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EX-32.1 - EXHIBIT 32.1 - HK BATTERY TECHNOLOGY INC | v223823_ex32-1.htm |
EX-31.1 - EXHIBIT 31.1 - HK BATTERY TECHNOLOGY INC | v223823_ex31-1.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, 2011.
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to ________
Commission File Number: 333-140148
Nevada Gold Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware
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000-52636
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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800 E. Colorado Blvd., Suite 888
Pasadena, CA
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91101
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(Address of principal executive offices)
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(Zip Code)
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925-938-0406
(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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 o No o
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 o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
As of May 23, 2011, 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
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AVAILABLE INFORMATION
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3
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FORWARD-LOOKING STATEMENTS
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4
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PART I—FINANCIAL INFORMATION
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5
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Item 1.
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Financial Statements.
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5
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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12
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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14
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Item 4.
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Controls and Procedures.
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14
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PART II—OTHER INFORMATION
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14
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Item 1.
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Legal Proceedings.
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14
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Item 1A.
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Risk Factors.
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14
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds.
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14
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Item 3.
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Defaults upon Senior Securities.
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15
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Item 4.
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(Removed and Reserved).
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15
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Item 5.
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Other Information.
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15
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Item 6.
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Exhibits.
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15
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SIGNATURE
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17
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2
AVAILABLE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the United States Securities and Exchange Commission (“SEC”). You may read and copy any document we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549, U.S.A. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330 (or 1-202-551-8090). The SEC maintains an internet site that contains annual, quarterly and current reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. Our electronic SEC filings are available to the public at http://www.sec.gov.
Our public internet site is http://www.nevadagoldholdings.com. We make available free of charge through our internet site, via a link to the SEC’s internet site at http://www.sec.gov, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically files such material with, or furnish it to, the SEC. We also make available through our internet site, via a link to the SEC’s internet site, statements of beneficial ownership of our equity securities filed by our directors, officers, 10% or greater shareholders and others under Section 16 of the Exchange Act.
These documents are also available in print without charge to any person who requests them by writing or telephoning:
Nevada Gold Holdings, Inc.
c/o Gottbetter & Partners, LLP
488 Madison Avenue
New York, New York 10022-5718
212-400-6900
Facsimile 212-400-6901
3
FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements, including, without limitation, in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere. Any and all statements contained in this Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future,” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this Report may include, without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to exploration programs, (ii) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iii) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the SEC, and (iv) the assumptions underlying or relating to any statement described in points (i), (ii) or (iii) above.
The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, our inability to obtain adequate financing, insufficient cash flows and resulting illiquidity, our inability to expand our business, government regulations, lack of diversification, volatility in the price of gold, increased competition, results of arbitration and litigation, stock volatility and illiquidity, and our failure to implement our business plans or strategies. A description of some of the risks and uncertainties that could cause our actual results to differ materially from those described by the forward-looking statements in this Report appears in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as amended (the “2010 Form 10-K”) in the section captioned “Risk Factors” and elsewhere in the 2010 Form 10-K and 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 2010 Form 10-K, the audited consolidated financial statements and notes thereto in the 2010 Form 10-K, the unaudited consolidated financial statements and notes thereto in this Report, and other documents which we may file from time to time with the SEC.
4
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
NEVADA GOLD HOLDINGS, INC.
(An Exploration Stage Company)
Consolidated Balance Sheets
(Unaudited)
March 31,
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December 31,
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|||||||
2011
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2010
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|||||||
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|||||||
ASSETS
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||||||||
CURRENT ASSETS
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||||||||
Cash
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$ | 1,808,384 | $ | 2,995,727 | ||||
Notes receivable - related parties
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1,000,000 | - | ||||||
Accrued interest receivable - related parties
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2,433 | - | ||||||
Other current assets
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8,062 | 8,062 | ||||||
Total Current Assets
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2,818,879 | 3,003,789 | ||||||
OTHER ASSETS
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||||||||
Mining reclamation bonds
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52,600 | 52,600 | ||||||
Total Other Assets
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52,600 | 52,600 | ||||||
TOTAL ASSETS
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$ | 2,871,479 | $ | 3,056,389 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
CURRENT LIABILITIES
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||||||||
Accounts payable
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$ | 64,174 | $ | 20,489 | ||||
Total Current Liabilities
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64,174 | 20,489 | ||||||
TOTAL LIABILITIES
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64,174 | 20,489 | ||||||
STOCKHOLDERS' EQUITY
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||||||||
Preferred stock:$0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding
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- | - | ||||||
Common stock:$0.001 par value, 300,000,000 shares authorized; 43,844,054 shares issued and outstanding
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43,844 | 43,844 | ||||||
Additional paid-in capital
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5,286,323 | 5,286,323 | ||||||
Deficit accumulated during the exploration stage
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(2,522,862 | ) | (2,294,267 | ) | ||||
Total Stockholders' Equity
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2,807,305 | 3,035,900 | ||||||
ToTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 2,871,479 | $ | 3,056,389 |
The accompanying notes are an integral part of these consolidated financial statements.
5
NEVADA GOLD HOLDINGS, INC.
(An Exploration Stage Company)
Consolidated Statements of Operations
(Unaudited)
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For the Three Months Ended
March 31,
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From Inception
on October 2,
2008 Through
March 31,
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||||||||||
2011
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2010
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2011
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REVENUES
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$ | - | $ | - | $ | - | ||||||
OPERATING EXPENSES
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General and administrative
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218,167 | 179,616 | 1,759,191 | |||||||||
Exploration costs
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16,290 | 60,560 | 400,797 | |||||||||
Total Operating Expenses
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234,457 | 240,176 | 2,159,988 | |||||||||
OTHER INCOME (EXPENSES)
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Interest expense
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- | (14,727 | ) | (483,603 | ) | |||||||
Interest income
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5,862 | - | 5,862 | |||||||||
Other income
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- | - | 2,367 | |||||||||
Gain on settlement of derivative liability
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- | - | 112,500 | |||||||||
Total Other Income (Expenses)
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5,862 | (14,727 | ) | (362,874 | ) | |||||||
LOSS BEFORE INCOME TAXES
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(228,595 | ) | (254,903 | ) | (2,522,862 | ) | ||||||
INCOME TAX EXPENSE
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- | - | - | |||||||||
NET LOSS
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$ | (228,595 | ) | $ | (254,903 | ) | $ | (2,522,862 | ) | |||
BASIC AND DILUTED LOSS PER COMMON SHARE
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$ | (0.01 | ) | $ | (0.05 | ) | ||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED
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43,844,054 | 4,842,130 |
The accompanying notes are an integral part of these consolidated financial statements.
6
NEVADA GOLD HOLDINGS, INC.
(An Exploration Stage Company)
Consolidated Statements of Stockholders' Equity
(Unaudited)
Common Stock
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Additional
Paid-In
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Deficit
Accumulated
During the
Exploration
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Total
Stockholders'
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|||||||||||||||||
Shares
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Amount
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Capital
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Stage
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Equity
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Balance at inception on October 2, 2008
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- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Common stock issued to founders for cash on October 2, 2008
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2,032,000 | 2,032 | (2,032 | ) | - | - | ||||||||||||||
Recapitalization pursuant to reverse merger
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2,626,263 | 2,626 | (183,604 | ) | - | (180,978 | ) | |||||||||||||
Common stock issued for debt issuance costs on December 31, 2008
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20,000 | 20 | 37,480 | - | 37,500 | |||||||||||||||
Common stock issued for cash on December 31, 2008, net of $31,540 of issuance costs
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55,200 | 55 | 71,905 | - | 71,960 | |||||||||||||||
Net loss for the period from inception on October 2, 2008 through December 31, 2008
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- | - | - | (20,896 | ) | (20,896 | ) | |||||||||||||
Balance, December 31, 2008
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4,733,463 | 4,733 | (76,251 | ) | (20,896 | ) | (92,414 | ) | ||||||||||||
Common stock issued for cash, net of $4,130 of direct issuance costs
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222,000 | 222 | 791,028 | - | 791,250 | |||||||||||||||
Common stock issued for services rendered
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20,000 | 20 | 74,980 | - | 75,000 | |||||||||||||||
Common shares cancelled
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(133,333 | ) | (133 | ) | 133 | - | - | |||||||||||||
Contributed services
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- | - | 75,000 | - | 75,000 | |||||||||||||||
Stock-based compensation
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- | - | 20,844 | - | 20,844 | |||||||||||||||
Net loss for the year ended December 31, 2009
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- | - | - | (866,318 | ) | (866,318 | ) | |||||||||||||
Balance, December 31, 2009
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4,842,130 | 4,842 | 885,734 | (887,214 | ) | 3,362 | ||||||||||||||
Common shares issued for exploration services rendered
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168,568 | 169 | 74,577 | - | 74,746 | |||||||||||||||
Capital contributed by shareholders for services
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- | - | 50,000 | - | 50,000 | |||||||||||||||
Stock-based compensation to employees
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- | - | 131,508 | - | 131,508 | |||||||||||||||
Common shares and warrants issued for cash pursuant to private placement offering
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34,500,000 | 34,500 | 3,415,500 | - | 3,450,000 | |||||||||||||||
Common shares and warrants issued upon conversion of promissory notes pursuant to private placement offering
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3,133,356 | 3,133 | 310,204 | - | 313,337 | |||||||||||||||
Balance forward
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42,644,054 | $ | 42,644 | $ | 4,867,523 | $ | (887,214 | ) | $ | 4,022,953 |
The accompanying notes are an integral part of these consolidated financial statements.
7
NEVADA GOLD HOLDINGS, INC.
(An Exploration Stage Company)
Consolidated Statements of Stockholders' Equity
(Unaudited)
(Continued)
Common Stock
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Additional
Paid-In
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Deficit
Accumulated
During the
Exploration
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Total
Stockholders'
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|||||||||||||||||
Shares
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Amount
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Capital
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Stage
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Equity
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Balance forward
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42,644,054 | $ | 42,644 | $ | 4,867,523 | $ | (887,214 | ) | $ | 4,022,953 | ||||||||||
Common shares and warrants issued for payment of debt pursuant to private placement offering
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1,200,000 | 1,200 | 118,800 | - | 120,000 | |||||||||||||||
Interest expense relating to intrinsic value of converted promissory notes
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- | - | 300,000 | - | 300,000 | |||||||||||||||
Net loss for the year ended December 31, 2010
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- | - | - | (1,407,053 | ) | (1,407,053 | ) | |||||||||||||
Balance, December 31, 2010
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43,844,054 | 43,844 | 5,286,323 | (2,294,267 | ) | 3,035,900 | ||||||||||||||
Net loss for the three months ended March 31, 2011
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- | - | - | (228,595 | ) | (228,595 | ) | |||||||||||||
Balance, March 31, 2011
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43,844,054 | $ | 43,844 | $ | 5,286,323 | $ | (2,522,862 | ) | $ | 2,807,305 |
The accompanying notes are an integral part of these consolidated financial statements.
8
(An Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended
March 31,
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From Inception on October 2, 2008 Through March 31,
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|||||||||||
2011
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2010
|
2011
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||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net loss
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$ | (228,595 | ) | $ | (254,903 | ) | $ | (2,522,862 | ) | |||
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
|
||||||||||||
Common stock issued for services
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- | 22,246 | 290,590 | |||||||||
Stock based compensation
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- | 32,877 | 131,508 | |||||||||
Contributed services
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- | 50,000 | 125,000 | |||||||||
Change in derivative liability
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- | - | (112,500 | ) | ||||||||
Interest expense related to intrinsic value of converted promissory notes
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- | - | 300,000 | |||||||||
Changes in Operating Assets and Liabilities:
|
||||||||||||
Accrued interest receivable
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(2,433 | ) | - | (2,433 | ) | |||||||
Other current assets
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- | - | (8,062 | ) | ||||||||
Accounts payable and accrued interest payable
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18,098 | 46,286 | (119,054 | ) | ||||||||
Net Cash Used in Operating Activities
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(212,930 | ) | (103,494 | ) | (1,917,813 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
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||||||||||||
Purchase of mining reclamation bond
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- | - | (52,600 | ) | ||||||||
Notes receivable - related parties
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(1,000,000 | ) | - | (1,000,000 | ) | |||||||
Net Cash Used in Investing Activities
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(1,000,000 | ) | - | (1,052,600 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Proceeds from issuance of common stock, net of issuance costs
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- | - | 4,313,210 | |||||||||
Proceeds from notes payable
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- | - | 450,000 | |||||||||
Principal payments on notes payable
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- | 200,000 | (200,000 | ) | ||||||||
Bank Overdraft
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25,587 | - | 25,587 | |||||||||
- | ||||||||||||
Net Cash Provided by Financing Activities
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25,587 | 200,000 | 4,588,797 | |||||||||
NET INCREASE IN CASH
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(1,187,343 | ) | 96,506 | 1,618,384 | ||||||||
CASH AT BEGINNING OF PERIOD
|
2,995,727 | 158,398 | - | |||||||||
CASH AT END OF PERIOD
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$ | 1,808,384 | $ | 254,904 | $ | 1,618,384 | ||||||
SUPPLEMENTAL DISCLOSURES OF
|
||||||||||||
CASH FLOW INFORMATION
|
||||||||||||
CASH PAID FOR:
|
||||||||||||
Interest
|
$ | - | $ | 8,082 | ||||||||
Income Taxes
|
$ | - | $ | - |
The accompanying notes are an integral part of these consolidated financial statements.
9
NEVADA GOLD HOLDINGS, INC.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2011
NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS AND SIGNFICANT ACCOUNTING POLICIES
Nevada Gold Holdings, Inc. (the “Company”) was incorporated under the laws of the State of Delaware on April 16, 2004. Nevada Gold Enterprises, Inc., a Nevada corporation, was incorporated under the laws of the State of Nevada on October 2, 2008. On December 31, 2008, Nevada Gold Acquisition Corp., a Nevada corporation formed on December 18, 2008, and a wholly owned subsidiary of Nevada Gold Holdings, Inc., merged with and into Nevada Gold Enterprises, Inc. Nevada Gold Enterprises, Inc. was the surviving corporation in the Merger. As a result of the Merger, Nevada Gold Enterprises, Inc., became a wholly-owned subsidiary of Nevada Gold Holdings, Inc. The Company is engaged in the exploration and development of gold mines.
The accompanying consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present fairly the consolidated financial position, consolidated results of operations, and consolidated cash flows at March 31, 2011, and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's December 31, 2010 audited financial statements. The results of operations for the three-month period ended March 31, 2011 is not necessarily indicative of the operating results for the full year.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.
Basic and Diluted Net Income (Loss) Per Share.
Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. For the three months ended March 31, 2011, fully diluted earnings per share excludes the dilutive effect of 39,131,356 common stock equivalents from options and warrants, because their inclusion would be anti-dilutive.
NOTE 2 – SIGNIFICANT TRANSACTIONS
Notes Receivable – Related Parties - 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. Each of these loans is unsecured, bears interest at 3% per annum, payable in full at maturity, and matures on December 31, 2011. Each of the borrowers is a wholly-owned subsidiary of Hybrid Kinetic Group Ltd., which is also the parent of the Company’s controlling stockholder, Far East Golden Resources. Hybrid Kinetic Group Ltd. has guaranteed each of the loans.
10
NEVADA GOLD HOLDINGS, INC.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2011
NOTE 3 – SUBSEQUENT EVENTS
In accordance with ASC 855-10 Company management reviewed all material events through the date these financial statements were issued, there are no material subsequent events to report.
11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations
Three Months Ended March 31, 2011, compared to Three Months Ended March 31, 2010
Revenues and Other Income
During the three month period ended March 31, 2011, the Company remained in the exploration stage and we did not realize any revenues from operations. Similarly, we have not realize any revenues from operations during the period from inception through March 31, 2011.
Expenses
Operating expenses totaled $234,457 in the three-month period ended March 31, 2011, a decrease of $5,719 from the $240,176 of operating expenses incurred during the three-month period ended March 31, 2010. For 2011, these expenses were primarily general and administrative expenses of $218,167, coupled with exploration costs of $16,290. The 2011 general and administrative increased $38,551, or 21% from the corresponding period in 2010 This increase was primarily attributable to increases in legal and accounting fees incurred as a result of the Company’s private placement offering. 2010 exploration costs decreased $44,270, or 73% from the 2010 period. The Company also recognized interest income of $5,862 during the period ended March 31, 2011, relating to notes receivable from related parties.
Net Losses
As a result of the foregoing, the Company incurred a net loss of $228,595, or ($0.01) per share, for the three months ended March 31, 2011, compared to a net loss of $254,903, or ($0.05) per share, for the corresponding period ended March 31, 2010. Our decreased net loss in the current period is due primarily to the decrease of exploration costs and interest expense incurred during the period.
2010 PPO
On October 29, 2010, November 16, 2010, and November 19, 2010 we held closings of the 2010 PPO for a total of 38,833,356 units of our securities, at an offering price of $0.10 per unit, each unit consisting of one share of Common Stock and a warrant to purchase one share of Common Stock for a period of five years, at an exercise price of $0.10 per share. Of the $3,883,337 gross proceeds, $3,450,000 consisted of cash consideration, $313,337 came from the automatic conversion of principal and interest on the convertible notes, and $120,000 represented the discharge of certain accounts payable. We plan to apply the net proceeds of the 2010 PPO to explore for gold at our property in northern Nevada and to determine if it contains gold deposits that can be mined at a profit, as well as possibly to acquire future exploration prospects, and for general working capital purposes. (Our property is not known to contain gold which can be mined at a profit, and there can be no assurance that a commercially exploitable gold deposit will be found on our property. We have not identified any other specific prospects at this time.)
We agreed, pursuant to a Registration Rights Agreement, to use our commercially reasonable efforts to file a registration statement under the Securities Act, covering the shares of Common Stock included in the Units and the shares of Common Stock issuable upon exercise of the warrants included in the Units, within 75 days after the final closing of the Offering and to have such registration statement declared effective within 180 days of such final closing date. We would be required to keep the registration statement effective until the earlier of one year from the date the registration statement is declared effective or until all of the registrable securities may be sold under Rule 144 during any 90 day period. The investors in the 2010 PPO have waived the requirement for us to file this registration statement until further notice.
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We have also granted certain “piggyback” registration rights covering the shares of Common Stock included in the Units and the shares of Common Stock issuable upon exercise of the warrants included in the Units.
We entered into agreements to pay placement agents and/or finders (collectively, “Finders”) cash fees of up to 10% of the purchase price of each Unit sold in the Offering to investors introduced to us by the relevant Finder (the “Introduced Investors”), and to issue each such Finder five-year warrants (the “Finder Warrants”) exercisable at $0.10 per share to purchase a number of shares of Common Stock equal to up to 10% of the shares of Common Stock included in the Units sold in the Offering to the Introduced Investors. As a result of the sales of the Units in the 2010 PPO, we have paid and/or become obligated to pay an aggregate of approximately $35,100 of fees to Finders and have issued and/or become obligated to issue Finder Warrants to purchase an aggregate of 351,000 shares of Common Stock.
On January 26, 2011, we made a loan of $200,000 to Hybrid Kinetic Motors Corporation; on February 24, 2011, we made a loan of $400,000 American Compass Inc.; and on March 24, 2011, we made a loan of $400,000 to American Compass Inc. Each of these loans is unsecured, bears interest at 3% per annum, payable at maturity, and matures on December 31, 2011. 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. has guaranteed each of the loans.
Liquidity and Capital Resources
March 31, 2011, we have $1,808,384 of cash on hand. We estimate our general and administrative, and exploration direct costs will require approximately $1,800,000 for the remainder of the 2011 calendar year exclusive of any new property acquisition costs and required work agreements on any such property.
The Company is positioned to resume drilling operations as soon as conditions permit which may be as early as May but possibly not until June. We have 13 targeted drill sites for the season representing our maximum granted prepared site areas (five acres) per Bureau of Land Management (“BLM”) regulations. All drilling activities have been contracted to Envirotech for the 2011 period. All sites are prepared and ready to be drilled. We estimate completing the 13 holes no later than August. All drilling results will be sampled and analyzed as we progress through the season. At the completion of the 13 targeted holes we will commence reclamation operations for the drilled sites so we may eventually apply to the BLM for additional site preparation once they certify our current sites have been fully reclaimed. This will end the drilling season at Tempo for the 2011 period.
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.
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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 sole officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2011 (the “Evaluation Date”). Based on this evaluation, our sole officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective to ensure that the information relating to us, including our consolidated subsidiaries, required to be disclosed by us in the reports filed or submitted by us under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our sole officer, as appropriate to allow timely decisions regarding required disclosure.
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 2011as we expand our business and develop our mining claims.
With the participation of our sole officer, we evaluated any change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There has been no such change in our internal control over financial reporting identified in connection with that evaluation.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time we may be involved in claims arising in connection with our business. There can be no assurance as to the ultimate outcome of any such claim. The amount of reasonably possible losses in connection with any actions that may be brought against us could be material to our consolidated financial condition, operating results and/or cash flows.
As of the date of this Report, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental authorities.
Item 1A. Risk Factors.
There have been no material changes from Risk Factors as previously disclosed in our 2010 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.
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Item 3. Defaults upon Senior Securities.
None.
Item 4. (Removed and Reserved).
Item 5. Other Information.
None.
Item 6. Exhibits.
The following Exhibits are being filed with this Quarterly Report on Form 10-Q.
In reviewing the agreements included or incorporated by reference as exhibits to this Quarterly Report on Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about us or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:
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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;
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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;
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may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
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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.
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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.
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Exhibit
Number
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Description |
31.1*
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Certification of principal executive and principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a)
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32.1*
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Certification of principal executive and principal financial officer pursuant to 18 U.S.C. Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002 (This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.)
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* Filed herewith
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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 26, 2011
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By:
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/s/ Jimmy Wang | |
Jimmy Wang | |||
Controller | |||
(Principal Financial Officer) |
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EXHIBIT INDEX
Exhibit
Number
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Description | |
Certification of principal executive and principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a)
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||
32.1
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Certification of principal executive and principal financial officer pursuant to 18 U.S.C. Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002 (This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.)
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