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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q/A


[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2012


[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For the transition period from __________ to __________

                                           

Realgold International, Inc.

(Name of Registrant as Specified in its Charter)


Nevada

 

000-21909

 

86-0779928

(State or other jurisdiction of incorporation)

 

(Commission File Number)

 

(IRS Employer ID No.)


69-2, Jalan Taman Melaka Raya 25,

Taman Melaka Raya, 75000 Melaka, Malaysia.

 (Address of principal executive office)


Registrant's telephone number, including area code: +6 06-281 4534 


Copy of Communications To:

Bernard & Yam, LLP 

Attention: Bin Zhou, Esq. 

401 Broadway Suite 1708 

New York, NY 10013 

Tel: 212-219-7783 

Fax: 212-219-3604 

(Name, Address and Telephone Number of Person 

Authorized to Receive Notice and Communications on Behalf of Registrant) 


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 past 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 definitions of “large accelerated filer,” accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer o

Accelerated Filer o

Non-accelerated Filer o

Smaller Reporting Company x

 

 

 

 

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


Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: as of September 30, 2012 and November 26, 2012, there are 7,270,101 shares of common stock issued and outstanding, respectively.


The purpose of this Form 10-Q/A Amendment is to furnish the Interactive data files pursuant to Rule 405 of Regulation S-T.



1



Part I - FINANCIAL INFORMATION


Item 1. Financial Statements


Realgold International Inc.

 (formerly Piranha Ventures, Inc.)


CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)


September 30, 2012


The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company.




2




REALGOLD INTERNATIONAL INC.

(FORMERLY KNOWN AS PIRANHA VENTURES, INC.)

BALANCE SHEETS - Unaudited

 

 

 

 

 

 

 

 

 

Sept. 30,

 

December 31,

 

 

 

2012

 

2011

          ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

     Cash in bank

 

 

 $       494,754

 

 $                -   

     Prepaid expense

 

 

                    -

 

                    -

 

 

 

 

 

 

          Total Current Assets

 

 

       494,754

 

                    -

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

 $       494,754

 

 $                  -

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

     Accounts Payable

 

 

 $         19,800

 

 $                -   

     Shareholder Payable

 

 

 $         12,442

 

 $         12,442

 

 

 

 

 

 

          Total Current Liabilities

 

 

            32,242

 

            12,442

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

     Preferred stock; $.001 par value, 10,000,000 shares

 

 

 

 

 

      authorized; 20,000 and 0 shares issued and outstanding, respectively

 

                  20

 

                    -

 

 

 

 

 

 

 

 

 

 

 

 

     Common stock; $.001 par value, 25,000,000 shares

 

 

 

 

 

       $.001 par value, 90,000,000 shares authorized;

 

 

 

 

 

       7,270,101 and 1,270,101 shares issued and outstanding, respectively

 

             7,270

 

             1,270

     Capital in excess of par value

 

 

       8,590,708

 

       5,996,728

     Retained deficit

 

 

      (8,135,486)

 

      (6,010,440)

 

 

 

 

 

 

          Total Stockholders' Equity (Deficit)

 

 

          462,512

 

           (12,442)

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 $       494,754

 

 $                  -



3




REALGOLD INTERNATIONAL INC.

(FORMERLY KNOWN AS PIRANHA VENTURES, INC.)

STATEMENTS OF OPERATIONS - Unaudited

 

 

 

 

 

 

Fort the three months ended

For the Nine months ended

 

Sept. 30,

Sept. 30,

Sept. 30,

Sept. 30,

 

2012

2011

2012

2011

 

 

 

 

 

INCOME

 $                -

 $                -

 $                   -

 $               -

 

 

 

 

 

EXPENSES

 

 

 

 

     General and administrative

 $        97,027

 $         7,970

 $     2,125,046

 $      17,171

        Total expenses

 $        97,027

 $         7,970

 $     2,125,046

 $      17,171

 

 

 

 

 

OPERATING LOSS

 $       (97,027)

 $        (7,970)

 $    (2,125,046)

 $     (17,171)

 

 

 

 

 

OTHER INCOME AND EXPENSE

 

 

 

 

     Interest expense

 $                -

 $                -

 $                   -

 $               -

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 $       (97,027)

 $        (7,970)

 $    (2,125,046)

 $     (17,171)

     Provision for income taxes

 $                -

 $                -

 $                   -

 $               -

 

 

 

 

 

NET LOSS

 $       (97,027)

 $        (7,970)

 $    (2,125,046)

 $     (17,171)

 

 

 

 

 

Deemed dividend of preferred stock

 $                -

 $                -

 $                   -

 $               -

 

 

 

 

 

NET LOSS ATTRIBUTED TO COMMON SHAREHOLDERS

 $       (97,027)

 $        (7,970)

 $    (2,125,046)

 $     (17,171)

 

 

 

 

 

 

 

 

 

 

LOSS PER SHARE - basic and diluted

 $          (0.01)

 $          (0.01)

 $            (0.34)

 $         (0.01)

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES- basic and diluted

 $   7,270,101

 $   1,269,786

 $     6,270,101

 $  1,459,220




4




REALGOLD INTERNATIONAL INC.

(FORMERLY KNOWN AS PIRANHA VENTURES, INC.)

STATEMENTS OF CASH FLOWS - unaudited

 

 

 

 

 

For the nine months ended

 

Sept. 30

 

Sept. 30

 

2012

 

2011

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

     Net (loss)

 $      (2,125,046)

 

 $           (17,171)

     Adjustments to reconcile net (loss) to net cash used

 

 

 

     by operating activities

 

 

 

     Stock based compensation

           1,980,000

 

                            -

     Changes in assets and liabilities

 

 

 

          Increase in prepaid expenses

 

 

                            -

          (Decrease) increase in accounts payable

                19,800

 

                            -

          Increase in accrued interest - related parties

                            -

 

                            -

 

 

 

 

          Net cash (used) by operating activities

            (125,246)

 

               (17,171)

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

     Loan from related party

                            -

 

                16,635

     Additional paid in capital

                            -

 

                            -

     Sale of preferred stock

                20,000

 

                            -

     Sale of common stock

              600,000

 

                            -

 

 

 

 

          Net Cash Provided By Financing Activities

              620,000

 

                16,635

 

 

 

 

NET INCREASE (DECREASE) IN CASH

              494,754

 

                    (536)

 

 

 

 

CASH - BEGINNING OF PERIOD

                            -

 

                      536

 

 

 

 

CASH - END OF PERIOD

 $           494,754

 

 $                        -

 

 

 

 

SUPPLEMENTAL INFORMATION

 

 

 

     Interest paid during the period

 $                        -

 

 $                        -

 

 

 

 

     Income taxes paid during the period

 $                        -

 

 $                        -

 

 

 

 

NON-CASH INVESTING AND FINANCING

 

 

 

     Related party payable offset accounts payables

 $                        -

 

 $                        -

    Conversion of related party note payable into equity

 

 

 $             16,635



The accompanying notes are an integral part of these financial statements.



5




Realgold International Inc.

(formerly Piranha Ventures, Inc.)

Notes to Consolidated Financial Statements - unaudited

September 30, 2012 and December 31, 2011


Note 1: Basis of Presentation and Summary of Significant Accounting Policies

The interim condensed consolidated financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim condensed consolidated financial statements be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2011. The Company follows the same accounting policies in the preparation of interim reports.


Organization – Realgold International Inc. (formerly Piranha Ventures, Inc.) (the “Company” or “Realgold”) was incorporated under the laws of the State of Arizona on November 14, 1994. On November 22, 1996, the Company reincorporated under the laws of the State of Nevada and effected a forward split of its common stock on a basis of approximately 242 shares of the Nevada corporation for each share of the Arizona corporation. The Company ceased to actively pursue its business operations relating to the publishing of interactive media software in July, 1999.  On December 15, 2011, the Company filed Amended and Restated Articles of Incorporation with the Secretary of State of Nevada changing its name from Piranha Ventures, Inc. to Realgold International Inc.  During December 2011, the Company established a subsidiary in Hong Kong, Realgold Venture Pte Limited. It does not have any operations other than acting as a holding entity.


On May 23, 2012, the Board of Directors of the Company adopted an Amendment to the Articles of Incorporation to increase authorized stock from 10,000,000 preferred shares and 99,000,000 common shares to 10,000,000 preferred shares and 990,000,000 common shares.


Stock Split

On June 13, 2011, the Company effected a reverse stock split of the issued and outstanding shares of the Company on a ten (10) to one (1) basis with all fractional shares rounded up to the nearest whole share. The capital stock accounts, all share data and earnings per share data give effect to the stock split, applied retrospectively, to all periods presented.






6





Realgold International Inc.

(formerly Piranha Ventures, Inc.)

Notes to Consolidated Financial Statements - unaudited

September 30, 2012 and December 31, 2011


Going Concern – The Company’s financial statements have been 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. The Company requires additional capital to continue its limited operations. Furthermore, the Company’s officers and directors serve in their capacities without compensation. The Company assumes that these arrangements and the availability of future capital sources will continue into the future, but no assurance thereof can be given. A change in these circumstances would have a material adverse effect on the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.


Income Taxes

The Company utilizes the liability method of accounting for income taxes as set forth in FASC 740-20, “Accounting for Income Taxes.” Under the liability method, deferred taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.  An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.


Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.


Cash and Cash Equivalents

For purposes of reporting cash flows, the Company considers all highly-liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.


Revenue Recognition

The Company plans to recognize revenue when the following four conditions are present: (1) persuasive evidence of an agreement exists, (2) the price is fixed or determinable, (3) delivery has occurred or services are rendered, and (4) collection is reasonably assured.





7




Realgold International Inc.

(formerly Piranha Ventures, Inc.)

Notes to Consolidated Financial Statements - unaudited

September 30, 2012 and December 31, 2011


Income (Loss) Per Common Share

Basic and diluted net loss per common share is computed using the net loss applicable to common shareholders and the weighted average number of shares of common stock outstanding. Diluted net loss per common share does not differ from basic net loss per common share since potential shares of common stock from conversion of preferred stocks are anti-dilutive for all periods presented. The fully diluted shares would be 27,270,101 and 20,770,101 for the three and nine months ended September 30, 2012, respectively.


Recently Issued Accounting Pronouncements

The Company has reviewed recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operations, financial position or cash flows.  Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.


Note 2: Income Taxes

Due to losses at September 30, 2012 and December 31, 2011, the Company had no income tax liability and thus no provision for taxes was recorded. At September 30, 2012 and December 31, 2011 the Company had available unused operating loss carry forwards of approximately $8,848,371 and $6,010,440, respectively, which may be applied against future taxable income and which expire in various years through 2030.


The amount of and ultimate realization of the benefits from the operating loss carry forwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company and other future events, the effects of which cannot be determined at this time. Because of the uncertainty surrounding the realization of the loss carry forwards, the Company has established a valuation allowance equal to the tax effect of the loss carry forwards and, therefore, no deferred tax asset has been recognized for the loss carry forwards. The net deferred tax assets are approximately $2,837,931 and $2,045,289 as of September 30, 2012 and December 31, 2011, respectively, with an offsetting valuation allowance of the same amount resulting in a change in the valuation allowance of approximately $792,642 during the nine months ended September 30, 2012.







8



 Realgold International Inc.

(formerly Piranha Ventures, Inc.)

Notes to Consolidated Financial Statements - unaudited

September 30, 2012 and December 31, 2011


Note 2: Income Taxes (Continued)


The Company has no tax positions at September 30, 2012 and December 31, 2011 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.  The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.  During the period ended September 30, 2012 and December 31, 2011, the Company recognized no interest and penalties.  The Company had no accruals for interest and penalties at September 30, 2011 and December 31, 2011. Income tax periods 2009, 2010, and 2011 are open for examination by taxing authorities.


Note 3: Capital Stock


Preferred Stock –


The Company has 10,000,000 shares of authorized preferred stock at $0.01 par value. As of September 30, 2012 and December 31, 2011, the Company has 20,000 and zero shares of preferred stock issued and outstanding, respectively.  


On February 2012 our CEO purchased series A Preferred Stock for a total price of $20,000. One share of Series A Preferred Stock may be converted into 1,000 shares of Common Stock. The 20,000 shares of Series A Preferred Stock that our CEO, Tan Lung Lai, purchased from the Company may be converted into 20,000,000 shares of common stock. The holder of each one share of Series A Preferred Stock is entitled to 1,000 votes. There is no dividend rate for this class of Preferred Stock.


Accounting for the Series A Preferred Stock


The Series A Preferred Stock has been classified as permanent equity as there was no redemption provision at the option of the holders. The Company evaluated the embedded conversion feature in its Series A Preferred Stock to determine if there was an embedded derivative requiring bifurcation. The Company concluded that the embedded conversion feature of the Series A Preferred Stock is not required to be bifurcated because the conversion feature is clearly and closely related to the host instrument. The Company believes the economic risks and characteristics of the Series A Preferred Stock itself and the common stock the embedded conversion feature allows the Investor to convert into have similar economic risks and characteristics.




9



Realgold International Inc.

(formerly Piranha Ventures, Inc.)

Notes to Consolidated Financial Statements - unaudited

September 30, 2012 and December 31, 2011


Stock-Based Compensation


The Company accounts for stock-based compensation under FASB ASC subtopic 718-10, Compensation – Stock Compensation: Overall. Under FASB Subtopic 718-10, the Company measures the cost of the employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the cost over the requisite service periods.


During February, 2012, stock based compensation for $1,980,000 was recorded when the Company issued 20,000 shares of preferred stock to our CEO for proceeds of $20,000. The preferred stock has an estimated fair value of $2,000,000 on the grant date. The Company allocated proceeds of $20,000 to preferred stock and $1,980,000 was recorded as stock compensation.


Common Stock 


On April 21, 2011, the Company cancelled 500,000 shares that were issued in 2009 and 2010 to certain shareholders that in turn sold their shares to the current president of the Company with his intention to cancel the shares to reduce insider holdings. Accordingly, a credit to common stock at $500 and debit to paid-in capital was recorded.


On June 13, 2011, the Company effected a reverse stock split of the issued and outstanding shares of the Company on a ten (10) to one (1) basis with all fractional shares rounded up to the nearest whole share. Recognizing the difficulty of odd lot shareholders to sell their shares of common stock, the reverse split did not reduce any shareholder below 100 shares so that any shareholder of record on the record date who would otherwise have had less than 100 shares as a result of the reverse split was not reduced below 100 shares.


In February 2012, the Company issued 6,000,000 shares of common stock to a group of 64 non-US individuals for a total price of $ 600,000 ($ 0.10 per share).


Note 4: Related Party Transactions


In the second quarter of 2011, the previous president of the Company acquired 500,000 shares of previously issued common shares from the former president and individuals in a private transaction, who had previously purchased such shares from the Company since September 2009. These shares, were promptly cancelled from the Company’s books and records. In the first nine months of 2011 a related party loaned the Company $11,543. On September 19, 2011 the former President and majority shareholder of the Company entered into a Stock Purchase Agreement whereby he would transfer 991,951 restricted common shares for cash, forgiveness of the $16,635 outstanding related party note payable and payment of all accounts payable as of the date of the Stock Purchase Agreement.



10



Realgold International Inc.

(formerly Piranha Ventures, Inc.)

Notes to Consolidated Financial Statements - unaudited

September 30, 2012 and December 31, 2011

Note 4: Related Party Transactions (continued)


On February 20, 2012, the Company issued 20,000 shares of Series A Preferred Stock to Tan Lung Lai, the Company’s President, CEO and CFO, for a total price of $ 20,000, under a Series A Preferred Stock Purchase Agreement that the Company entered with Tan Lung Lai on December 15, 2011. The Series A Preferred Stock is a class of preferred stock that the Company created on November 2, 2011. One share of Series A Preferred Stock may be converted into 1,000 shares of Common Stock and the holder of each one share of Series A Preferred Stock is entitled to 1,000 votes. The 20,000 shares of Series A Preferred Stock that Tan Lung Lai purchased from the Company may be converted into 20,000,000 shares of common stock and also granted Tan Lung Lai with 20,000,000 votes of voting rights.


Note 5: Subsequent Events


ASC 855-16-50-4 establishes accounting and disclosure requirements for subsequent events. ASC 855 details the period after the balance sheet date during which we should evaluate events or transactions that occur for potential recognition or disclosure in the financial statements, the circumstances under which we should recognize events or transactions occurring after the balance sheet date in our financial statements and the required disclosures for such events.  We adopted this statement effective June 15, 2009 and have evaluated all subsequent events through the date these financial statements were issued.




















11



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations



Special Note Regarding Forward-Looking Statements


This periodic report contains certain forward-looking statements with respect to the Plan of Operation provided below, including information regarding the Company’s financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities, and the plans and objectives of management. The statements made as part of the Plan of Operation that are not historical facts are hereby identified as "forward-looking statements."


Management's Discussion and Analysis or Plan of Operation


Certain statements in this Report constitute “forward-looking statements.”  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development, market acceptance or installation of our products and services; changes in government regulations; availability of management and other key personnel; availability, terms and deployment of capital; relationships with third-party equipment suppliers; and worldwide political stability and economic growth. The words “believe,” “expect,” “anticipate,” “intend” and “plan” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.


Critical Accounting Policies and Estimates


The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and accompanying notes.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.  Realgold believes there have been no significant changes during the three month period ended September 30, 2012.




12



Plan of Operations


Overview:


The Company has not received any revenue from operations in each of the last two fiscal years. The Company’s current operations have consisted of taking such action as management believes necessary to prepare to seek an acquisition or merger with an operating entity.


The financial statements contained in this interim report have been prepared assuming that the Company will continue as a going concern. The Company is not engaged in any revenue producing activities and has not established any source of revenue other than described herein. These factors raise substantial doubt that the Company will be able to continue as a going concern even though management believes that sufficient funding is available to meet its operating needs during the next twelve months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


Risks associated with the plan of operation:


In its search for a business opportunity, management anticipates that the Company will incur additional costs for legal and accounting fees to locate and complete a merger or acquisition. Other than previously discussed, the Company does not have any revenue producing activities whereby it can meet the financial requirements of seeking a business opportunity. There can be no assurance that the Company will receive any benefits from the efforts of management to locate a business opportunity.


The Company does not propose to restrict its search for a business opportunity to any particular industry or geographical area and may, therefore, attempt to acquire any business in any industry. The Company has unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors. Consequently, if and when a business opportunity is selected, such business opportunity may not be in an industry that is following general business trends.


The selection of a business opportunity in which to participate is complex and risky. Additionally, the Company has only limited resources and this fact may make it more difficult to find any such opportunities. There can be no assurance that the Company will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to the Company and its stockholders. The Company will select any potential business opportunity based on management's business judgment. The Company may acquire or participate in a business opportunity based on the decision of management that potentially could act without the consent, vote, or approval of the Company's stockholders.


It is unlikely that any revenue will be generated until such time as the Company locates a business opportunity to acquire or with which it can merge. However, the Company is not restricting its search to those business opportunities that have profitable operations. Even though a business opportunity is acquired that has revenues or gross income, there is no assurance that profitable operations or net income will result therefrom. Consequently, even though the Company may be successful in acquiring a business opportunity,



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such acquisition does not assume that a profitable business opportunity is being acquired or that stockholders will benefit through an increase in the market price of the Company's common stock.


The acquisition of a business opportunity, no matter what form it may take, will almost assuredly result in substantial dilution for the Company's current stockholders. Inasmuch as the Company only has its equity securities (its common and preferred stock) as a source to provide consideration for the acquisition of a business opportunity, the Company's issuance of a substantial portion of its authorized common stock is the most likely method for the Company to consummate an acquisition. The issuance of any shares of the Company's common stock will dilute the ownership percentage that current stockholders have in the Company.


The Company does not intend to employ anyone in the future, unless its present business operations were to change. At the present time, management does not believe it is necessary for the Company to have an administrative office and utilizes the mailing address of the Company's president for business correspondence.


LIQUIDITY AND CAPITAL RESOURCES


On September 30, 2012, Realgold had $494,754 in cash and $32,242 in liabilities.  Realgold has only incidental ongoing expenses primarily associated with maintaining its corporate status and filings with the Securities and Exchange Commission.   


Currently, management believes expenses for the next twelve months primarily will be for auditing, accounting and legal expenses.  

Management anticipates that the Company will incur more costs including legal and accounting fees to locate and complete a merger or acquisition. Management intends to provide loans or sell equity to cover the cost for the foreseeable future.  However, management and current stockholders have limited funds and will not be able to provide support indefinitely.  Although management believes it has funds to pay ongoing expenses for at least the next twelve months, if Realgold is not able to find a potential business, Realgold would have to look to outside sources of capital.  Additionally, it is possible that any business that is acquired would need additional capital which could lead to dilution to current investors.


RESULTS OF OPERATIONS


For the three and nine months ended September 30, 2012 the Company had a net loss of $97,027 and $2,125,046, respectively compared to $7,970 and $17,171 loss for the three and nine months ended September 30, 2011. The increase mainly consists of stock based compensation for $1,980,000 which was recorded when the Company issued 20,000 shares of preferred stock to our CEO with proceeds of $20,000. The preferred stock has an estimated fair value of $2,000,000 on the grant date. Accordingly, we allocated proceeds of $20,000 to preferred stock and $1,980,000 was recorded as stock compensation. The Company anticipates losses to remain at the present level until a business opportunity is found. The Company had no revenue during the three and nine months ended September 30, 2012. The Company does not anticipate any revenue until it locates a new business opportunity.





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Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


N/A-Smaller Reporting Company


Item 4.  Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


Our management, consisting of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. We believe our controls do provide reasonable assurances.

 

Management’s Report on Internal Control over Financial Reporting


Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

 

Our management, the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of September 30, 2012.  Based on this evaluation, our management concluded that, as of September 30, 2012, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in our periodic reports is recorded, processed, summarized and reported, within the time periods specified for each report and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our financial statements are prepared by our financial and accounting staff under the direction of our Chief Financial Officer in accordance with generally



15



accepting accounting principles in effect in the PRC; however we engage an outside consultant to convert our financial statements for presentation in accordance with generally accepted accounting principles in effect in the United States ("US GAAP"). We believe our internal controls over financial reporting in accordance with PRC GAAP are adequate for the proper supervision of the conduct of our business. Nevertheless, the need to convert our financial statements into US GAAP and the lack of familiarity of our accounting staff with US GAAP and US securities laws and regulations is a deficiency in our internal controls over financial reporting and disclosure controls and procedures. This deficiency will not be considered remediated until we hire financial and accounting personnel with the requisite knowledge and experience concerning US GAAP.


Changes in internal control over financial reporting


There have been no changes in internal control over financial reporting.

PART II - OTHER INFORMATION


ITEM 1.  Legal Proceedings


None


ITEM 1A. Risk Factors


N/A-Smaller Reporting Company


ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds


Recent Sales of Unregistered Securities


On June 15, 2010, the Company converted its outstanding related party notes payable totaling $5,000 into 111,111 shares of Common Stock.


On June 15, 2010, the Company offered and sold 166,667 shares of its common stock for $0.045 per share to qualified purchasers through an offer and sale in compliance with exemptions from state and federal registration requirements.


On November 9, 2010, the Company converted its outstanding related party notes payable totaling $2,500 into 55,556 shares of Common Stock.


On December 30, 2010, the Company offered and sold 55,556 shares of its common stock for $0.045 per share to qualified purchasers through an offer and  in compliance with exemptions from state and federal registration requirements.


On February 7, 2011, Kip Eardley was issued 155,556 shares of common stock for $ 0.045  per share through an offer and sale in compliance with exemptions from state and federal registration requirements.



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On April 25, 2011, Kip Eardley voluntarily cancelled 500,000 shares of restricted common stock for no consideration.


On June 13, 2011, Company completed a 1 for 10 reverse stock split reducing the total issued and outstanding shares to 1,270,101. Recognizing the difficulty of odd lot shareholders to sell their shares of common stock, the reverse split did not reduce any shareholder below 100 shares so that any shareholder of record on the record date who would otherwise have had less than 100 shares as a result of the reverse split was not reduced below 100 shares.


On December 15, 2011, the Company entered into a Series A Preferred Stock Purchase Agreement with Tan Lung Lai, our President, CEO and CFO. Under the Agreement, the Company issued 20,000 shares of Series A Preferred Stock to Tan Lung Lai for a total price of $ 20,000. Series A Preferred Stock is a class of preferred stock that the Company created on November 2, 2011. One share of Series A Preferred Stock may be converted into 1,000 shares of Common Stock and the holder of each one share of Series A Preferred Stock is entitled to 1,000 votes. The 20,000 shares of Series A Preferred Stock that Tan Lung Lai purchased from Company may be converted into 20,000,000 shares of common stock. Therefore, the 20,000 Shares of Series A Preferred Stock that Tan Lung Lai purchased from the Company grant Tan Lung Lai with 20,000,000 votes of voting rights.


The 20,000 shares of Series A Preferred Stock were issued to Tan Lung Lai on February 20, 2012. The sale of the 20,000 shares of Series A Preferred Stock has not been registered with the SEC and was pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933.


On December 16, 2011, the Company entered a Regulation S Stock Purchase Agreement with a group of 64 non-US individual purchasers (“Purchasers”). Under the Agreement, the Company will issue a total of 6,000,000 shares of common stock to Purchasers for a total price of $ 600,000 ($ 0.10 per share). The 6,000,000 shares of common stock were issued on February 20, 2012. The issuance of the 6,000,000 shares is pursuant to the exemption provided by Regulation S. None of the Purchasers is a US person and the transactions underlying the Agreement are carried out outside of the US. 


Use of Proceeds of Registered Securities


None; not applicable.


Purchases of Equity Securities by Us and Affiliated Purchasers


During the three months ended September 30, 2012, we have not purchased any equity securities.


ITEM 3.  Defaults Upon Senior Securities


We are not aware of any defaults upon senior securities.


ITEM 4.   Mine Safety Disclosures



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None


ITEM 5.  Other Information.


None




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ITEM 6.  Exhibits


a) Index of Exhibits:


Exhibit Table #

Title of Document

Location


3 (i)

Articles of Incorporation

 Incorporated by reference*


3 (ii)

Bylaws

Incorporated by reference*


4

Specimen Stock Certificate Incorporated by reference*


31

Rule 13a-14(a)/15d-14a(a) Certification – CEO & CFO This filing


32

Section 1350 Certification – CEO & CFO This filing


101.

INS XBRL Instance


101.

XSD XBRL Schema


101.

CAL XBRL Calculation


101.

DEF XBRL Definition


101.

LAB XBRL Label


101.

PRE XBRL Presentation


* Incorporated by reference from the Company's registration statement on Form 10-SB filed with the Commission, SEC File No. 000-21909.


SIGNATURES


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.


Realgold International, Inc.

(Registrant)


Dated: November 26, 2012


By: 

/s/ Tan Lung Lai         

     Tan Lung Lai

Chief Executive Officer

Chief Financial Officer





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