UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K/A


(Mark
One)


x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
              For
      fiscal year ended: December 31,
      2009




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)





Nevada
                  
                  20-3724068(State
      or other jurisdiction of
                    incorporation
      or organization)
                  
                  (IRS
      Employer Identification No.)





1640
      Terrace Way
                    Walnut
      Creek, California
                  
                  94597(Address
      of principal executive offices)
                  
                  (Postal
      Code)




Registrant’s
telephone number, including area code:  (775) 835-6177




Securities
registered under Section 12(b) of the Act:  None




Securities
registered under Section 12(g) of the Act:  Common Stock, Par Value of $0.001 Per
Share




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.   Yes o   No x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act.  Yes o   No x




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act 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 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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a smaller reporting company.  See the
definitions of the “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.   (Check
one):




Large
Accelerated Filer o                                                    Accelerated
Filer o


Non-Accelerated
Filer o                                                      Smaller
reporting company x


(Do
not check if a smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).Yes oNo x




On June
30, 2009, the last business day of the registrant’s most recently completed
second fiscal quarter, 48,121,946 shares of its Common Stock, $0.001 par value
per share (its only class of voting or non-voting common equity) were held by
non-affiliates of the registrant.  The market value of those shares
was $10,586,828, based on the last sale price of $0.22 per share of the Common
Stock on that date.  For this purpose, shares of Common Stock
beneficially owned by each executive officer and director of the registrant and
each beneficial owner of 10% or more of the Common Stock outstanding have been
excluded because such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes.




As of
April 14, 2010, there were 76,430,476 shares of the registrant's common stock,
par value $0.001, issued and outstanding.






DOCUMENTS
INCORPORATED BY REFERENCE


None
  
 
  This
Annual Report on Form 10-K/A is being filed to correct certain typographical
errors and to supplement certain information in the following
Items:
 
 ·
                Item
      1 – Business
 
 ·
                Item
      1A – Risk Factors
 
 ·
                Item
      2 – Properties
 
 ·
                Item
      5 – Market for Registrant’s Common Equity, Related Stockholder Matters and
      Issuer Purchases of Equity
Securities
 
 ·
                Item
      7 – Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
 
 ·
                Item
      9 – Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure
 
 ·
                Item
      9A.[T] – Controls and Procedures
 
 ·
                Item
      10 – Directors, Executive Officers, and Corporate
    Governance
 
 ·
                Item
      11 – Executive Compensation
 
 ·
                Item
      12 – Security Ownership of Certain Beneficial Owners and Management and
      Related Stockholder Matters
 
 ·
                Item
      13 – Certain Relationships and Related Transactions, and Director
      Independence
 
 ·
                  Item
      15 – Exhibits and Financial Statement Schedules·
                  Notes
      to Consolidated Financial
Statements
 
 ·
                Note
      3 – Significant Accounting Policies
 
 ·
                Note
      4 – Debt and Equity


TABLE
OF CONTENTS




Item
                  
                  PageAvailable
      Information
                  
                  2Forward-Looking
      Statements
                  
                  3PART
      I
                  
                  41.
                  Business
                  
                  41A.
                  Risk
      Factors
                  
                  122.
                  Properties
                  
                  203.
                  Legal
      Proceedings
                  
                  274.
                  Submission
      of Matters to a Vote of Security Holders
                  
                  27PART
      II
                  
                  285.
                  Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                  
                  286.
                  Selected
      Financial Data
                  
                  327.
                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                  
                  338.
                  Financial
      Statements and Supplemental Data
                  
                  359.
                  Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                  
                  359A.[T]
                  Controls
      and Procedures
                  
                  38PART
      III
                  
                  3910.
                  Directors,
      Executive Officers, and Corporate Governance
                  
                  3911.
                  Executive
      Compensation
                  
                  4112.
                  Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                  
                  4413.
                  Certain
      Relationships and Related Transactions, and Director
      Independence
                  
                  4514.
                  Principal
      Accountant Fees and Services
                  
                  46PART
      IV
                  
                  4715.
                  Exhibits
      and Financial Statement Schedules
                  
                  47









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


Telephone:
212-400-6900


Facsimile:
212-400-6901





2




FORWARD-LOOKING
STATEMENTS





This
Annual Report contains forward-looking statements, including, without
limitation, in the sections captioned “Description of Business,” “Risk Factors,”
and “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
the section captioned “Risk Factors” and elsewhere in this Report.




Readers
are cautioned not to place undue reliance on forward-looking statements because
of the risks and uncertainties related to them and to the risk factors. We
disclaim any obligation to update the forward-looking statements contained in
this Report to reflect any new information or future events or circumstances or
otherwise.




Readers
should read this Report in conjunction with the discussion under the caption
“Risk Factors,” our financial statements and the related notes thereto in this
Report, and other documents which we may file from time to time with the
SEC.




3




PART I





ITEM
      1.
            BUSINESS





This
Report contains summaries of the material terms of various agreements executed
in connection with the transactions described herein. The summaries of these
agreements are subject to, and are qualified in their entirety by, reference to
these agreements, all of which are incorporated herein by
reference.





Historical
Development





We were
incorporated as Nano Holdings International, Inc., in Delaware on April 16,
2004.  Prior to the Merger (as defined below), our business was to
sell party and drinking supplies, including gelatin shot mixes, shot glasses,
flavored sugar and salts, and various other drinking containers and
paraphernalia.





Name
Change and Capital Increase





On
November 3, 2008, we filed a Certificate of Amendment to our Certificate of
Incorporation with the Secretary of State of the State of Delaware, which (i)
changed our name from Nano Holdings International, Inc., to Nevada Gold
Holdings, Inc., and (ii) increased our authorized capital stock from 75,000,000
shares of common stock, par value $0.001, to 300,000,000 shares of common stock,
par value $0.001, and 10,000,000 shares of preferred stock, par value
$0.001.





As used
in this Report, unless otherwise stated or the context clearly indicates
otherwise, the term “Nano Holdings” refers to Nevada Gold Holdings, Inc., before
giving effect to the Merger (defined below), the term “NGE” refers to Nevada
Gold Enterprises, Inc., a Nevada corporation formed on October 7, 2008, before
giving effect to the Merger, the term “NGHI” refers to Nevada Gold Holdings,
Inc., after giving effect to the Merger, and the terms “Company,” “we,” “us,”
and “our” refer to Nevada Gold Holdings, Inc., and its wholly-owned subsidiary,
NGE, after giving effect to the Merger.





Stock
Splits





Our Board
of Directors authorized a 30.30303-for-1 forward split of our common stock, par
value $0.001 per share (“Common Stock”), in the form of a stock dividend (the
“2008 Stock Split”), which was paid on November 21, 2008, to Holders of record
on November 19, 2008.  Our Board of Directors authorized a 2-for-1
forward split of our Common Stock, in the form of a stock dividend (the “2009
Stock Split”), which was paid on May 12, 2009, to Holders of record on May 8,
2009. All share and per share numbers in this Report relating to the Common
Stock have been adjusted to give effect to these stock splits, unless otherwise
stated.





Merger





On
December 31, 2008, pursuant to a Merger Agreement entered into on the same date,
Nevada Gold Acquisition Corp., a Nevada corporation formed on December 18, 2008,
and a wholly owned subsidiary of Nano Holdings (“Acquisition Sub”), merged with
and into NGE, with NGE being the surviving corporation (the “Merger”). As a
result of the Merger, NGE became a wholly-owned subsidiary of the
NGHI.





Pursuant
to the Merger, we ceased operating as a distributor of party and drinking
supplies and acquired the business of NGE to engage in the exploration and
eventual development of gold mines and have continued NGE’s existing business
operations as a publicly-traded company under the name Nevada Gold Holdings,
Inc.  See “Split-Off Agreement” below.





At the
closing of the Merger, each of the 200 shares of NGE’s common stock issued and
outstanding immediately prior to the closing of the Merger was converted into
80,000 shares of our Common Stock. As a result, an aggregate of 16,000,000
shares of our Common Stock were issued to the holders of NGE’s common stock. NGE
did not have any stock options or warrants to purchase shares of its capital
stock outstanding at the time of the Merger.




4




The
Merger Agreement contains a post-closing adjustment to the number of shares of
Company Common Stock issued to the former NGE stockholders, in an amount up to
500,000 shares of Company Common Stock, to be issued to the former NGE
stockholders on a pro
rata basis for any breach of the Merger Agreement by Nevada Gold
Holdings, Inc., discovered during the two-year period following the Closing
Date. In order to secure the indemnification obligations of NGE under the Merger
Agreement, 5% of the shares of Company Common Stock to which the principal
former NGE stockholder (David Mathewson, who was also subsequent to the Merger
our sole director, Chief Executive Officer and President, and who is now still a
director of the Company) is entitled in exchange for his shares of NGE in
connection with the Merger will be held in escrow for a period of two years
pursuant to an escrow agreement.





The
Merger Agreement contained customary representations and warranties and pre- and
post-closing covenants of each party and customary closing conditions. Breaches
of the representations and warranties will be subject to customary
indemnification provisions.





The
Merger was treated as a recapitalization of the Company for financial accounting
purposes. NGE is considered the acquirer for accounting purposes, and the
historical financial statements of Nano Holdings before the Merger have been
replaced with the historical financial statements of NGE before the Merger in
all subsequent filings with the Securities and Exchange Commission (the
“SEC”).





The
parties have taken all actions necessary to ensure that the Merger is treated as
a tax-free exchange under Section 368(a) of the Internal Revenue Code of 1986,
as amended.





The
issuance of shares of Common Stock to holders of NGE’s capital stock in
connection with the Merger was not registered under the Securities Act, in
reliance upon the exemption from registration provided by Section 4(2) of the
Securities Act and Regulation D promulgated by the SEC under that section, which
exempt transactions by an issuer not involving any public offering. These
securities may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirement.





Split-Off
Agreement





Upon the
closing of the Merger, under the terms of a Split-Off Agreement, the Company
transferred all of its pre-Merger operating assets and liabilities to its
wholly-owned subsidiary, Sunshine Group, Inc., a Delaware
corporation (“Sunshine”) formed on December 18, 2008, including, without
limitation, the Company’s equity interests in Sunshine Group, LLC, a Florida
limited liability company (“Sunshine LLC”). Thereafter, pursuant to the
Split-Off Agreement, the Company transferred all of the outstanding shares of
capital stock of Sunshine to Marion R. “Butch” Barnes, William D. Blanchard and
Robert Barnes, pre-Merger stockholders of Nano Holdings (the “Split-Off”), in
consideration of and in exchange for (i) the surrender and cancellation of an
aggregate of 100,000,000 shares of the Company’s Common Stock held by those
stockholders and (ii) certain representations, covenants and
indemnities.





Private
Placements





On
December 31, 2008, NGHI closed a private placement (the “Bridge PPO”) of (a)
414,000 shares of Common Stock, at a purchase price of $0.25 per share, and (b)
$150,000 principal amount of its 10% Secured Convertible Promissory Note (the
“2008 Bridge Note”), at a purchase price of par, for aggregate gross proceeds of
$253,500, before deducting expenses related to the offerings.  Upon
the closing of the Merger, the purchaser of the 2008 Bridge Note also received
150,000 shares of Common Stock under the terms of the 2008 Bridge
Note.  (The 2008 Bridge Note has subsequently been repaid; see
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations – 2008 Bridge Note” for more information.)




5




On March
9, 2009, NGHI held a second closing of the Bridge PPO for 165,000 shares of
Common Stock, at a purchase price of $0.25 per share.





As an
inducement to certain investors to purchase Common Stock in the Bridge PPO, the
principal former NGE stockholder (David Mathewson, who was then our Chief
Executive Officer, President and sole director and is now our director) agreed
to transfer to those investors in private transactions an aggregate of 3,210,000
shares of the Company Common Stock that he received in the Merger.





On June
24, 2009, we closed a private placement (the “2009 PPO”) of 2,000,000 units of
our securities, at a purchase price of $0.25 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 $0.50 per share, for gross
proceeds of $500,000.





On
September 18, 2009, we held a second closing of the 2009 PPO for 1,000,000 of
the same units on the same terms, for gross proceeds of $250,000.





On
December 10, 2009, we borrowed $100,000 under a bridge loan note (the “2009
Bridge Note”) from a private institution. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations – 2009 Bridge Note”
for more information.





On
February 5, 2010, we entered into a financing arrangement with JMJ Financial
(the “Investor”), pursuant to which the Investor may lend us up to
$3,200,000.  We issued convertible promissory notes to the Investor in
an aggregate principal amount of $3,200,000 (the “2010 Notes”).  We
received $200,000 from the Investor on February 5, 2010.  See
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations – 2010 Notes” for more information.





These
offerings and issuances were exempt from registration under the Securities Act
of 1933, as amended (the “Securities Act”). The Bridge PPO and the 2009 PPO were
exempt in reliance upon Regulation D and Regulation S promulgated by the SEC
under the Act and were sold only to “accredited investors,” as defined in
Regulation D and non-“U.S. persons” as defined in Regulation S.  The
issuances of the 2008 Bridge Note, the 2009 Bridge Note and of the 2010 Notes
were exempt from registration under Section 4(2) of the Act as not involving any
public offering.  These securities may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirement. Additional information concerning the Bridge PPO, the
2008 Bridge Note, the 2009 PPO, the 2009 Bridge Note and the 2010 Notes is
presented below under “Management’s Discussion and Analysis of Financial
Condition and Results of Operations.”





Investor
Relations Agreement and Warrants





In the
Merger Agreement, we agreed to enter into an agreement with an investor
relations firm to be identified (the “IR Consultant”) to provide investor
relations services to the Company, pursuant to which we will agree to issue to
the IR Consultant warrants to purchase an aggregate of 1,000,000 shares of
Common Stock, exercisable for a period of five years, at an exercise price of
$1.00 per share.





2008
Equity Incentive Plan





Before
the Merger, Nano Holdings’ Board of Directors adopted the 2008 Equity Incentive
Plan (the “2008 Plan”), which provides for the issuance of up to 4,000,000
shares of Common Stock as incentive awards granted to executive officers, key
employees, consultants and directors.




6




Lock-up
Agreements and Other Restrictions





In
connection with the Merger, David Mathewson, the then sole officer, director and
employee of the Company, and the two other former stockholders of NGE entered
into lock-up agreements, whereby they are restricted for a period of 24 months
(in the case of Mr. Mathewson) or 12 months (in the case of the other two
stockholders) from certain sales or dispositions of the Common Stock acquired by
them in the Merger. In addition, the Common Stock issued to the former NGE
stockholders in the Merger is not permitted to be included in a registration
statement for a period of 24 months after the closing. In addition, for a period
of 12 months after the closing, former NGE stockholders agreed to be subject to
restrictions on engaging in certain transactions, including effecting or
agreeing to effect short sales, whether or not against the box, establishing any
“put equivalent position” with respect to the Common Stock, borrowing or
pre-borrowing any shares of Common Stock, or granting other rights (including
put or call options) with respect to the Common Stock or with respect to any
security that includes, relates to or derives any significant part of its value
from the Common Stock, or otherwise seeks to hedge their position in the Common
Stock.





Directors
and Officers





Our Board
of Directors consists of three members. On the Closing Date of the Merger, David
Rector, the sole director of Nano Holdings before the Merger, resigned his
position as a director, and David Mathewson was appointed to fill the vacancy on
the Board of Directors. Also on the Closing Date, Mr. Rector, the President and
sole officer of Nano Holdings, resigned and Mr. Mathewson was appointed CEO,
President, Secretary and Treasurer by the Board. On November 5, 2009, Mr.
Mathewson resigned as CEO, President, Secretary and Treasurer (but remained on
the Board of Directors), and Mr. Rector was appointed a director and CEO,
President and Secretary.  On November 13, 2009, John N. Braca was
appointed to the Board of Directors.  See “Management – Directors and
Executive Officers.”





Accounting
Treatment; Change of Control




The
Merger was accounted for as a “reverse merger,” and NGE was deemed to be the
acquirer in the reverse merger. Consequently, the assets and liabilities and the
historical operations that will be reflected in the financial statements prior
to the Merger will be those of NGE and will be recorded at the historical cost
basis of NGE, and the consolidated financial statements after completion of the
Merger will include the assets and liabilities of NGE, historical operations of
NGE and operations of the Company and its subsidiary from the closing date of
the Merger. As a result of the issuance of the shares of Common Stock pursuant
to the Merger, a change in control of the Company occurred as of the date of
consummation of the Merger. Except as described in this Report, no arrangements
or understandings exist among present or former controlling stockholders with
respect to the election of members of our Board of Directors and, to our
knowledge, no other arrangements exist that might result in a change of control
of the Company.




We
continued to be a “smaller reporting company,” as defined under the Exchange
Act.





Overview
of Our Business





We are
engaged in the highly speculative business of exploring for gold. We currently
hold a lease on one property in northern Nevada, on which we have the right to
explore, and if warranted, mine for gold. Our current plan is to explore for
gold at our one property and to determine if it contains gold deposits which can
be mined at a profit. Our property is not known to contain gold which can be
mined at a profit.  We have commenced initial exploration activities.
We also plan to acquire future exploration prospects, but have not identified
any specific future prospects at this time. Our
exploration staff consistssolely
of our Geological Advisor, David Mathewson. We plan to engage independent
engineers, contractors and consultants on an as-needed basis. We cannot assure
you that a commercially exploitable gold deposit will be found on our
property.




7




In
Nevada, there are five property categories that can be available for exploration
and eventual development and mining: public lands, private fee lands, unpatented
mining claims, patented mining claims, and tribal lands. Our property consists
of unpatented mining claims on federal lands. The primary sources of land for
exploration and mining activities are land owned by the United States federal
government through the Bureau of Land Management and the United States Forest
Service, land owned by state governments, tribal governments and individuals, or
land obtained from entities which currently hold title to or lease government or
private lands.




We
currently have rights to explore for gold on one property, known as Tempo
Mineral Prospect, all of which we lease from Gold Standard Royalty
Corporation, a subsidiary of Golden Predator Mines Inc.,
which acquired its rights to this property from the Lyle F. Campbell
Trust of Reno, Nevada, which acquired its rights to this property from the
Federal Bureau of Land Management by staking. We acquired our interest in the
lease from KM Exploration, Ltd., a Nevada limited liability company in which our
director and Geological Advisor (and former CEO and President), David Mathewson,
had a 50% ownership interest prior to its dissolution. (See “Certain
Relationships and Related Transactions, and Director Independence”
below.)  More details about our property may be found in the section
captioned “Properties.” Below is a map indicating the location of our property
in Nevada.









8




See Part
I, Item 2, “Properties,” below for more detailed information about the Tempo
Mineral Prospect and our exploration program.
 
 Although
mineral exploration is a time consuming and expensive process with no assurance
of success, the process is straightforward. We first acquire the rights to
explore for gold. We then explore for gold by examining the soil, the rocks on
the surface, and by drilling into the ground to retrieve underground rock
samples, which can then be analyzed for their mineral content. This exploration
activity is undertaken in phases, with each successive phase built upon the
information previously gained in prior phases. If our exploration program
discovers what appears to be an area which may be able to be profitably mined
for gold, we will focus most of our activities on determining whether that is
feasible, including further delineation of the location, size and economic
feasibility of any such potential ore body.
 
 In the
event that we discover gold deposits on our property which can be mined at a
profit, we will need to raise substantial additional financing in order for the
deposits to be developed. In such event, we may seek to enter into a
joint-venture agreement with another entity in order to mine our property or
enter into other arrangements. Any gold that is mined from our property will be
refined and eventually sold on the open market to dealers.
  Competition
  We
compete with other exploration companies, many of which possess greater
financial resources and technical abilities than we do. Our main areas of
competition are acquiring exploration rights and engaging qualified personnel.
The gold exploration industry is highly fragmented, and we are a very small
participant in this sector. Many of our competitors explore for a variety of
minerals and control many different properties around the world. Many of them
have been in business longer than we have and have probably established more
strategic partnerships and relationships and have greater financial
accessibility than we do.
  There is
significant competition for properties suitable for gold exploration. As a
result, we may be unable to continue to acquire interests in attractive
properties on terms that we consider acceptable.
  Market
for Gold
 
 In the
event that gold is produced from our property, we believe that wholesale
purchasers for the gold would be readily available. Readily available wholesale
purchasers of gold and other precious metals exist in the United States and
throughout the world. Among the largest are Handy & Harman, Engelhard
Industries and Johnson Matthey, Ltd. Historically, these markets are liquid and
volatile. Wholesale purchase prices for precious metals can be affected by a
number of factors, all of which are beyond our control, including but not
limited to:
  ●
              fluctuation
      in the supply of, demand and market price for
  gold;
  ●
              mining
      activities of our competitors;
  ●
              sale
      or purchase of gold by central banks and for investment purposes by
      individuals and financial
institutions;
  ●
              interest
      rates;
  ●
              currency
      exchange rates;
  ●
              inflation
      or deflation;
  ●
              fluctuation
      in the value of the United States dollar and other currencies;
      and
  ●
              political
      and economic conditions of major gold or other mineral-producing
      countries.
  9
  10-Year
Gold Prices









If we
find gold that is deemed of economic grade and in sufficient quantities to
justify removal, we may seek additional capital through equity or debt financing
to build a mine and processing facility, or find some other entity to mine our
property on our behalf, or sell our rights to mine the gold. Upon mining, the
ore would be processed through a series of steps that produces a rough
concentrate. This rough concentrate is then sold to refiners and smelters for
the value of the minerals that it contains, less the cost of further
concentrating, refining and smelting. Refiners and smelters then sell the gold
on the open market through brokers who work for wholesalers including the major
wholesalers listed above. Based upon the current demand for gold, we believe
that we will not have any difficulty in selling any gold that we may recover.
However, we have not found any gold as of today, and there is no assurance that
we will find any gold in the future.
  Hedging
Transactions
  We do not
currently engage in hedging transactions and we have no hedged mineral
resources.
  Compliance
with Government Regulation
  Various
levels of governmental controls and regulations address, among other things, the
environmental impact of mineral exploration and mineral processing operations
and establish requirements for decommissioning of mineral exploration properties
after operations have ceased. With respect to the regulation of mineral
exploration and processing, legislation and regulations in various jurisdictions
establish performance standards, air and water quality emission standards and
other design or operational requirements for various aspects of the operations,
including health and safety standards. Legislation and regulations also
establish requirements for decommissioning, reclamation and rehabilitation of
mineral exploration properties following the cessation of operations and may
require that some former mineral properties be managed for long periods of time
after exploration activities have ceased.
 
 Our
exploration activities are subject to various levels of federal and state laws
and regulations relating to protection of the environment, including
requirements for closure and reclamation of mineral exploration properties. Some
of the laws and regulations include the Clean Air Act, the Clean Water Act,
the Comprehensive Environmental Response, Compensation and Liability Act, the
Emergency Planning and Community Right-to-Know Act, the Endangered Species Act,
the Federal Land Policy and Management Act, the National Environmental Policy
Act, the Resource Conservation and Recovery Act, and all related state laws in
Nevada. Additionally, our property is subject to the federal General Mining Law
of 1872, which regulates how mineral claims on federal lands are
obtained.
  10
  In 1989,
the State of Nevada adopted the Mined Land Reclamation Act (the “Nevada MLR
Act”), which established design, operation, monitoring and closure requirements
for all mining operations in the state. The Nevada MLR Act has increased the
cost of designing, operating, monitoring and closing new mining facilities and
could affect the cost of operating, monitoring and closing existing mining
facilities. New facilities are also required to provide a reclamation plan and
financial assurance to ensure that the reclamation plan is implemented upon
completion of operations. The Nevada MLR Act also requires reclamation plans and
permits for exploration projects that will result in more than five acres of
surface disturbance.
  We plan
to secure all necessary permits for our exploration activities and we will file
for the required permits to conduct our exploration programs as necessary. These
permits are usually obtained from either the Bureau of Land Management or the
United States Forest Service. Obtaining such permits usually requires the
posting of small bonds for subsequent remediation of trenching, drilling and
bulk-sampling. Delays in the granting of permits are not uncommon, and any
delays in the granting of permits may adversely affect our exploration
activities. Additionally, necessary permits may be denied, in which case we will
be unable to pursue our exploration activities. It may be possible to appeal any
denials of permits, but any such appeal will result in additional delays and
expense, which may cause you to lose all or part of your
investment.
  We do not
anticipate discharging water into active streams, creeks, rivers, lakes or any
other bodies of water without an appropriate permit. We also do not anticipate
disturbing any endangered species or archaeological sites or causing damage to
our property. Re-contouring and re-vegetation of disturbed surface areas will be
completed pursuant to the applicable permits. The cost of remediation work
varies according to the degree of physical disturbance. It is difficult to
estimate the cost of compliance with environmental laws since the full nature
and extent of our proposed activities cannot be determined at this
time.
 
 Employees
  We
currently have one employee. In the future, if our activities grow, we may
hire personnel on an as-needed basis. For the foreseeable future, we plan to
engage freelance geologists, engineers and other consultants as
necessary.
 
 Research
and Development Expenditures
 
 We are
not currently conducting any research and development activities other than
those relating to the possible acquisition of new gold properties or projects.
As we proceed with our exploration programs we may need to engage additional
contractors and consider the possibility of adding permanent employees, as well
as the possible purchase or lease of equipment. Our planned exploration
activities are described in the section captioned “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.”
 
 Subsidiaries
  Nevada
Gold Enterprises, Inc. (“NGE”) is our only subsidiary.  The Company
owns 100% of the stock of NGE.
  11
  Patents/Trademarks/Licenses/Franchises/Concessions/Royalty
Agreements or Labor Contracts
  We do not
own any patents or trademarks. Also, we are not a party to any license or
franchise agreements, concessions, or labor contracts. In the event that gold is
produced from our property, we will have to pay royalties as disclosed in the
section captioned “Properties.”
 
 
 ITEM
      1A.
              RISK
      FACTORS
 
 THIS
ANNUAL REPORT ON FORM 10-K CONTAINS CERTAIN STATEMENTS RELATING TO FUTURE EVENTS
OR THE FUTURE FINANCIAL PERFORMANCE OF OUR COMPANY. YOU ARE CAUTIONED THAT SUCH
STATEMENTS ARE ONLY PREDICTIONS AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT
ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS,
YOU SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS ANNUAL
REPORT ON FORM 10-K, INCLUDING THE MATTERS SET FORTH BELOW, WHICH COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING
STATEMENTS.
 
 Risks
Related to the Business and Financial Condition
 
 Our
business is exploring for gold, which is a highly speculative activity. An
investment in our securities involves a high degree of risk. You should not
invest in our securities if you cannot afford to lose your entire investment. In
deciding whether you should invest in our securities, you should carefully
consider the following information together with all of the other information
contained in this Current Report. Any of the following risk factors can cause
our business, prospects, financial condition or results of operations to suffer
and you to lose all or part of your investment.
  Exploring
for gold is an inherently speculative business.
 
 Exploring
for gold is a business that by its nature is very speculative. There is a strong
possibility that we will not discover any gold which can be mined at a profit.
Even if we do discover gold deposits, the deposit may not be of the quality or
size necessary for us to make a profit from actually mining it. Few properties
that are explored are ultimately developed into producing mines. Unusual or
unexpected geological formations, geological formation pressures, fires, power
outages, labor disruptions, flooding, explosions, cave-ins, landslides and the
inability to obtain suitable or adequate machinery, equipment or labor are just
some of the many risks involved in mineral exploration programs and the
subsequent development of gold deposits.
  12
  We
need to obtain additional financing to fund our exploration
program.
 
 We do not
have sufficient capital to fund our exploration program as it is currently
planned or to fund the acquisition and exploration of new properties. We
estimate that we will need to raise approximately $1 million to pay for our
exploration program through December 31, 2010, as it is currently planned and
described in this Report, and our estimated administrative expenses,
lease payments and estimated claim maintenance costs.  We will likely
require additional funding after that date. 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.
 
 The
global financial crisis may have an impact on our business and financial
condition in ways that we currently cannot predict.
 
 The
continued credit crisis and related turmoil in the global financial system may
have an impact on our business and financial position. The recent high costs of
fuel and other consumables may negatively impact production costs at our
operations. In addition, the financial crisis may limit our ability to raise
capital through credit and equity markets. As discussed further below, the
prices of the metals that we may produce are affected by a number of factors,
and it is unknown how these factors will be impacted by a continuation of the
financial crisis.
 
 Our
management has conflicts of interest.
 
 One of
our directors David Mathewson, has private mining interests and also may serve
as a director of other gold exploration companies. Consequently, his personal
interests may come into conflict with our interests. Situations may arise where
Mr. Mathewson is presented with business opportunities which may be desirable
not only for us, but also to the other companies with which he is affiliated. In
addition to competition for suitable business opportunities, we also compete
with these other gold exploration companies for investment capital, technical
resources, key personnel and other things. You should carefully consider these
potential conflicts of interest before deciding whether to invest in our
securities.
 
 Mr.
Mathewson previously held a 50% ownership interest in KM Exploration, Ltd., a
Nevada limited liability company, from which we acquired the lease for our Tempo
property. See “Certain Relationships and Related Transactions, and Director
Independence” below. The lease agreement relating to our property is described
in greater detail in the section captioned “Properties.”
 
 We
do not know if our property contains any gold that can be mined at a
profit.
 
 The
property on which we have the right to explore for gold is not known to have any
deposits of gold which can be mined at a profit. Whether a gold deposit can be
mined at a profit depends upon many factors. Some but not all of these factors
include: the particular attributes of the deposit, such as size, grade and
proximity to infrastructure; operating costs and capital expenditures required
to start mining a deposit; the availability and cost of financing; the price of
gold, which is highly volatile and cyclical; and government regulations,
including regulations relating to prices, taxes, royalties, land use, importing
and exporting of minerals and environmental protection.
  13
  We
are an exploration stage company with no mining operations and we may never have
any mining operations in the future.
 
 Our
business is exploring for gold. In the unlikely event that we discover
commercially exploitable gold deposits, we will not be able to make any money
from them unless the gold is actually mined. We will need to either mine the
gold ourselves, find some other entity to mine our properties on our behalf, or
sell our rights to mine the gold. Mining operations in the United States are
subject to many different federal, state and local laws and regulations,
including stringent environmental, health and safety laws. If we assume any
operational responsibility for mining on our property, it is possible that we
will be unable to comply with current or future laws and regulations, which can
change at any time. It is possible that changes to these laws will be adverse to
any potential mining operations. Moreover, compliance with such laws may cause
substantial delays and require capital outlays in excess of those anticipated,
adversely affecting any potential mining operations. Our future mining
operations, if any, may also be subject to liability for pollution or other
environmental damage. It is possible that we will choose to not be insured
against this risk because of high insurance costs or other reasons.
 
 We
are a new company with a short operating history and have only lost
money.
 
 NGE, our
sole operating subsidiary, was formed on October 7, 2008. Our operating history
consists of starting our preliminary exploration activities. We have no
income-producing activities. We have already lost money because of the expenses
we have incurred in recruiting personnel, acquiring the rights to explore on our
property, and starting our preliminary exploration activities. Exploring for
gold is an inherently speculative activity. There is a strong possibility that
we will not find any commercially exploitable gold deposits on our property.
Because we are a gold exploration company, we may never achieve any meaningful
revenue.
 
 We
may not be able to follow our internal procedures relating to the authorization
and reporting of our financial transactions, or such procedures may not function
as intended.
 
 We are a
small company with limited resources. We have no full-time employees. This may
cause us not to comply with our internal procedures designed to assure that our
financial information is properly gathered and reported. In the event that we do
not follow these internal procedures, or if they do not function as intended, we
could publish materially incorrect financial statements. This could cause
investors to lose confidence in the accuracy of our reported financial
information, impair our ability to secure additional financing, and result in a
loss of your investment.
 
 Our
business is subject to extensive environmental regulations which may make
exploring for or mining gold prohibitively expensive, and which may change at
any time.
 
 All of
our operations are subject to extensive environmental regulations which can make
exploring for gold expensive or prohibit it altogether. We may be subject to
potential liabilities associated with the pollution of the environment and the
disposal of waste products that may occur as the result of our exploring for
gold on our properties. We may have to pay to remedy environmental pollution,
which may reduce the amount of money that we have available to use for exploring
for gold. This may adversely affect our financial position, which may cause you
to lose your investment. If we are unable to fully remedy an environmental
problem, we might be required to suspend operations or to enter into interim
compliance measures pending the completion of the required remedy. If a decision
is made to mine our Tempo property and we retain any operational responsibility
for doing so, our potential exposure for remediation may be significant, and
this may have a material adverse effect upon our business and financial
position. We have not purchased insurance for potential environmental risks
(including potential liability for pollution or other hazards associated with
the disposal of waste products from our exploration activities) because we
currently have no intention of mining our property. However, if we change our
business plan to include the mining of our property and assuming that we retain
operational responsibility for mining, then such insurance may not be available
to us on reasonable terms or at a reasonable price. All of our exploration and,
if warranted, development activities may be subject to regulation under one or
more local, state and federal environmental impact analyses and public review
processes. It is possible that future changes in applicable laws, regulations
and permits or changes in their enforcement or regulatory interpretation could
have significant impact on some portion of our business, which may require our
business to be economically re-evaluated from time to time. These risks include,
but are not limited to, the risk that regulatory authorities may increase
bonding requirements beyond our financial capability. Inasmuch as posting of
bonding in accordance with regulatory determinations is a condition to the right
to operate under all material operating permits, increases in bonding
requirements could prevent operations even if we are in full compliance with all
substantive environmental laws.
  14
  We
may be denied the government licenses and permits which we need to explore for
gold on our property. In the event that we discover commercially exploitable
gold deposits, we may be denied the additional government licenses and permits
which we will need to mine gold on our property.
 
 Exploration
activities usually require the granting of permits from various governmental
agencies. For example, exploration drilling on unpatented mineral claims
requires a permit to be obtained from the United States Bureau of Land
Management, which may take several months or longer to grant the requested
permit. Depending on the size, location and scope of the exploration program,
additional permits may also be required before exploration activities can be
undertaken. Prehistoric or Indian grave yards, threatened or endangered species,
archeological sites or the possibility thereof, difficult access, excessive dust
and important nearby water resources may all result in the need for additional
permits before exploration activities can commence. As with all permitting
processes, there is the risk that unexpected delays and excessive costs may be
experienced in obtaining required permits. The needed permits may not be granted
at all. Delays in or our inability to obtain necessary permits will result in
unanticipated costs, which may result in serious adverse effects upon our
business.
 
 The
value of our property is subject to volatility in the price of
gold.
 
 Our
ability to obtain additional and continuing funding, and our profitability
should we ever commence mining operations, will be significantly affected by
changes in the market price of gold. Gold prices fluctuate widely and are
affected by numerous factors, all of which are beyond our control. Some of these
factors include the sale or purchase of gold by central banks and financial
institutions; interest rates; currency exchange rates; inflation or deflation;
fluctuation in the value of the United States dollar and other currencies;
speculation; global and regional supply and demand, including investment,
industrial and jewelry demand; and the political and economic conditions of
major gold or other mineral-producing countries throughout the world, such as
Russia and South Africa. The price of gold or other minerals have fluctuated
widely in recent years, and a decline in the price of gold could cause a
significant decrease in the value of our property, limit our ability to raise
money, and render continued exploration and development of our property
impracticable. If that happens, then we could lose our rights to our property
and be compelled to sell some or all of these rights. Additionally, the future
development of our mining property beyond the exploration stage is heavily
dependent upon the level of gold prices remaining sufficiently high to make the
development of our property economically viable. You may lose your investment if
the price of gold decreases. The greater the decrease in the price of gold, the
more likely it is that you will lose money.
 
 Our
property title may be challenged. We are not insured against any challenges,
impairments or defects to our mineral claims or property title. We have not
verified title to our property.
 
 Our
property is comprised of an unpatented lode claim created and maintained in
accordance with the federal General Mining Law of 1872. Unpatented lode claims
are unique U.S. property interests and are generally considered to be subject to
greater title risk than other real property interests because the validity of
unpatented lode claims is often uncertain. This uncertainty arises, in part, out
of the complex federal and state laws and regulations under the General Mining
Law. We have not conducted a title search on our Tempo Mineral Prospect
property. The uncertainty resulting from not having a title search on the
property leaves us exposed to potential title suits. Defending any challenges to
our property title will be costly, and may divert funds that could otherwise be
used for exploration activities and other purposes. In addition, unpatented lode
claims are always subject to possible challenges by third parties or contests by
the federal government, which, if successful, may prevent us from exploiting our
discovery of commercially extractable gold. Challenges to our title may increase
our costs of operation or limit our ability to explore on certain portions of
our property. We are not insured against challenges, impairments or defects to
our property title, nor do we intend to carry title insurance in the future.
Potential conflicts to our mineral claims are discussed in detail in the section
captioned “Properties.”
  15
  Possible
amendments to the General Mining Law could make it more difficult or impossible
for us to execute our business plan.
 
 The U.S.
Congress has considered proposals to amend the General Mining Law of 1872 that
would have, among other things, permanently banned the sale of public land for
mining. The proposed amendment would have expanded the environmental regulations
to which we are subject and would have given Indian tribes the ability to hinder
or prohibit mining operations near tribal lands. The proposed amendment would
also have imposed a royalty of 4% of gross revenue on new mining operations
located on federal public land, which would have applied to all of our property.
The proposed amendment would have made it more expensive or perhaps too
expensive to recover any otherwise commercially exploitable gold deposits which
we may find on our property. While at this time the proposed amendment is no
longer pending, this or similar changes to the law in the future could have a
significant impact on our business model. Senator Harry Reid of Nevada, Senate
Majority Leader, has announced that because of other priorities, there will be
no consideration to deal with the General Mining Law of 1872 issue “this
year.”
 
 Market
forces or unforeseen developments may prevent us from obtaining the supplies and
equipment necessary to explore for gold.
 
 Gold
exploration is a very competitive business. Competitive demands for contractors
and unforeseen shortages of supplies and/or equipment could result in the
disruption of our planned exploration activities. Current demand for exploration
drilling services, equipment and supplies is robust and could result in suitable
equipment and skilled manpower being unavailable at scheduled times for our
exploration program. Fuel prices are extremely volatile as well. We will attempt
to locate suitable equipment, materials, manpower and fuel if sufficient funds
are available. If we cannot find the equipment and supplies needed for our
various exploration programs, we may have to suspend some or all of them until
equipment, supplies, funds and/or skilled manpower become available. Any such
disruption in our activities may adversely affect our exploration activities and
financial condition.
 
 We
may not be able to maintain the infrastructure necessary to conduct exploration
activities.
 
 Our
exploration activities depend upon adequate infrastructure. Reliable roads,
bridges, power sources and water supply are important factors which affect
capital and operating costs. Unusual or infrequent weather phenomena, sabotage,
government or other interference in the maintenance or provision of such
infrastructure could adversely affect our exploration activities and financial
condition.
 
 Our
exploration activities may be adversely affected by the local climate, which
prevents us from exploring our property year-round.
 
 The local
climate makes it impossible for us to conduct exploration activities on our
properties year-round. Because of their rural location and the lack of developed
infrastructure in the area, our properties are generally impassible during the
muddy season, which lasts roughly from December through May. During this time,
it may be difficult or impossible for us to access our property, make repairs,
or otherwise conduct exploration activities on them. Earthquakes, heavy rains,
snowstorms, and floods could result in serious damage to or the destruction of
facilities, equipment or means of access to our property, or may otherwise
prevent us from conducting exploration activities on our property.
  16
  We
do not carry any property or casualty insurance and do not intend to carry such
insurance in the future.
 
 Our
business is subject to a number of risks and hazards generally, including but
not limited to adverse environmental conditions, industrial accidents, unusual
or unexpected geological conditions, ground or slope failures, cave-ins, changes
in the regulatory environment and natural phenomena such as inclement weather
conditions, floods and earthquakes. Such occurrences could result in damage to
our property, equipment, infrastructure, personal injury or death, environmental
damage, delays, monetary losses and possible legal liability. You could lose all
or part of your investment if any such catastrophic event occurs. We do not
carry any property or casualty insurance at this time, nor do we intend to carry
this type of insurance in the future (except that we will carry all insurance
that we are required to by law, such as motor vehicle insurance). Even if we do
obtain insurance, it may not cover all of the risks associated with our
operations. Insurance against risks such as environmental pollution or other
hazards as a result of exploration is generally not available to us or to other
companies in our business on acceptable terms. Should any events against which
we are not insured actually occur, we may become subject to substantial losses,
costs and liabilities which will adversely affect our financial
condition.
 
 We
must make annual lease payments and claim maintenance payments or we will lose
our rights to our property.
 
 We are
required under the terms of our property lease to make annual lease payments. We
are also required to make annual claim maintenance payments to Federal Bureau of
Land Management and to the county in which our property is located in order to
maintain our rights to explore and, if warranted, to develop our property. Our
annual claim maintenance payments currently total approximately $32,256. If we
fail to meet these obligations, we will lose the right to explore for gold on
our property. Our property lease is described in greater detail in the section
captioned “Properties.”
 
 There
is a limited public market for our securities and they will not be listed on a
widely traded market in the foreseeable future.
 
 There is
currently a limited public market for shares of our Common Stock and one may
never develop. Our Common Stock is quoted on the OTC Bulletin Board operated by
the National Association of Securities Dealers, Inc. The OTC Bulletin Board is a
thinly traded market and lacks the liquidity of certain other public markets
with which some investors may have more experience. We may not ever be able to
satisfy the listing requirements for our Common Stock to be listed on an
exchange or Nasdaq, which are often a more widely-traded and liquid market.
Some, but not all, of the factors which may delay or prevent the listing of our
Common Stock on a more widely-traded and liquid market include the following:
our stockholders’ equity may be insufficient; the market value of our
outstanding securities may be too low; our net income from operations may be too
low; our Common Stock may not be sufficiently widely held; we may not be able to
secure market makers for our Common Stock, and we may fail to meet the rules and
requirements mandated by the several exchanges and markets to have our Common
Stock listed.
 
 We
cannot assure you that the Common Stock will become liquid or that it will be
listed on a securities exchange.
 
 We expect
our Common Stock to remain eligible for quotation on the OTC Bulletin Board, or
on another over-the-counter quotation system. In those venues, however, an
investor may find it difficult to obtain accurate quotations as to the market
value of our Common Stock. In addition, if we fail to meet the criteria set
forth in SEC regulations, various requirements would be imposed by law on
broker-dealers who sell our securities to persons other than established
customers and accredited investors. Consequently, such regulations may deter
broker-dealers from recommending or selling our Common Stock, which may further
affect the liquidity of our Common Stock.  This would also make it
more difficult for us to raise additional capital. While we intend eventually to
apply to list the Common Stock on the Nasdaq Stock Market, there can be no
assurance that such listing will be successful or that the Common Stock will
ever be listed on a national securities exchange.
  17
  “Penny
Stock” rules will initially make buying or selling our Common Stock difficult
because the broker-dealers selling our Common Stock will be subject to certain
limitations.
 
 Trading
in our securities is subject to certain regulations adopted by the Securities
Exchange Commission, commonly known as the “penny stock” rules and which apply
to stocks selling below $5.00 per share. Our shares of Common Stock qualify as
“penny stocks” and are covered by Section 15(g) of the Exchange Act, which
imposes additional practice requirements on broker-dealers who sell shares of
such stocks in the market. “Penny stock” rules govern how broker-dealers can
deal with their clients and with “penny stocks.” For sales of our securities,
including the sale of any Common Stock by the selling shareholders, the
broker-dealer must make a special suitability determination and receive from you
a written agreement prior to making a sale of stock to you. The additional
burdens imposed upon broker-dealers by the “penny stock” rules may discourage
broker-dealers from effecting transactions in our securities, which could
severely affect their market price and liquidity. This could prevent you from
easily reselling your shares or warrants when they become freely tradable and
could cause the price of our securities to decline.
 
 Compliance
with U.S. securities laws, including the Sarbanes-Oxley Act, will be costly and
time-consuming.
 
 We are a
reporting company under U.S. securities laws, and we are obliged to comply with
the provisions of applicable U.S. laws and regulations, including the Securities
Act, the Exchange Act and the Sarbanes-Oxley Act of 2002 and the related rules
of the SEC, and the rules and regulations of the relevant U.S. market. Preparing
and filing annual and quarterly reports and other information with the SEC,
furnishing audited reports to stockholders and other compliance with these rules
and regulations will involve a material increase in regulatory, legal and
accounting expenses and the attention of management, and there can be no
assurance that we will be able to comply with the applicable regulations in a
timely manner, if at all.
 
 We
do not plan to pay any dividends in the foreseeable future.
 
 We have
never paid a dividend and we are unlikely to pay a dividend in the foreseeable
future, if ever. Whether any dividends are distributed in the future, as well as
the specific details of any such dividends, will be decided by our Board of
Directors based upon a number of factors, including but not limited to our
earnings, financial requirements and other conditions prevailing at the time. We
may never pay dividends. You should carefully consider this before deciding
whether to purchase our securities.
  Securities
analysts may not initiate coverage or continue to cover our Common Stock, and
this may have a negative impact on its market price.
 
 The
trading market for our Common Stock will depend, in part, on the research and
reports that securities analysts publish about our business. We do not have any
control over these analysts. There is no guarantee that securities analysts will
cover the Common Stock. If securities analysts do not cover the Common Stock,
the lack of research coverage may adversely affect its market price. If we are
covered by securities analysts, and our stock is the subject of an unfavorable
report, our stock price would likely decline. If one or more of these analysts
ceases to cover our Company or fails to publish regular reports on us, we could
lose visibility in the financial markets, which could cause our stock price or
trading volume to decline. In addition, because we became public through a
“reverse triangular merger,” we may have further difficulty attracting the
coverage of securities analysts.
  18
  You
may experience dilution of your ownership interests because of the future
issuance of additional shares of our Common Stock.
 
 Any
future issuance of our equity or equity-backed securities may dilute
then-current stockholders’ ownership percentages and could also result in a
decrease in the fair market value of our equity securities, because our assets
would be owned by a larger pool of outstanding equity. As described above, we
may need to raise additional capital through public or private offerings of our
common or preferred stock or other securities that are convertible into or
exercisable for our common or preferred stock. We may also issue such securities
in connection with hiring or retaining employees and consultants (including
stock options issued under our equity incentive plans), as payment to providers
of goods and services, in connection with future acquisitions or for other
business purposes. Our Board of Directors may at any time authorize the issuance
of additional common or preferred stock without common stockholder approval,
subject only to the total number of authorized common and preferred shares set
forth in our articles of incorporation. The terms of equity securities issued by
us in future transactions may be more favorable to new investors, and may
include dividend and/or liquidation preferences, superior voting rights and the
issuance of warrants or other derivative securities, which may have a further
dilutive effect. Also, the future issuance of any such additional shares of
common or preferred stock or other securities may create downward pressure on
the trading price of the common stock. There can be no assurance that any such
future issuances will not be at a price (or exercise prices) below the price at
which shares of the common stock are then traded.
 
 Any
failure to maintain effective internal control over our financial reporting
could materially adversely affect us.
 
 Section
404 of the Sarbanes-Oxley Act of 2002 will require us to include in our annual
reports on Form 10-K, beginning with the Form 10-K for the fiscal year ending
December 31, 2010, an assessment by management of and an auditor attestation
report on the effectiveness of our internal control over financial reporting. In
addition, in future periods our independent auditors will be required to attest
to and report on management’s assessment of the effectiveness of such internal
control over financial reporting. While we intend to diligently and thoroughly
document, review, test and improve our internal control over financial reporting
in order to ensure compliance with Section 404, management may not be able to
conclude that our internal control over financial reporting is effective.
Furthermore, even if management were to reach such a conclusion, if our
independent auditors are not satisfied with the adequacy of our internal control
over financial reporting, or if the independent auditors interpret the
requirements, rules or regulations differently than we do, then they may decline
to attest to management’s assessment or may issue a report that is qualified.
Any of these events could result in a loss of investor confidence in the
reliability of our financial statements, which in turn could negatively impact
the price of our common stock.
 
 In
particular, we must perform system and process evaluation and testing of our
internal control over financial reporting to allow management and our
independent registered public accounting firm to report on the effectiveness of
our internal control over financial reporting, as required by Section 404. Our
compliance with Section 404 will require that we incur substantial accounting
expense and expend significant management efforts. We currently do not have an
internal audit group, and we will need to retain the services of additional
accounting and financial staff or consultants with appropriate public company
experience and technical accounting knowledge to satisfy the ongoing
requirements of Section 404. We intend to review the effectiveness of our
internal controls and procedures and make any changes management determines
appropriate, including to achieve compliance with Section 404 by the date on
which we are required to so comply. However, any significant deficiencies in our
control systems may affect our ability to comply with SEC reporting requirements
and any applicable listing standards or cause our financial statements to
contain material misstatements, which could negatively affect the market price
and trading liquidity of our common stock and cause investors to lose confidence
in our reported financial information, as well as subject us to civil or
criminal investigations and penalties.
  19
  Our
principal stockholders have the power to control the Company because they hold a
majority of our outstanding shares of Common Stock.
 
 Under
certain circumstances, our director and Geological Advisor and former CEO and
President, David Mathewson,
as the holder of 29.9% of our outstanding shares of Common Stock, may have the
ability to substantially influence or control our business and affairs. This
includes the election and removal of directors and officers, mergers,
consolidations, or the sale of all or substantially all of our assets. This
concentration of ownership may have the effect of delaying, deferring or
preventing a change in control of the company, impeding a merger, consolidation,
takeover or other business combination involving the company, or discouraging a
potential acquirer from making a tender offer or otherwise attempting to obtain
control of the company. This may adversely affect the value of your investment,
and you should carefully consider this concentration of ownership before
deciding whether to invest in our Company. Other stockholders who beneficially
own more than 5% of our outstanding shares of Common Stock are identified in
“Security Ownership of Certain Beneficial Owners and Management.”
 
 We
are a holding company that depends on cash flow from our subsidiaries to meet
our obligations and pay dividends.
 
 We are a
holding company with no material assets other than the stock of our wholly-owned
subsidiary, NGE. Accordingly, we anticipate that all of our operations will be
conducted by NGE (and any additional subsidiaries we may form or acquire). We
currently expect that the earnings and cash flow of our subsidiaries will
primarily be retained and used by them in their operations, including servicing
any debt obligations they may have now or in the future. Therefore, our
subsidiaries may not be able to generate sufficient cash flow to distribute
funds to us in order to allow us to pay our obligations as they become due or,
although we do not anticipate paying any dividends in the foreseeable future,
pay future dividends on, or make any distributions with respect to, our common
or other stock. Additionally, our ability to participate as an equity holder in
any distribution of assets of any subsidiary upon liquidation is generally
subordinate to the claims of creditors of the subsidiaries.
 
 
 ITEM
      2.
              PROPERTIES
 
 Executive
Offices
 
 Our
business office is located at 1640 Terrace Way, Walnut Creek, CA 94597. Our
office is located in the residence of our President, David Rector.  It
contains office furniture and equipment sufficient to administer our current
business.  Mr. Rector donates the use of this office space to
us.
 
 Tempo
Mineral Prospect (“Tempo”)
  We have
the right to explore for gold on a property located in Austin, Nevada, known as
Tempo Mineral Prospect. We acquired our original exploration rights to the Tempo
Mineral Prospect pursuant to a lease with Gold Standard Royalty Corporation, a
subsidiary of Golden Predator Mines Inc. (the “Lessor”), which acquired its
rights to this property from the Lyle F. Campbell Trust of Reno, Nevada, an
entity with which we are not affiliated and which acquired its rights to Tempo
Mineral Prospect from the Federal Bureau of Land Management by staking. The
lease covers 206 contiguous unpatented lode claims, totaling 2,920 acres. We may
terminate our lease of the Tempo Mineral Prospect at any time. Our property is
not known to contain gold that can be mined at a profit, although the area in
which our property is located has a history of mining activity by
others.  Our current property was selected by our director and
Geological Advisor, and former CEO and President, David Mathewson.
 
 In
October 2009, we located an additional 60 unpatented mining claims, in three
groups, as shown on the map below. These claims are contiguous with and lie
within the area of interest (AOI) of the Tempo lease.
  20
  Property
Description, Location and Access
  Tempo is
located in the southern Ravenswood Mountains 14 miles northwest of Austin,
Nevada, within the north-south trending Rabbit Creek Gold
Trend.  Tempo is a Carlin-style sediment-hosted gold exploration
target. The property consists of 206 unpatented mining claimstotaling approximately
4,000 acres, in a contiguous block approximately 6.5 miles north to south and up
to 1.8 miles east to west, covering approximately 6.5 square miles.
 
 Tempo is
accessible through good roads as well as cross-country. Access is generally
available from May through December. Between December and May is the muddy
season, during which wet weather and poor road conditions will generally prevent
us from accessing the property. We know of no environmental or archeological
issues related to this property.
  21
  Map
of Tempo Mineral Prospect









22




Tempo
Geology









23




Title
Report
  We have
not conducted a title survey on Tempo, and have no immediate plans to do so in
the future.
  Geology
and History
  We
believe that Tempo’s geology, geochemistry and alteration are typical of those
in the Rabbit Creek gold trend. The central target is defined by a gold and
arsenic soil anomaly approximately 5,000 feet in strike length. Both upper-plate
and permissive lower-plate rocks are present. Rock samples indicate a high of 20
gm/t for gold and 300 gm/t for silver. The central portion of the property
covers approximately one square mile of lower plate carbonate rock intruded by
Laramide diorites with associated gold-bearing skarn. The northern third of the
property includes numerous exposures of lower-plate carbonate rocks within a
large expanse of non-permissive upper-plate rocks. Jasperoids are common and
contain anomalous to very anomalous gold and arsenic values.
 
 Previous
work at Tempo by numerous companies includes geologic mapping; extensive rock
chip and soil sampling; IP, resistivity, air and ground magnetic, and gravity
geophysical surveys; and close and wide spaced reverse circulation
drilling.  Results of much of this work are in a digital archive that
constitutes an important database for continued evaluation of the
property.
 
 Synthesis
of mapped faults and structures interpreted from gravity, magnetic, and
resistivity geophysical surveys defines four regions of relatively complex
structural intersections. These areas are candidates for enhanced flow of
potential ore-forming hydrothermal fluids.
 
 Compilation
of archive rock chip and soil geochemical data defines seven areas 1,500 to
6,000 feet long of robust, combined anomalous gold, arsenic, antimony, mercury
and silver in both rocks and soils. These anomalies coincide with or are
adjacent to regions of complex structural intersections and deserve adequate
drill tests through the Roberts Mountains Formation.
 
 Based on
review of historical drill information, we believe that the targeted Roberts
Mountains Formation is poorly tested by past drilling.  Of the
approximately 123 holes(with
known collar coordinates)previously drilled by others in and adjacent to
the Tempo claim block, 64 bottom in Tertiary volcanic units or in the upper
plate of the Roberts Mountains Thrust and do not reach the potential host
rocks.  Of the 58 holes that do intersect the Roberts Mountains
Formation, only 13 are deeper than 600 feet, and only five, including NGT-01 and
NGT-02 drilled by us, test the bottom contact of the Roberts Mountains
Formation, an important ore horizon at the Jerritt Canyon mine in the
Independence Range, Elko Co., Nevada.
 
 With
respect to drill tests of the seven areas of robust geochemical anomalies, only
two contain drill holes that intersect the Roberts Mountains Formation, three
contain holes that do not reach the target unit, and two have not been drill
tested.
 
 The
southern-most geochemical anomaly is 6,000 feet long and contains at least seven
drill holes with maximum grades between 0.03 and 0.3 gold ounces per ton in a
narrow trend 3,500 feet long. Host rock to the drilled mineralization is the
Ordovician Vinini Formation of the upper plate of the Roberts Mountains Thrust.
No holes in this zone intersect the favored Roberts Mountains
Formation.
 
 Two areas
of known mineralization are within the claim block.  The old Maloy
mine consists of an abandoned shaft and prospect diggings developed on a north
trending bull quartz vein associated with granodiorite pods intruding the
Roberts Mountains Formation.  In the south end of the claim block and
hosted in upper plate Vinini Formation is a small, shallow, low grade gold
resource calculated by Digger Resources (Digger Resources, 1996; Dave Mathewson,
pers. comm., 2009) that coincides with the southern multi-element geochemical
anomaly.  About 2,000 feet northwest of the claim block, an abandoned
100-foot deep open pit developed a barite orebody in upper plate
rocks.
  24
  We
believe that multiple high-quality gold targets in Tempo remain to be
identified, qualified and assessed by drilling.
 
 The
exploration model at Tempo is that of the sediment-hosted, fine-grained,
disseminated Carlin-type gold deposit. In this setting micron to sub-micron size
gold is disseminated in silty calcareous host rocks (silty limestone and
dolomite, calcareous and dolomitic siltstone). The gold generally occurs in or
on very fine grained pyrite, arsenical pyrite, or fine carbonaceous material in
the host rock. The mineralizing fluid also deposits a characteristic suite of
“pathfinder” elements with and near the gold. Besides gold, arsenic is most
important in this group that also includes antimony, mercury and
silver.
 
 Faults,
stratigraphic discontinuities and intrinsic host-rock porosity and permeability
provide critical channelways for the ore-forming hydrothermal fluids to access
the host rocks.  These fluids characteristically alter the rock by
silicification (jasperoid), decarbonatization, dolomitization, argillization and
formation of calcite and barite veins.  Decarbonatization can cause
collapse breccias that further increase permeability. Except for silicification,
the products of alteration are not erosionally resistant and consequently are
not well exposed at the surface. Decarbonatization and argillization generally
reduce the density of the host rock and this effect may be measurable in gravity
surveys.
 
 Deposit
shapes are variable and controlled by rock porosity and permeability as affected
by faulting, brecciation, and alteration. Deposits range from tabular to
pipe-like with attitudes from horizontal to vertical. Changes in gold grades at
the margins of deposits can be abrupt or gradational. Ore grades depend on
mining economics and can range from about 0.02 oz/ton (~700 parts per billion
(ppb)) to +1 oz/ton (+ 34,000 ppb) of gold. Underground mining grades of gold
are commonly above 0.2 oz/ton.
 
 Exploration
Program
 
 We
initiated drilling on the Tempo property in October 2009.  Ten sites
across the property were permitted and prepared for drilling.  The
sites were located to test new geophysical and resultant structural and
alteration interpretations based largely on additional gravity data collected in
2007.  Three widely spaced sites were drilled.  The holes
are all reverse circulation, range in depth from 1,140 to 1,330 feet, and total
3,750 feet.  Hole NGT-01 in the north end of the property drilled
through the targeted potential host rocks. NGT-02 and NGT -03 were collared in
the central part of the property about 2 1⁄2 miles to the south. The second hole
drilled into potential host rocks and was terminated due to poor drilling
conditions. The third hole did not reach the depth of the potential host rocks
and was terminated because of excessive ground water.
 
 All three
holes intersected anomalous gold and the indicator elements arsenic, antimony,
and mercury and further confirm that one or more Carlin-style sediment-hosted
gold deposits likely remains undiscovered at Tempo.
 
 2010
Program
 
 In 2010,
we intend to complete the remaining seven drill hole program designed, permitted
and bonded in 2009. Additional surface work and target synthesis conducted in
2009 identified several additional targets that will be further evaluated and
considered for addition to the 2010 drill program. The 2010 program will involve
a minimum of approximately 9,000 feet in the 7 holes and is projected to have an
all-in including assays cost of about $500,000. It is believed that the results
of one or more of these holes will be sufficiently encouraging to design and
launch a phase two drilling program, perhaps in late 2010. Gold exploration in
Nevada is typically iterative and subject to ongoing adjustments in drill
programs leading to discovery of these commonly enigmatically obscured, but
often very economically lucrative, Nevada Carlin-type gold
deposits.
  25
  Environmental
and Safety
  We are not aware of any
specific environmental issues at Tempo; of indicator, threatened or endangered
plant or animal species; or of significant archeology sites that would affect
exploration or development of the Tempo property.  The
abandoned Maloy mine shaft could be considered a safety hazard and a candidate
for abandoned mine closure.It is not
known if batsuse
the underground workings. Closing of the shaft may have to take batsinto
consideration.
 
 Tempo
Mineral Prospect Lease
  Our lease for 206 of the Tempo lode
claims is with Gold Standard Royalty Corporation, a subsidiary of Golden
Predator Mines Inc., which acquired its rights to this property
from the Lyle F. Campbell Trust of Reno, Nevada, an entity with which we
are not affiliated and which acquired its rights to this property from the
Federal Bureau of Land Management by staking its lode
claims.
 
 The Tempo
lease was originally between the Lessor and Gold Run, Inc., a Delaware
corporation (“Gold Run”) as lessee.  The Lease was assigned by Gold
Run to KM Exploration Ltd., a Nevada limited liability company (“KM”), on August
14, 2008, and was subsequently assigned to NGE as of December 15,
2008.
  NGE
acquired its interest in the Tempo lease prior to the Merger pursuant to a
reassignment of the lease from KM Exploration, Ltd. In connection with the
reassignment, we reimbursed KM Exploration for claim fees ($19,503) and
preparation cost ($961.50), totaling $20,464.50. Also in connection with the
reassignment, Mr. Mathewson, then the sole stockholder of NGE, assigned five
shares of NGE (which converted into 400,000 shares each of Company Common Stock
upon the Merger) to each of two individuals (one of whom was the owner of the
other 50% interest in KM Exploration prior to its dissolution).  (See
“Certain Relationships and Related Transactions, and Director Independence”
below.)
  Our 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. We may terminate this lease
at any time. Until production is achieved, our lease payments (deemed “advance
minimum royalties”) consist of an initial payment of $5,000, which we made upon
the effectiveness of our lease, followed by annual payments according to the
following schedule:
 
 Due Date of Advance
                              Minimum Royalty Payment
                            
                            Amount of Advance
                              Minimum Royalty PaymentJanuary
      15, 2008 (paid)
                            
                            $
                            10,000January
      15, 2009 (paid)
                            
                            $
                            15,000January
      15, 2010 (paid)
                            
                            $
                            30,000January
      15, 2011
                            
                            $
                            45,000January
      15, 2012 and annuallythereafter
      during the term of the lease
                            
                            The
      greater of $60,000 or the dollarequivalent
      of 90 ounces of gold
 
 In the
event that we produce gold or other minerals from the leased Tempo claims, our
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 we recover. Our
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 we produce gold or other minerals from Tempo and
pay the Lessor a production royalty, then, within any one calendar year, we may
use 100% of that year’s advance royalty payment as a credit against our
royalties payable for that year. If our royalty payments payable for that year
are greater than our advance royalty payment paid for that year, then we can
credit all advance minimum royalty payments made in previous years against 50%
of the production royalty payable for that year.
  26
  In the
event that we pay the Lessor a production royalty, we have 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 our gross sales price for those minerals. The purchase price for each royalty
“point” shall be according to the following schedule:
 
 Royalty Point Purchased
                  
                  PriceFirst
      1%
                  
                  $
                  1,500,000Second
      1%
                  
                  $
                  3,000,000
 
 We cannot
purchase the remaining 2% production royalty on gold, silver, platinum or
palladium or the 2% production royalty applicable to all other
minerals.
 
 Our lease
requires us to perform $50,000 worth of physical work on the property for 2009.
Starting in 2010 and thereafter, we must perform a minimum of $50,000 worth of
work annually on the property, of which at least $25,000 is physical
work.
 
 Claim
Maintenance Payments
  We are
required to make annual claim maintenance payments to the Bureau of Land
Management and to the counties in which our property is located. If we fail to
make these payments, we will lose our rights to our property. As of the date of
this Report, our annual maintenance payments are $133.50 per claim, consisting
of payments to the Bureau of Land Management and to the counties in which our
properties are located. Our property consists of an aggregate of 206 lode
claims. Our aggregate annual claim maintenance costs are currently
$32,256.
 
 
 ITEM
      3.
              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
      4.
              SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
HOLDERS
 
 No
matters were submitted to a vote of security holders, through the solicitation
of proxies or otherwise, during the fourth quarter of the fiscal year covered by
this Report.
  27
  PART
II
 
 ITEM
      5.
              MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
 
 Since May
8, 2007, our Common Stock is quoted on the OTC Bulletin Board (the “OTCBB”)
under the symbol “NGHI.OB”.
 
 The
following table sets forth the high and low closing bid prices for our Common
Stock for the fiscal quarters indicated as reported on the OTCBB. The quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions. Our Common Stock is very thinly traded,
and therefore pricing of our Common Stock on the OTCBB does not necessarily
represent its fair market value.
 
 Period
                  
                  High (1)
                  
                  
                  Low (1)Fiscal Year Ended December
      31, 2008:First
      Quarter
                  
                  $
                  *
                  
                  
                  $
                  *Second
      Quarter
                  
                  
                  *
                  
                  
                  
                  *Third
      Quarter
                  
                  
                  *
                  
                  
                  
                  *Fourth
      Quarter
                  
                  
                  *
                  
                  
                  
                  *Fiscal Year Ending December 31,
      2009:First
      Quarter (from February 17, 2009)
                  
                  $
                  
                  
                  
                  $Second
      Quarter
                  
                  
                  0.4900
                  
                  
                  
                  0.2000Third
      Quarter
                  
                  
                  0.2810
                  
                  
                  
                  0.1300Fourth
      Quarter
                  
                  
                  0.1370
                  
                  
                  
                  0.0710Fiscal Year Ending December 31,
      2010:First
      Quarter
                  
                  $
                  0.0790
                  
                  
                  $
                  0.0315Second
      Quarter (through April 14, 2010)
                  
                  
                  0.0510
                  
                  
                  
                  0.0400
  
 *
              There
      was no bid price information for our Common Stock prior to February 17,
      2009.(1)
              All
      quotations give retroactive effect to the 30.30303-for-1 forward stock
      split that was effected on November 21, 2008, and to the 2-for-1forward stock split
      that was effected on May 12, 2009.
 
 Holders
  As of
April 14, 2010, there were 76,430,476 shares of our Common Stock issued and
outstanding held by 28 shareholders of record.
 
 Dividends
 
 We have
never declared any cash dividends with respect to our Common
Stock.  Future payment of dividends is within the discretion of our
board of directors and will depend on our earnings, capital requirements,
financial condition and other relevant factors.  Although there are no
material restrictions limiting, or that are likely to limit, our ability to pay
dividends on our Common Stock, we presently intend to retain future earnings, if
any, for use in our business and have no present intention to pay cash dividends
on our Common Stock.
  28
  Recent
Sales of Unregistered Securities
 
 On
December 31, 2008, the Company sold in connection with the Bridge PPO (a) an
aggregate of 414,000 shares of its common stock to a total of 13 investors, for
aggregate consideration of $103,500, or $0.25 per share and (b) $150,000
principal amount of the 2008 Bridge Note, for consideration of $150,000, in each
case before deducting expenses related to the offerings.  Upon the
closing of the Merger, the purchaser of the Bridge Note also received 300,000
shares of Common Stock under the terms of the 2008 Bridge Note.  See
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations–2008 Bridge Note” for more information on the 2008 Bridge Note, which
is incorporated herein by reference.
  On March
9, 2009, NGHI held a second closing of the Bridge PPO for 165,000 shares of
Common Stock, at a purchase price of $0.25 per share.
 
 As an
inducement to certain investors to purchase Common Stock in the Bridge PPO, the
principal former NGE stockholder (David Mathewson, who was then our Chief
Executive Officer, President and sole director and is now our director) agreed
to transfer to those investors in private transactions an aggregate of 3,210,000
shares of the Company Common Stock that he received in the Merger.
 
 The
Company entered into a consulting agreement as of May 11, 2009, with respect to
the provision of investor relations and corporate communications services,
pursuant to which it agreed to issue to the consultant an aggregate of 100,000
shares of Common Stock, with 50,000 shares due on signing and 50,000 due after
90 days.
 
 On June
24, 2009, we had a first closing of the 2009 PPO for 2,000,000 units of our
securities, at a purchase price of $0.25 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 $0.50 per share, for gross
proceeds of $500,000.
 
 From the
proceeds of the first closing of the 2009 PPO, $100,000 principal amount of the
2008 Bridge Note was repaid, together with $4,602.74 of accrued interest
thereon.  Further, the Company agreed with the holder of the Bridge
Note that in consideration of this prepayment, and the issuance to the holder of
the 2008 Bridge Note of an additional 200,000 shares of Common Stock, no
adjustment under the 2008 Bridge Note would be made to the conversion price
therein as a result of the issuance and sale by the Company of shares of Common
Stock for a consideration per share of $0.125 on December 31, 2008, and March 9,
2009, nor as a result of the 2009 PPO closing on June 24, 2009, or any
subsequent issuance of units, up to a maximum of 8,000,000 units in the
aggregate, nor as a result of any other events that had occurred up to that
time.
 
 On
September 18, 2009, we held a second closing of the 2009 PPO for 1,000,000 of
the same units on the same terms, for gross proceeds of $250,000.
 
 In
connection with the 2009 PPO, the Company entered into a Placement Agency
Agreement with Gottbetter Capital Markets, LLC (the “Placement Agent”), in which
the Company agreed (i) to pay a cash fee to the Placement Agent equal to 10% of
the gross proceeds from the sale of units to investors introduced to the Company
by the Placement Agent and 2% of the gross proceeds from the sale of units to
any other investors, and (ii) to issue to the Placement Agent warrants to
purchase a number of shares of Common Stock equaling 10% of the units sold to
investors introduced to the Company by the Placement Agent and 2% of the units
sold to any other investors, exercisable for a period of five years at an
exercise price of $0.50 per share.  In connection with the closing on
June 24, 2009, the Placement Agent earned a cash fee of $10,000 and warrants to
purchase 200,000 shares of Common Stock; and in connection with the closing on
September 18, 2009, the Placement Agent earned a cash fee of $15,000
and warrants to purchase 60,000 shares of Common Stock.
  29
  From the
proceeds of the second closing of the 2009 PPO, we repaid the balance of $50,000
of, plus accrued interest of $3,479.45 on, the 2008 Bridge Note.
 
 On
December 1, 2009, we issued 2,500,000 shares of Common Stock to a consultantpursuant to a consulting agreement under which the consultant would
provide the Company with services for management consulting, business advisory,
shareholder information and public relations.  The Consultant also
paid the Company $500.00 in cash.  In February 2010, that consulting
agreement was terminated and the 2,500,000 shares were returned and
cancelled.
 
 On
December 10, 2009, we borrowed $100,000 under the 2009 Bridge Note from a
private institution. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—2009 Bridge Note” for more informationon the 2009 Bridge Note,
which is incorporated herein by reference.
 
 On
February 5, 2010, we entered into a financing arrangement with JMJ Financial
(the “Investor”), pursuant to which the Investor may lend us up to
$3,200,000.  We issued convertible promissory notes to the Investor in
an aggregate principal amount of $3,200,000 (the “2010 Notes”).  We
received $200,000 from the Investor on February 5, 2010.  See
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations–2010 Notes” for more informationon the 2010 Notes, which
is incorporated herein by reference.
 
 These
offerings and issuances were exempt from registration under the Securities Act
of 1933, as amended (the “Securities Act”) The Bridge PPO and the 2009 PPO were
exempt in reliance upon Regulation D and Regulation S promulgated by the SEC
under the Act and were sold only to “accredited investors,” as defined in
Regulation D and non-“U.S. persons” as defined in Regulation S.  The
issuances of the 2008 Bridge Note, the 2009 Bridge Note, the 2010 Notes and the
shares of Common Stock issued to consultants were exempt from registration under
Section 4(2) of the Act as not involving any public offering.  These
securities may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirement.
  Stock
Splits
  The Company effected a 30.30303-for-one
forward split of its Common Stock in the form of a stock dividend, which was
paid on November 21, 2008, to Holders of record on November 19, 2008. The
Company effected a 2-for-1 forward split of its Common Stock, in the form of a
stock dividend, which was paid on May 12, 2009, to Holders of record on May 8,
2009. All share and per share numbers in this Report relating to the
Common Stock have been adjusted to give effect to these stock splits, unless
otherwise stated.
  Issuances
by NGE
  In
October 2008, NGE issued 200 shares of common stock of NGE to David Mathewson,
our director and Geological Advisor, in consideration for his formation of NGE
and for his services as its sole officer and director; in connection with the
reassignment of the Tempo lease to NGE, Mr. Mathewson, assigned five shares of
NGE to each of two individuals (one of whom was the owner of the other 50%
interest in KM Exploration prior to its dissolution). These transactions were
exempt from registration pursuant to Section 4(2) of the Securities Act, since
the foregoing issuance did not involve a public offering, the recipient took the
shares for investment and not resale and NGE took appropriate measures to
restrict transfer. No underwriters or agents were involved in the foregoing
issuance and no underwriting discounts or commissions were paid by
NGE.
  30
  Shares
Issued in Connection with the Merger
  On the
closing date of the Merger, the holders of common stock of NGE surrendered all
of their 200 issued and outstanding shares and received an aggregate of
16,000,000 shares of the Company’s Common Stock.
  The
Company’s stockholders retained 19,696,973 shares of Common Stock in the
Merger.
  Upon the
closing of the Merger, the purchaser of the 2008 Bridge Note also received
150,000 shares of Common Stock under the terms of the 2008 Bridge
Note.
  The
transactions described above were exempt from registration under Section 4(2) of
the Securities Act and Rule 506 of Regulation D as promulgated by the SEC. None
of the securities were sold through an underwriter and, accordingly, there were
no underwriting discounts or commissions involved.
  Purchases
of Equity Securities by the Issuer and Affiliated Purchasers
 
 Except in
connection with the issuances described above, during the fourth quarter of the
fiscal year covered by this Report, no purchases were made by or on behalf of
the Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under
the Exchange Act, of shares or other units of any class of the Company’s equity
securities.
 
 Securities
Authorized for Issuance under Equity Compensation Plans
  The
following table sets forth, as of December 31, 2009, information with respect to
compensation plans (including individual compensation arrangements) under which
equity securities of the Company are authorized for issuance:
 
 Equity Compensation Plan InformationPlan category
                      
                      Number of securities
                        to be issued upon
                        exercise of
                        outstanding options,
                        warrants and rights
                        (a)
                      
                      Weighted-average
                        exercise price of
                        outstanding options,
                        warrants and rights
                        (b)
                      
                      Number of securities
                        remaining available
                        for future issuance
                        under equity
                        compensation plans
                        (excluding securities
                        reflected in column
                        (a))
                        (c)Equity
      compensation plans approved by security holdersEquity
      compensation plans not approved by security holders
                      
                      
                      1,250,000
                      
                      
                      
                      
                      2,750,000Total
                      
                      
                      1,250,000
                      
                      
                      
                      
                      2,750,000
 
 On
December 30, 2008, the Board of Directors of the Company adopted the 2008 Equity
Incentive Plan (the “2008 Plan”) which provided for incentive award grants of up
to 4,000,000 shares of our Common Stock.   If an incentive award
granted under the 2008 Plan expires, terminates, is unexercised or is forfeited,
or if any shares are surrendered to us in connection with an incentive award,
the shares subject to such award and the surrendered shares will become
available for further awards under the 2008 Plan.
 
 In
addition, the number of shares of Common Stock subject to the 2008 Plan, any
number of shares subject to any numerical limit in the 2008 Plan, and the number
of shares and terms of any incentive award are expected to be adjusted in the
event of any change in our outstanding Common Stock by reason of any stock
dividend, spin-off, split-up, stock split, reverse stock split,
recapitalization, reclassification, merger, consolidation, liquidation, business
combination or exchange of shares or similar transaction.
  31
  Administration
 
 The
compensation committee of the Board, or the Board in the absence of such a
committee, will administer the 2008 Plan.  Subject to the terms of the
2008 Plan, the compensation committee has complete authority and discretion to
determine the awards under the 2008 Plan.
 
 Grants
  The 2008
Plan authorizes the grant to participants of nonqualified stock options,
incentive stock options, restricted stock awards, restricted stock units,
performance grants intended to comply with Section 162(m) of the Internal
Revenue Code (as amended, the “Code”) and stock appreciation rights, as
described below:
  ●
              Options
      granted under the 2008 Plan entitle the grantee, upon exercise, to
      purchase a specified number of shares from us at a specified exercise
      price per share. The exercise price for shares of Common Stock covered by
      an option cannot be less than the fair market value of the Common Stock on
      the date of grant unless agreed to otherwise at the time of the
      grant.
 
 ●
              Restricted
      stock awards and restricted stock units may be awarded on terms and
      conditions established by the compensation committee, which may include
      performance conditions for restricted stock awards and the lapse of
      restrictions on the achievement of one or more performance goals for
      restricted stock units.
  ●
              The
      compensation committee may make performance grants, each of which will
      contain performance goals for the award, including the performance
      criteria, the target and maximum amounts payable, and other terms and
      conditions.
  ●
              The
      2008 Plan authorizes the granting of stock awards. The compensation
      committee will establish the number of shares of Common Stock to be
      awarded and the terms applicable to each award, including performance
      restrictions.
  ●
              Stock
      appreciation rights (“SARs”) entitle the participant to receive a
      distribution in an amount not to exceed the number of shares of Common
      Stock subject to the portion of the SAR exercised multiplied by the
      difference between the market price of a share of Common Stock on the date
      of exercise of the SAR and the market price of a share of Common Stock on
      the date of grant of the SAR.
  Duration,
Amendment, and Termination
  The Board
has the power to amend, suspend or terminate the 2008 Plan without stockholder
approval or ratification at any time or from time to time. No change may be made
that increases the total number of shares of Common Stock reserved for issuance
pursuant to incentive awards or reduces the minimum exercise price for options
or exchange of options for other incentive awards, unless such change is
authorized by our stockholders within one year. Unless sooner terminated, the
2008 Plan will terminate ten years after it was adopted.
   ITEM
      6.
              SELECTED
      FINANCIAL DATA
 
 Not
applicable.
  32
  ITEM
      7.
              MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
 
 The
following discussion and analysis of financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and related notes included elsewhere in this report. This discussion
contains forward-looking statements that involve risks, uncertainties and
assumptions. See “Note Regarding Forward-Looking Statements.” Our actual results
could differ materially from those anticipated in the forward-looking statements
as a result of certain factors discussed in “Risk Factors” and elsewhere in this
report.
 
 The
following discussion and analysis of the Company’s financial condition and
results of operations is based on the preparation of our financial statements in
accordance with U.S. generally accepted accounting principles. You should
read this discussion and analysis together with such financial statements and
the related notes thereto.
  Results
of Operations
 
 Fiscal
Year Ended December 31, 2009, compared to Fiscal Year Ended December 31,
2008
 
 Revenues
and Other Income
 
 During
the twelve month period ended December 31, 2009,the
Company remained in the exploration stageand
we did not realize any revenues from operations.  Similarly, we did
not realize any revenuesfrom
operations during the period from inception through December 31,
2008.
  Expenses
 
 General
and administrative expenses totaled $615,580in
the year ended December 31, 2009, an increase of $615,149from
the $431of
general and administrative
expenses incurred in theperiod
from inception on October 2, 2008 throughDecember
31, 2008.  This increase is due primarily to increases in legal and
accounting fees associated with our two private placement offerings consummated
during the
2009 fiscal year.  Exploration coststotaled
$205,156for
the year ended December 31, 2009, an increase of $184,691from
the $20,465 in exploration costsincurred
during the year ended December 31, 2008.  This increase is due
primarilyto
increased activity with respect to our drilling activities.During
the year ended December 31, 2009 the Company also recognized interest expense of
$158,082, and a gain on the settlement of a derivative liability in the amount
of $112,500.
  Net
Losses
 
 As a
result of the foregoing, the Company incurred a net loss of
$866,318, or
($0.01) per share, in the year ended December 31, 2009, compared to a net loss
of $20,896, or
($0.00) per
share,for the
period from inception on October 2, 2008 throughDecember
31, 2008.  Our increase in net
loss in the later period is largely due to the increase of general and
administrative expense and exploration costsincurred
during the 2009 fiscal year.
 
 2008
Bridge Note
 
 The 2008
Bridge Note issued in the Bridge PPO had a principal amount of
$150,000, had a term of one year (or earlier upon certain events of
default) and bore interest at 10% per annum, payable at
maturity.  Upon the closing by the Company of any financing, merger or
acquisition, or any other business combination, resulting in gross cash proceeds
to the Company in excess of $500,000 (a “Financing”), the Company was required
to redeem the 2008 Bridge Note in full, provided that upon the closing of a
Financing, the holder was entitled, at its option, to convert all or any part of
the principal amount of the 2008 Bridge Note into  shares of the
Company’s Common Stock at a price of $1.00 per share, subject to adjustment in
certain circumstances.  The 2008 Bridge Note was secured pursuant to
security agreement by all of the assets of NGHI and NGE.  From the
proceeds of the first closing of our 2009 PPO, $100,000 principal amount of the
2008 Bridge Note was repaid, together with $4,602.74 of accrued interest
thereon.  Further, the Company agreed with the holder of the Bridge
Note that in consideration of this prepayment, and the issuance to the holder of
the 2008 Bridge Note of an additional 200,000 shares of Common Stock, no
adjustment under the 2008 Bridge Note would be made to the conversion price
therein as a result of the issuance and sale by the Company of shares of Common
Stock for a consideration per share of $0.125 on December 31, 2008, and March 9,
2009, nor as a result of the 2009 PPO closing on June 24, 2009, or any
subsequent issuance of units, up to a maximum of 8,000,000 units in the
aggregate, nor as a result of any other events that had occurred up to that
time.  From the proceeds of the second closing of the 2009 PPO, we
repaid the balance of $50,000 of, plus accrued interest of $3,479.45 on, the
2008 Bridge Note.
  33
  2009
Bridge Note
 
 On
December 10, 2009, we borrowed $100,000 under a bridge loan note (the “2009
Bridge Loan”) from a private institution. The 2009 Bridge Loan matures on June
4, 2010, unless extended by Lender and Borrower in writing, and bears interest
at 10% per annum, payable at maturity; provided, however, that no interest shall
be payable on the Loan if the Company, on or before the maturity date, closes a
private placement of its Common Stock and the outstanding principal amount of
the 2009 Bridge Note is converted into Common Stock as provided below.Upon the closing of a
private placement of its Common Stock on or before the maturity date, the
outstanding principal amount of the 2009 Bridge Note will automatically be
converted into shares of Common Stock, at a price per share equal to the price
per share of Common Stock paid by investors in the private
placement.
 
 2010
Notes
 
 On
February 5, 2010, we entered into a financing arrangement with JMJ Financial
(the “Investor”), pursuant to which the Investor may lend us up to
$3,200,000.  We issued convertible promissory notes to the Investor in
an aggregate principal amount of $3,200,000 (the “2010 Notes”).  We
received $200,000 from the Investor on February 5, 2010.  The 2010
Notes bear a one-time interest of 8% and mature three years from the date of
issuance.  Prepayment under the 2010 Notes is not permitted, unless
approved by the Investor.
 
 Under the
terms of the 2010 Notes, the Investor is entitled, at its option, to convert all
or part of the principal amount and accrued interest into shares of our Common
Stock at a conversion price equal to 70% of the lowest trade price of the Common
Stock in the twenty (20) trading days immediately prior to the conversion,
subject to adjustment in certain circumstances.  The 2010 Notes
contain a standard “blocker” provision so that the Investor does not have the
right to convert any portion of the 2010 Notes to the extent that, after giving
effect to such conversion, the Investor and its affiliates would beneficially
own in excess of 4.99% of the number of shares of Common Stock outstanding
immediately after giving effect to such conversion.
 
 In
consideration of our issuing the 2010 Notes, the Investor issued to us six
secured and collateralized promissory notes in an aggregate principal amount of
$3,000,000 (the “Investor Notes”).  The Investor Notes bear a one-time
interest of 8% and mature in three years from the date of
issuance.  No interest or principal payments are required until the
maturity date, but both principal and interest may be prepaid prior to
maturity.  The Investor Notes are secured by $3,000,000 worth of money
market fund (or similar equivalent) or other assets (the
“Collateral”).  On each Investor Note, the Investor has agreed to pay
down the principal in a minimum amount of $100,000 per month, commencing 210
days after the original date of issuance.  However, the Investor may
adjust the payment schedule within its sole discretion.  In the event
that the Investor defaults on the Investor Notes, the Company may take
possession of the Collateral.
  34
  Liquidity
and Capital Resources
 
 At
December 31, 2009, we have approximately $258,000 of cash on hand.  We
estimate our general and administrative direct costs will require $245,000 for
the balance of the 2010 calendar year.  This covers all lease, licensing
and claim fees due by the Company.  The Company is positioned to resume
drilling operations in May 2010 and has prepared sites for the balance of the
initial ten targeted holes, an additional seven holes.  We estimate that
completing the seven holes will require approximately $400,000.  Additional
planned field operations are targeting to drill ten more holes by 2010 year-end,
at an estimated cost of $600,000, including all supporting mineral analysis and
geophysical reports and analysis.  Base on these estimates, we will need to
raise an additional $1 million in capital in 2010.
  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 8.
              FINANCIAL
      STATEMENTS AND SUPPLEMENTAL DATA
 
 Our
audited financial statements as of, and for the years ended, December 31, 2009
and 2008, are included beginning on page F-1 immediately following the signature
page to this Report.  See Item 15 for a list of the financial
statements included herein.
 
 
 ITEM
      9.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
 
 (a)           On
August 10, 2009, Moore & Associates, Chartered, resigned as the Company’s
independent registered public accountants, and the Board of Directors of the
Company acknowledged the resignation of Moore & Associates, Chartered. The
Board of Directors of the Company approved the engagement of Seale and Beers,
CPAs, to serve as the Company’s independent registered public accountants for
the fiscal year 2009, and engaged them on August 12, 2009.
 
 Moore
& Associates, Chartered, issued its auditors’ report on our financial
statements for the year ended December 31, 2008, which included an explanatory
paragraph as to the Company’s ability to continue as a going
concern.
 
 Other
than the going concern uncertainty described above, the auditors’ report of
Moore & Associates, Chartered, on the financial statements of the Company
for the period ended December 31, 2008, contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principle.
 
 During
the two fiscal years ended December 31, 2008, and through the date of the
resignation of Moore & Associates, Chartered, there were no disagreements
with Moore & Associates, Chartered (as defined in Item 304(a)(1)(iv) of
Regulation S-K) on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of Moore & Associates, Chartered, would have
caused them to make reference thereto in their report on financial statements
for such years.
  35
  During
the two fiscal years ended December 31, 2008, and through the date of the
resignation of Moore & Associates, Chartered, there were no reportable
events as defined in Item 304(a)(1)(v) of Regulation S-K.
 
 The
Company requested Moore & Associates, Chartered to furnish it with a letter
addressed to the Securities and Exchange Commission stating whether it agrees
with the above statements.  Moore & Associates, Chartered,
informed us that, on the advice of counsel, it will not provide the requested
letter.
 
 On August
31, 2009, the Company was informed by letter from the SEC that the Public
Company Accounting Oversight Board (“PCAOB”) revoked the registration of Moore
& Associates, Chartered, on August 27, 2009, because of violations of PCAOB
rules and auditing standards in auditing the financial statements, PCAOB rules
and quality controls standards, and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 thereunder, and noncooperation with a PCAOB
investigation.
 
 During
the two fiscal years ended December 31, 2008, and through the date the
engagement of Seale and Beers, CPAs, neither the Company nor anyone on its
behalf consulted with Seale and Beers, CPAs, regarding either:
 
 ·
              The
      application of accounting principles to a specified transaction, either
      completed or proposed, or the type of audit opinion that might be rendered
      on the Company’s financial statements, and neither was a written report
      provided to the Company nor was oral advice provided that Seale and Beers,
      CPAs, concluded was an important factor considered by the Company in
      reaching a decision as to an accounting, auditing, or financial reporting
      issue; or
 
 ·
              Any
      matter that was either the subject of a disagreement or a reportable
      event, as each term is defined in Items 304(a)(1)(iv) or (v) of Regulation
      S-K, respectively.
 
 (b)           Subsequently
the Board of Directors of the Company dismissed Seale and Beers, CPAs, as the
Company’s independent registered public accountants, and the Board of Directors
approved the engagement of GBH CPAs, PC, to serve as the Company’s independent
registered public accountants for fiscal year 2009. GBH CPAs, PC, was engaged on
August 24, 2009.
 
 Seale and
Beers, CPAs has issued no reports on the financial statements of the Company for
any period.
 
 During
the two fiscal years ended December 31, 2008, and through the date of the
dismissal of Seale and Beers, CPAs, there were no disagreements with Seale and
Beers, CPAs (as defined in Item 304(a)(1)(iv) of Regulation S-K) on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Seale and Beers, CPAs, would have caused them to make reference
thereto in any report on financial statements for such years, except as
follows:
 
 In a
letter dated September 9, 2009, to the Office of the Chief Accountant of the
SEC, Seale and Beers, CPAs, stated that there were two instances where they were
concerned the Company was incorrectly applying Generally Accepted Accounting
Principles:
 
 (1)
              Seale
      and Beers, CPAs, stated that the Company “did not provide documentation
      for transferring $257,028 of accrued interest, notes payable and accounts
      payable from Nano Holdings International to a wholly owned subsidiary,
      Sunshine Group, prior to divesting itself of Sunshine Group during the
      quarter ending December 31, 2008. These liabilities (and retained loss)
      are not included in the Company’s financial
  statements.”
 
 (2)
              Seale
      and Beers, CPAs, stated that the Company “did not provide documentation
      supporting the $20,465 initial value it placed on its Tempo Mineral
      Prospect which was acquired in a related party transaction during the
      quarter ending December 31, 2008.”
  36
  A copy of
said letter of Seale and Beers, CPAs, is filed as Exhibit 16.1 to the Company’s
Current Report on Form 8-K filed with the SEC on September 17,
2009.
  Our Board
of Directors has discussed the matters raised in said letter of Seale and Beers,
CPAs, with our independent registered public accounting firm, GBH CPAs, PC, and
has reached the following conclusions:
 
 (1)         In
its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, the
Company reported $268,365 of total current liabilities, consisting of accounts
payable and accrued expenses of $20,932 and notes payable and accrued interest
of $247,433.
 
 On
October 30, 2008, these notes payable and accrued interest through that date
were settled, paid off and released by agreement with the note holders for the
aggregate sum of $5,000, which did not result in a gain on forgiveness of debt
for the Company because it relates to operations for a period prior to the
Merger.  Documentation thereof has been provided to Seale and Beers,
CPAs.
 
 At
December 31, 2008, immediately prior to the Merger between Nevada Gold
Acquisition Corp., a wholly owned subsidiary of the Company into Nevada Gold
Enterprises, Inc. (in which Nevada Gold Enterprises, Inc., was the surviving
corporation), the Company’s accounts payable and accrued expenses totaled
$156,745, and were carried over to the continuing entity.
 
 (2)         As
a result of the Merger, the Company acquired the Tempo Mineral
Prospect.  The lease had been acquired by NGE prior to the Merger
pursuant to a reassignment of the lease from KM Exploration, Ltd.  In
connection with the reassignment, NGE reimbursed KM Exploration for claim fees
($19,503) and preparation cost ($962), totaling $20,465, and David Mathewson,
then the sole stockholder of NGE and now our sole director and officer, assigned
five shares of NGE common stock (which converted into 400,000 shares each of the
Company’s Common Stock upon the Merger) to each of two individuals (one of whom
was the owner of a 50% interest in KM Exploration).  In the Company’s
Current Report on Form 8-K filed with the SEC on January 7, 2009, and subsequent
reports, the Tempo Mineral Prospect was capitalized as an asset with a value of
$20,465, and we did not recognize any impairment of the mining claims.  In
conjunction with the restatements referred to in Item 4.02 below, the mining
claim is expected to be assigned no fair value because there has not been a
final or bankable feasibility study and the designation of proven and probable
reserves.
 
 During
the two fiscal years ended December 31, 2008, and through the date of the
dismissal of Seale and Beers, CPAs, there were no other reportable events as
defined in Item 304(a)(1)(v) of Regulation S-K.
 
 During
the two fiscal years ended December 31, 2008, and through the date of the
engagement of GBH CPAs, PC, neither the Company nor anyone on its behalf
consulted with GBH CPAs, PC, regarding either:
 
 ·
              The
      application of accounting principles to a specified transaction, either
      completed or proposed, or the type of audit opinion that might be rendered
      on the Company’s financial statements, and neither was a written report
      provided to the Company nor was oral advice provided that GBH CPAs, PC,
      concluded was an important factor considered by the Company in reaching a
      decision as to an accounting, auditing, or financial reporting issue;
      or
 
 ·
              Any
      matter that was either the subject of a disagreement or a reportable
      event, as each term is defined in Items 304(a)(1)(iv) or (v) of Regulation
      S-K, respectively.
 
 37
 
 ITEM 9A.[T]
              CONTROLS
      AND PROCEDURES
 
 Evaluation
of Our Disclosure Controls and Procedures
 
 Under the
supervision and with the participation of our Chief Executive Officer (our
principal executive and principal financial officer), we conducted an evaluation
of the effectiveness of the design and operation of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act,
as of December 31, 2009 (the “Evaluation Date”).  Based on this
evaluation, our Chief Executive 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 Chief Executive Officer, as appropriate to allow
timely decisions regarding required disclosure.
 
 We are a
small organization with limited personnel during 2009. We were unable to
implement an effective system of disclosure controls and procedures as of
the Evaluation Date. We expect
to create a system of disclosure controls and procedures in 2010 as we expand
our business and develop our mining claims.  Nevertheless,
management believes that this Report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this Report.
 
 Management’s
Report on Internal Control over Financial Reporting
 
 Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act.  Internal control over financial reporting is a process
designed by, or under the supervision of, an issuer’s principal executive and
principal financial officers, or persons performing similar functions, and
effected by its board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes in
accordance with generally accepted accounting principles (GAAP). Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements.  Also, projection of any evaluation of
effectiveness to future periods is subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives.
 
 Management
has conducted, with the participation of our Chief Executive Officer (our
principal executive and principal financial officer), an assessment, including
testing of the effectiveness, of our internal control over financial reporting
as of December 31, 2009. In evaluating the effectiveness of our internal control
over financial reporting, our management used the criteria set forth in Internal
Control over Financial Reporting – Guidance for Smaller Public Companies issued
by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”). A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the company's annual or interim
financial statements will not be prevented or detected on a timely basis. We
have identified the following material weakness: We were unable to implement a
system of segregation of duties necessary to establish an effective system of
internal controls as of the Evaluation Date.
  38
  We are a
small organization with limited personnel during 2008. We expect to create a
system of internal controls in 2009 as we expand our business and develop our
mining claims.  To address the material weaknesses, we performed
additional analysis and other post-closing procedures in an effort to ensure our
consolidated financial statements included in this Report have been prepared in
accordance with GAAP. Accordingly, management believes that the financial
statements included in this report fairly present in all material respects our
financial condition, results of operations and cash flows as of the dates and
for the periods presented.
 
 This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management’s report in this annual
report.
 
 Changes
in Internal Control over Financial Reporting
 
 There
have been no changes in our internal control over financial reporting that
occurred during the quarter ended December 31, 2009, that have materially
affected or are reasonably likely to materially affect our internal control over
financial reporting.
 
 
 PART
III
 
 ITEM
      10.
              DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE
 
 Executive
Officers and Directors
  Below are
the names and certain information regarding the Company’s current executive
officers and directors:
  Name
                            
                            Age
                            
                            Title
                            
                            Date
      First AppointedDavid
      Rector
                            
                            63
                            
                            Chief
      Executive Officer, President, Secretary and Treasurer
                            
                            November
      5, 2009John
      N. Braca
                            
                            52
                            
                            Director
                            
                            November
      13, 2009David
      C. Mathewson
                            
                            65
                            
                            Director
      and Geological Advisor
                            
                            December
      31,
2008
 
 Directors
are elected to serve until the next annual meeting of stockholders and until
their successors are elected and qualified.  Officers are elected by
the Board of Directors and serve until their successors are appointed by the
Board of Directors.
 
 The
principal occupation and business experience during the past five years for our
current officer and director is as follows:
 
 David Rector,Chief Executive Officer, President,
Secretary and Director.  Mr. Rector has
served as our Chief Executive Officer, President, Secretary and Director since
November 5, 2009. Mr. Rector does not have an employment agreement with us but
receives $6,000 per month in compensation for his services to us. Mr.
Rector had previously served as our Chief Executive Officer, Chief
Financial Officer, President, Secretary, Treasurer and Director from April 19,
2004 through December 31, 2008. He has served as Chief Executive Officer, Chief
Financial Officer, President, Secretary, Treasurer and Director of Standard
Drilling, Inc. since November 2007 and of Federal Sports & Entertainment,
Inc. since September 30, 2008. Mr. Rector previously served as President, Chief
Executive Officer and Chief Operating Officer of Nanoscience Technologies, Inc.
from June 2004 to December 2006, when he resigned as an officer and director of
Nanoscience. Mr. Rector also served as President, Chief Executive Officer, Chief
Financial Officer and Treasurer of California Gold Corp. (f/k/a US Uranium,
Inc.) from June 15, 2007 to July 11, 2007 and again from August 8, 2007 to
November 12, 2007.  Since June 1985, Mr. Rector has been the principal
of the David Stephen Group, which provides enterprise consulting services to
emerging and developing companies in a variety of industries. From January 1995
until June 1995, Mr. Rector served as the General Manager of the Consumer
Products Division of Bemis-Jason Corporation. Mr. Rector was employed by Sunset
Designs Inc., a manufacturer and marketer of consumer product craft kits from
June 1980 until June 1985.
  39
  Additionally,
Mr. Rector currently serves on the Board of Directors of the following public
companies:
  Name
                
                Director
      SinceSenesco
      Technologies, Inc. (AMEX:SNT)
                
                February
      2002Dallas
      Gold & Silver Exchange (AMEX:DSG)
                
                May
      2003California
      Gold Corp.. (OTCBB:CLGL)
                
                June
      2007Standard
      Drilling, Inc. (STDR.PK)
                
                November
      2007Li3
      Energy, Inc. (OTCBB:LIEG)
                
                June  2008Federal
      Sports & Entertainment, Inc. (OTCBB:FEDS)
                
                September
      2008
  As a
result, the amount of time that Mr. Rector has to devote to our activities may
be limited.
  John N. Braca,Director.Mr. Braca became a
director of the Company on November 13, 2009.  Mr. Braca is
a licensed Certified Public Accountant in the State of Pennsylvania and is
affiliated with the American Institute of Certified Public Accountants and the
Pennsylvania Institute of Certified Public Accountants. Mr. Braca currently
serves as a director and member of the audit and compensation committees of
Senesco Technologies, Inc. He has also served as a director and board
observer for other healthcare, technology and biotechnology companies
over the course of his career.  He continues to work with both
investors and management of companies in both exit and business development
scenarios.  Since April 2006, Mr. Braca has been the managing director
of Fountainhead Venture Group, a healthcare information technology venture fund
providing investment and business consulting services to evolving businesses.
From May 2005 through March 2006, Mr. Braca was a business advisor to
GlaxoSmithKline research and development operations. From 1997 to
April 2005, Mr. Braca was a general partner and director of business investments
for S.R. One, Limited, the venture capital subsidiary of GlaxoSmithKline. From
January 2000 to July 2003, Mr. Braca was a general partner of Euclid SR Partners
Corporation, an independent venture capital partnership. Prior to joining S.R.
One, Mr. Braca held various finance and operating positions of increasing
responsibility within several subsidiaries and business units of
GlaxoSmithKline.  Mr. Braca received a Bachelor of Science in Accounting
from Villanova University and a Master of Business Administration in Marketing
from Saint Joseph’s University.
  David C. Mathewson,Director and Geological
Advisor.Mr. Mathewson was the Chief Executive Officer,
President, Secretary, Treasurer, Chief Geologist and sole director of NGE from
its inception on October 7, 2008, and became Chief Executive Officer, President,
Secretary, Treasurer, Chief Geologist and sole direct of the Company upon the
Merger.  He resigned as Chief Executive Officer, President, Secretary,
Treasurer and Chief Geologist on November 5, 2009, but remains as our
directorand
Geological Advisor.  Mr. Mathewson has more than 30 years of hands-on
gold exploration experience on the Carlin gold trend in north-central
Nevada.  Between August 2006 and August 2008, Mr. Mathewson was
President, Chief Geologist and director of Gold Run, Inc., a public
company.  Between June 2002 and June 2006, Mr. Mathewson was the Vice
President of Exploration for Tone Resources, Ltd., a Canadian corporation, where
he managed that company’s gold exploration program (Mr. Mathewson remained a
director of Tone Resources until his resignation on March 23,
2007).  Between May 2001 and June 2002, Mr. Mathewson staked claims
and evaluated business opportunities both as an individual and through his
50%-owned company, KM Exploration, Ltd (which has since been
dissolved).  Between January 1995 and May 2001, he was the Regional
Manager of Exploration for Newmont Mining Company, where he was responsible for
managing that company’s exploration activities in the Great Basin and Carlin
gold trends.  Prior to that, he was engaged as Newmont Mining
Company’s Senior Exploration Geologist from April 1989 through December
1995.
  40
  Board
Committees
  Our Board
of Directors c has not established an audit committee, a compensation committee,
a nominating committee or any other committee.  The Board of Directors
currently acts in the capacity of an audit committee.
  Although
we do not have an audit committee, the Board of Directors has determined that
Mr. Braca meets the definition of an “audit committee financial expert,” as
defined in Item 407 of Regulation S-K.
  Shareholder
Recommendations of Nominees to the our Board of Directors
  Currently,
we do not have a policy with regard to procedures by which security holders may
recommend nominees to our Board of Directors.
 
 Code
of Ethics
  The
Company currently has not adopted a written code of ethics.
 
 Section
16(a) Beneficial Ownership Reporting Compliance
 
 Based
solely upon a review of Forms 3 and 4 and amendments thereto furnished to the
Company under  Rule 16a-3(e) under the Exchange Act during its most
recent fiscal year and Forms 5 and amendments thereto furnished to the Company
with respect to its most recent fiscal year, and any written representation to
the Company from the reporting person that no Form 5 is required, no person who,
at any time during the fiscal year, was a director, officer, beneficial owner of
more than ten percent of the Company’s Common Stock, or any other person known
to the Company to be subject to section 16 of the Exchange Act with respect to
the Company, failed to file on a timely basis, as disclosed in the above Forms,
reports required by section 16(a) of the Exchange Act during the most recent
fiscal year or prior fiscal years, except as described below:
 
 Name
                        
                        Number of late reports
                        
                        Number of transactions that were not reported on a
      timely basis
                        
                        Failure to file a required
    FormDavid Rector
                        
                        1
                        
                        1
                        
                        —David C. Mathewson
                        
                        3
                        
                        3
                        
                        —John N. Braca
                        
                        1
                        
                        1
                        
                        —
   ITEM
      11.
              EXECUTIVE
      COMPENSATION
 
 The
following table sets forth information concerning the total compensation paid or
accrued by us during the last three fiscal years ended December 31, 2009, to (i)
all individuals that served as our principal executive officer or acted in a
similar capacity for us at any time during the fiscal year ended December 31,
2009; (ii) all individuals that served as our principal financial officer or
acted in a similar capacity for us at any time during the fiscal year ended
December 31, 2009; and (iii) all individuals that served as executive officers
of ours at any time during the fiscal year ended December 31, 2009, that
received annual compensation during the fiscal year ended December 31, 2009, in
excess of $100,000.
  41
  Summary
Compensation Table
  Name and
                                                                                                                            Principal Position
                                                                                                                          
                                                                                                                          
                                                                                                                          Year
                                                                                                                          
                                                                                                                          
                                                                                                                          Salary
                                                                                                                            ($)
                                                                                                                          
                                                                                                                          
                                                                                                                          Bonus
                                                                                                                            ($)
                                                                                                                          
                                                                                                                          
                                                                                                                          Stock
                                                                                                                            Awards
                                                                                                                            ($)
                                                                                                                          
                                                                                                                          
                                                                                                                          Option
                                                                                                                            Awards
                                                                                                                            ($)
                                                                                                                          
                                                                                                                          
                                                                                                                          Non-
                                                                                                                            Equity
                                                                                                                            Incentive
                                                                                                                            Plan
                                                                                                                            Compen-
                                                                                                                            sation ($)
                                                                                                                          
                                                                                                                          
                                                                                                                          Change
                                                                                                                            in
                                                                                                                            Pension
                                                                                                                            Value
                                                                                                                            and Non-
                                                                                                                            qualified
                                                                                                                            Deferred
                                                                                                                            Compen-
                                                                                                                            sation
                                                                                                                            Earnings
                                                                                                                            ($)
                                                                                                                          
                                                                                                                          
                                                                                                                          All Other
                                                                                                                            Compensation
                                                                                                                            ($)
                                                                                                                          
                                                                                                                          
                                                                                                                          Total ($)David
      Rector
                                                                                                                          
                                                                                                                          
                                                                                                                          2009
                                                                                                                          
                                                                                                                          
                                                                                                                          $
                                                                                                                          12,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          $
                                                                                                                          16,231
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          $
                                                                                                                          28,231CEO,
      President, CFO,
                                                                                                                          
                                                                                                                          
                                                                                                                          2008
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —Secretary, Treasurer,
      and Director(1)
                                                                                                                          
                                                                                                                          
                                                                                                                          2007
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          —David
      Mathewson(2)
                                                                                                                          
                                                                                                                          
                                                                                                                          2009
                                                                                                                          
                                                                                                                          
                                                                                                                          $
                                                                                                                          15,000
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          
                                                                                                                          $
                                                                                                                          15,000Geological
      Advisor
                                                                                                                          
                                                                                                                          
                                                                                                                          2008and
      Director
                                                                                                                          
                                                                                                                          
                                                                                                                          2007
  
 (1)
              Mr.
      Rector was our sole officer and director until December 31, 2008, when he
      resigned all positions with the Company; on November 5, 2009, he became
      our Chief Executive Officer, President, Secretary and
      director.
 
 (2)
              Mr.
      Mathewson became our sole officer and director on December 31, 2008; he
      resigned his officer positions on November 5,
  2009.
  On
November 5, 2009, our Board of Directors granted under our 2008 Plan to David
Rector, in connection with his appointment as our Chief Executive Officer,
President, Secretary and director, incentive stock options to purchase 1,000,000
shares of Common Stock at a purchase price of $0.135 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, our Board of Directors granted under our 2008 Plan to John N.
Braca , in
connection with his appointment as our director, non-qualified stock options to
purchase 250,000 shares of Common Stock at a purchase price of $0.127 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.
 
 Except as
described above, we have not issued any stock options, nor have we maintained
any stock option or other incentive plans other than our 2008 Plan. (See “Item
5, Market for Common Equity and Related Stockholder Matters – Securities
Authorized for Issuance under Equity Compensation Plans” above.) We have no
plans in place and have never maintained any plans that provide for the payment
of retirement benefits or benefits that will be paid primarily following
retirement including, but not limited to, tax qualified deferred benefit plans,
supplemental executive retirement plans, tax-qualified deferred contribution
plans and nonqualified deferred contribution plans.
  42
  Employment
Agreements with Executive Officers
 
 The
Company entered into an employment agreement effective as of January 1, 2009
(the “Effective Date”) with David Mathewson, pursuant to which Mr. Mathewson
served as our Chief Executive Officer, President and Chief
Geologist.  The term of the employment agreement commenced on the
Effective Date and was to end on the first anniversary of the Effective Date,
unless sooner terminated as provided in employment agreement (the “Term”);
thereafter, the Term would have automatically renewed for successive periods of
one year, unless either party gave to the other at least thirty (30) days’ prior
written notice of their intention not to renew the employment agreement prior to
the end of the Term or the then applicable renewal Term, as the case may be.
Pursuant to the employment agreement, Mr. Mathewson’s annual base salary was
$120,000; provided, however, that for the first year of the term, the base
salary was $105,000 per annum, with $5,000 payable for the months of January,
February and March of 2009, and $10,000 payable for the remaining months of
2009.  Mr. Mathewson received a total of $15,000 in salary in
2009.  The employment agreement contained no provisions relating to a
bonus.
 
 The Board
of Directors would have determined whether and to what extent Mr. Mathewson
would participate in any stock or option plan of the Company. During the Term,
Mr. Mathewson was entitled to participate in the Company’s insurance programs
and any ERISA benefit plans that may be adopted.
 
 Mr.
Mathewson was entitled to receive reimbursement of all expenses reasonably
incurred by him in performing his services, including all travel and living
expenses while away from home on business or incurred at the specific request or
direction of the Company. The Company advanced to Mr. Mathewson, on a fully
accountable basis, an allowance for reimbursable expenses of $5,000 per month
(or, if reimbursable expenses for the prior month did not equal or exceed
$5,000, then an amount equal to $5,000 less the unused portion of the prior
month’s advance).
 
 The
Company was to grant Mr. Mathewson a 1% net smelter return royalty (“NSR”) for
all prospects generated by him that were acquired by staking for the Company.
The Company was to grant Mr. Mathewson a 1/2% percent NSR for all prospects
generated by him that are subsequently leased by the Company, exclusive of the
“Tempo” property, provided that (i) such lease carries a total maximum NSR of 4%
percent (inclusive of the 1/2% percent NSR to Mr. Mathewson), and (ii) such
lease does not adjoin a claim from which Mr. Mathewson is otherwise entitled to
receive participation in an NSR. The Company was to have the right to purchase
all of such 1/2% percent NSRs respecting leased prospects in the aggregate at
any time for $500,000.
 
 On
November 5, 2009, the Company and Mathewson agreed to terminate the employment
agreement, and Mr. Mathewson resigned as Chief Executive Officer, President,
Secretary, Treasurer and Chief Geologist of the Company.  Mr.
Mathewson waived the right to receive any base salary accrued to the termination
date but not yet paid. The Company is not obligated to pay Mr. Mathewson any
severance.  No NSRs have accrued under the agreement, and the Company
is not obligated to grant any NSRs to Mr. Mathewson.  Mr. Mathewson
agreed that he will not, directly or indirectly, own, manage, operate, finance,
control or participate in the ownership, management, operation, financing, or
control of, be employed by, associated with, or in any manner connected with,
lend any credit to, or render services or advice to any business, firm,
corporation, partnership, association, joint venture or other entity that
engages in or conducts the business of gold exploration, anywhere within the
Tempo property located in Lander County, Nevada, or within two miles of the
current outside boundary of the Tempo property, for a period of three years or
for as long as the Company maintains ownership control or a participatory
involvement in the Tempo property (whichever is longer), or unless otherwise
agreed upon by the Company’s Board of Directors.  Mr. Mathewson also
surrendered to the Company, without payment therefor, two million (2,000,000)
shares of the Company’s Common Stock, which were cancelled and returned to
authorized but unissued shares.
  43
  Director
Compensation
  Directors
are elected by the vote of a majority in interest of the holders of voting stock
and hold office until the expiration of the term for which they are elected and
until successors  are qualified and elected.
 
 A
majority of the authorized number of directors constitutes a quorum of the Board
of Directors for the transaction of business.  The directors must be
present at the meeting to constitute a quorum.  However, any action
required or permitted to be taken by the Board of Directors may be taken without
a meeting if all members of the Board of Directors individually or collectively
consent in writing to the action.
 
 At this
time directors do not receive compensation for their
services.
 
 
 ITEM
      12.
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
  The
following table sets forth information with respect to the beneficial ownership
of our common stock known by us as of April 14, 2010:
  ●
              each
      person or entity known by us to be the beneficial owner of more than 5% of
      our common stock;
 
 ●
              each
      of our directors;
 
 ●
              each
      of our executive officers; and
 
 ●
              all
      of our directors and executive officers as a
  group.
  Except as
otherwise indicated, the persons listed below have sole voting and investment
power with respect to all shares of our common stock owned by them, except to
the extent such power may be shared with a spouse.
  There are
no securities, options or warrants exercisable within sixty days and, which if
exercised, would result in the holder becoming the beneficial owner of 5% or
more of our Common Stock.
  44
  Name
      and Address
                                      of
      Beneficial Owner
                                    
                                    Title
      of Class
                                    
                                    Amount
      and Nature
                                      ofBeneficial Ownership(1)
                                    
                                    Percent
      of Class (2)David
      C. Mathewson
                                      1265
      Mesa Drive
                                      Fernley,
      NV 89408
                                    
                                    Common
      Stock
                                    
                                    22,276,000
                                    
                                    29.9
                                    %David
      Rector
                                    
                                    Common
      Stock
                                    
                                    0
                                    (3)
                                    *
                                    %John
      N. Braca
                                    
                                    Common
      Stock
                                    
                                    0
                                    (4)
                                    *
                                    %All
      directors and executive officers as a group (3 persons)
                                    
                                    Common
      Stock
                                    
                                    22,276,000
                                    
                                    29.9
                                    %
  
 *
              less
      than 1%(1)
              All
      named parties have, to our knowledge, sole investment and voting control
      of the shares set forth in this table.(2)
              Percentages
      based upon shares of common stock outstanding as of April 14, 2010;
      percentages are rounded.(3)
              Does
      not include 1,000,000 shares of common stock issuable upon the exercise of
      options granted under the 2008 Plan, which fully vests on December 31,
      2010.(4)
              Does
      not include 250,000 shares of common stock issuable upon the exercise of
      options granted under the 2008 Plan, which fully vests on December 31,
      2010.
 
  ITEM
      13.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
 
 Prior to
the Merger, NGE acquired the leasehold interest in the Tempo property from KM
Exploration, Ltd., a Nevada limited liability company in which our CEO,
President, Chief Geologist and sole director, David Mathewson, had a 50%
ownership interest prior to its dissolution.  In consideration of the
transfer of the lease to NGE, NGE reimbursed KM Exploration for claim fees
($19,503) and preparation cost ($961.50), totaling $20,464.50. Also in
connection with the reassignment, Mr. Mathewson, then the sole stockholder of
NGE, assigned five shares of NGE (which converted into 400,000 shares each of
Company Common Stock upon the Merger) to each of two individuals (one of whom
was the owner of the other 50% interest in KM Exploration prior to its
dissolution).
  On
December 31, 2008, in connection with the Merger, David Mathewson received
15,200,000 shares of our Common Stock in exchange for 190 shares of NGE common
stock owned by Mr. Mathewson.  Subsequent to the closing of the
Merger, Mr. Mathewson transferred to certain investors in the Bridge PPO, in
private transactions, an aggregate of 3,060,000 of his shares.  In
connection with the Merger, Mr. Mathewson entered into a lock-up agreement,
pursuant to which he is prohibited from certain sales or dispositions of any
other shares of our Common Stock received in the Merger for a period of two
years from December 31, 2008, without the prior written consent of the
Company.
 
 See
“Business—Historical Development—Split-Off Agreement” for a description of
certain transactions involving Marion R. “Butch” Barnes in connection with the
Merger.
  45
  Nano Holdings recorded the value of
uncompensated services provided by itsofficer and
director, David Rector, and the President of Sunshine,Marion“Butch”
Barnes, as a contribution of capital during the year ended December 31, 2008.
However, as a result of the “reverse merger” accounting, with NGE deemed to be
the accounting acquirer in the reverse merger, these amountsdo not
appear on our statementsof stockholders’ equity at December 31, 2009 or
2008.
 
 Director
Independence
 
 We are
not currently subject to listing requirements of any national securities
exchange or inter-dealer quotation system which has requirements that a majority
of the board of directors be “independent.”  Nevertheless, our Board
of Directors has determined that one of our three directors, John N. Braca, is
“independent” within the definition of independence provided in the Marketplace
Rules of The Nasdaq Stock Market.
 
 
 ITEM
      14.
              PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
 
 Audit
Fees
  The
aggregate fees billed to us by our principal accountant for services rendered
during the fiscal years ended December 31, 2009 and 2008, are set forth in the
table below:
  Fee
      Category
                    
                    Fiscal
      year ended
                      December 31, 2009
                    
                    
                    Fiscal
      year ended
                      December 31, 2008Audit
      fees (1)
                    
                    $
                    19,100
                    
                    
                    $
                    8,000Audit-related
      fees (2)
                    
                    $
                    0
                    
                    
                    $
                    0Tax
      fees (3)
                    
                    $
                    0
                    
                    
                    $
                    0All
      other fees (4)
                    
                    $
                    0
                    
                    
                    $
                    0Total
      fees
                    
                    $
                    19,100
                    
                    
                    $
                    8,000
  (1)
              Audit
      fees consist of fees incurred for professional services rendered for the
      audit of consolidated financial statements, for reviews of our interim
      consolidated financial statements included in our quarterly reports on
      Form 10-Q and for services that are normally provided in connection with
      statutory or regulatory filings or
engagements.
 
 (2)
              Audit-related
      fees consist of fees billed for professional services that are reasonably
      related to the performance of the audit or review of our consolidated
      financial statements, but are not reported under “Audit
    fees.”
 
 (3)
              Tax
      fees consist of fees billed for professional services relating to tax
      compliance, tax planning, and tax
advice.
 
 (4)
              All
      other fees consist of fees billed for all other
  services.
 
 46
 
 PART
IV
 
 ITEM
      15.
              EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES
 
 The
consolidated financial statements of the Company are listed on the Index to
Financial Statements on this annual report on Form 10-K beginning on page
F-1.
 
 Financial
      Statements
                  
                  PageReport
      of Independent Registered Public Accounting Firm
                  
                  F-3Consolidated
      Balance Sheets as of December 31, 2009 and 2008
                  
                  F-4Consolidated
      Statements of Operations for the years ended December 31, 2009 and 2008
      and for the periods from October 2, 2008 (inception) through December 31,
      2009 and 2008
                  
                  F-5Statements
      of Changes in Stockholders’ Equity (Deficit) for the period from June 9,
      2006 to December 31, 2009
                  
                  F-6Consolidated
      Statements of Cash Flows for the years ended December 31, 2009 and 2008
      and for the periods from October 2, 2008 (inception) through December 31,
      2009 and 2008
                  
                  F-7Notes
      to Financial Statements
                  
                  F-8
      – F-13
 
 Financial
Statement Schedules
 
 All
financial statement schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.
 
 Exhibits
 
 The
following Exhibits are being filed with this Annual Report on Form
10-K.
  In
reviewing the agreements included as exhibits to this Form 10-K, 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
the Company 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 the Company may be found elsewhere in this Form 10-K and the
Company’s other public filings, which are available without charge through the
SEC’s website at http://www.sec.gov.
See “Available Information.”
  47
  Exhibit
                                                                                Number
                                                                              
                                                                              Description2.1*
                                                                              
                                                                              Agreement
      and Plan of Merger and Reorganization, dated as of December 31, 2008, by
      and among Nevada Gold Holdings, Inc., Nevada Gold Acquisition Corp. and
      Nevada Gold Enterprises, Inc.2.2*
                                                                              
                                                                              Certificate
      of Merger3.1
                                                                              
                                                                              Certificate
      of Incorporation of the Registrant (incorporated by reference
      from Exhibit 3.1 to the Registrant’s Form SB-2 Registration Statement
      filed with the SEC on August 1, 2006)3.2
                                                                              
                                                                              Certificate
      of Amendment to Certificate of Incorporation of the Registrant (incorporated by reference
      from Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with
      the Commission on November 6, 2008)3.3
                                                                              
                                                                              Bylaws
      of the Registrant (incorporated by reference
      from Exhibit 3.1 to the Registrant’s Form SB-2 Registration Statement
      filed with the Commission on August 1, 2006)10.1*
                                                                              
                                                                              Form
      of Subscription Agreement by and between Nevada Gold Holdings, Inc., and
      the investors party thereto10.2*
                                                                              
                                                                              Form
      of Addendum to Subscription Agreement by and between Nevada Gold Holdings,
      Inc., and the investors party thereto10.3*†
                                                                              
                                                                              Lock-Up
      Agreement, dated as of December 31, 2008, between Nevada Gold Holdings,
      Inc., and David Mathewson10.4*
                                                                              
                                                                              Split-Off
      Agreement, dated as of December 31, 2008, by and among Nevada Gold
      Holdings, Inc., Sunshine Group, Inc., and Marion R. “Butch” Barnes,
      William D. Blanchard and Robert Barnes10.5*
                                                                              
                                                                              General
      Release Agreement, dated as of December 31, 2008, by and among Nevada Gold
      Holdings, Inc., Sunshine Group, Inc., and Marion R. “Butch” Barnes,
      William D. Blanchard and Robert Barnes10.6*
                                                                              
                                                                              Form
      of Agreement and Release between David Mathewson and the subscribers
      thereto10.7*
                                                                              
                                                                              Tempo
      Mineral Lease dated May 18, 2007, by and between Gold Standard Royalty
      (Nevada) Inc., successor in interest to Bertha C. Johnson, Trustee of the
      Lyle F. Campbell Trust, as Lessor, and NGE, as successor to KM Exploration
      LTD., as successor to Gold Run, Inc.10.8*
                                                                              
                                                                              Amendment
      to Tempo Mineral Lease dated January 6, 2009, between Gold Standard
      Royalty (Nevada) Inc., successor in interest to Bertha C. Johnson, Trustee
      of the Lyle F. Campbell Trust, as Lessor, and NGE, as successor to KM
      Exploration LTD., as successor to Gold Run, Inc.10.9*
                                                                              
                                                                              Form
      of Securities Purchase Agreement dated December 31, 2008, between Nevada
      Gold Holdings, Inc., and the Buyers party thereto10.10*
                                                                              
                                                                              Form
      of 10% Secured Convertible Promissory
Note
  48
  10.11*
                                
                                Form
      of Security Agreement dated December 31, 2008, among Nevada Gold Holdings,
      Inc., Nevada Gold Enterprises, Inc., and the Buyers party
      thereto10.12*†
                                
                                Nevada
      Gold Holdings, Inc., 2008 Equity Incentive Plan10.13*
                                
                                Form
      of amended Subscription Agreement between Nevada Gold Holdings, Inc., and
      the investors party thereto (incorporated
      by reference to Exhibit 10.13 to the registrant’s Annual Report on Form
      10-K for the year ended December 31, 2008)10.14
      †
                                
                                Employment
      Agreement dated as of January 1, 2009, between Nevada Gold Holdings, Inc.,
      and David Mathewson (incorporated by reference to
      Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the
      SEC on March 24, 2009)10.15†**
                                
                                Letter
      agreement dated November 5, 2009, between Nevada Gold Holdings, Inc., and
      David Mathewson re resignation and termination of Employment
      Agreement10.16
                                
                                Form
      of Subscription Agreement in connection with the Company’s private
      placement offering of units of securities, each unit consisting of one
      share of the Company’s Common Stock and a warrant to purchase one share of
      Common Stock (incorporated by reference to
      Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the
      quarter ended September 30, 2009)10.17
                                
                                Form
      of Warrant to Purchase Common Stock (incorporated by reference to
      Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the
      quarter ended September 30, 2009)10.18
                                
                                Form
      of Subscription Agreement in connection with the Company’s private
      placement offering of units of securities, each unit consisting
      of  one share of the Company’s Common Stock and a warrant to
      purchase one share of Common Stock (incorporated by reference to
      Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the
      quarter ended June 30, 2009)10.19
                                
                                Form
      of Amendment to Subscription Agreement (incorporated by reference to
      Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the
      quarter ended June 30, 2009)10.20
                                
                                Form
      of Warrant to Purchase Common Stock (incorporated by reference to
      Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the
      quarter ended June 30, 2009)10.21
                                
                                Amendment
      to Tempo Mineral Lease dated January 6, 2009, between Gold Standard
      Royalty (Nevada) Inc., successor in interest to Bertha C. Johnson, Trustee
      of the Lyle F. Campbell Trust, as Lessor, and NGE, as successor to KM
      Exploration LTD., as successor to Gold Run, Inc. (incorporated by reference to
      Exhibit 10.8 to the registrant’s Current Report on Form 8-K filed with the
      SEC on January 7, 2009)21.1**
                                
                                Subsidiaries
      of the Registrant31.1**
                                
                                Certification
      of principal executive and principal financial officer pursuant to Rule
      13a-14(a) and 15d-14(a)32.1**
      §
                                
                                Certification
      of principal executive and principal financial officer pursuant to 18
      U.S.C. Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act
      of
2002
 *
              Incorporated
      by reference to identically numbered exhibit to the registrant’s Current
      Report on Form 8-K filed with the SEC on January 7,
  2009.
 
 **
              Filed
      herewith
 
 †
              Management
      contract or compensatory plan or arrangement required to be filed as an
      exhibit to this Form 10-K pursuant to Item 15(b) of
      Form 10-K.
 
 §
              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.
  49
  SIGNATURES
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
 
 NEVADA
      GOLD HOLDINGS, INC.Dated:  April
      19, 2010
                By:
                /s/ David
      RectorDavid
      RectorChief
      Executive Officer, President, Secretary and
  Treasurer
 
 In
accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
  SIGNATURE
                                
                                TITLE
                                
                                DATE/s/ David
      Rector
                                
                                Director;
      Chief Executive Officer, President, Secretary and
Treasurer
                                
                                April
      19, 2010David
      Rector/s/ John N. Braca
                                
                                Director
                                
                                April
      19, 2010John
      N. Braca/s/ David C. Mathewson
                                
                                Director
                                
                                April
      19, 2010David
      C. Mathewson
  50
  FINANCIAL
      STATEMENTS
 
 PageReport
      of Independent Registered Public Accounting FirmConsolidated
      Balance Sheets as of December 31, 2009 and 2008
                    
                    F-2Consolidated
      Statements of Operations for the years ended December 31, 2009 and
      2008
                    
                    F-3Statements
      of Changes in Stockholders’ Equity (Deficit) for the period from June 9,
      2006 to December 31, 2009
                    
                    F-5Consolidated
      Statements of Cash Flows for the years ended December 31, 2009 and
      2008
                    
                    F-5Notes
      to Financial Statements
                    
                    F-6
  F-1
  NEVADA
GOLD HOLDINGS, INC.
 (An
Exploration Stage Company)
 Consolidated
Balance Sheet
 ASSETSDecember
      31,
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  December
      31,2009
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  2008(Restated)CURRENT
      ASSETSCash
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  $
                                                                                                                                                                                                                                                                  158,398
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  $
                                                                                                                                                                                                                                                                  -Cash
      held in trust
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  -
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  253,440Total
      Current Assets
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  158,398
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  253,440OTHER
      ASSETSMining
      reclamation bond
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  15,444
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  -Total
      Other Assets
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  15,444
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  -TOTAL
      ASSETS
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  $
                                                                                                                                                                                                                                                                  173,842
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  $
                                                                                                                                                                                                                                                                  253,440LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)CURRENT
      LIABILITIESAccounts
      payable
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  $
                                                                                                                                                                                                                                                                  70,480
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  $
                                                                                                                                                                                                                                                                  233,354Derivative
      liability
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  -
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  112,500Note
      payable
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  100,000
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  -Total
      Current Liabilities
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  170,480
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  345,854STOCKHOLDERS'
      EQUITY (DEFICIT)Preferred
      stock:$0.001 par value, 10,000,000 shares authorized;
      no shares issued and outstanding
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  -
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  -Common stock:$0.001
      par value, 300,000,000 shares authorized;
      72,631,946 and 71.001.946 shares issued
      and outstanding, respectively
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  72,632
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  71,002Additional
      paid-in capital (deficit)
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  817,944
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  (142,520
                                                                                                                                                                                                                                                                  )Deficit
      accumulated during the exploration stage
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  (887,214
                                                                                                                                                                                                                                                                  )
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  (20,896
                                                                                                                                                                                                                                                                  )Total
      Stockholders' Equity (Deficit)
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  3,362
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  (92,414
                                                                                                                                                                                                                                                                  )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  $
                                                                                                                                                                                                                                                                  173,842
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                  $
                                                                                                                                                                                                                                                                  253,440


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




F-2


NEVADA
GOLD HOLDINGS, INC.


(An
Exploration Stage Company)


Consolidated
Statement of Operations




From
      Inception
                                                    
                                                    
                                                    From
      InceptionFor
      the Year
                                                    
                                                    
                                                    on
      October 2,
                                                    
                                                    
                                                    on
      October 2,Ended
                                                    
                                                    
                                                    2008
      Through
                                                    
                                                    
                                                    2008
      ThroughDecember
      31,
                                                    
                                                    
                                                    December
      31,
                                                    
                                                    
                                                    December
      31,2009
                                                    
                                                    
                                                    2008
                                                    
                                                    
                                                    2009REVENUES
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    -EXPENSESGeneral
      and administrative
                                                    
                                                    
                                                    615,580
                                                    
                                                    
                                                    
                                                    431
                                                    
                                                    
                                                    
                                                    616,011Exploration
      costs
                                                    
                                                    
                                                    205,156
                                                    
                                                    
                                                    
                                                    20,465
                                                    
                                                    
                                                    
                                                    225,621Total
      Expenses
                                                    
                                                    
                                                    820,736
                                                    
                                                    
                                                    
                                                    20,896
                                                    
                                                    
                                                    
                                                    841,632OTHER
      INCOME (EXPENSE)Interest
      expense
                                                    
                                                    
                                                    (158,082
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (158,082
                                                    )Gain
      on settlement of derivative liability
                                                    
                                                    
                                                    112,500
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    112,500Total
      Other Income (Expense)
                                                    
                                                    
                                                    (45,582
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (45,582
                                                    )LOSS
      BEFORE INCOME TAXES
                                                    
                                                    
                                                    (866,318
                                                    )
                                                    
                                                    
                                                    (20,896
                                                    )
                                                    
                                                    
                                                    (887,214
                                                    )INCOME
      TAX EXPENSE
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -NET
      LOSS
                                                    
                                                    $
                                                    (866,318
                                                    )
                                                    
                                                    $
                                                    (20,896
                                                    )
                                                    
                                                    $
                                                    (887,214
                                                    )BASIC
      AND DILUTED LOSS PER COMMON SHARE
                                                    
                                                    $
                                                    (0.01
                                                    )
                                                    
                                                    $
                                                    (0.00
                                                    )WEIGHTED AVERAGE
      NUMBER OF
      COMMON SHARES OUTSTANDING, BASIC
      AND DILUTED
                                                    
                                                    
                                                    72,445,261
                                                    
                                                    
                                                    
                                                    70,633,946






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




F-3




NEVADA
GOLD HOLDINGS, INC.


(An
Exploration Stage Company)


Consolidated
Statement of Stockholders' Equity (Deficit)




DeficitAccumulated
                                                                                  
                                                                                  
                                                                                  TotalAdditional
                                                                                  
                                                                                  
                                                                                  During
      the
                                                                                  
                                                                                  
                                                                                  Stockholders'Common
      Stock
                                                                                  
                                                                                  
                                                                                  Paid-In
                                                                                  
                                                                                  
                                                                                  Exploration
                                                                                  
                                                                                  
                                                                                  EquityShares
                                                                                  
                                                                                  
                                                                                  Amount
                                                                                  
                                                                                  
                                                                                  Capital
                                                                                  
                                                                                  
                                                                                  Stage
                                                                                  
                                                                                  
                                                                                  (Deficit)Balance
      at inception onOctober
      2, 2008
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -Common
      stock issuedto
      founders for cashon
      October 2, 2008
                                                                                  
                                                                                  
                                                                                  30,480,000
                                                                                  
                                                                                  
                                                                                  
                                                                                  30,480
                                                                                  
                                                                                  
                                                                                  
                                                                                  (30,480
                                                                                  )
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -Recapitalization
      pursuant toreverse
      merger
                                                                                  
                                                                                  
                                                                                  39,393,946
                                                                                  
                                                                                  
                                                                                  
                                                                                  39,394
                                                                                  
                                                                                  
                                                                                  
                                                                                  (220,372
                                                                                  )
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  (180,978
                                                                                  )Common
      stock issued for debtissuance
      costs onDecember
      31, 2008
                                                                                  
                                                                                  
                                                                                  300,000
                                                                                  
                                                                                  
                                                                                  
                                                                                  300
                                                                                  
                                                                                  
                                                                                  
                                                                                  37,200
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  37,500Common
      stock issued for cashon
      December 31, 2008, net of$31,540
      of direct issuance costs
                                                                                  
                                                                                  
                                                                                  828,000
                                                                                  
                                                                                  
                                                                                  
                                                                                  828
                                                                                  
                                                                                  
                                                                                  
                                                                                  71,132
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  71,960Net
      loss for the period frominception
      on October 2, 2008through
      December 31, 2008
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  (20,896
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (20,896
                                                                                  )Balance,
      December 31, 2008
                                                                                  
                                                                                  
                                                                                  71,001,946
                                                                                  
                                                                                  
                                                                                  
                                                                                  71,002
                                                                                  
                                                                                  
                                                                                  
                                                                                  (142,520
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (20,896
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (92,414
                                                                                  )Common
      stock issued for cash,net
      of $4,130 of direct issuance costs
                                                                                  
                                                                                  
                                                                                  3,330,000
                                                                                  
                                                                                  
                                                                                  
                                                                                  3,330
                                                                                  
                                                                                  
                                                                                  
                                                                                  787,920
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  791,250Common
      stock issued forservices
      rendered
                                                                                  
                                                                                  
                                                                                  300,000
                                                                                  
                                                                                  
                                                                                  
                                                                                  300
                                                                                  
                                                                                  
                                                                                  
                                                                                  74,700
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  75,000Common
      shares cancelled
                                                                                  
                                                                                  
                                                                                  (2,000,000
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (2,000
                                                                                  )
                                                                                  
                                                                                  
                                                                                  2,000
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -Contributed
      services
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  75,000
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  75,000Stock-based
      compensation
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  20,844
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  20,844Net
      loss for the year endedDecember
      31, 2009
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  (866,318
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (866,318
                                                                                  )Balance,
      December 31, 2009
                                                                                  
                                                                                  
                                                                                  72,631,946
                                                                                  
                                                                                  
                                                                                  $
                                                                                  72,632
                                                                                  
                                                                                  
                                                                                  $
                                                                                  817,944
                                                                                  
                                                                                  
                                                                                  $
                                                                                  (887,214
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  3,362






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




F-4




NEVADA
GOLD HOLDINGS, INC.


(An
Exploration Stage Company)


Consolidated
Statement of Cash Flows




From
      Inception
                                              
                                              
                                              From
      InceptionFor
      the Year
                                              
                                              
                                              on
      October 2,
                                              
                                              
                                              on
      October 2,Ended
                                              
                                              
                                              2008
      Through
                                              
                                              
                                              2008
      ThroughDecember
      31,
                                              
                                              
                                              December
      31,
                                              
                                              
                                              December
      31,2009
                                              
                                              
                                              2008
                                              
                                              
                                              2009OPERATING
      ACTIVITIESNet
      loss
                                              
                                              $
                                              (866,318
                                              )
                                              
                                              $
                                              (20,896
                                              )
                                              
                                              $
                                              (887,214
                                              )Adjustments
      to Reconcile Net Loss to Net CashProvoded
      by (Used in) Operating ActivitiesCommon
      stock issued for services
                                              
                                              
                                              95,844
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              95,844Contributed
      services
                                              
                                              
                                              75,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              75,000Gain
      on change in derivative liability
                                              
                                              
                                              (112,500
                                              )
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (112,500
                                              )Changes
      in Operating Assets and Liabilities:Increase
      in accounts payable
                                              
                                              
                                              (162,874
                                              )
                                              
                                              
                                              52,376
                                              
                                              
                                              
                                              (110,498
                                              )Net Cash Provided by
      (Used in) Operating
      Activities
                                              
                                              
                                              (970,848
                                              )
                                              
                                              
                                              31,480
                                              
                                              
                                              
                                              (939,368
                                              )INVESTING
      ACTIVITIES
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Purchase
      of mining reclamation bond
                                              
                                              
                                              (15,444
                                              )
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (15,444
                                              )Change
      in cash held in trust
                                              
                                              
                                              253,440
                                              
                                              
                                              
                                              (253,440
                                              )
                                              
                                              
                                              -Net Cash Provided by
      (Used in) Investing
      Activities
                                              
                                              
                                              237,996
                                              
                                              
                                              
                                              (253,440
                                              )
                                              
                                              
                                              (15,444
                                              )FINANCING
      ACTIVITIESProceeds from
      issuance of common stock, net
      of issuance costs
                                              
                                              
                                              791,250
                                              
                                              
                                              
                                              71,960
                                              
                                              
                                              
                                              863,210Proceeds
      from notes payable
                                              
                                              
                                              100,000
                                              
                                              
                                              
                                              150,000
                                              
                                              
                                              
                                              250,000Net
      Cash Provided by Financing Activities
                                              
                                              
                                              891,250
                                              
                                              
                                              
                                              221,960
                                              
                                              
                                              
                                              1,113,210NET
      DECREASE IN CASH
                                              
                                              
                                              158,398
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              158,398CASH
      AT BEGINNING OF PERIOD
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -CASH
      AT END OF PERIOD
                                              
                                              $
                                              158,398
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              158,398SUPPLEMENTAL
      DISCLOSURES OF CASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
                                              
                                              $
                                              8,082
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              8,082Income
      Taxes
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -






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




F-5




NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008


NOTE 1 -
ORGANIZATION AND DESCRIPTION OF BUSINESS
  Nevada
Gold Holdings, Inc. (the “Company”, formerly known as Nano Holdings
International, Inc.) 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. (the “Merger”). 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.
  Pursuant
to the Merger, Nevada Gold Holdings, Inc. ceased operating as a distributor of
party and drinking supplies and acquired the business of Nevada Gold
Enterprises, Inc., to engage in the exploration and eventual development of gold
mines and will continue the Company’s existing business operations as a
publicly-traded company under the name 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 39,393,946 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. As used herein, the “Company” means Nevada Gold Holdings,
Inc.
 
 NOTE 2 -
GOING CONCERN
  The
Company's consolidated financial statements are prepared using generally
accepted accounting principles in the United States of America applicable to a
going concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern and has accumulated losses
since inception. The ability of the Company to continue as a going concern is
dependent on the Company obtaining adequate capital to fund operating losses
until it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease operations. These factors raise
substantial doubt about the Company’s ability to continue as a going
concern.
  In order
to continue as a going concern, the Company will need, among other things,
additional capital resources. Management's plan is to obtain such resources for
the Company by obtaining capital from management and significant shareholders
sufficient to meet its minimal operating expenses and seeking equity and/or debt
financing. However management cannot provide any assurances that the Company
will be successful in accomplishing any of its plans.
  The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying consolidated financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as
a going concern
  NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES
  a.   Accounting
Method
 
 The
Company’s financial statements are prepared using the accrual method of
accounting.  The Company has elected a December 31
year-end.
  F-6
 NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
 NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 b.  Revenue
Recognition
 
 The
Company has not earned any revenues since inception.  The Company will
develop appropriate revenue recognition policies at such time that planned
principal operations become feasible.
 
 c.  Income
Taxes
 
 The
Company recognizes deferred tax assets and liabilities based on differences
between the financial reporting and tax bases of assets and liabilities using
the enacted tax rates and laws that are expected to be in effect when the
differences are expected to be recovered.  The Company provides a
valuation allowance for deferred tax assets for which it does not consider
realization of such assets to be more likely than not.
 
 d.   Use
of Estimates
 
 The
preparation of the financial statements in conformity with generally accepted
accounting principles 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.  Actual results could differ from those
estimates.
 
 e.  Basic
Earnings (Loss) Per Share
 
 Basic net
earnings (loss) per common share is computed by dividing net earnings (loss)
applicable to common shareholders by the weighted-average number of common
shares outstanding during the period. Diluted net earnings (loss) per common
share is determined using the weighted-average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock
equivalents, consisting of shares that might be issued upon exercise of common
stock options. In periods where losses are reported, the weighted-average number
of common shares outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.
 
 The
dilutive effect of outstanding stock options and warrants is reflected in
diluted earnings per share by application of the treasury stock method. The
dilutive effect of outstanding convertible securities is reflected in diluted
earnings per share by application of the if-converted method.
 
 F-7
  NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
   NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 e. Basic
Earnings (Loss) Per Share (Continued)
 
 The
following is a reconciliation of basic and diluted earnings per share for 2009
and 2008:
 
 Periods
      EndedDecember
      31,2009
                  
                  
                  2008Numerator:Net
      income (loss) available to common shareholders
                  
                  $
                  (866,318
                  )
                  
                  $
                  (20,896
                  )Denominator:Weighted
      average shares - basic
                  
                  
                  72,445,261
                  
                  
                  
                  70,633,946Net
      income (loss) per share - basic
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.00
                  )Potential
      dilutive effect of common stock equivalents:Options
      and warrants
                  
                  
                  -
                  
                  
                  
                  -Convertible
      Debt
                  
                  
                  -
                  
                  
                  
                  -Denominator:Weighted
      average shares - diluted
                  
                  
                  72,445,261
                  
                  
                  
                  70,633,946Net
      income (loss) per share - diluted
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.00
                  )
 
 For the
year ended December 31, 2009, fully diluted earnings per share excludes the
dilutive effect of 4,470,000 common stock equivalents from options and
warrants and 1,250,000 common stock equivalents from convertible debt, because
their inclusion would be anti-dilutive. For the period ended December 31,
2008, fully diluted earnings per share excludes the dilutive effect of 600,000
common stock equivalents from convertible debt, because their inclusion would be
anti-dilutive.
 
 f.  Cash
and Cash Equivalents
 
 The
Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.
 
 g.  Common
Stock
 
 The
holders of the Company’s common stock are entitled to receive dividends out of
assets or funds legally available for the payment of dividends of such times and
in such amounts as the board from time to time may determine.  Holders
of common stock are entitled to one vote for each share held on all matters
submitted to a vote of shareholders.  There is no cumulative voting of
the election of directors then standing for election.  The common
stock is not entitled to pre-emptive rights and is not subject to conversion or
redemption.  Upon liquidation, dissolution or winding up of the
company, the assets legally available for distribution to stockholders are
distributable ratably among the holders of the common stock after payment of
liquidation preferences, if any, on any outstanding payment of other claims of
creditors.
 
 F-8
 
 NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
 NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 h.  Preferred
Stock
 
 Shares of
preferred stock may be issued from time to time in one or more series, each of
which shall have such distinctive designation or title as shall be determined by
the board of directors of the Company.  Preferred stock shall have
such voting powers, full or limited, or no voting powers, and such preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as may be adopted from time
to time by the board of directors.
 
 i.
General and Administrative Expenses
 
 General
and administrative expenses include those costs not directly related to the
sales of the Company’s products. These expenses include travel, administrative
compensation, and various legal and professional fees.
 
 j.  Principles
of Consolidation
 
 The
accompanying 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.
 
 
 
 F-9
 
 NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
 NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 k.  Recent
Accounting Pronouncements
 In May
2009, the Company adopted the Codification standards that establish standards
for accounting for and disclosing subsequent events (events which occur after
the balance sheet date but before financial statements are issued or are
available to be issued). The standard requires and entity to disclose the date
subsequent events were evaluated and whether that evaluation took place on the
date financial statements were issued or were available to be issued. It is
effective for interim and annual periods ending after June 15, 2009. Management
has reviewed all subsequent events through the date that the financial
statements were issued in accordance with this pronouncement.  The
adoption of this standard did not have a material impact on the Company’s
financial condition or results of operation.
 
 In June
2009, the Financial Accounting Standards Board ("FASB") established the FASB
Accounting Standards Codification (the "Codification") as the source of
authoritative accounting principles recognized by the FASB to be applied by
non-governmental entities in the preparation of financial statements in
conformity with GAAP.  Rules and interpretive releases of the Securities
and Exchange Commission ("SEC") under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants.  The introduction
of the Codification does not change GAAP and other than the manner in which new
accounting guidance is referenced, the adoption of these changes had no impact
on our consolidated financial statements.
   
 l. Income
Taxes
 
 Deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences.  Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax
bases.  Deferred tax assets are reduced by a
valuation  allowance when, in the opinion of management,  it
is more likely than not that some  portion or all of the deferred tax
assets will to be realized. Deferred tax assets and liabilities are adjusted for
the effects of changes in tax laws and rates on the date of
enactment.
 
 Net
deferred tax assets consist of the following components as of December 31, 2009
and 2008:
  2009
                            
                            
                            2008Deferred
      tax assets:NOL
      carryover
                            
                            $
                            346,013
                            
                            
                            $
                            8,149Valuation
      allowance
                            
                            
                            (346,013
                            )
                            
                            
                            (8,149
                            )Net
      deferred tax asset
                            
                            $
                            --
                            
                            
                            $
                            --
  The
income tax provision differs from the amount of income tax determined by
applying the U.S. federal and state income tax rates of 39% to pretax income
from continuing operations for the years ended December 31, 2009 and 2008 due to
the following:
  2009
                        
                        
                        2008Income
      tax benefit at statutory rate
                        
                        $
                        (337,864
                        )
                        
                        $
                        (8,149
                        )Valuation
      allowance
                        
                        
                        337,864
                        
                        
                        
                        8,149$
                        -
                        
                        
                        $
                        -
 At
December 31, 2009, the Company had net operating loss carryforwards of
approximately $900,000 that may be offset against future taxable income through
2030. No tax benefit has been reported in the December 31, 2009 financial
statements since the potential tax benefit is offset by a valuation allowance of
the same amount. Due to the change in ownership provisions of the Tax Reform Act
of 1986, net operating loss carry forwards for Federal income tax reporting
purposes are subject to annual limitations.
  F-10
  NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
 NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 l. Income
Taxes (Continued)
 
 Net
operating loss carryforwards may be limited as to use in future years as a
result of any change in ownership.
 
 NOTE 4 –
DEBT AND EQUITY
 
 On
October 2, 2008 the Company issued 30,480,000 shares of common stock various
individuals.  These shares were issued as founders’ shares and were
recorded for the cash value the founders paid of $25.  In the
accompanying consolidated statement of stockholders’ equity (deficit), the $25
has been included in the reverse merger recapitalization.
 
 On
December 31, 2008, the Company sold in a private placement offering an aggregate
of 828,000 post-split shares of common stock for cash at $0.125 per
share. On December 31, 2008, the Company also received $150,000 pursuant to
a secured convertible note payable with an unrelated party. Under the terms of
this convertible note, interest accrues at a rate of 10.0 % per annum, and the
balance, including accrued interest, was due on December 31, 2009, was
convertible at $1.00 per share that was adjustable based on the conversion
prices of options, warrants or other convertible instruments issued by the
Company. The Company analyzed the conversion feature of the note and
determined that the conversion feature was a derivative liability. The
derivative liability was valued at $112,500 based on the intrinsic value between
the original conversion price and the stock price on December 31, 2008. The
Company recorded a debt discount for the value of the derivative
liability. Upon the closing of the Merger, the purchaser of the note also
received 300,000 post-split shares of Common Stock under the terms of the
convertible note.  These shares were valued at $0.125 per share
($37,500).  The Company recorded a debt discount for the value of the
300,000 shares issued to the purchaser of the convertible note. On June 24,
2009, the Company prepaid $100,000 of principal on this note, $4,603 in
accrued interest, and issued 200,000 shares of common stock to the holder
of the note payable as consideration for waiving certain disputed
anti-dilution clauses of the note. These shares were valued at $0.25 per share
($50,000) and were recorded as common stock issued for services for the year
ended December 31, 2009. On September 21, 2009, the Company paid the remaining
$50,000 in note principal and $8,082 in accrued interest, thus satisfying the
note in full.  As a result of the convertible note repayment, the
derivative liability was settled and the Company recognized a $112,500 gain for
the year ended December 31, 2009; additionally, the debt discount on the
convertible note, totaling $150,000 ($112,500 from the derivative liability and
$37,500 from the 300,000 shares) was recognized as interest expense for the year
ended December 31, 2009. As of December 31, 2009 the Company has no remaining
obligations under the terms of the note.
 
 Effective
March 9, 2009, the Company issued 330,000 post-split shares of common stock for
cash at $0.125 per share.
  On May
11, 2009, the Company entered into a consulting agreement whereby the Company
receives certain investor relation and corporate communications services in
exchange for the issuance of 100,000 post-split shares of the Company’s common
stock.  Of these shares, 50,000 were issued upon execution of the
agreement, at a value of $0.25 per share.  The remaining 50,000 shares
were issued on August 26, 2009, also at $0.25 per share.
  Effective
May 13, 2009, the Company’s shares of common stock were forward split on a 2
shares for 1 share basis, in the form of a stock dividend. The accompanying
financial statements have been restated to reflect the forward stock split on a
retro-active basis.
 
 On
November 5, 2009 the Company received 2,000,000 shares from David Mathewson, who
surrendered the shares pursuant to his resignation as an officer of the
Company.  The shares were subsequently cancelled by the Company in
April, 2010.
 
 F-11
 
 NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
 NOTE 4 –
DEBT AND EQUITY (Continued)
 
 Private Placement
Offerings
 
 On June
24, 2009, the Company consummated a private placement offering whereby the
Company issued 2,000,000 units in exchange for cash at $0.25 per unit for net
proceeds after closing costs of $500,000.  Each unit consists of one
share of common stock and one warrant to purchase one share of common stock at
$0.50 per share, exercisable for a period of five years. Concurrent with
the private placement offering, the Company agreed to grant an additional
200,000 warrants to the related placement agent,which were valued at $44,456
using the Black-Scholes options pricing model assuming common stock volatility
of 153% and a risk-free rate of 3.94.  Each of these warrants allows
the recipient the right to purchase one share of the Company’s common stock at a
price of $0.25 per share, for a period of up to five years.  The
Company performed an analysis of the 2,000,000 warrants using the Black-Scholes
options pricing model, assuming common stock volatility of 153% and a risk-free
rate of 3.94%, resulting in an aggregate relative fair value of
$235,327.  The fair value of the warrants was recognized in additional
paid in capital for the year ended December 31, 2009.The warrants were deemed
not to be derivatives.
 
 On
September 18, 2009, the Company consummated a private placement offering whereby
the Company issued 1,000,000 units in exchange for cash at $0.25 per unit for
net proceeds after offering costs of $4,130.  Each unit consists of
one share of common stock and one warrant to purchase one share of common stock
at $0.50 per share, exercisable for a period of five years.  Each of
these warrants allows the recipient the right to purchase one share of the
Company’s common stock at a price of $0.25 per share, for a period of up to five
years.  The Company performed an analysis of the warrants using the
Black-Scholes options pricing model, assuming common stock volatility of 134%
and a risk-free rate of 3.94%, resulting in an aggregate relative fair value of
$109,474.  The fair value of the warrants was recognized in additional
paid in capital for the year ended December 31, 2009. The warrants were deemed
not to be derivatives.
 
 In
connection with the private placement offering, the Company had previously
entered into a Placement Agency Agreement with Gottbetter Capital Markets, LLC
(the “Placement Agent”), in which the Company agreed (i) to pay a cash fee to
the Placement Agent equal to 10% of the gross proceeds from the sale of PPO
Units to investors introduced to the Company by the Placement Agent and 2% of
the gross proceeds from the sale of PPO Units to any other investors, and (ii)
to issue to the Placement Agent warrants to purchase a number of shares of
Common Stock equaling 10% of the PPO Units sold to investors introduced to the
Company by the Placement Agent and 2% of the PPO Units sold to any other
investors, exercisable for a period of five years at an exercise price of $0.50
per share.  In connection with the closing on September 18, 2009, the
Placement Agent earned a cash fee of $5,000 and warrants to purchase 20,000
shares of Common Stock.  The Company valued these warrants at $2,181,
pursuant to the Black-Scholes options pricing model. The fair value of the
warrants was recognized in additional paid in capital for the year ended
December 31, 2009.
 
 Bridge
Loan
 
 On
December 7, 2009 the Company entered into a Bridge Loan Agreement with Theory
Capital Corp., an unrelated third party entity (“Theory”), whereby Theory loaned
a total of $100,000 to the Company.  The note accrues interest at a
rate of 10.0% per annum, and is due and payable in full on June 4,
2010.  The note is mandatorily convertible into common stock upon the
Company’s closing of a private placement offering, or the due date, whichever
comes first.  The loan is convertible into common stock at the market
value of the shares on the date of conversion.   The Company’s
management has assessed the conversion feature of the note and concluded that it
is a contingent conversion feature, which will not be recorded until the
triggering event (a future private placement offering by the Company) takes
place.
 
 F-12
  NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
 NOTE 4 –
DEBT AND EQUITY (Continued)
 
 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 1,000,000
shares of Common Stock at a purchase price of $0.135 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 250,000 shares of Common Stock at a purchase price of $0.127 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.
 
 The
Company’s 2008 Equity Incentive Plan (the Plan), which is shareholder-approved,
permits the grant of share options and shares to its employees for up to 4
million shares of common stock. The Company believes that such awards better
align the interests of its executive officers, key employees, consultants and
directors with those of its shareholders.
  
  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.
  2009Expected
      volatility
                        
                        
                        193
                        %Expected
      dividends
                        
                        
                        0
                        %Expected
      term (in years)
                        
                        
                        3Risk-free
      rate
                        
                        
                        2.3
                        %
 
 F-13
  NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
  NOTE 4 –
DEBT AND EQUITY (Continued)
 
 Stock Option
Awards
 
 A summary
of option activity under the Plan as of December 31, 2009, and changes during
the year then ended is presented below:
  Options
                
                Shares
                
                
                Weighted-
                  Average
                  Exercise
                  Price
                
                
                Weighted-
                  Average
                  Remaining
                  Contractual
                  Term
                
                
                Aggregate
                  Intrinsic
                  ValueOutstanding
      at January 1, 2008
                
                
                -
                
                
                
                -Granted
                
                
                1,250,000
                
                
                $
                0.13
                
                
                
                4.9
                
                
                $
                -Exercised
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Forfeited
      or expired
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Outstanding
      at December 31, 2009
                
                
                1,250,000
                
                
                $
                0.13
                
                
                
                4.9
                
                
                
                -Exercisable
      at December 31, 200
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
  The
weighted-average grant-date fair value of options granted during the years ended
December 31, 2009 and 2008, was $0.12 and $-0-, respectively.
  A summary
of the status of the Company’s nonvested shares as of December 31, 2009, and
changes during the year ended December 31, 2009, is presented
below:
  Nonvested Shares
                
                Shares
                
                
                Weighted-Average
                  Grant-Date
                  Fair ValueNonvested
      at January 1, 2009
                
                
                -
                
                
                
                -Granted
                
                
                1,250,000
                
                
                $
                0.13Vested
                
                
                -
                
                
                
                -Forfeited
                
                
                -
                
                
                
                -Nonvested
      at December 31, 2009
                
                
                1,250,000
                
                
                $
                0.13
 
 F-14
  NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
 NOTE 4 –
DEBT AND EQUITY (Continued)
 
 Warrants
 
 A summary
of warrant activity as of December 31, 2009, and changes during the year then
ended is presented below:
  Options
                
                Shares
                
                
                Weighted-
                  Average
                  Exercise
                  Price
                
                
                Weighted-
                  Average
                  Remaining
                  Contractual
                  Term
                
                
                Aggregate
                  Intrinsic
                  ValueOutstanding
      at January 1, 2009
                
                
                -
                
                
                
                -Granted
                
                
                3,220,000
                
                
                $
                0.50
                
                
                
                4.6
                
                
                $
                -Exercised
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Forfeited
      or expired
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Outstanding
      at December 31, 2009
                
                
                3,220,000
                
                
                $
                0.50
                
                
                
                4.6
                
                
                
                -Exercisable
      at December 31, 2009
                
                
                3,220,000
                
                
                $
                0.50
                
                
                
                4.6
                
                
                
                -
   NOTE 5 –
FAIR VALUE MEASUREMENTS
 
 Fair
value is defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date and establishes a three level hierarchy for measuring fair
value. Fair value measurements are classified and disclosed in one of the
following categories:
 
 Level 1:   Quoted prices
(unadjusted) in active markets for identical assets and liabilities that we have
the ability to access at the measurement date.
 
 Level 2:  Inputs other
than quoted prices included within Level 1 that are either directly or
indirectly observable for the asset or liability, including quoted prices for
similar assets or liabilities in active markets, quoted prices for identical or
similar assets or liabilities in inactive markets, inputs other than quoted
prices that are observable for the asset or liability, and inputs that are
derived from observable market data by correlation or other means. Instruments
categorized in Level 2 include non-exchange traded derivatives such as
over-the-counter forwards and swaps.
 
 Level 3:  Unobservable inputs
for the asset or liability, including situations where there is little, if any,
market activity for the asset or liability.
 
 The
valuation assumptions utilized to measure the fair value of the Company’s
derivatives were observable inputs based on market data obtained from
independent sources and are considered Level 2 inputs (quoted prices for
similar assets, liabilities (adjusted) and market-corroborated
inputs).
 
 F-15
  NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
 NOTE 5 –
FAIR VALUE MEASUREMENTS (Continued)
 
 The
following table presents for each hierarchy level our assets and liabilities,
including both current and non-current portions, measured at fair value on a
recurring basis, as of December 31, 2008 (no assets are measured at fair
value on a recurring basis at December 31, 2009):
  Level
      1
                                            
                                            
                                            
                                            Level
      2
                                            
                                            
                                            
                                            Level
      3
                                            
                                            
                                            
                                            TotalAssets —
      Current:$
                                            --
                                            
                                            
                                            $
                                            --
                                            
                                            
                                            $
                                            --
                                            
                                            
                                            $
                                            --Liabilities —
      Current:Derivative
      – conversion feature of debt
                                            
                                            $
                                            --
                                            
                                            
                                            $
                                            112,500
                                            
                                            
                                            $
                                            --
                                            
                                            
                                            $
                                            --
 In
consideration of credit risk, the Company considers that it is of substantial
credit quality and has the financial resources and willingness to meet its
potential repayment obligations associated with the derivative
transactions.
 
 The
estimated fair value of financial instruments is the amount at which the
instrument could be exchanged currently between willing parties. The carrying
amounts reported in the consolidated balance sheet for cash and cash held in
trust, and accounts payable approximate fair value due to the immediate or
short-term maturity of these financial instruments. We use available marketing
data and valuation methodologies to estimate the fair value of debt. The
following disclosure does not impact our financial position, results of
operations or cash flows.
  December 31,
      2009
                                            
                                            
                                            December 31,
      2008Carrying
      Amount
                                            
                                            
                                            Estimated
      Fair Value
                                            
                                            
                                            Carrying
      Amount
                                            
                                            
                                            Estimated
      Fair ValueShort-Term
      DebtConvertible
      Debt
                                            
                                            
                                            100,000
                                            
                                            
                                            
                                            100,000
                                            
                                            
                                            
                                            --
                                            
                                            
                                            
                                            150,000Long-Term
      Debt
                                            
                                            $
                                            100,000
                                            
                                            
                                            $
                                            100,000
                                            
                                            
                                            $
                                            --
                                            
                                            
                                            $
                                            150,000
   NOTE 6 –
COMMITMENTS AND CONTINGENCIES
 
 Litigation
 The
Company is party to various legal actions arising in the ordinary course of
business. Matters that are probable of unfavorable outcomes to the Company and
which can be reasonably estimated are accrued. Such accruals are based on
information known about the matters, the Company’s estimates of the outcomes of
such matters and its experience in contesting, litigating and settling similar
matters. None of the actions are believed by management to involve future
amounts that would be material to our financial position or results of
operations after consideration of recorded accruals although actual amounts
could differ materially from management’s estimate that are reasonably possible
to occur will not have a material adverse affect on the Company’s financial
position or results of operations.
 
 F-16
  NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
   NOTE 6 –
COMMITMENTS AND CONTINGENCIES (Continued)
 
 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 PaymentJanuary
      15, 2008 (paid)
                        
                        $
                        10,000January
      15, 2009 (paid)
                        
                        $
                        15,000January
      15, 2010 (paid)
                        
                        $
                        30,000January
      15, 2011
                        
                        $
                        45,000January
      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
   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 $133.50 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 $32,256.
 
 
 NOTE
7 – SUBSEQUENT EVENTS
 
 On
February 5, 2010, the Company entered into a financing arrangement with JMJ
Financial (“JMJ”), pursuant to which the JMJ may lend the Company up to
$3,200,000.  The Company issued convertible promissory notes to JMJ in
an aggregate principal amount of $3,200,000.  The Company received
$200,000 from JMJ pursuant to these notes on February 5, 2010.  The
Notes bear a one-time interest of 8% and mature three years from the date of
issuance.  Prepayment under the Notes is not permitted, unless
approved by the JMJ.  Under the terms of the Notes, JMJ is entitled,
at its option, to convert all or part of the principal amount and accrued
interest into shares of the Company’s Common Stock at a conversion price equal
to 70% of the lowest trade price of the Common Stock in the twenty (20) trading
days immediately prior to the conversion, subject to adjustment in certain
circumstances.
 
 On
February 17, 2010, the Company entered into a six month consulting agreement
whereby the Company receives certain investor relation and corporate
communications services in exchange for the issuance of 1,000,000 post-split
shares of the Company’s common stock as of the date of the
agreement.   The agreement can be terminated immediately by either
party upon written notice.
  F-17
  NEVADA
GOLD HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 December
31, 2009 and 2008
 NOTE 8
-  CORRECTION OF AN ERROR
 
 The
Company has restated the consolidated balance sheet, consolidated
statements of operations and cash flows as of and for the period ended December
31, 2008 for matters related to the following errors: (i) an overstatement of
current liabilities, (ii) an overstatement of general and administrative
expenses, and  (iii) the incorrect classification of the cost of
the Tempo Mineral Prospect.
 
 Following
is a description of the errors related to the overstatement of current
liablities at December 31, 2008, and the overstatement of general and
administrative expenses for the period from inception through December 31,
2008:  The Company overstated current liabilities due to the Company’s
accounting consultant misconstruing certain transactions taking place within the
Company’s trust account, which is maintained by an external
accountant.  Certain cash payments on prior period liabilities were
incorrectly recorded as accruals of new accounts payable and accrued
expenses. This overstatement was offset by $112,500 that the Company
recorded as additional paid in capital instead of as a current liability related
to the derivative liability on the conversion feature of a convertible note
payable.
 
 Following
is a description of the error related to the overstatement of general and
administrative expenses for the period from inception through December 31,
2008:  The Company overstated general and administrative expenses, as
certain expense payments were incorrectly recorded as accruals of
liabilities.
  Following
is a description of the error related to the incorrect classification of the
cost of the Tempo Mineral Prospect:  The asset was originally
classified as an asset and valued at the predecessor owner’s cost of
$20,465.  In accordance with SEC Staff guidance, since there has not
been a final or bankable feasibility study and the designation of proven and
probable reserves, the Tempo Mineral Prospect was considered to be an
exploration cost for the period ended December 31, 2008.
 
 The
effects on the Company’s previously issued consolidated financial statements for
the fiscal year ended December 31, 2008, of the aforementioned errors are
summarized as follows:
 AsPreviously
                        
                        
                        As
                        
                        
                        IncreaseDecember
      31, 2008
                        
                        Reported
                        
                        
                        Restated
                        
                        
                        (Decrease)Cash
      held in trust
                        
                        $
                        253,440
                        
                        
                        $
                        253,440
                        
                        
                        $
                        -Total
      current assets
                        
                        
                        253,440
                        
                        
                        
                        253,440
                        
                        
                        
                        -Mining
      claims
                        
                        
                        20,465
                        
                        
                        
                        -
                        
                        
                        
                        (20,465
                        )Mining
      reclamation bond
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Total
      assets
                        
                        
                        273,905
                        
                        
                        
                        253,440
                        
                        
                        
                        (20,465
                        )Accounts
      payable and accrued expenses
                        
                        
                        363,996
                        
                        
                        
                        233,354
                        
                        
                        
                        (130,642
                        )Derivative
      liability
                        
                        
                        -
                        
                        
                        
                        112,500
                        
                        
                        
                        112,500Total
      liabilities
                        
                        
                        363,996
                        
                        
                        
                        345,854
                        
                        
                        
                        18,142Total
      stockholders’ equity (deficit)
                        
                        
                        (90,091
                        )
                        
                        
                        (92,414
                        )
                        
                        
                        (2,323
                        )For
      the Period Ended December 31, 2008Exploration
      costs
                        
                        
                        -
                        
                        
                        
                        20,465
                        
                        
                        
                        20,465General
      and administrative expense
                        
                        
                        90,282
                        
                        
                        
                        431
                        
                        
                        
                        89,851Net
      loss
                        
                        
                        (90,282
                        )
                        
                        
                        (20,896
                        )
                        
                        
                        69,386Net
      loss per share, basic and diluted
                        
                        
                        (0.00)
                        
                        
                        
                        (0.00)
                        
                        
                        
                        (0.00)Cash
      provided by (used in) operating activities
                        
                        
                        (25)
                        
                        
                        
                        31,480
                        
                        
                        
                        31,455Cash
      provided by (used in) investing activities
                        
                        
                        -
                        
                        
                        
                        (253,440)
                        
                        
                        
                        (253,440)Cash
      provided by (used in) financing activities
                        
                        
                        -
                        
                        
                        
                        221,960
                        
                        
                        
                        221,960
 
 F-18