XOTC:NGHI Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012


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, 2012.

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      .No  X  .


As of August 18, 2011, there were 42,865,074 shares of the registrant’s common stock, par value $0.001 per share, outstanding.



{00135598.4 / 0919-001}



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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

17

Item 4.

Controls and Procedures.

17

PART II—OTHER INFORMATION

18

 

Item 1.

Legal Proceedings

18

Item 1A. Risk Factors

 

19

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

19

Item 3.

Defaults upon Senior Securities

19

Item 4.

Mine Safety Disclosures

19

Item 5.

Other Information

19

Item 6.

Exhibits

20

SIGNATURE

 

21





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, 2011 (the “2011 Form 10-K”) in the section captioned “Risk Factors” and elsewhere in the 2011 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 2011 Form 10-K, the audited consolidated financial statements and notes thereto in the 2011 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)

CONSOLIDATED BALANCE SHEET

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2012

$

 

2011

$

 

 

(Unaudited)

 

(Audited)

ASSETS

Current assets

 

 

 

 

 Cash and cash equivalents

126,521

 

9,276

 

 Prepaid expense

76,595

 

35,000

 

 Notes receivable - related party

200,000

 

1,320,000

 

 Accrued interest receivable - related party

4,052

 

15,724

 

 Other current assets

-

 

-

Total current assets

407,168

 

1,380,000

 

 

 

 

 

 

Mining reclamation bond

-

 

-

 

 

 

 

 

 Total assets

407,168

 

1,380,000

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable

17,238

 

17,238

 

Notes payable

155,000

 

7,600

 

Other payable

17,801

 

14,510

 

Accrued expenses and other liabilities

72,981

 

141,836

Total current liabilities

263,020

 

181,184

 

 

 

 

 

Total liabilities

263,020

 

181,184

 

 

 

 

 

Stockholders' (deficit) equity

 

 

 

 

Preferred stock, $.001 par value; 10,000,000 shares authorized, 0 share issued and outstanding as of June 30, 2012 and December 31, 2011

-

 

-

 

Common stock, $.001 par value; 300,000,000 shares authorized, 43,844,054 shares issued and outstanding as of June 30, 2012 and December 31, 2011

43,844

 

43,844

 

Additional paid-in capital

5,286,323

 

5,286,323

 

Accumulated deficit

(5,186,019)

 

(4,131,351)

Total stockholders' (deficit) equity

144,148

 

1,198,816

 

 

 

 

 

 Total liabilities and stockholders' (deficit) equity

407,168

 

1,380,000

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements



5




NEVADA GOLD HOLDINGS, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF OPERATIONS

UNAUDITED

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

From Inception on October 2, 2008 Through June 30, 2012
$

 

2012

$

 

2011

$

 

2012

$

 

2011

$

 

 

 

 

 

 

 

 

 

 

 

Revenues

-

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

Research and development

76,595

 

48,710

 

111,595

 

65,000

 

577,392

General and administrative

409,959

 

490,351

 

940,478

 

708,518

 

4,246,000

Total operating expenses

486,554

 

539,061

 

1,052,073

 

773,518

 

4,823,392

 

 

 

 

 

 

 

 

 

 

Loss from operations

(486,554)

 

(539,061)

 

(1,052,073)

 

(773,518)

 

(4,823,392)

 

 

 

 

 

 

 

 

 

 

Interest income (expense)

 

 

 

 

 

 

 

 

 

Interest income  

1,749

 

10,500

 

3,459

 

16,362

 

22,821

Other income

-

 

8,062

 

-

 

8,062

 

2,367

Gain on settlement of derivative

 liability

-

 

-

 

-

 

-

 

112,500

Interest expense

(1,163)

 

-

 

(2,325)

 

-

 

(495,424)

Total interest income (expense)

587

 

18,562

 

1,134

 

24,424

 

(357,736)

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

(485,968)

 

(520,499)

 

(1,050,939)

 

(749,094)

 

(5,181,128)

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

3,729

 

-

 

3,729

 

-

 

3,729

 

 

 

 

 

 

 

 

 

 

Net loss

(489,697)

 

(520,499)

 

(1,054,668)

 

(749,094)

 

(5,184,857)

 

 

 

 

 

 

 

 

 

 

Net loss per share of common stock:

 

 

 

 

 

 

 

 

 

Basic

(0.01)

 

(0.01)

 

(0.02)

 

(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

43,844,054

 

43,844,054

 

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

 

 

 

 

 

 

 

Six Months Ended June 30,

 

From Inception on October 2, 2008 Through June 30, 2012

$

 

2012

$

 

2011

$

 

Cash flows from operating activities

 

 

 

 

 

Net Income

(1,054,668)

 

(749,094)

 

(5,186,019)

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

(41,595)

 

(35,000)

 

(76,595)

Notes receivables

1,120,000

 

(1,828,553)

 

(200,000)

Accrued interest receivable - related party

11,672

 

(12,933)

 

(4,052)

Other assets

-

 

8,062

 

-

Accounts payable and accrued interest payable

-

 

10,919

 

71,707

Other payable

3,291

 

-

 

3,291

Accrued expenses and other liabilities

(68,855)

 

-

 

72,981

Net cash used by operating activities

(30,155)

 

(2,606,599)

 

(4,584,089)

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Purchase of mining reclamation bond

-

 

52,600

 

-

Notes receivable - related parties

-

 

-

 

-

Change in cash held in trust

-

 

-

 

-

Net cash provided (used) by investing activities

-

 

52,600

 

-

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

-

 

-

 

4,313,210

Proceeds from notes payable

147,400

 

-

 

597,400

Payments on notes payable

-

 

-

 

(200,000)

Bank overdraft

-

 

-

 

-

Issuance of common stock

-

 

-

 

-

Net cash provided by financing activities

147,400

 

-

 

4,710,610

 

 

 

 

 

 

Net change in cash and cash equivalent

117,245

 

(2,553,999)

 

126,521

 

 

 

 

 

 

Cash and cash equivalent at the beginning of year

9,276

 

2,995,727

 

-

 

 

 

 

 

 

Cash and cash equivalent at the end of year

126,521

 

441,728

 

126,521

 

 

 

 

 

 

Supplemental disclosures of cash flow Information:

 

 

 

 

 

Cash Paid for Interest

-

 

-

 

,082

See accompanying notes to condensed consolidated financial statements




7



NEVADA GOLD HOLDINGS, INC.

(A Development Stage Company)

Notes to the Unaudited Consolidated Financial Statements

For the three and six months ended June 30, 2012 and 2011


NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Organization, Nature of Business and Trade Name


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 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 is engaged in the acquisition, exploration and development of gold mining claims in Nevada.


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 June 30, 2012, and for all periods presented herein, have been made.


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, 2011 audited consolidated financial statements. The results of operations for the periods ended June 30, 2012 and 2011 are not necessarily indicative of the operating results for the full years.




8



Basic and diluted 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 June 30, 2012 and 2011, 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 and diluted earnings per share for 2012 and 2011:


  

 

Six months ended

June 30,

Historical net loss per share:

 

2012

 

 

2011

  

 

 

 

 

 

Net income (loss)

 

$

(1,054,668)

 

 

$

(749,094)

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

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

43,844,054

 

 

 

43,844,054

Basic and Diluted

 

$

(0.02)

 

 

$

(0.02)

 

Recently issued accounting standards

 

In May 2011 the FASB issued additional guidance on fair value measurements that clarifies the application of existing guidance and disclosure requirements, changes certain fair value measurement principles and requires additional disclosures about fair value measurements. The updated guidance is effective on a prospective basis for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The adoption of this guidance will not have a material impact on our financial statements.


In June 2011, the Financial Accounting Standards Board, or FASB, issued guidance regarding the presentation of comprehensive income. The new standard requires the presentation of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new standard also requires presentation of adjustments for items that are reclassified from other comprehensive income to net income in the statement where the components of net income and the components of other comprehensive income are presented. The updated guidance is effective on a retrospective basis for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The adoption of this guidance will not have a material impact on our financial statements.


NOTE 2 – PREPAID EXPENSE


The Company has entered into a lease with Gold Standard Royalty (GSR) and Gold Run Inc. for mineral right lease at the Tempo property in Lander County, Nevada. Per the lease, Nevada Gold is to pay the equivalent of 90 oz of gold as advance minimum royalty to GSR from 2012 and onwards. The lease is in effect until terminated by either party. Payment in the amount of $153,191 was made during the three months ended March 31, 2012. 50% of the prepayment was being expensed during the quarter ended June 30, 2012. As of June 30, 2012, the prepay amount is recorded as $76,595.


NOTE 3 – NOTES RECEIVABLE


On January 26, 2011, the Company made a loan of $200,000 to Hybrid Kinetic Motors Corporation, a related party. On February 24, 2011, the Company made a loan of $400,000 to American Compass Inc., a related party; and on March 24, 2011, the Company made an additional loan of $400,000 to American Compass Inc.  (ACI) on various dates from April to June, the Company has made additional loans with American Compass Inc. in the amount of $800,000, bring additional notes receivable from this party to $1,600,000 from February 2011 to June 2011. $480,000 was repaid during the year, bringing the new total to $1,120,000. Each of these loans is unsecured and due on demand with 3% interest per annum. During the three months, the Company received payment from ACI to pay off the $1,120,000 loan. As of June 30, 2012, total notes receivable were $200,000.  The Company accrued interest receivables in the amount of $4,052 as of June 30, 2012.  Each of the borrowers is a wholly owned subsidiary of Hybrid Kinetic Group Ltd., which is also the parent of our controlling stockholder, Far East Golden Resources.  Hybrid Kinetic Group Ltd. guaranteed each of the loans.




9



NOTE 4 – NOTES PAYABLE


As of June 30, 2012, the Company holds a loan payable to ACI in the amount of $155,000. This loan has a 3% interest rate per annum and it is due on demand. As of June 30, 2012, the accrued interest on this loan is $2,325.


NOTE 5 – ACCRUED EXPENSES


During the year ended December 31, 2011, the Company has accrued director fee in the amount of $60,000 and accrued expenses related to an issuance of the convertible note back in 2009 in the amount of $10,657. Together with the accrued interest from the Theory Capital Corp. note and the ACI note, total accrued expenses as of June 30, 2012 are $72,981.


NOTE 6 – COMMITMENT AND CONTINGENCIES


Mining Lease

 

The Company is required under the terms of our property lease to make annual lease payments. The Company is also required to make annual claim maintenance payments to Federal Bureau of Land Management and to the county in which its property is located in order to maintain its rights to explore and, if warranted, to develop its property. If the Company fails to meet these obligations, it will lose the right to explore for gold on its property.


The Company’s property lease is for an initial period of ten years from May 2007 and may be extended in five year increments for up to a total term of 99 years. The Company may terminate this lease at any time. Until production is achieved, the Company’s lease payments (deemed “advance minimum royalties”) consist of an initial payment of $5,000, which was made upon the effectiveness of the lease, followed by annual payments according to the following schedule:


Due Date of Advance

Minimum Royalty Payment

  

Amount of Advance

Minimum Royalty Payment

  

January 15, 2008 (paid)

  

$

10,000

  

January 15, 2009 (paid)

  

$

15,000

  

January 15, 2010 (paid)

  

$

30,000

  

January 15, 2011 (paid)

  

$

45,000

  

January 15, 2012 and annually thereafter

during the term of the lease

  

The greater of $60,000 or the dollar equivalent of 90 ounces of gold.

  


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


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


Royalty Point Purchased

  

Price

  

First 1%

  

$

1,500,000

  

Second 1%

  

$

3,000,000

  


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


The Company’s lease required us to perform $50,000 worth of physical work on the property for 2009. Starting in 2010 and thereafter, the Company must perform a minimum of $50,000 worth of work annually on the property, of which at least $25,000 is physical work.  Work performed in any year in excess of these amounts is carried forward to offset the obligation in future years.  The Company met its commitment for 2010 but did not do so for 2011.




10



The Company is required to make annual claim maintenance payments to the Bureau of Land Management and to the counties in which its property is located. If the Company fails to make these payments, it will lose its rights to the property. As of the date of this Report, the annual maintenance payments are approximately $155 per claim, consisting of payments to the Bureau of Land Management and to the counties in which the Company’s properties are located. The Company’s property consists of an aggregate of 206 lode claims. The aggregate annual claim maintenance costs are currently approximately $32,000.


On March 31, 2012, the Company received a notice from the Committee on Foreign Investment in the United States (CFIUS) of the Department of the Treasury that an agency notice has been filed with regard to Far East Golden Resources Investment Limited’s acquisition of 88.4 percent of the outstanding common shares of the Company. On April 26, 2012, the Company received another notice from CFIUS that CFIUS is undertaking an investigation of that transaction.


On May 30, 2012, Nevada Gold 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 FEGRI) 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, FEGRI and Nevada Gold (collectively, the “Companies”) submitted to CFIUS a request to withdraw the Notice, in which Hybrid Kinetic and FEGRI 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 Nevada Gold’s 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 FEGRI’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.


NOTE 7 – FAIR VALUE MEASUREMENTS


Effective January 1, 2009, the Company adopted new fair value accounting guidance. The adoption of the guidance was limited to financial assets and liabilities and did not have a material effect on the Company’s financial condition or results of operations.

 



11



The guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact business and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The guidance establishes three levels of inputs that may be used to measure fair value:

 

Level 1 — Quoted prices in active markets for identical assets or liabilities.

 

Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities


Level 3 — Unobservable inputs to the valuation methodology that is significant to the measurement of fair value of assets or liabilities.


Assets Measured at Fair Value on a Recurring Basis


The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis which were comprised of the following types of instruments as of June 30, 2012:


  

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Cash (1)

 

$

532,221

 

 

$

532,221

 

 

$

-

 

 

$

-

 

Total cash equivalents as of June 30, 2012

 

$

532,221

 

 

$

532,221

 

 

$

-

 

 

$

-

 

 

(1)

Included in cash and cash equivalents on the Company's Balance Sheet.


NOTE 8 – RELATED PARTY TRANSACTIONS


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


American Compass Inc. is a sister company with Nevada Gold Holdings, Inc.. Hybrid Kinetic Group Ltd  is also the parent company.


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 9 – SHAREHOLDERS’ EQUITY


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 June 30, 2012; 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 and the Company needs to issue the common stock for the $100,000 convertible notes soon.


NOTE 10 – CAPITAL STOCK


Contribution of Capital


On February 17, 2010 a shareholder of the Company transferred 66,667 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 $0.75 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 a contribution of capital in the amount of $50,000 during the year ended December 31, 2010.



12



Private Placement Offering


On October 29, 2010 the Company consummated a private placement offering (“the offering”) whereby the Company issued 38,833,356 units at $0.10 per unit for total proceeds of $3,883,337.  The proceeds consisted of $3,450,000 in cash, conversions of $313,337 in convertible notes payable, and $120,000 as credit on certain of the Company’s trade payables.  Each unit consists of one share of the Company’s common stock and one warrant to purchase one share of the Company’s common stock at $0.10 per share, exercisable for a period of five years from the date of closing.  The offering resulted in the Company undergoing a change in control, with Far East Golden Resources Investment Limited holding 30,000,000 of 43,694,054 (69%) post-offering common shares.  The offering warrants were valued using the Black Scholes model using the following assumptions: stock price at valuation, $0.36; strike price, $0.10; risk free rate 0.97%; 5 year average expected warrant term; and volatility of 113%. The Company attributed $2,969,195 of the offering proceeds associated with the transaction to the warrants based on the fair value of the warrants. The fair value of the warrants were accounted for as both an increase to additional paid in capital and as a decrease to additional paid in capital since the warrants were considered an incremental direct cost of raising capital.


In connection with the private placement offering transaction, the Company analyzed the contingent conversion features of the convertible notes and recorded interest expense totaling approximately $300,000 based on the intrinsic values of the convertible notes at the time of conversion and a market price of $0.36 per share.


Other Issuances


On November 18, 2010 the Company’s Board of Directors resolved to issue 150,000 shares of common stock to an independent third-party investor relations firm, as payment for services rendered during 2010. The Company valued these shares at $0.35 per share based on the quoted market price of the shares, resulting in a total value of the shares transferred of $52,500.  


Stock Option Awards


On November 5, 2009, the Company’s Board of Directors granted to David Rector, in connection with his appointment as the Company’s Chief Executive Officer, President, Secretary and director, incentive stock options to purchase 66,667 shares of Common Stock at a purchase price of $2.10 per share (the closing bid price quoted on the OTCBB on the date of grant), vesting 100% on December 31, 2010, and expiring November 4, 2014.


On November 16, 2009, the Company’s Board of Directors granted to John N. Braca, in connection with his appointment as a director, non-qualified stock options to purchase 16,667 shares of Common Stock at a purchase price of $1.95 per share (the closing bid price quoted on the OTCBB on the date of grant), vesting 100% on December 31, 2010, and expiring November 15, 2014.


On December 30, 2008, the Board of Directors of the Company adopted, and its stockholders approved, the 2008 Equity Incentive Plan (the “Plan”) which initially provided for incentive award grants of up to 266,667 shares of Common Stock.   However, in connection the Company’s 1-for-15 reverse stock split effected in September 2010, with stockholder approval, the Company amended the Plan to increase the total number of shares of Common Stock that may be granted pursuant to awards there under from 266,667 to 3,000,000, and to add a provision for automatic annual increases based on increases in the Company’s capitalization (the “Evergreen Clause”).

 

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the table below. Expected volatilities are based on implied volatilities from, historical volatility of the Company’s stock, and other factors. The Company uses historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding; the range given below results from certain groups of employees exhibiting different behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.


  

  

June30, 2012

 

Expected volatility

  

  

294

%

Expected dividends

  

  

0

%

Expected term (in years)

  

  

1

  

Risk-free rate

  

  

0.12

%




13



A summary of option activity under the Plan as of June 30, 2012, and changes during the year then ended is presented below:


Options

  

Shares

  

  

Weighted-

Average

Exercise

Price

  

  

Weighted-

Average

Remaining

Contractual

Term

  

  

Aggregate

Intrinsic

Value

  

Outstanding at December 31, 2011

  

  

83,333

 

 

$

2.001

 

 

 

3.9

 

 

$

-

  

Granted

  

  

-

 

 

 

-

 

 

 

-

 

 

 

-

  

Exercised

  

  

-

 

 

 

-

 

 

 

-

 

 

 

-

  

Forfeited or expired

  

  

-

 

 

 

-

 

 

 

-

 

 

 

-

  

Outstanding at June 30, 2012

  

  

83,333

 

 

$

2.001

 

 

 

3.9

 

 

$

-

  

Exercisable at June 30, 2012

  

  

83,333

 

 

$

2.001

 

 

 

3.9

 

 

$

-

  


The weighted-average grant-date fair value of options granted during the periods ended June 30, 2012 and 2011 were $0.

 

The Company recorded $0 stock-based compensation for the six months ended June 30, 2012 and there was no change to the Company’s non-vested shares as of the six months ended June 30, 2012. 

 

Warrants


A summary of warrant activity as of June 30, 2012, and changes during the year then ended is presented below:


Warrants

  

  

Shares

  

Outstanding at December 31, 2011

 

 

37,966,653

 

Granted

  

  

-

  

Exercised

  

  

-

  

Forfeited or expired

  

  

-

 

Outstanding at June 30, 2012

  

  

37,966,653

  

Exercisable at June 30, 2012

  

  

37,966,653

  


NOTE 11 – OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

 

The Company has not entered into any transactions with unconsolidated entities whereby it has financial guarantees, subordinated retained interests, or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company.

 


NOTE 12 – 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



14



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 affect upon it and its shareholders.  


NOTE 13 – SUBSEQUENT EVENTS


Management has reviewed material events subsequent to the six months ended June 30, 2012 and prior to the filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”. No additional disclosures are required.



15



Item 2.

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


Going Concern


The Company’s unaudited consolidated financial statements presented herein 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.  


Results of Operations


Three Months Ended June 30, 2012, compared to Three Months Ended June 30, 2011

 

Revenues and Other Income

  

During the three month period ended June 30, 2012, the Company remained in the exploration 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 June 30, 2012.

  

Expenses

  

Operating expenses, consisting entirely of general and administrative expenses, totaled $409,959 in the three-month period ended June, 2012, compared to $539,061 in the three-month period ended June 30, 2011, which consisted primarily of general and administrative expenses.

  

Net Losses

  

As a result of the foregoing, the Company incurred a net loss of $489,697, or ($0.01) per share, for the three months ended June 30, 2012, compared to a net loss of $520,499, or ($0.01) per share, for the corresponding period ended June 30, 2011.


Six Months Ended June 30, 2012, compared to Six Months Ended June 30, 2011.


Revenues and Other Income

  

During the six month period ended June 30, 2012, the Company remained in the exploration 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 June 30, 2012.

  

Expenses

  

Operating expenses totaled $1,052,073 in the six-month period ended June 30, 2012, consisting primarily of general and administrative expenses of $940,478, coupled with research and development costs of $111,595.   Operating expenses totaled $ 773,518 in the six-month period ended June 30, 2011, consisting primarily of general and administrative expenses of $ 708,518, coupled with research and development costs of $ 65,000.  


Net Losses

  



16



As a result of the foregoing, the Company incurred a net loss of $1,054,668, or ($0.02) per share, for the six months ended June 30, 2012, compared to a net loss of $749,094, or ($0.02) per share, for the corresponding period ended June 30, 2011.


Liquidity and Capital Resources


As of June 30, 2012, we have $126,521 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 financial and executive officers, 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, 2012 (the “Evaluation Date”).  Based on this evaluation, such officers 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 financial and executive officers, 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. We expect to develop a system of disclosure controls and procedures in 2012 as we expand our business and develop our mining claims.


With the participation of our principal financial and executive officers, 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.





17




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 Investment Limited, a Hong Kong incorporated entity (“FEGRI”), 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 FEGRI) 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, FEGRI and Nevada Gold (collectively, the “Companies”) submitted to CFIUS a request to withdraw the Notice, in which Hybrid Kinetic and FEGRI 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 FEGRI’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.



18



Item 1A.

Risk Factors.


There have been no material changes from Risk Factors as previously disclosed in our 2011 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.


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.


 



19



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 June 30, 2012, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets at June 30, 2012 and December 31, 2011, (ii) the Condensed Consolidated Statements of Operations for the three- and six- month periods ended June 30, 2012 and 2011, and from inception on October 2, 2008 through June 30, 2012, (iii) the Condensed Consolidated Statements of Cash Flows for the three- and six- month periods ended June 30, 2012 and 2011, and from inception on October 2, 2008 through June 30, 2012, and (v) Notes to Condensed Consolidated Financial Statements.


*

Filed/furnished  herewith


**  To be filed by amendment.


§§

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.




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 20, 2012

By:

/s/ Jimmy Wang                       

  

  

Jimmy Wang

  

  

Controller

(Principal Financial Officer)



20



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.)



21


XOTC:NGHI Quarterly Report 10-Q Filling

XOTC:NGHI Stock - Get Quarterly Report SEC Filing of XOTC:NGHI stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

XOTC:NGHI Quarterly Report 10-Q Filing - 6/30/2012
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