting from May 1, 2011. Rent increases by 2.7% per year. The rents are payable in installments of $29,280.67 per month (from May 1, 2011 to April 30, 2012). The lease will terminate on Jan 31, 2017.


Annual minimum lease commitment for 5 years:

 

 

12/31/2013

367,350

12/31/2014

377,269

12/31/2015

387,455

12/31/2016

397,916

12/31/2017

33,453

Total annual Lease commitments

1,563,444




11



NEVADA GOLD HOLDINGS, INC.

Notes to the Unaudited Consolidated Financial Statements

(A Development Stage Company)

For the three month ended March 31, 2013 and 2012


NOTE 9 – RELATED PARTY TRANSACTIONS


Hybrid Kinetic Group Ltd. is the parent of the Company’s controlling stockholder, Far East Golden Resources.


Office services are provided without charge by the primary shareholder of the Company. Such costs are immaterial to the consolidated financial statements and, accordingly, have not been reflected therein.


NOTE 10 – SUBSEQUENT EVENTS


The Company evaluated all events or transactions that occurred after March 31, 2013 through the date of this filing in accordance with FASB ASC 855 “Subsequent Events”. The Company determined that it does not have any subsequent event requiring recording or disclosure.




12




Item 2.

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


Going Concern


In the course of its development activities, the Company has sustained losses and expects such losses to continue through at least the end of 2013.  The Company expects to finance its operations primarily through one or more future financings.  However, there exists substantial doubt about the Company’s ability to continue as a going concern for at least the next twelve months, because the Company will be required to obtain additional capital in the future to continue its operations and there is no assurance that it will be able to obtain such capital, through equity or debt financing, or any combination thereof, or on satisfactory terms or at all.  Our independent auditors have included an explanatory paragraph in their report on our consolidated financial statements included in this report that raises substantial doubt about our ability to continue as a going concern.  Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.  We have generated no operating revenues since our inception.  We had an accumulated deficit of $6,397,482 as of March 31, 2013.  Our continuation as a going concern is dependent upon future events, including our ability to raise additional capital and to generate positive cash flows.  Our audited consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which implies we will continue to meet our obligations and continue our operations for the next twelve months.  Realization values may be substantially different from carrying values as shown, and our consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amount and classification of liabilities that might be necessary as a result of the going concern uncertainty.


Overview


Historically, we were engaged in the business of exploring for gold.  During the fiscal year ended December 31, 2013, we engaged in limited oil and gas activities, had minimal operations, and generated no revenues.  In January 2013, our management determined to discontinue our gold exploration activities and to focus on attempting to acquire other assets or business operations that would maximize shareholder value.  No specific assets or businesses have been definitively identified and there is no certainty that any such assets or business will be identified or any transactions will be consummated.  See Part I, Item 1, “Business—Our Business Plan,” and Part I, Item 1A, “Risk Factors,” ion the 2012 Form 10-K for additional information and risks associated with our proposed business plan.  


We expect that we will need to raise funds in order to effectuate our business plan.  We may seek additional investors to purchase our stock to provide us with working capital to fund our operations.  Thereafter, we will seek to establish or acquire businesses or assets with additional funds raised either via the issuance of shares or debt.  There can be no assurance that additional capital will be available to us at all or on acceptable terms.  We may seek to raise the required capital by other means.  We may have to issue debt or equity or enter into a strategic arrangement with a third party.  We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds will have a severe negative impact on our ability to remain a viable company.  In pursuing the foregoing goals, we may seek to expand or change the composition of the Board or make changes to our current capital structure, including issuing additional shares or debt and adopting a stock option plan.


We do not expect to generate any revenues over the next twelve months.  Our principal business objective for the next twelve months will be to seek, investigate and, if such investigation warrants, engage in a business combination with a private entity whose business presents an opportunity for our shareholders.


Results of Operations


Three Months Ended March 31, 2013, compared to Three Months Ended March 31, 2012

 

Revenues and Other Income

  

During the three month period ended March 31, 2013, the Company remained in the developing stage and we did not realize any revenues from operations. Similarly, we have not realized any revenues from operations during the period from inception through March 31, 2013.

  

Expenses

  

Operating expenses, consisting entirely of general and administrative expenses, totaled $308,565 in the three-month period ended March, 2013, compared to $563,809 in the three-month period ended Marh 31, 2012, which consisted primarily of general and administrative expenses.



13




Net Losses

  

As a result of the foregoing, the Company incurred a net loss of $313,998, or ($0.01) per share, for the three months ended March 31, 2013, compared to a net loss of $563,809, or ($0.01) per share, for the corresponding period ended March 31, 2012.


Liquidity and Capital Resources


As of March 31, 2013, we have $61,583 of cash on hand.

   

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 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 4.

Controls and Procedures.


Under the supervision and with the participation of our principal executive officer and our 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 March 31, 2013 (the “Evaluation Date”).  Based on this evaluation, such officer[s] 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 principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.


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.  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.


With the participation of our principal executive officer and our principal financial 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.




14




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, except as described below, 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.


CFIUS Matter


As previously reported, on March 30, 2012, we received a notice from the Committee on Foreign Investment in the United States (“CFIUS”) that an agency notice had been submitted to CFIUS on March 28, 2012 (the “Notice”) pursuant to Section 721 of the Defense Production Act of 1950, as amended, with regard to the acquisition in October 2010 by Far East Golden Resources, in a private placement offering of shares equal to approximately 88.4% (at the time) of the outstanding common stock of Nevada Gold (the “Transaction”); and on April 26, 2012, we received another notice from CFIUS that CFIUS was undertaking an investigation of that transaction.


On May 30, 2012, we received a notification from CFIUS (the “Notice”) proposing that Hybrid Kinetic Group Limited, a limited liability company incorporated in Bermuda (“Hybrid Kinetic”) (the ultimate controlling entity of Far East Golden Resources) and the U.S. Department of Defense (“DoD”) enter into a National Security Agreement as a measure to mitigate asserted risks to the national security of the United States determined to exist by CFIUS due to the fact that our Tempo property is in proximity to U.S. Naval Air Station Fallon, which agreement would have required, among other things, that Hybrid Kinetic and Nevada Gold take actions to sell, break or abandon all leases and claims at or near our Tempo mine site (the “Tempo Leases and Claims”) through the disavowal, transfer, or sale of all interests in the Tempo Leases and Claims.


On June 11, 2012, Hybrid Kinetic, Far East Golden Resources and Nevada Gold (collectively, the “Companies”) submitted to CFIUS a request to withdraw the Notice, in which Hybrid Kinetic and Far East Golden Resources agreed to undertake certain actions to divest their interests in Nevada Gold, in lieu of a disposition or abandonment by Nevada Gold of the Tempo Leases and Claims.  CFIUS, by letter dated June 11, 2012, granted the request for withdrawal, based upon the representations and commitments made by the Companies in the withdrawal request and subject to the terms and conditions imposed by CFIUS in an Order dated June 11, 2012.


Specifically, among other things, Hybrid Kinetic and its subsidiaries agreed, within 90 days from June 11, 2012, to divest all their interests in Nevada Gold. The Companies will notify the U.S. Department of Defense and the U.S. Department of the Treasury (the “USG Agencies”) of any proposed divestment no less than 10 calendar days in advance of effecting such divestment. The parties may proceed to complete the transfer after the 10 calendar day period expires if: (a) the USG Agencies do not object to the proposed transferee during the 10 calendar day advance notice period; (b) the proposed transferee is a U.S. citizen who is not a dual citizen or is an entity that is wholly owned by U.S. citizens who are not dual citizens; and (c) the proposed transferee has no prior direct or indirect contractual, financial, employment, familial, or other relationship with Hybrid Kinetic or persons that own or are employed by Hybrid Kinetic. In all other circumstances, Hybrid Kinetic will not complete the transfer until the USG Agencies inform Hybrid Kinetic in writing that the USG Agencies have no objection to the proposed transfer.  Further, no personnel, employee or agent of Hybrid Kinetic may access the property conveyed by the Tempo Leases and Claims or any other leases or claims in which Hybrid Kinetic has acquired any direct or indirect interest as a result of the Transaction or through Nevada Gold (collectively, the “Nevada Gold Leases and Claims”) without prior approval by the USG Agencies.  In addition, Hybrid Kinetic, including contractors and business representatives acting on its behalf, will not obtain, through any means, any ownership interest or control over Nevada Gold, including any representation on our Board of Directors, or any Nevada Gold Leases and Claims.  Until confirmation of the divestment, the USG Agencies will have access to the property conveyed by the Nevada Gold Leases and Claims.


The Order is enforceable, through injunctive or other judicial relief, and failure to comply with the Order may result in the imposition of civil or criminal penalties.


Hybrid Kinetic has submitted to CFIUS a proposed purchaser of Far East Golden Resources’s interests in Nevada Gold, and CFIUS is still reviewing the qualifications of the purchaser. We expect to have a final decision from CFIUS soon.  Hybrid Kinetic has informed us that it intends to comply with the terms of the Order in a timely fashion; however, there can be no assurance that it will do so in a manner acceptable to the USG Agencies or at all.



15




On Nov. 6, 2012, Hybrid Kinetic received a notice from CFIUS that in order to give Hybrid Kinetic additional time to comply with the divestment requirement, CFIUS granted an extension of the time frame within which Hybrid Kinetic must divest all interest in Nevada Gold, as specified in the Order, to Tuesday, November 20, 2012.  This modification does not affect any other provision of the Order or the application of any provision thereof.


On March 13, 2013, Hybrid Kinetic received a notice from CFIUS that CFIUS does not object to Hybrid Kinetic’s transfer of all its interest in Nevada Gold to an unrelated third party. This unrelated third party is conducting due diligence on the purchase of the shares currently owned by Hybrid Kinetic. Further, immediately upon completing the divestment, the parties are required to provide CFIUS copies of the documents effectuating the divestment and a signed statement by a Hybrid Kinetic officer certifying that Hybrid Kinetic has divested all of its interest in Nevada Gold.


We believe that the termination of the Tempo lease in February 2013 renders CFIUS’ concerns moot, and we have asked them to rescind the Order.


Item 1A.

Risk Factors.


There have been no material changes from Risk Factors as previously disclosed in our 2012 Form 10-K.


Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.


Other than as previously reported in our Current Reports on Form 8-K, we have not sold any of our equity securities during the period covered by this Report.


Item 3.

Defaults upon Senior Securities.


None.


Item 4.

Mine Safety Disclosures.


Neither the Company nor its subsidiary is currently the operator of any mine.


Item 5.

Other Information.


None.


Item 6.

Exhibits.


The following Exhibits are being filed with this Quarterly Report on Form 10-Q.


In reviewing any 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.



16




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.


Exhibit

Number

Description


31.1*

Certification of principal executive officer pursuant to Rule 13a-14(a) and 15d-14(a)

 

31.2*

Certification of principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a)

 

32.1*

Certification of principal executive 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.)

 

32.2*

Certification of 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.)


101§§

The following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets at March 31, 2013 and December 31, 2012, (ii) the Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2013 and 2012, and from inception on October 2, 2008 through March 31, 2013, (iii) the Condensed Consolidated Statements of Cash Flows for the three- month periods ended March 31, 2013 and 2012, and from inception on October 2, 2008 through March 31, 2013, and (v) Notes to Condensed Consolidated Financial Statements.


*

Filed/furnished herewith


§§

Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filings.




17




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: May 20, 2013

By: /s/ Jimmy Wang

  

Jimmy Wang

  

Controller

(Principal Financial Officer)





18



EXHIBIT INDEX



Exhibit

Number

Description


31.1

Certification of principal executive officer pursuant to Rule 13a-14(a) and 15d-14(a)


31.2

Certification of principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a)


32.1

Certification of principal executive 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.)


32.2

Certification of 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.)


101

The following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets at March 31, 2013 and December 31, 2012, (ii) the Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2013 and 2012, and from inception on October 2, 2008 through March 31, 2013, (iii) the Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2013 and 2013, and from inception on October 2, 2008 through March 31, 2013, and (v) Notes to Condensed Consolidated Financial Statements.