SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 ———————
 FORM
10-Q
 ———————
  þ  QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF
1934
 
 For the
quarterly period ended: March 31, 2010
 
 or
 
  ̈  TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the
transition period from ________________ to ________________
 
 Commission
file number 000-50494
  ———————
 Money4Gold
Holdings, Inc.
 (Exact
name of registrant as specified in its charter)
 ———————
  Delaware
              
              98-0412432(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (I.R.S.
      Employer
                Identification
      No.)200
      E. Broward Blvd., Suite 1200
                Ft.
      Lauderdale, FL
              
              33301(Address
      of principal executive offices)
              
              (Zip
      Code)
 
 (954)
915-1550
 (Registrant’s
telephone number, including area code)
  ———————
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   Yes  þ   No   ̈
  Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).  Yes   ̈   No   ̈
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
  Large
accelerated filer o     Accelerated
filer o
  Non-accelerated
filer o (Do not
check if a smaller reporting company)   Smaller reporting company
þ
  Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).   Yes   ̈   No  þ
   Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
  Class
              
              Outstanding
      as of May 10, 2010Common
      Stock, $0.0001 par value per share
              
              192,286,341
      shares
 
 
 
 Money4Gold
Holdings, Inc. and Subsidiaries
  TABLE
OF CONTENTS
 
 PagePART
      I – FINANCIAL INFORMATIONItem
      1.
                      Financial
      Statements.
                      3Item
      2.
                      Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.
                      23Item
      3.
                      Quantitative
      and Qualitative Disclosures About Market Risk.
                      30Item
      4.
                      Controls
      and Procedures.
                      30Item
      4T.
                      Controls
      and Procedures
                      30PART
      II – OTHER INFORMATIONItem
      1.
                      Legal
      Proceedings.
                      31Item
      1A.
                      Risk
      Factors.
                      31Item
      2.
                      Unregistered
      Sales of Equity Securities and Use of Proceeds.
                      31Item
      3.
                      Defaults
      Upon Senior Securities.
                      31Item
      4.
                      (Removed
      and Reserved)
                      31Item
      5.
                      Other
      Information.
                      31Item
      6.
                      Exhibits.
                      31SIGNATURES
                      33
  
  PART
I – FINANCIAL INFORMATION
  Item
      1.
              Financial
      Statements.
  Money4Gold
Holdings, Inc. and Subsidiaries
 Condensed Consolidated
Balance Sheets
  As
      of March 31,
                                                  
                                                  
                                                  As
      of December 31,2010
                                                  
                                                  
                                                  2009(Unaudited)
                                                  
                                                  
                                                  (Audited)AssetsCurrent
      Assets:Cash
                                                  
                                                  $
                                                  204,820
                                                  
                                                  
                                                  $
                                                  297,426Accounts
      receivable - related party
                                                  
                                                  
                                                  466,745
                                                  
                                                  
                                                  
                                                  1,083,487Inventory
                                                  
                                                  
                                                  682,278
                                                  
                                                  
                                                  
                                                  855,763Prepaid
      asset - related party - current portion
                                                  
                                                  
                                                  187,627
                                                  
                                                  
                                                  
                                                  187,627Prepaid
      expenses and other current assets
                                                  
                                                  
                                                  419,967
                                                  
                                                  
                                                  
                                                  667,605Total
      Current Assets
                                                  
                                                  
                                                  1,961,437
                                                  
                                                  
                                                  
                                                  3,091,908Fixed
      Assets - net
                                                  
                                                  
                                                  215,250
                                                  
                                                  
                                                  
                                                  75,908Other
      Assets:Goodwill
                                                  
                                                  
                                                  11,142,273
                                                  
                                                  
                                                  
                                                  11,142,273Intangible
      assets - net
                                                  
                                                  
                                                  54,409
                                                  
                                                  
                                                  
                                                  10,668Intangible
      asset - related party - net
                                                  
                                                  
                                                  184,868
                                                  
                                                  
                                                  
                                                  199,455Prepaid
      asset - related party - net of current portion
                                                  
                                                  
                                                  406,525
                                                  
                                                  
                                                  
                                                  453,432Other
      assets
                                                  
                                                  
                                                  90,708
                                                  
                                                  
                                                  
                                                  113,793Total
      Other Assets
                                                  
                                                  
                                                  11,878,783
                                                  
                                                  
                                                  
                                                  11,919,621Total
      Assets
                                                  
                                                  $
                                                  14,055,470
                                                  
                                                  
                                                  $
                                                  15,087,437Liabilities and Stockholders'
      EquityCurrent
      Liabilities:Accounts
      payable
                                                  
                                                  $
                                                  2,130,375
                                                  
                                                  
                                                  $
                                                  1,432,428Accounts
      payable - related party
                                                  
                                                  
                                                  73,971
                                                  
                                                  
                                                  
                                                  45,984Accrued
      expenses
                                                  
                                                  
                                                  395,114
                                                  
                                                  
                                                  
                                                  241,038Deferred
      revenue
                                                  
                                                  
                                                  1,480,701
                                                  
                                                  
                                                  
                                                  1,576,462Total
      Current Liabilities
                                                  
                                                  
                                                  4,080,161
                                                  
                                                  
                                                  
                                                  3,295,912Stockholders'
      Equity:Convertible
      Series A preferred stock, ($0.0001 par value, 25,000,000 shares
      authorized, 400,000 and3,400,000
      issued and outstanding)
                                                  
                                                  
                                                  40
                                                  
                                                  
                                                  
                                                  340Common
      stock, ($0.0001 par value, 300,000,000 shares authorized, 191,536,339 and
      183,208,004 sharesissued
      and outstanding)
                                                  
                                                  
                                                  19,154
                                                  
                                                  
                                                  
                                                  18,321Subscriptions
      receivable
                                                  
                                                  
                                                  (1,001,667
                                                  )
                                                  
                                                  
                                                  -Additional
      paid in capital
                                                  
                                                  
                                                  20,889,328
                                                  
                                                  
                                                  
                                                  19,080,568Accumulated
      deficit
                                                  
                                                  
                                                  (9,751,996
                                                  )
                                                  
                                                  
                                                  (7,272,073
                                                  )Accumulated
      other comprehensive loss
                                                  
                                                  
                                                  (179,550
                                                  )
                                                  
                                                  
                                                  (35,631
                                                  )Total
      Stockholders' Equity
                                                  
                                                  
                                                  9,975,309
                                                  
                                                  
                                                  
                                                  11,791,525Total
      Liabilities and Stockholders' Equity
                                                  
                                                  $
                                                  14,055,470
                                                  
                                                  
                                                  $
                                                  15,087,437
   See
accompanying notes to unaudited interim condensed consolidated financial
statements.
 
 3
 
 Money4Gold
Holdings, Inc. and Subsidiaries
 Condensed Consolidated
Statements of Operations
 (Unaudited)
 
 For
      the Three Months Ended March 31,2010
                                        
                                        
                                        2009Revenue
                                        
                                        $
                                        17,272,133
                                        
                                        
                                        $
                                        1,195,638Cost
      of revenue
                                        
                                        
                                        6,335,660
                                        
                                        
                                        
                                        549,890Gross
      Profit
                                        
                                        
                                        10,936,473
                                        
                                        
                                        
                                        645,748Sales
      and marketing expenses
                                        
                                        
                                        10,723,204
                                        
                                        
                                        
                                        872,984General
      and administrative expenses
                                        
                                        
                                        2,682,395
                                        
                                        
                                        
                                        1,100,012Loss
      from Operations
                                        
                                        
                                        (2,469,126
                                        )
                                        
                                        
                                        (1,327,248
                                        )Other
      Income (Expense):Interest
      income
                                        
                                        
                                        -
                                        
                                        
                                        
                                        78Interest
      expense
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (27,362
                                        )Loss
      on foreign exchange
                                        
                                        
                                        (10,797
                                        )
                                        
                                        
                                        -Change
      in fair value of derivative liability - embedded
conversion
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (1,160
                                        )Total
      Other Income (Expense) - Net
                                        
                                        
                                        (10,797
                                        )
                                        
                                        
                                        (28,444
                                        )Net
      Loss
                                        
                                        $
                                        (2,479,923
                                        )
                                        
                                        $
                                        (1,355,692
                                        )Net
      loss per common share - basic and diluted
                                        
                                        $
                                        (0.01
                                        )
                                        
                                        $
                                        (0.02
                                        )Weighted
      average number of shares outstanding during the period - basic and
      diluted
                                        
                                        
                                        185,502,671
                                        
                                        
                                        
                                        79,116,959Comprehensive
      Loss, Net of Tax:Net
      loss
                                        
                                        $
                                        (2,479,923
                                        )
                                        
                                        $
                                        (1,355,692
                                        )Foreign
      currency translation adjustment
                                        
                                        
                                        (143,919
                                        )
                                        
                                        
                                        -Comprehensive
      Loss
                                        
                                        $
                                        (2,623,842
                                        )
                                        
                                        $
                                        (1,355,692
                                        )
 
 
 See
accompanying notes to unaudited interim condensed consolidated financial
statements.
  4
  Money4Gold
Holdings, Inc. and Subsidiaries
 Condensed Consolidated
Statements of Cash Flows
 (Unaudited)
  For
      the Three Months Ended March 31,2010
                        
                        
                        2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                        
                        $
                        (2,479,923
                        )
                        
                        $
                        (1,355,692
                        )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Change
      in fair value of derivative liability - embedded conversion
      feature
                        
                        
                        -
                        
                        
                        
                        1,160Stock
      based compensation expense
                        
                        
                        807,626
                        
                        
                        
                        122,548Amortization
      of debt discount
                        
                        
                        -
                        
                        
                        
                        20,829Amortization
      of debt issuance costs
                        
                        
                        -
                        
                        
                        
                        3,750Amortization
      of prepaid asset - related party
                        
                        
                        46,907
                        
                        
                        
                        65,459Depreciation
      and amortization
                        
                        
                        35,231
                        
                        
                        
                        -Changes
      in operating assets and liabilities:Decrease
      (increase) in:Accounts
      receivable - related party
                        
                        
                        610,323
                        
                        
                        
                        143,782Inventory
                        
                        
                        163,444
                        
                        
                        
                        (29,368
                        )Prepaid
      and other current assets
                        
                        
                        229,139
                        
                        
                        
                        (60,541
                        )Other
      assets
                        
                        
                        (3,589
                        )
                        
                        
                        (12,831
                        )Increase
      (decrease) in:Accounts
      payable
                        
                        
                        1,098,295
                        
                        
                        
                        60,845Accounts
      payable - related party
                        
                        
                        (366,606
                        )
                        
                        
                        (59,406
                        )Accrued
      expenses
                        
                        
                        130,548
                        
                        
                        
                        15,144Deferred
      Revenues
                        
                        
                        (77,018
                        )
                        
                        
                        -Net
      Cash Provided by (Used In) Operating Activities
                        
                        
                        194,377
                        
                        
                        
                        (1,084,321
                        )CASH
      FLOWS FROM INVESTING ACTIVITIES:Cash
      paid to purchase fixed assets
                        
                        
                        (159,476
                        )
                        
                        
                        (2,123
                        )Net Cash Used in Investing
      Activities
                        
                        
                        (159,476
                        )
                        
                        
                        (2,123
                        )
 
 
 See
accompanying notes to unaudited interim condensed consolidated financial
statements.
  5
  Money4Gold
Holdings, Inc. and Subsidiaries
 Condensed Consolidated
Statements of Cash Flows (Continued)
 (Unaudited)
 
 For
      the Three Months Ended March 31,2010
                                                                    
                                                                    
                                                                    2009CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from media line of credit
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    250,000Proceeds
      from convertible note payable
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    250,000Cash
      paid as debt issue costs
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    (12,500
                                                                    )Proceeds
      from issuance of common stock and warrants in private
      placement
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    80,000Net Cash Provided By Financing
      Activities
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    567,500Net
      Increase (Decrease) in Cash
                                                                    
                                                                    
                                                                    34,902
                                                                    
                                                                    
                                                                    
                                                                    (518,944
                                                                    )Effect
      of Exchange Rates on Cash
                                                                    
                                                                    
                                                                    (127,507
                                                                    )
                                                                    
                                                                    
                                                                    334Cash
      - Beginning of Period
                                                                    
                                                                    
                                                                    297,426
                                                                    
                                                                    
                                                                    
                                                                    778,436Cash
      - End of Period
                                                                    
                                                                    $
                                                                    204,820
                                                                    
                                                                    
                                                                    $
                                                                    259,826SUPPLEMENTARY CASH FLOW
      INFORMATION:Cash
      Paid During the Period for:Interest
                                                                    
                                                                    $
                                                                    -
                                                                    
                                                                    
                                                                    $
                                                                    -Taxes
                                                                    
                                                                    $
                                                                    -
                                                                    
                                                                    
                                                                    $
                                                                    -SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND
      FINANCING ACTIVITIES:Sale
      of stock for subscription receivable
                                                                    
                                                                    $
                                                                    1,001,667
                                                                    
                                                                    
                                                                    $
                                                                    -Accrual
      of covenant not to compete
                                                                    
                                                                    $
                                                                    50,000
                                                                    
                                                                    
                                                                    $
                                                                    -Conversion
      of preferred stock into common stock
                                                                    
                                                                    $
                                                                    300
                                                                    
                                                                    
                                                                    $
                                                                    220Derivative
      liability arising from Convertible Note Payable
                                                                    
                                                                    $
                                                                    -
                                                                    
                                                                    
                                                                    $
                                                                    69,429
 
 See
accompanying notes to unaudited interim condensed consolidated financial
statements.
  6
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
  Note 1 – Organization and
Business
 
 Money4Gold
Holdings, Inc. is based in Florida and, through our wholly-owned
subsidiaries (collectively, “Money4Gold,” “Company,” “we,” “us,” and/or
“our”), operates in the United States, Canada, and several countries in Europe.
Through direct response advertising and marketing campaigns, we purchase for
resale precious metals including gold, silver and platinum as well as diamonds
and other precious stones from the public.
  Note 2 – Basis of
Presentation
  The
accompanying unaudited interim condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) for interim financial information and pursuant
to the instructions to Form 10-Q and Article 8 of Regulation S-X of
the United States Securities and Exchange Commission (“SEC”). Accordingly, they
do not include all the information and footnotes necessary for a comprehensive
presentation of financial position, results of operations, or cash flows. It is
our opinion, however, that the accompanying unaudited interim condensed
consolidated financial statements include all adjustments, consisting of a
normal recurring nature, which are necessary for a fair presentation of the
financial position, operating results and cash flows for the periods
presented.
  The
accompanying unaudited interim condensed consolidated financial statements
should be read in conjunction with our Annual Report on Form 10-K for the
year ended December 31, 2009 as filed with the SEC, which contains the
audited financial statements and notes thereto, together with Management’s
Discussion and Analysis, for the year ended December 31, 2009 and the
period from February 14, 2008 (inception) to December 31, 2008. The interim
results for the three month period ended March 31, 2010 are not necessarily
indicative of the results to be expected for the year ending December 31,
2010 or for any future interim period.
  Note 3 – Liquidity and
Management’s Plans
  We
incurred a $2,479,923 net loss (including $889,764 of
non-cash charges)  for the three months ended March 31,
2010.  As of March 31, 2010, we had a $9,751,996 accumulated
deficit and working capital deficit of $2,118,724.
  We
do not yet have a sustained history of financial
stability. Historically our principal source of liquidity has been the
issuances of debt and equity securities, including preferred stock, common stock
and various debt financing transactions. We believe that the higher level
of revenue attained during the third and fourth quarters of 2009 and the first
quarter of 2010 is a result of the successful implementation of the first stages
of our business plan and that, if we can improve our returns on our media
investments and control our costs accordingly, continued implementation will
generate steadily improving results and cash flows in the
future.
  Management
believes that our cash balance on May 10, 2010 of approximately $1.1 million,
current level of working capital, anticipated cash that will be received from
revenue generated from advertisements that have already aired, and additional
funds through the issuance of debt and/or equity securities will be sufficient
to sustain operations through at least March 31, 2011. However, there can be no
assurance that the plans and actions proposed by management will be successful,
that we will continue to generate revenue from advertisements that have already
aired, or that unforeseen circumstances will not require us to seek additional
funding sources in the future or effectuate plans to conserve liquidity. In
addition, there can be no assurance that our efforts to raise additional
funds through the issuance of debt and/or equity securities will be successful
or that in the event additional sources of funds are needed to continue
operations, that they will be available on acceptable terms, if at
all.
 
  Note 4 – Significant
Accounting Policies
  Principles
of Consolidation
 7
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 The
accompanying unaudited interim condensed consolidated financial statements
include the accounts of Money4Gold and its wholly-owned subsidiaries. All
significant intercompany balances and transactions have been eliminated in
consolidation.
  Use
of Estimates
  The
preparation of unaudited interim condensed consolidated financial statements in
conformity with GAAP requires management to make estimates and
assumptions that affect the amounts reported in the unaudited interim condensed
consolidated financial statements and accompanying notes. Such estimates and
assumptions impact, among others, the following: the amount allocated to
goodwill and other intangible assets, the estimated useful lives for amortizable
intangible assets and property, plant and equipment, accrued expenses, deferred
revenue, the fair value of warrants granted in connection with various
financing transactions, share-based payment arrangements, and the fair value of
derivative liabilities.
  Making
estimates requires management to exercise significant judgment. It is at least
reasonably possible that the estimate of the effect of a condition, situation or
set of circumstances that existed at the date of the unaudited interim condensed
consolidated financial statements, which management considered in formulating
its estimate could change in the near term due to one or more future confirming
events. Accordingly, the actual results could differ significantly from our
estimates.
 
  Reclassification
  We have
reclassified certain prior year amounts to conform to the current year’s
presentation. These reclassifications have no effect on the financial position
at December 31, 2009 or on the results of operations for the three months
ended March 31, 2009.
  We
minimize credit risk associated with cash and cash equivalents by periodically
evaluating the credit quality of our primary financial institutions. At times,
our cash and cash equivalents may be uninsured or in deposit accounts that
exceed the Federal Deposit Insurance Corporation insurance limit. We had no
uninsured balances at March 31, 2010 or December 31, 2009.
  Accounts
Receivable
  Accounts
receivable represent obligations from a related party customer, the Refinery
(Note 11). As discussed below under Revenue Recognition, we are able to estimate
the total value of each batch of precious metals received. The Refinery advances
to us, up to 80% of the value of the precious metals we have received, but not
yet delivered. After completion of the melt and validation process, the final
amount due to us, net of the advance, is determined and is recorded as an
account receivable.
  We
periodically evaluate the collectability of our accounts receivable and consider
the need to record an allowance for doubtful accounts based upon historical
collection experience and specific information. Actual amounts could vary from
the recorded estimates. We did not deem it necessary to record an allowance for
doubtful accounts at March 31, 2010 or December 31, 2009.
  Inventory
  Inventory
consists predominantly of gold and other precious metals and is carried at the
lower of cost or net realizable value. Cost is based solely on the amount paid
by us to third parties in the general public, which is generally lower than the
current market value. As such, we do not deem it necessary to record a
reserve for obsolete inventory.
 8
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 Fixed
Assets
  Fixed
assets are stated at cost. Depreciation is calculated on a straight-line
basis over the estimated useful lives of the related assets, which ranges from
three to seven years.
  Long-Lived
Assets
  We carry
long-lived assets at the lower of their carrying amount or their fair
value. We periodically review the carrying values of our long-lived assets
when events or changes in circumstances indicate that it is more likely than not
that their carrying values may exceed their fair values, and record an
impairment charge when considered necessary.
  When
circumstances indicate that an impairment of value may have occurred, we test
such assets for recoverability by comparing the estimated undiscounted future
cash flows expected to result from the use of such assets and their eventual
disposition to their carrying amounts. If the undiscounted future cash flows are
less than the carrying amount of the asset, an impairment loss, measured as the
excess of the carrying value of the asset over its estimated fair value, is
recognized. Fair value, for purposes of calculating impairment, is measured
based on estimated future cash flows, discounted at a market rate of
interest.
  Goodwill
  Goodwill
is tested for impairment at the reporting unit level (operating segment or one
level below an operating segment) on an annual basis and between annual tests if
an event occurs or circumstances change that would more likely than not reduce
the fair value of a reporting unit below its carrying value. These events or
circumstances could include a significant change in the business climate, legal
factors, operating performance indicators, competition or sale or disposition of
a significant portion of a reporting unit. Application of the goodwill
impairment test requires judgment, including the identification of reporting
units, assignment of assets and liabilities to reporting units, assignment of
goodwill to reporting units, and determination of the fair value of each
reporting unit. The fair value of each reporting unit is estimated using a
discounted cash flow methodology. This requires significant judgments including
estimation of future cash flows, which is dependent on internal forecasts,
estimation of the long-term growth rate of our business, the useful life over
which cash flows will occur, and determination of our weighted average cost of
capital. Changes in these estimates and assumptions could materially affect the
determination of fair value and/or goodwill impairment charge for each reporting
unit.
 
 During
the three months ended March 31, 2010, we did not identify any indication of
goodwill impairment.
  Convertible
Instruments
  We review
all of our convertible instruments for the existence of an embedded conversion
feature which may require bifurcation, if certain criteria are met. These
criteria include circumstances in which:
  a)
              The
      economic characteristics and risks of the embedded derivative instrument
      are not clearly and closely related to the economic characteristics and
      risks of the host contract,
  b)
              The
      hybrid instrument that embodies both the embedded derivative instrument
      and the host contract is not remeasured at fair value under otherwise
      applicable GAAP with changes in fair value reported in earnings as they
      occur, and
  c)
              A
      separate instrument with the same terms as the embedded derivative
      instrument would be considered a derivative instrument subject to certain
      requirements (except for when the host instrument is deemed to be
      conventional).
 9
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 A
bifurcated derivative financial instrument may be required to be recorded at
fair value and adjusted to market at each reporting period end date. In
addition, we may be required to classify certain stock equivalents issued in
connection with the underlying debt instrument as derivative
liabilities.
  For
convertible instruments that we have determined should not be bifurcated from
their host instruments, we record discounts to convertible notes for the
intrinsic value of conversion options embedded in debt instruments based upon
the differences between the fair value of the underlying common stock at the
commitment date of the note transaction and the effective conversion price
embedded in the note. Debt discounts under these arrangements are amortized
over the term of the related debt to their earliest date of
redemption. Also when necessary, we record deemed dividends for the
intrinsic value of conversion options embedded in preferred shares based upon
the differences between the fair value of the underlying common stock at the
commitment date of the financing transaction and the effective conversion price
embedded in the preferred shares.
  In
addition, we review all of our convertible instruments for the existence of a
beneficial conversion feature. Upon the determination that a beneficial
conversion feature exists, the relative fair value of the beneficial conversion
feature would be recorded as a discount from the face amount of the respective
debt instrument and the discount would be amortized to interest expense over the
life of the debt.
  Finally,
if necessary, we will determine the existence of liquidated damage provisions.
Liquidated damage provisions are not marked to market, but evaluated based upon
the probability that a related liability should be recorded.
  Common
Stock Purchase Warrants and Derivative Financial Instruments
  We review
any common stock purchase warrants and other freestanding derivative financial
instruments at each balance sheet date and classify them on our balance sheet
as:
  a)
              Equity
      if they (i) require physical settlement or net-share settlement, or
      (ii) gives us a choice of net-cash settlement or settlement in our
      own shares (physical settlement or net-share settlement), or
      as
  b)
              Assets
      or liabilities if they (i) require net-cash settlement (including a
      requirement to net cash settle the contract if an event occurs and if that
      event is outside our control), or (ii) give the counterparty a choice of
      net-cash settlement or settlement in shares (physical settlement or
      net-share settlement).
  We assess
classification of our common stock purchase warrants and other freestanding
derivatives at each reporting date to determine whether a change in
classification between assets and liabilities is required.
  We had no
freestanding derivatives as of March 31, 2009 or December 31, 2008.
 
 Revenue
Recognition
  We
generate revenue from the sale of precious metals, including gold, silver and
platinum, and from the sale of diamonds and other precious stones. Revenue
is recognized when all of the following conditions exist: (1) persuasive
evidence of an arrangement exists, (2) delivery has occurred, (3) the sales
price is fixed or determinable, and (4) collectability is reasonably
assured.
  Precious
Metals
  We grade
the quality of the precious metals purchased from the public and estimate the
total quantity of pure gold, silver and platinum received. We then
lock in the current spot rate of each metal sufficient to cover the total
quantity received in the current batch with the Refinery. After a holding
period of at least 10 days to allow for returns, the precious metals are
delivered to the Refinery to be melted. Upon melting the precious metals,
the Refinery validates the quality of pure gold, silver, and platinum and remits
payment to us based on the quantity of each precious metal at the agreed
upon spot rates, as described above. Revenue is recognized upon melting of
the precious metals and the validation of the quality and quantity of each
precious metal by the Refinery.
 10
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 No
returns are accepted from the Refinery and upon delivery of the precious metals
to the refiner, we have no further obligations.
  Diamonds
and Other Precious Stones
  Diamonds
and other precious stones are generally purchased from the public in connection
with the purchase of precious metals. We value diamonds and other precious
stones based on a variety of factors including size and quality and then resell
them. To date, all diamonds and other precious stones have been sold to an
affiliate of an officer of one of our wholly-owned subsidiaries. Revenue is
recognized upon the acceptance of the diamonds and other precious stones by the
purchaser.
  Deferred
Revenue
  Upon our
estimate of the total quantity of pure gold, silver, and platinum received and
the locking in of the current spot rate for each precious metal, we are able to
estimate the total value of the batch received. The Refinery advances to us, up
to 80% of the value of the precious metals we have received, but not yet
delivered. This amount is recorded as deferred revenue until the specific
batch is melted and processed as described above, at which time, it is recorded
as revenue.
  Cost
of Revenue
  Our cost
of revenue includes our cost of acquiring precious metals and stones as well as
any other direct costs and expenses required to ship, secure, grade, log and
process the metals and stones internally. In addition, fees and other costs
incurred in connection with processing at the Refinery are charged to cost of
revenue.
  Advertising
  Advertising
costs are expensed as they are incurred and are included in sales and
marketing  expenses. Advertising expense amounted to $8,529,669
and $872,984 for the three months ended March 31, 2010 and March 31, 2009,
respectively.
  Foreign
Currency Transactions
  The
unaudited interim condensed consolidated financial statements are presented in
United States Dollars. The financial position and results of operations of our
foreign subsidiaries are measured using the local currency as the functional
currency. Assets and liabilities of our foreign subsidiaries have been
translated from their local currency (British pounds, Canadian dollars and
Euros) into the reporting currency, U.S. dollars, using period end exchange
rates. Equity transactions have been translated using the historical
exchange rate that was in effect when the transaction occurred. The resulting
translation adjustments are recorded as a separate component of accumulated
other comprehensive loss. Revenues and expenses have been translated using
weighted average exchange rates for the respective periods. Transaction gains
and losses resulting from foreign currency transactions are recorded as foreign
exchange gains or losses and are included in general and administrative
expense in the consolidated statement of operations. We have not entered
into any financial instruments to offset the impact of foreign currency
fluctuations.
 
 Share-Based
Payment Arrangements
  Generally,
all forms of share-based payments, including stock option grants, restricted
stock grants and stock appreciation rights are measured at their fair value on
the awards’ grant date, based on the estimated number of awards that are
ultimately expected to vest. Share-based compensation awards issued to
non-employees for services rendered are recorded at either the fair value of the
services rendered or the fair value of the share-based payment, whichever
is more readily determinable. The expense resulting from share-based payments
are recorded in cost of goods sold or general and administrative expense in the
consolidated statement of operations, depending on the nature of the services
provided. We have applied fair value accounting and the related provisions
of ASC 718 for all share based payment awards. The fair value of
share-based payments is recognized ratably over the stated vesting period. In
the event of termination, we will cease to recognize compensation
expense.
 11
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 Net
Loss per Share
  Basic
earnings per share (“EPS”) is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding during
the period, excluding the effects of any potentially dilutive securities.
Diluted EPS gives effect to all dilutive potential of shares of common stock
outstanding during the period including stock options or warrants, using the
treasury stock method (by using the average stock price for the period to
determine the number of shares assumed to be purchased from the exercise of
stock options or warrants), and convertible debt or convertible preferred stock,
using the if-converted method. Diluted EPS excludes all dilutive potential of
shares of common stock if their effect is anti-dilutive.
   The
computation of basic and diluted loss per share for the three months ended
March 31, 2010 and 2009 excludes the following potentially dilutive
securities because their inclusion would be anti-dilutive:
  Three
      Months Ended March 31,2010
                                
                                
                                2009Convertible
      Preferred Stock
                                
                                
                                400,000
                                
                                
                                
                                11,900,000Common
      Stock Purchase Warrants
                                
                                
                                21,800,003
                                
                                
                                
                                8,400,000Stock
      Options
                                
                                
                                13,215,834
                                
                                
                                
                                1,073,13435,415,837
                                
                                
                                
                                21,373,134
 
 Comprehensive
Loss
  Other
comprehensive loss includes all changes in stockholders’ equity during a period
from non-owner sources and is reported in the consolidated statement of
stockholders’ equity. To date, other comprehensive loss consists of changes in
accumulated foreign currency translation adjustments.
 
 Recent Accounting Pronouncements
 
 In
January 2010, the FASB issued updated guidance to amend the disclosure
requirements related to recurring and nonrecurring fair value measurements. This
update requires new disclosures on significant transfers of assets and
liabilities between Level 1 and Level 2 of the fair value hierarchy
(including the reasons for these transfers) and the reasons for any transfers in
or out of Level 3. This update also requires a reconciliation of recurring
Level 3 measurements about purchases, sales, issuances and settlements on a
gross basis. In addition to these new disclosure requirements, this update
clarifies certain existing disclosure requirements. For example, this update
clarifies that reporting entities are required to provide fair value measurement
disclosures for each class of assets and liabilities rather than each major
category of assets and liabilities. This update also clarifies the requirement
for entities to disclose information about both the valuation techniques and
inputs used in estimating Level 2 and Level 3 fair value measurements.
This update is effective for the interim and annual reporting periods beginning
January 1, 2010, except for the requirement to provide the Level 3
activity of purchases, sales, issuances, and settlements on a gross basis, which
will become effective for the interim and annual reporting period beginning
January 1, 2011. We will not be required to provide the amended disclosures
for any previous periods presented for comparative purposes. Other than
requiring additional disclosures, adoption of this update will not have a
material effect on our unaudited interim condensed consolidated financial
statements.
 
 Note 5 – Fair
Value
 
 The fair
value of our financial assets and liabilities reflects our estimate of amounts
that we would have received in connection with the sale of the assets or paid in
connection with the transfer of the liabilities in an orderly transaction
between market participants at the measurement date. In connection with
measuring the fair value of our assets and liabilities, we seek to maximize the
use of observable inputs (market data obtained from independent sources) and to
minimize the use of unobservable inputs (internal assumptions about how market
participants would price assets and liabilities). The following fair value
hierarchy is used to classify assets and liabilities based on the observable
inputs and unobservable inputs used in order to value the assets and
liabilities:
 12
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 Level 1:
              Quoted
      prices in active markets for identical assets or liabilities. An active
      market for an asset or liability is a market in which transactions for the
      asset or liability occur with sufficient frequency and volume to provide
      pricing information on an ongoing
basis.
 
 Level 2:
              Observable
      inputs other than Level 1 inputs. Examples of Level 2 inputs
      include quoted prices in active markets for similar assets or liabilities
      and quoted prices for identical assets or liabilities in markets that are
      not active.
 
 Level 3:
              Unobservable
      inputs based on our assessment of the assumptions that market participants
      would use in pricing the asset or
liability.
  Our
investment strategy is focused on capital preservation. We intend to invest in
instruments that meet credit quality standards.  The current expectation is
to maintain cash and cash equivalents, once these resources are
available.
  The
following are the major categories of assets measured at fair value on a
nonrecurring basis during the three months ended March 31, 2010, using quoted
prices in active markets for identical assets (Level 1); significant other
observable inputs (Level 2); and significant unobservable inputs
(Level 3):
  Level 1:
                      Quoted Prices
                      in
      Active
                      Markets for
                      Identical
                      Assets
                    
                    
                    Level 2:
                      Quoted Prices
                      in
      Inactive
                      Markets for
                      Identical
                      Assets
                    
                    
                    Level 3:
                      Significant
                      Unobservable
                      Inputs
                    
                    
                    Total at
                      December 31, 2009
                    
                    
                    Total
                      Impairment
                      For the Year Ended
                      December 31, 2009Goodwill
                    
                    $
                    -0-
                    
                    
                    $
                    11,142,273
                    
                    
                    $
                    -0-
                    
                    
                    $
                    11,142,273
                    
                    
                    $
                    -0-Total
                    
                    $
                    -0-
                    
                    
                    $
                    11,142,273
                    
                    
                    $
                    -0-
                    
                    
                    $
                    11,142,273
                    
                    
                    $
                    -0-
  We have
determined the estimated fair value amounts presented in these unaudited interim
condensed Consolidated Financial Statements using available market information
and appropriate methodologies. However, considerable judgment is required in
interpreting market data to develop the estimates of fair value. The estimates
presented in the unaudited interim condensed Consolidated Financial Statements
are not necessarily indicative of the amounts that we could realize in a current
market exchange. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts. We
have based these fair value estimates on pertinent information available as of
the respective balance sheet dates and have determined that, as of such dates,
the carrying value of all financial instruments approximates fair
value.
  Note 6 –
Acquisitions
  On
May 7, 2009, we acquired 100% of MGE Enterprises Corporation, a
Wyoming corporation (“MGE”). MGE operated in the United States under the
names mygoldenvelope.com and sobredeoro.com using a business model similar to
ours. In addition, their management has provided us with extensive experience in
creating and growing businesses that provide shareholder value in a broad array
of industries, including direct response, Internet marketing and national retail
distribution and sales. MGE’s ability to reach a broader number of
consumers through their experience in multi-language television advertising,
direct response, and retail distribution and sales greatly accelerated our
growth and increased our depth of management experience.
  We used
the acquisition method of accounting in connection with the acquisition of MGE
and accordingly, our unaudited interim condensed consolidated financial
statements include the results of operations of MGE for the three months ended
March 31, 2010.
  The
following unaudited condensed consolidated pro forma information gives effect to
the acquisition of MGE as if the transaction had occurred on January 1,
2008. The following pro-forma information is presented for illustration purposes
only and is not necessarily indicative of the results that would have been
attained had the acquisition been completed on January 1, 2008, nor are
they indicative of results that may occur in any future periods:
 13
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 For
      the Three
                          Months
      Ended
                          March 31,
      2009Revenues
                        
                        $
                        3,244,348Net
      Loss
                        
                        
                        (1,888,060
                        )Basic
      and Diluted Loss from Continuing Operations per Common
    Share
                        
                        $
                        (0.01
                        )Weighted
      Average Shares Outstanding - Basic and Diluted
                        
                        
                        153,993,391
 
 
 Note 7 –Fixed
Assets
 
 Fixed
assets consist of the following at March 31, 2010 and December 31,
2009:
 
 Balance
      at
                            March
      31, 2010
                          
                          
                          Balance
      at December 31, 2009
                          
                          
                          Estimated
                            Useful
        LifeLeasehold
      Improvements
                          
                          $
                          115,281
                          
                          
                          $
                          39,694
                          
                          
                          
                          *Security
      Equipment
                          
                          
                          78,015
                          
                          
                          
                          26,005
                          
                          
                          7yearsComputers
                          
                          
                          18,228
                          
                          
                          
                          6,024
                          
                          
                          3yearsFurniture
      and Fixtures
                          
                          
                          11,216
                          
                          
                          
                          2,397
                          
                          
                          7yearsOffice
      Equipment
                          
                          
                          3,386
                          
                          
                          
                          3,386
                          
                          
                          3years226,126
                          
                          
                          
                          77,506Less:
      Accumulated Depreciation
                          
                          
                          (10,876
                          )
                          
                          
                          (1,598
                          )Fixed
      Assets, Net
                          
                          $
                          215,250
                          
                          
                          $
                          75,908
  * The
shorter of three years or the life of the lease.
 
  Depreciation
expense pertaining to fixed assets during the three months ended March 31, 2010
and 2009 was $14,385 and $-0-, respectively.
  
  Note 8 –Debt and Other
Financing
  Convertible
Note Payable
  On
March 4, 2009, we issued a $250,000 Convertible Note Payable (the
“Convertible Note”) to Whalehaven Capital Fund Limited (“Whalehaven”). The
Convertible Note had a three month term, bore interest at an annual rate of 15%
compounded monthly beginning on the date of issuance and was secured by all of
our assets. All principal and accrued interest was due and payable on
June 1, 2009, but was subsequently extended to June 1, 2010, as
described below. We used the $237,500 net proceeds received from this
Convertible Note to provide working capital.
 
 The
Convertible Note was convertible at the option of Whalehaven, in whole or in
part, into shares of our common stock at an initial conversion price equal to
the average of the three lowest closing bid prices within the prior twenty day
trading period immediately preceding the date we received notice of
conversion. The conversion price was adjustable for standard anti-dilution
provisions such as stock splits, stock dividends and similar types of
recapitalization events. In addition, the conversion was limited such that
Whalehaven could only convert on a date that the amount of the principal
and/or accrued interest in connection with that number of shares of common stock
would be in excess of the sum of:
 14
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 (a)
              The
      number of shares of common stock beneficially owned by Whalehaven and its
      affiliates on a conversion date, repayment date, the date notice of
      redemption is given, or the date notice of mandatory conversion is given,
      as the case may be;
  (b)
              Any
      common stock issuable in connection with the unconverted portion of the
      Convertible Note; and
  (c)
              The
      number of shares of common stock issuable upon the conversion or repayment
      of the Convertible Note with respect to which the determination of this
      provision is being made, would result in beneficial ownership by
      Whalehaven and its affiliates of more than 4.99% of the outstanding shares
      of our common stock on such date.
  We
evaluated the conversion feature embedded in the Convertible Note to determine
whether such conversion feature should be bifurcated from its host instrument
and accounted for as a freestanding derivative. We determined that since the
exercise price of the convertible debt contained a variable conversion feature,
such conversion feature should be bifurcated from its host instrument and
accounted for as a freestanding derivative.
  We
estimated the fair value of the conversion feature using the Black-Scholes
option pricing model using the following assumptions:
  Expected
      dividends
                      
                      
                      0
                      %Expected
      volatility
                      
                      
                      133.72
                      %Expected
      term – embedded conversion option
                      
                      0.24 yearsRisk
      free interest rate
                      
                      
                      0.26
                      %
  We
allocated a portion of the proceeds from the Convertible Note to the conversion
feature based on the relative fair value of the principal amount and the
conversion feature. The relative fair value of the conversion feature, which
amounted to $69,429, was recorded as a discount to the Convertible Note and a
corresponding increase to a derivative liability. This discount amount was being
amortized to interest expense over the contracted term of the Convertible Note.
During the three months ended March 31, 2009, we amortized $20,829 to interest
expense.  The underlying note was repaid in full during
2009.
  At March
31, 2009, we recalculated the fair value of the conversion feature and
determined that the value had increased by $1,160. Accordingly, we recorded a
loss and a corresponding increase in the value of the derivative liability in
the amount of $1,160.  We valued the derivative liability at March 31,
2009 using the Black-Scholes option pricing model utilizing the following
assumptions:
  Expected
      dividends
                    
                    
                    0
                    %Expected
      volatility
                    
                    
                    151.16
                    %Expected
      term – embedded conversion option
                    
                    0.17 yearsRisk
      free interest rate
                    
                    
                    0.21
                    %
  In
connection with the issuance of the Convertible Note, we paid debt-issuance
costs of $27,590, including a $12,500 fee to Whalehaven and $15,090 in legal and
other costs. These debt issue costs were capitalized as debt issuance costs and
were amortized to interest expense over the contracted term of the
Convertible Note. During the three months ended March 31, 2009, we amortized
$3,750 to interest expense.
 
  Note 9 – Commitments and
Contingencies
  We lease
space for our corporate headquarters and for our aggregation facilities located
around the world under operating lease agreements that expire at various dates
through October 2014.  Aggregate rent expense for all operating
leases was $63,237 and $36,637, for the three months ended March 31, 2010
and 2009, respectively.
 15
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 Economic
Risks and Uncertainties
  The
recent global economic slowdown has caused a general tightening in the credit
markets, lower levels of liquidity, increases in the rates of default and
bankruptcy, and extreme volatility in credit, equity and fixed income markets.
These conditions not only limit our access to capital, but also make it
difficult for our customers, our vendors and us to accurately forecast and plan
future business activities. Furthermore, our operations are subject to
fluctuating prices of precious metals. A decrease in the value of gold, silver
or platinum could have an adverse effect on our business.
  Foreign
Operations
  Our
operations in various geographic regions expose us to risks inherent in doing
business in each of the countries in which we transact business. Operations in
countries other than the United States are subject to various risks particular
to each country. With respect to any particular country, these risks may
include, but are not limited to:
  ·
              Currency
      fluctuations, devaluations, conversion and expropriation
      restrictions;·
              Confiscatory
      taxation or other adverse tax policies;·
              Political
      and economic instability;·
              Inflation;·
              Trade
      restrictions and economic embargoes imposed by the United States and other
      countries;·
              Expropriation
      and nationalization of our assets or of our customers in that
      country;·
              Governmental
      activities that limit or disrupt markets, payments, or limit the movement
      of funds;·
              Governmental
      activities that may result in the deprivation of contract
      rights;·
              Civil
      unrest, acts of terrorism, force majeure, war or other armed conflict;
      and·
              Natural
      disasters including those related to earthquakes, hurricanes, tsunamis and
      flooding.
 
 Employment
Agreements
  We have
entered into employment agreements with several of our current executives for
initial terms of up to three years, which can or will be renewed for additional
one year terms thereafter, unless written notice is provided by the respective
parties. The agreements provide, among other things, for the payment of
aggregate annual base salaries of approximately $825,000, as well as such
incentive compensation and discretionary bonuses as the Board of Directors may
determine. In addition, the employment agreements provide for up to eighteen
months of severance compensation for terminations under certain circumstances.
Aggregate potential severance compensation amounted to approximately $1,237,500
at March 31, 2010.
 
 Former
Chief Operating Officer – Todd Oretsky
  On
February 2, 2010, Mr. Oretsky resigned as our Chief Operating Officer and as a
member of our Board of Directors on mutually agreeable terms with the Company to
pursue other opportunities.
  16
  Legal
Proceedings
  From time
to time, we are periodically a party to or otherwise involved in legal
proceedings arising in the normal and ordinary course of business. As of the
date of this report, we are not aware of any proceeding, threatened or pending,
against us which, if determined adversely, would have a material effect on our
business, results of operations, cash flows or financial position.
  Customer
and Vendor Concentrations
  Our
revenues are predominantly generated from the sale of precious metals to a
related party. During each of the three month periods ended March 31, 2010 and
March 31, 2009 this related party customer accounted for approximately 100% of
our revenue.  At March 31, 2010 and December 31, 2009, the amount due from
this customer was approximately 89% and 93% of our accounts receivable,
respectively.
  During
the three months ended March 31, 2010, three vendors accounted for approximately
15%, 12% and 10% of our total purchases, and for the three months ended
March 31, 2009 a related party vendor accounted for approximately 31% of
our total purchases.  At March 31, 2010, one vendor accounted for
approximately 12% of our accounts payable, and at December 31, 2009, a
related party vendor and one other vendor accounted for approximately 17%
and 12% of our total accounts payable, respectively.
 
  Note 10 – Stockholders’
Equity
  Convertible
Series A Preferred Stock
  Our
Convertible Series A Preferred Stock (“Series A PS”) has no voting
rights, no liquidation preference, and are not entitled to receive dividends.
Each share of the Series A PS is convertible into one share of our common
stock at the election of the holder. We have determined that no beneficial
conversion feature or derivative financial instruments exist in connection with
the Series A PS as the conversion rate was fixed at an amount equal to the
market price of our common stock.
  On
March 19, 2009, 2,200,000 shares of our Series A PS were converted
into 2,200,000 shares of our common stock of which, 950,000 shares were
converted by a family member of our Chief Financial Officer and 1,250,000
shares were converted by another shareholder.
  On
January 25, 2010, 3,000,000 shares of our Series A PS were converted into
3,000,000 shares of our common stock by a family member of our Chief Financial
Officer.
 
 Common
Stock
   Private
Placements
  During
March 2009, we closed on a private placement transaction, whereby we issued
400,000 shares of our common stock and warrants granting the right to purchase
up to 400,000 shares of our common stock to various investors. The warrants are
exercisable for three years and have an exercise price of $0.40 per share. Gross
proceeds from the sale amounted to $80,000, and were used for working capital
purposes.
 17
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 On March
31, 2010, we closed on a private placement transaction (the “March 2010 PP”)
whereby we issued 5,758,337 shares of our common stock at $0.20 per
share.  Gross proceeds from the sale amounted to $1,151,667, of which
$1,001,667 was received and was being held in escrow as of March 31, 2010 and
the remaining $150,000 was received during the first week of April
2010.  At March 31, 2010, we have recorded $1,001,667 as subscriptions
receivable on our unaudited condensed consolidated balance sheet representing
the sale of 5,008,335 shares of our common stock.  $1,151,667 was
released to us from escrow in April 2010.  The funds will be used for
working capital.  There were no material offering costs associated
with this transaction.
 
 Included
in the March 2010 PP was an investment of $50,000 by Doug Feirstein, our Chief
Executive Officer and an investment of $25,000 from Michael Moran, our Vice
President of Corporate Development.
 
 In
connection with this private placement transaction, we are required to file a
registration statement with the SEC within 45 days of closing, or liquidated
damages will be assessed.  Liquidated damages are payable at our
option in cash or in shares of our common stock at fair market value and are
calculated as 1% of the total amount invested for each 30 day period, beginning
after the 45 day requirement, for which the shares remain unregistered, up to a
maximum of six months.
 
 Share
Grants
 
 On
December 22, 2008, we granted an aggregate of 2,000,000 shares of common stock
to two employees.  The grant had a fair value of $600,000 based upon
the quoted closing trading price of the stock on the date of the grant. Of the
2,000,000 shares, 500,000 were fully vested and the remaining 1,500,000 shares
vest over a period of 30 months.  During the three months ended March
31, 2010, we identified an error in the term used for the calculation of the
periodic amoritzation and recorded a one-time adjustment to the expense
pertaining to this grant of $65,161, resulting in a negative expense for
the period of $20,161.  During the three months ended March 31, 2009,
we recognized $60,000 as expense pertaining to this grant.
 
 During
March 2009, we granted 750,000 shares of common stock to two
employees.  The grant had a fair value of $292,500 based upon the
quoted closing trading price of the stock on the date of the grant and will vest
over a period of 36 months.  During the three months ended March 31,
2010 and 2009, we recognized $24,375 and $8,125 of expense pertaining to
this grant, respectively.
 
 During
October 2009, we issued 870,666 shares of restricted common stock, having a
fair value of $190,197, based upon the quoted closing trading price of our
common stock as of the issuance dates, to directors. The shares vest annually
over a three-year period, subject to continued service as a director on each
applicable vesting date.  During the three months ended March 31,
2010, we recognized $46,853 as expense pertaining to this grant, including
$34,375 as a result of the accelerated vesting for Neil McDermott in connection
with his resignation from the Board on March 9, 2010.
 
 On
January 4, 2010, we issued 120,000 shares of restricted common stock, having a
fair value of $36,000, based upon the quoted closing trading price of our common
stock as of the issuance dates, to a consultant for technology services. The
shares vested at the time of issuance and, as a result, during the three months
ended March 31, 2010, we recognized $36,000 of expense pertaining to this
grant.
  On
October 20, 2008, we granted 300,000 shares of common stock to Neil McDermott
for his future service as a director.  In connection with his
resignation, 200,000 shares of common stock that had not yet vested, were
immediately vested.  During the three months ended March 31, 2010, we
recognized $110,030 as compensation expense pertaining to this grant, including
$94,780 as a result of the accelerated vesting for Mr. McDermott.
 
 Common
Stock Purchase Warrant Grants
 
 During
November 2009, we granted 5,000,000 warrants to a consultant for services to be
performed.  The warrants have an exercise price of $0.23, are
exercisable for three years and vest ratably over a twelve month
period.  The estimated fair value of these stock warrants on their
date of grant was $798,119, which we estimated using the Black-Scholes option
pricing model using the following assumptions:
 18
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 Risk-free
      interest rate
                    
                    
                    0.37
                    %Expected
      dividend yield
                    
                    
                    0
                    %Expected
      volatility
                    
                    
                    189.44
                    %Expected
      life
                    
                    3
      yearsExpected
      forfeitures
                    
                    
                    0
                    %
  We
recorded stock based compensation expense of $199,530 during the three months
ended March 31, 2010, related to this award.
  The
following summarizes our warrant activity for the period from December 31, 2009
through March 31, 2010:
  Warrants
                          
                          
                          Weighted
      Average Exercise Price
                          
                          
                          Weighted
                            Average
                            Remaining
                            Contractual
                            Life
      (in years)Outstanding
      – December 31, 2009
                          
                          
                          21,800,003
                          
                          
                          $
                          0.35
                          
                          
                          
                          2.3Granted
                          
                          
                          ---Exercised
                          
                          
                          ---Forfeited
      or Cancelled
                          
                          
                          (---
                          )Outstanding
      – March 31, 2010
                          
                          
                          21,800,003
                          
                          
                          $
                          0.37
                          
                          
                          2.0Exercisable
      – March 31, 2010
                          
                          
                          17,633,336
                          
                          
                          $
                          0.41
                          
                          
                          1.9
  At March 31, 2010, the total intrinsic value
of all warrants outstanding and exercisable was $-0-.
  Stock
Option Grants
  On
October 20, 2008, we adopted the 2008 Equity Incentive Plan (the
“Plan”) covering 8,000,000 stock rights including options, restricted stock and
stock appreciation rights. Under the Plan, non-employee directors receive
initial and annual grants of options and restricted stock for their service as a
director and committee member. The initial grants will vest over a three-year
period and the annual grants vest on June 30 of each year, subject to
continued service on the applicable vesting dates.
   On
October 20, 2008, we granted 573,134 non-qualified stock options to
contractors and non-employee directors for services to be rendered. The options
are exercisable over a five-year term at $0.61 per share. Of the total options
granted, 373,134 were issued to two non-employee directors under the terms of
the Plan vesting annually in equal increments over a three-year period. The
remaining 200,000 options were fully vested upon issuance. These options had an
aggregate fair value of $275,964 using the Black-Scholes option-pricing
model.  For each of the three month periods ended March 31, 2010 and
2009 we recognized $14,972 of expense related to the 373,134 options. The
200,000 fully vested options, had a fair value of $96,300, and were expensed in
full during 2008.
 
 On
December 31, 2008, we granted 250,000 non-qualified stock options to
an employee for future services. The options are exercisable over a five-year
term, vesting quarterly in equal increments over a three-year period. These
options are exercisable at $0.36 per share. These options had a fair value of
$75,225 using the Black-Scholes option-pricing model.  For each of the
three month periods ended March 31, 2010 and 2009 we recognized $6,269 of
expense pertaining to these grants.
  The total
grant date fair value of the options listed above that were granted during 2008
was $481,939, based upon the use of a Black-Scholes option-pricing model using
the following management assumptions:
 19
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
  Risk-free
      interest rate
                    
                    
                    1.55%
      - 2.82
                    %Expected
      dividend yield
                    
                    
                    0
                    %Expected
      volatility
                    
                    
                    108%
      - 122.7
                    %Expected
      term
                    
                    5
      yearsExpected
      forfeitures
                    
                    
                    0
                    %
  During
the second quarter of 2009, we granted options to purchase 250,000 shares of our
common stock at a weighted average exercise price of $0.31 per share to an
employee. The options have a five year contractual term and vest in equal
quarterly installments over a period of three years. The estimated fair value of
these stock options on their date of grant was $71,100, which we estimated using
the Black-Scholes option pricing model using the following
assumptions:
  Risk-free
      interest rate
                    
                    
                    1.36
                    %Expected
      dividend yield
                    
                    
                    0
                    %Expected
      volatility
                    
                    
                    153.55
                    %Expected
      life
                    
                    5
      yearsExpected
      forfeitures
                    
                    
                    0
                    %
  For the
three months ended March 31, 2010, we recognized $5,925 of expense pertaining to
this grant.
  During
the fourth quarter of 2009, we granted options to purchase 1,164,709 shares of
our common stock at a weighted average exercise price of $0.23 per share to our
directors. The options have a five year contractual term and vest in equal
quarterly installments over a period of three years. The estimated fair value of
these stock options on their date of grant was $257,837, which we estimated
using the Black-Scholes option pricing model using the following
assumptions:
  Risk-free interest rate
                    
                    
                    2.31-2.51
                    %Expected dividend yield
                    
                    
                    0
                    %Expected volatility
                    
                    
                    162.60-180.87
                    %Expected
      life
                    
                    5
      yearsExpected
      forfeitures
                    
                    
                    0
                    %
  For the
three months ended March 31, 2010, we recognized $50,417 of expense pertaining
to these grants, including $32,145 pertaining to the accelerated vesting of
shares issued to one of our directors in connection with his resignation from
the Board.
  During
December 2009, we granted options to purchase 10,977,991 shares of our common
stock at a weighted average exercise price of $0.27 per share to our employees.
The options have a five year contractual term and vest in equal quarterly
installments over a period of four years. The estimated fair value of these
stock options on their date of grant was $2,974,821, which we estimated using
the Black-Scholes option pricing model using the following
assumptions:
  Risk-free
      interest rate
                    
                    
                    2.49
                    %Expected
      dividend yield
                    
                    
                    0
                    %Expected
      volatility
                    
                    
                    190.48
                    %Expected
      life
                    
                    5
      yearsExpected
      forfeitures
                    
                    
                    0
                    %
  For the
three months ended March 31, 2010, we recognized $333,417 of expense pertaining
to these grants, including $147,492 pertaining to the accelerated vesting of
shares issued to our former Chief Operating Officer in accordance with his
separation agreement.
  On March
10, 2010, Money4Gold increased the aggregate number of shares of common stock
which may be issued pursuant to the 2008 Equity Incentive Plan from 8,000,000 to
27,000,000.
 20
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 The
following table summarizes our stock option activity for the period from
December 31, 2009 through March 31, 2010:
 
 
 Number of
                              Options
                            
                            
                            Weighted
                              Average
                              Exercise
                              Price
                            
                            
                            Weighted
                              Average
                              Remaining
                              Contractual
                              Life
                              (in Years)
                            
                            
                            Aggregate
                              Intrinsic
                              ValueBalance
      at December 31, 2009
                            
                            
                            13,215,834
                            
                            
                            $
                            0.45
                            
                            
                            
                            4.8Granted
                            
                            
                            ---
                            
                            
                            
                            ---Forfeited
      or Cancelled
                            
                            
                            ---
                            
                            
                            
                            ---Balance
      at March 31, 2010
                            
                            
                            13,215,834
                            
                            
                            $
                            0.45
                            
                            
                            
                            4.6
                            
                            
                            $
                            ---Exercisable
      at March 31, 2010
                            
                            
                            2,076,645
                            
                            
                            $
                            0.33
                            
                            
                            
                            4.4
                            
                            
                            $
                            ---
  The
following table summarizes our stock option activity for non-vested options for
the period from December 31, 2009 through March 31, 2010:
  Number of Options
                        
                        
                        Weighted Average
                          Grant Date
                          Fair ValueOutstanding
      – December 31, 2009
                        
                        
                        12,595,364
                        
                        
                        $
                        0.27Granted
                        
                        
                        ---
                        
                        
                        $
                        ---Vested
                        
                        
                        (1,456,175
                        )
                        
                        $
                        0.27Cancelled
      or Forfeited
                        
                        
                        (---
                        )
                        
                        $
                        ---Outstanding
      – March 31, 2010
                        
                        
                        11,139,189
                        
                        
                        $
                        0.27
 
 There
were no options granted during the three months ended March 31, 2010. Total
unamortized compensation expense related to stock options at March 31, 2010
amounted to $3,028,987 and is expected to be recognized over a weighted average
period of 2.6 years.
  Note 11 – Related Party
Transactions
  Refinery
   During
each of the three month periods ended March 31, 2010 and 2009, we recorded
$46,907 in cost of revenue pertaining to prepaid refining services and $14,593
of amortization expense pertaining to a non-compete agreement, both of which
pertain to our service agreement with Republic Metals Corporation.
  Marketing
Services
   During
the three months ended March 31, 2010 and March 31, 2009, we recorded
$1,048,656 and $499,339, respectively, of marketing expense to an online
marketing and lead generation services company in which our President is a 50%
shareholder.
 
  Note 12 – Geographic
Information
  We
currently generate revenue exclusively from the sale of precious metals,
including gold, silver and platinum, and from the sale of diamonds and other
precious stones.  Our operations in each of our markets exhibit
similar financial performance metrics and have similar economic
characteristics.  As such, we have aggregated our operations around
the world into a single operating segment.
 21
 
  Money4Gold
Holdings, Inc. and Subsidiaries
 Notes
to Unaudited Interim Condensed Consolidated Financial Statements
 March
31, 2010
 Below is
a summary of our revenue and total assets by geographic region as of and for the
periods indicated:
  United States
                    
                    
                    Canada
                    
                    
                    Europe
                    
                    
                    ConsolidatedRevenue
      for the three months ended March 31, 2010
                    
                    $
                    8,046,582
                    
                    
                    $
                    4,481,401
                    
                    
                    $
                    4,744,150
                    
                    
                    $
                    17,272,133Total
      Assets at March 31, 2010
                    
                    
                    12,856,929
                    
                    
                    
                    433,319
                    
                    
                    
                    765,222
                    
                    
                    
                    14,055,470Revenue
      for the three months ended March 31, 2009
                    
                    $
                    1,012,389
                    
                    
                    
                    183,249
                    
                    
                    
                    —
                    
                    
                    $
                    1,195,638Total
      Assets at December 31, 2009
                    
                    
                    15,087,437
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    15,087,437
 
  Note 13 – Subsequent
Events
  We
evaluated subsequent events between the balance sheet date of March 31, 2010 and
May 14, 2010, which represents the date the unaudited interim condensed
consolidated financial statements were issued. There were no subsequent events
to report.
 
 22
  Item
2.  Management’s Discussion and Analysis of Financial Condition and Results
of Operations.
  The
following discussion and analysis should be read in conjunction with our
unaudited interim condensed consolidated financial statements and related notes
appearing elsewhere in this report on Form 10-Q. In addition to historical
information, this discussion and analysis contains forward-looking statements
that involve risks, uncertainties, and assumptions. Our actual results may
differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including but not limited to those set forth under
“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31,
2009, as filed with the United States Securities and Exchange Commission, or the
SEC.
  Management’s
discussion and analysis of financial condition and results of operations is
based upon our unaudited interim condensed consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these unaudited
interim condensed consolidated financial statements requires us to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues, and expenses, and related disclosure of contingent assets
and liabilities. On an ongoing basis, we evaluate our estimates and assumptions,
including, but not limited to, those related to revenue recognition, allowance
for doubtful accounts, income taxes, goodwill and other intangible assets, and
contingencies. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates and
assumptions.
  Company
Overview
  Overview
 
 Money4Gold
Holdings, Inc. (“Money4Gold” or the “Company”) is an emerging global leader in
direct-from-consumer, reverse logistics, currently specializing in the
procurement and aggregation of precious metals to be recycled.  We
utilize consumer oriented advertising efforts to solicit individuals interested
in liquidating unwanted items.  Through our global platform, we
facilitate an end-to-end consumer solution, from acquisition through
liquidation. We have a low cost, highly scalable and flexible business model
that allows us to quickly and efficiently adapt to entry into new markets,
changes in economic conditions, supply and demand levels and other similar
factors.
 
 Our focus
has been on providing a fast, secure and convenient service that enables the
public to discretely sell their precious metals from the comfort and security of
their home or office.  Our relationship with Republic Metals
Corporation (the “Refinery”), allows us to secure current market prices for all
of the precious metals we purchase on a daily basis. We are currently exploring
additional future expansion plans that include the introduction of similar
reverse logistics services for products other than precious metals.
 
 Our
corporate headquarters are located at 200 East Broward Blvd., Suite 1200 in Ft.
Lauderdale, Florida. Our phone number is (954) 915-1550 and our corporate
website can be found at www.money4gold.com.
  Corporate
History and Acquisitions
 
 We were
incorporated in Delaware on November 18, 2003. On July 23, 2008, we
acquired Money4Gold, Inc., an early stage precious metals company, and changed
our name to Money4Gold Holdings, Inc.  On May 7, 2009, we acquired MGE
Enterprises Corporation, a Wyoming corporation, or MGE, operating in the United
States under the names mygoldenvelope.com and sobredeoro.com. MGE brought
extensive experience in creating and growing businesses that provide shareholder
value in a broad array of industries, including direct response, Internet
marketing and national retail distribution and sales. MGE’s ability to reach a
broader number of consumers through their experience in multi-language
television advertising, direct response, and retail distribution and sales
greatly accelerated our growth and increased our depth of management
experience.
 
 23
  Diversification
Plans
  
 We are
exploring several alternatives to diversify our business beyond precious metals
by evaluating reverse logistics services for small consumer electronics and
similar related components.  In connection with these plans, on May 7,
2010, we entered into a letter of intent to acquire all of the stock of Office
Products Recycling Associates, Inc., or OPRA, a recycler of cell phones,
smart phones, inkjet printer cartridges and toners within the
business-to-business and direct-from-consumer markets.
 
 Recent
Trends
 
 Our
revenue during the third quarter 2009, the fourth quarter 2009 and the first
quarter of 2010 was $6.8 million, $19.6 million, and $17.3 million,
respectively.  For the first quarter of 2010, we experienced a
lower Media Efficiency Rate (as defined below as MER). As discussed in more
detail below under the Liquidity section, we believe this is a result of
seasonality, recent negative portrayal of our industry by the media, and an
under-performing advertising and marketing campaign aired during the first
quarter of 2010, mainly in our European markets.  In response to these
recent trends and developments, we are developing a replacement advertising and
marketing campaign, examining our expense structure in each of our markets, and
have slowed and/or temporarily suspended some projects while we re-evaluate our
implementation strategy for our future plans.
 
 Critical
Accounting Policies
  In
response to financial reporting release FR-60, Cautionary Advice Regarding
Disclosure About Critical Accounting Policies, from the SEC, we have
selected our more subjective accounting estimation processes for purposes of
explaining the methodology used in calculating the estimate, in addition to the
inherent uncertainties pertaining to the estimate and the possible effects on
the our financial condition. The accounting estimates are discussed below and
involve certain assumptions that, if incorrect, could have a material adverse
impact on our results of operations and financial condition. See Note 4 to
our unaudited interim condensed consolidated financial statements found
elsewhere in this report and Note 4 to our consolidated financial statements for
the year ended December 31, 2009 as filed with the SEC for further discussion
regarding our critical accounting policies and estimates.
 
 Goodwill
  Goodwill
is tested for impairment at the reporting unit level (operating segment or one
level below an operating segment) on an annual basis and between annual tests if
an event occurs or circumstances change that would more likely than not reduce
the fair value of a reporting unit below its carrying value. These events or
circumstances could include a significant change in the business climate, legal
factors, operating performance indicators, competition or sale or disposition of
a significant portion of a reporting unit. Application of the goodwill
impairment test requires judgment, including the identification of reporting
units, assignment of assets and liabilities to reporting units, assignment of
goodwill to reporting units, and determination of the fair value of each
reporting unit. The fair value of each reporting unit is estimated using a
discounted cash flow methodology. This requires significant judgments including
estimation of future cash flows, which is dependent on internal forecasts,
estimation of the long-term growth rate of our business, the useful life over
which cash flows will occur, and determination of our weighted average cost of
capital. Changes in these estimates and assumptions could materially affect the
determination of fair value and/or goodwill impairment charge for each reporting
unit.
 
  Common
Stock Purchase Warrants and Derivative Financial Instruments
  We review
any common stock purchase warrants and other freestanding derivative financial
instruments at each balance sheet date and classify them on our balance sheet
as:
  a)
              Equity
      if they (i) require physical settlement or net-share settlement, or
      (ii) gives us a choice of net-cash settlement or settlement in our
      own shares (physical settlement or net-share settlement), or
      as
  b)
              Assets
      or liabilities if they (i) require net-cash settlement (including a
      requirement to net cash settle the contract if an event occurs and if that
      event is outside our control), or (ii) give the counterparty a choice of
      net-cash settlement or settlement in shares (physical settlement or
      net-share settlement).
  24
  We assess
classification of our common stock purchase warrants and other freestanding
derivatives at each reporting date to determine whether a change in
classification between assets and liabilities is required.
 
  Revenue
Recognition
  We
generate revenue from the sale of precious metals, including gold, silver and
platinum, and from the sale of diamonds and other precious stones. Revenue
is recognized when all of the following conditions exist: (1) persuasive
evidence of an arrangement exists, (2) delivery has occurred, (3) the sales
price is fixed or determinable, and (4) collectability is reasonably
assured.
  Precious
Metals
  We grade
the quality of the precious metals purchased from the public and estimate the
total quantity of pure gold, silver and platinum received. We then
lock in the current spot rate of each metal sufficient to cover the total
quantity received in the current batch with the Refinery. After a holding
period of at least 10 days to allow for returns, the precious metals are
delivered to the Refinery to be melted. Upon melting the precious metals,
the Refinery validates the quality of pure gold, silver, and platinum and remits
the net payment to us based on the quantity of each precious metal at the agreed
upon spot rates, as described above. Revenue is recognized upon melting of
the precious metals and the validation of the quality and quantity of each
precious metal by the Refinery.
  No
returns are accepted from the Refinery and upon delivery of the precious metals
to the refiner, we have no further obligations.
  Diamonds
and Other Precious Stones
  Diamonds
and other precious stones are generally purchased from the public in connection
with the purchase of precious metals. We value diamonds and other precious
stones based on a variety of factors including size and quality and then resell
them. To date, all diamonds and other precious stones have been sold to an
affiliate of an officer of one of our wholly-owned subsidiaries. Revenue is
recognized upon the acceptance of the diamonds and other precious stones by the
purchaser.
  Deferred
Revenue
  Upon our
estimate of the total quantity of pure gold, silver, and platinum received and
the locking in of the current spot rate for each precious metal, we are able to
estimate the total value of the batch received. The Refinery advances to us, up
to 80% of the value of the precious metals we have received, but not yet
delivered. This amount is recorded as deferred revenue until the specific
batch is melted and processed as described above, at which time, it is recorded
as revenue.
 
  Share-Based
Payment Arrangements
  Generally,
all forms of share-based payments, including stock option grants, restricted
stock grants and stock appreciation rights are measured at their fair value on
the awards’ grant date, based on the estimated number of awards that are
ultimately expected to vest. Share-based compensation awards issued to
non-employees for services rendered are recorded at either the fair value of the
services rendered or the fair value of the share-based payment, whichever is
more readily determinable. The expense resulting from share-based payments are
recorded in cost of goods sold or general and administrative expense in the
unaudited interim condensed consolidated statement of operations, depending on
the nature of the services provided.
 
  Results
of Operations
  We
currently generate revenue exclusively from the sale of precious metals,
including gold, silver and platinum, and from the sale of
diamonds.  Our operations in each of our markets exhibit similar
financial performance metrics and have similar economic
characteristics.  As such, we have aggregated our operations around
the world into a single operating segment.
  25
  We
acquired MGE on May 7, 2009 using the purchase method of
accounting.  As such, the results of operations for MGE are only
included in our consolidated results of operations from that date
onward.  The pro forma results of operations as if the acquisition of
MGE had occurred as of January 1, 2009 can be found in Note 6 to the unaudited
interim condensed consolidated financial statements found elsewhere in this
report, however the comparison of the pro forma results are not meaningfully
different than the comparison of the actual results as presented
below.
 
  Results
for the Three Months Ended March 31, 2010 Compared to the Three Months
Ended March 31, 2009
  The
following table sets forth, for the periods indicated, results of operations
information from our unaudited interim condensed consolidated financial
statements:
 
 For
      the Three Months Ended March 31,
                      
                      
                      Change
                      
                      
                      Change2010
                      
                      
                      2009
                      
                      
                      (Dollars)
                      
                      
                      (Percentage)Revenue
                      
                      $
                      17,272,133
                      
                      
                      $
                      1,195,638
                      
                      
                      $
                      16,076,495
                      
                      
                      
                      1,345
                      %Cost
      of Revenue
                      
                      
                      6,335,660
                      
                      
                      
                      549,890
                      
                      
                      
                      5,785,770
                      
                      
                      
                      1,052
                      %Gross
      Profit
                      
                      
                      10,936,473
                      
                      
                      
                      645,748
                      
                      
                      
                      10,290,725
                      
                      
                      
                      1,594
                      %Sales
      and Marketing
                      
                      
                      10,723,204
                      
                      
                      
                      872,984
                      
                      
                      
                      9,850,220
                      
                      
                      
                      1,128
                      %General
      and Administrative
                      
                      
                      2,682,395
                      
                      
                      
                      1,100,012
                      
                      
                      
                      1,582,383
                      
                      
                      
                      144
                      %Operating
      Loss
                      
                      
                      (2,469,126
                      )
                      
                      
                      (1,327,248
                      )
                      
                      
                      (1,141,879
                      )
                      
                      
                      86
                      %Interest
      Income (Expense), net
                      
                      
                      -
                      
                      
                      
                      (27,284
                      )
                      
                      
                      27,284
                      
                      
                      
                      (100
                      %)Other
      Expense
                      
                      
                      (10,797
                      )
                      
                      
                      (1,160
                      )
                      
                      
                      (9,637
                      )
                      
                      
                      831
                      %Net
      Loss
                      
                      $
                      (2,479,923
                      )
                      
                      $
                      (1,355,692
                      )
                      
                      $
                      (1,124,231
                      )
                      
                      
                      83
                      %
 
 Our
revenue is largely dependent on the frequency and effectiveness of our direct
response advertising and marketing campaigns.  As such, advertising
and marketing expenditures represent our most significant costs, amounting to
62% and 73% of revenue for the three months ended March 31, 2010 and 2009,
respectively.  We manage our advertising and marketing campaigns, and
make allocation decisions, by measuring their effectiveness primarily based on
projected revenue earned as compared to the cost of the advertisement, referred
to as a Media Efficiency Rate, or MER.  There are a variety of factors
that impact the MER including:
  1.
              The
      number of leads generated from an
advertisement,
  2.
              The
      rate at which those leads convert into actual packs submitted by members
      of the public (the “Sellers”), and
  3.
              The
      average revenue generated from the packs
  received.
 
 Each of
these factors, and hence our MERs, vary by market and by the particular
advertising method utilized within each market.
  The
1,345% increase in revenue during the three months ended March 31, 2010, as
compared to the same period in 2009 was driven by a 1,128% increase in the
volume of advertising in 2010, as well as an increase in the overall
effectiveness of those advertisements, as evidenced by the faster rate of growth
in revenue as compared to advertising.  The experience brought by the
MGE management team enabled us to identify and capitalize on opportunities to
increase our MERs in our various markets during the three months ended March 31,
2010 as compared to the same period in 2009.  In addition, during
2010, we operated in several foreign markets in which we did not compete during
the three months ended March 31, 2009, where less competition allows for higher
MERs.  In each market, we were able to increase the number of leads
generated by a single advertisement and/or increase the conversion rate of the
leads into packs received back from Sellers either through better time slot
placement or via more effective advertising content.  As discussed in
more detail below in the Liquidity section, although MERs during the three
months ended March 31 were higher in 2010 than in 2009, it was lower than in the
fourth quarter of 2009.  Also contributing to the higher revenue was
the increase in the value of an ounce of gold which has increased our revenue
per ounce of gold received.
  26
  Direct
advertising and marketing costs are expensed as incurred, but generally
result in revenue being generated over the eight to twelve week period following
the airing of the advertisement.  As a result, advertising and
marketing investments made during the latter part of a financial period tend to
have a disproportionately negative impact on profitability within that period
and a disproportionately favorable impact on profitability in future
periods.  This impact is generally difficult to measure as the future
revenue is generated over extended periods of time and is contingent upon a
variety of factors, including factors beyond our control.
  Cost of
revenue increased to $6,335,660 during the three months ended March 31, 2010, as
compared to $549,890 during the same period in 2009. A significant portion of
this increase is proportional to the increase in our revenue. We generally pay
the Sellers a percentage of the market value of the gold we purchase from
them.  Therefore a portion of our cost of revenue is directly
correlated to our revenue, both on a volume and per unit basis. The other
components of our cost of revenue, such as the direct costs and expenses
required to ship, secure, grade, log and process the metals and stones
internally are not directly correlated to the price of gold and other precious
metals. As a result, although these costs have increased, our gross margin on
a percentage basis is higher for the three months ended March 31, 2010 as
compared to the same period in 2009 due to the increase in the value of an ounce
of gold and other precious metals.
  General
and administrative expenses include professional fees for technology
development, legal and accounting services as well as consulting and internal
personnel costs for our back office support functions. General and
administrative expenses increased to $2,682,395 during the three months ended
March 31, 2010, as compared to $1,100,012 during the same period of 2009. The
increase is primarily a result of investments in our infrastructure to support
our expansion into new markets including initial development of a new technology
platform and the addition of several staff and multiple consulting projects
aimed at properly managing the growth and expansion into new product offerings
and new geographic markets.  As discussed below under the Liquidity
section, based on recent trends and developments, we are examining our expense
structure in each of our markets and have slowed and/or temporarily suspended
some projects while we re-evaluate our implementation strategy for our future
plans.  In addition, in 2010 we incurred depreciation expense on the
assets acquired to support the infrastructure investments.
  Interest
expense, net of interest income, of $27,284 during the three months ended March
31, 2009 was primarily attributable to interest on our advances from the
Refinery and interest pertaining to the convertible note payable obtained on
March 4, 2009.
  Liquidity
and Capital Resources
  During
the three months ended March 31, 2010, we incurred a net loss of $2,479,923
(including $889,764 of non-cash charges) and generated $194,377 from our
operations primarily as a result of an increase in our accounts payable of
$1,098,295 and a decrease in our accounts receivable of $610,323. As of
March 31, 2010, we had a $9,751,996 accumulated deficit and working capital
deficit of $2,118,724.
  During
the three months ended March 31, 2010, our investing activities used net cash of
$159,476, to purchase fixed assets.
  As
discussed above, we utilize direct response advertising and marketing campaigns,
including television, radio, print and Internet to solicit precious metals
including gold, silver and platinum as well as diamonds from the public. These
advertising and marketing campaigns are our most significant use of cash from
operations. Payment policies for these campaigns vary by country and range from
standard 30 day payment terms to prepayments of up to one-month prior to the
advertisement running. Once the advertisements run, we receive requests for mail
order kits from potential Sellers, which they fill with the items they wish to
sell and send the kit to our processing facility. After payment to the Sellers
and holding the precious metals for a minimum period of time, we aggregate the
precious metals received at our local processing facilities and prepare them for
sale to the Refinery. The Refinery advances us 80% of the estimated value of the
precious metals received each week, at an interest rate of 8% per annum. Upon
physical receipt of the precious metals, up to three weeks later, the Refinery
evaluates them to ascertain the final definitive value. At that point, we settle
with the Refinery and they send us the additional amounts due.
  27
  Mail
order kits are generally received back from the Sellers over an eight to twelve
week period following the date of the advertisement. As such, we generally
realize the cash benefits resulting from our advertisements in the two to
fourteen weeks following the date on which an advertisement runs.
  Our
international operations were initiated by launching direct response advertising
and marketing campaigns in Canada in late 2008 and then in the United Kingdom in
early 2009.  During 2009 we have experienced rapid growth in these
markets and, as a result, increased our advertising and marketing levels in
those countries and continued expanding by commencing operations in several
other European countries during the second half of 2009 and the first quarter of
2010.
 
 Our
consolidated revenue for the third and fourth quarter of 2009 of $6.8 million
and $19.6 million, respectively, increased dramatically over the respective
prior quarters and the fourth quarter of 2009 was profitable.  Our
revenue during the first quarter of 2010 however, declined to $17.3 million and
we incurred a net loss of $2,479,923.  Because of our limited size in
the fourth quarter of 2008 and our rapid growth during 2009, we do not have
sufficient comparable history to determine the level of seasonality of our
business.  We believe that the first quarter 2010 revenue was lower
than fourth quarter 2009, in part as a result of the holiday season in December
2009, during which time our advertising and marketing campaigns appear to be
less effective.  Compounding the seasonal effects mentioned above
however, we believe that negative representation of our industry by multiple
media agencies in several of the markets in which we operate resulted in
pressure on our MER.  These negative portrayals may have reduced the
confidence the general public had in our industry in general.  Lastly,
we periodically revise and update our advertising and marketing campaigns to
replace certain aging commercials and keep our campaigns
fresh.  During the first quarter of 2010, we aired several new
commercials, mainly in our European markets.  These advertisements
were substantially less effective than campaigns we had run previously, and we
quickly reverted back to our prior campaigns.  We are currently
developing new advertisements to replace the aging campaigns presently on the
air. This process requires time to create a concept and bring it through
production however, and there can be no assurance that when these new
advertisements are completed and aired, that they will be
successful.
 
 As a
result of the lower MER, we expect that our revenue will be lower in the second
quarter of 2010 as compared to the first quarter of 2010, and possibly
beyond.  We have re-evaluated our advertising and marketing campaigns
in each of our markets and have scaled back our spending levels to focus on the
markets and campaigns that continue to generate MER levels above certain minimum
targets.  To minimize the impact of lower revenue on profitability and
cash flows, we are examining our expense structure in each of our markets and
have slowed and/or temporarily suspended some projects while we re-evaluate our
implementation strategy for our future plans.  Specifically, we are
deferring all or part of our executive salaries, assessing staffing levels based
on current volume, reviewing contracts with minimum thresholds pertaining to
existing services to ensure we are utilizing these services in an optimal
fashion, and reassessing timing of our expansion plans.
 
 Our
future expansion plans include the introduction of similar reverse logistics
services for products other than precious metals as a means of diversifying our
operations and minimizing the risks of having only one service
offering.  In connection with our future expansion plans, on May 7,
2010, we entered into a letter of intent to acquire all of the stock of OPRA, a
recycler of cell phones, smart phones, inkjet printer cartridges and toners
within the business-to-business and direct-from-consumer markets.  To
complete the acquisition of OPRA, we will need to raise additional cash and/or
issue additional shares of our stock which will be dilutive towards existing
shareholders.
  There can
be no assurance that we can improve our MER or that we will continue to be
successful with the execution of the first stages of our business plan, nor can
there be assurance that continued implementation of our existing plans will
generate profitability and positive cash flows in the future.  In
addition, our expansion plans into similar reverse logistics services for
products other than precious metals could require substantial amounts of capital
beyond our current capabilities.
  On March
31, 2010, we closed on a private placement transaction (the “March 2010 PP”)
whereby we sold 5,758,337 shares of our common stock at $0.20 per
share.  Gross proceeds from the sale amounted to $1,151,667, of which
$1,001,667 was received and was being held in escrow as of March 31, 2010 and
the remaining $150,000 was received during the first week of April
2010.  At March 31, 2010, we have recorded $1,001,667 as subscriptions
receivable on our unaudited condensed consolidated balance sheet representing
the sale of 5,008,335 shares of our common stock.  $1,151,667 was
released to us from escrow in April 2010.  The funds will be used for
working capital.  There were no material offering costs associated
with this transaction.
  28
  Included
in March 2010 PP was an investment of $50,000 by Doug Feirstein, our Chief
Executive Officer and an investment of $25,000 from Michael Moran, our Vice
President of Corporate Development.  In addition, as part of this
offering, Todd Oretsky, our former Chief Operating Officer, sold a number of
shares equal to the number of shares sold by us at $0.10 per share.
 
 We
do not yet have a sustained history of financial
stability. Historically our principal source of liquidity has been the
issuances of debt and equity securities, including preferred stock, common stock
and various debt financing transactions. We believe that the higher level
of revenue attained during the third and fourth quarters of 2009 and the first
quarter of 2010 is a result of the successful implementation of the first stages
of our business plan and that, if we can improve our returns on our media
investments, control our costs accordingly, and raise sufficient capital to
successfully acquire, integrate, and grow OPRA, continued implementation will
generate steadily improving results and cash flows in the future. In
addition, we are currently attempting to raise additional funds through the
issuance of debt and/or equity securities.
  Management
believes that our cash balance on May 10, 2010 of approximately $1.1 million,
current level of working capital, anticipated cash that will be received from
revenue generated from advertisements that have already aired, and additional
funds through the issuance of debt and/or equity securities will be sufficient
to sustain operations through at least March 31, 2011.
  There can
be no assurance that the plans and actions proposed by management will be
successful, that we will continue to generate revenue from advertisements that
have already aired, or that unforeseen circumstances will not require us to seek
additional funding sources in the future or effectuate plans to conserve
liquidity. In addition, there can be no assurance that our efforts to
raise additional funds through the issuance of debt and/or equity
securities will be successful or that in the event additional sources of funds
are needed to continue operations, that they will be available on acceptable
terms, if at all.
 
  Related
Party Transactions
  Refinery
  On
June 1, 2008, we entered into an agreement with Refinery, whereby we agreed
to sell all of our precious metals in the United States exclusively to the
Refinery and the Refinery agreed to refrain from entering into a relationship
with any third party that is similar to our relationship with them. The
agreement is for an initial term of five years. As consideration for this
agreement, the Refinery received 10,000,000 fully vested shares of our
common stock valued at $1,230,000. Of this amount, we ascribed $938,135 to
prepaid refining services, which is being amortized into cost of revenue on a
straight line basis over the term of the agreement, and we ascribed $291,865 to
an intangible asset, representing the value of the non-compete agreement, which
is being amortized into cost of revenue on a straight line basis over the term
of the agreement. In addition, we lease space for our United States processing
center on a month-to-month basis from the Refinery. An officer of the Refinery
is a member of our Board of Directors.
  Marketing
Services
  We
purchase online marketing and lead generation services from a company in which
our President is a 50% shareholder. Our pricing is calculated at a 10% markup to
their cost, capped at $1.50 per lead. This markup is exclusively for the
unrelated 50% shareholders. Our President does not share in any profits earned
by this vendor for services rendered to us.
 
  New
Accounting Pronouncements
  See Note
4 to our unaudited interim condensed consolidated financial statements included
in this report for a discussion of recent accounting
pronouncements.
  29
  Forward-Looking
Statements
  This
report contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 including our future expansion plans,
profitability and liquidity, anticipated capital expenditures, cash expected to
be received from advertisements that have already run, our expectations
regarding revenue, our belief regarding decreased revenues, our belief regarding
having sufficient cash and our belief regarding working
capital.  Forward-looking statements can be identified by words such
as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,”
“expects” and similar references to future periods.
 
 Forward-looking statements are based on
our current expectations and assumptions regarding our business, the economy and
other future conditions.  Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict.  Our actual results may differ
materially from those contemplated by the forward-looking statements.  We
caution you therefore against relying on any of these forward-looking
statements.  They are neither statements of historical fact nor guarantees
or assurances of future performance. Important factors that could cause actual
results to differ materially from those in the forward-looking statements
include the impact of competition, the future prices of gold and other precious
metals, future economic conditions, the condition of the global credit and
capital markets, our ability to sell additional debt and/or equity
securities, and the completion and integration of the OPRA
acquisition.
 
 Further information on our risk factors
is contained in our filings with the SEC, including our Form 10-K for the year
ended December 31, 2009.  Any forward-looking statement made by us in
this report speaks only as of the date on which it is made.  Factors
or events that could cause our actual results to differ may emerge from time to
time, and it is not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may be required
by law.
 
  Item
      3.
              Quantitative
      and Qualitative Disclosures About Market
Risk.
  Not
applicable to smaller reporting companies.
  Item
      4.
              Controls
      and Procedures.
  Not
applicable to smaller reporting companies.
  Item
      4T.
              Controls
      and Procedures
  Evaluation
of Disclosure Controls and Procedures
  Our
management carried out an evaluation with the participation of our Chief
Executive Officer and Chief Financial Officer, required by Rule 13a-15 of
the Securities Exchange Act of 1934 (the “Exchange Act”) of the effectiveness of
our disclosure controls and procedures as defined in Rule 13a-15(e) under the
Exchange Act.
 
 Based on
their evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were effective as of
the end of the period covered by this report to ensure that information required
to be disclosed by us in the reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified SEC rules and forms and is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required
disclosure.
  Changes
in Internal Controls Over Financial Reporting
  There
were no changes in our internal control over financial reporting as defined in
Rule 13a-15(f) under the Exchange Act that occurred during the period covered by
this report that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
  30
  PART
II – OTHER INFORMATION
  Item
      1.
              Legal
      Proceedings.
  From time
to time, we are periodically a party to or otherwise involved in legal
proceedings arising in the normal and ordinary course of business. As of the
date of this report, we are not aware of any proceeding, threatened or pending,
against us which, if determined adversely, would have a material effect on our
business, results of operations, cash flows or financial position.
  Item
      1A.
              Risk
      Factors.
  Not
applicable to smaller reporting companies.
  Item
      2.
              Unregistered
      Sales of Equity Securities and Use of
Proceeds.
  In
addition to those unregistered securities previously disclosed in reports filed
with the SEC, we have sold securities without registration under the Securities
Act of 1933 (the "Act"), as described below.
 
  Name
      or Class of Investor
                Date
      Sold
                No. of
      Securities
                ConsiderationSeries
      A Holder(1)
                January
      25, 2010
                3,000,000
      shares of common stock
                Conversion
      of Series A Preferred StockFinder(2)
                March
      5, 2010
                800,000 warrants
      exercisable at $0.50 per share
                Finder’s
      FeeConsultant(2)
                March
      5, 2010
                120,000
      shares of common stock
                Consulting
      servicesInvestor
      relations(2)
                March
      5, 2010
                250,000
      shares of common stock
                Settlement
      for cancelling agreementConsultant(2)
                March
      5, 2010
                50,000
      shares of common stock
                Consultant
      servicesRecruiter(2)
                March
      5, 2010
                48,750
      shares of common stock
                Recruiting
      servicesConsultant(2)
                March
      5, 2010
                28,150
      shares of common stock
                Consulting
      servicesInvestors(2)
                March
      31, 2010
                5,758,337
      shares of common stock
                Purchased
      the shares in a private placement at $0.20 per
  share
 
  
  Item
      3.
              Defaults
      Upon Senior Securities.
  None.
  Item
      4.
              (Removed
      and Reserved).
  
  Item
      5.
              Other
      Information.
  None.
  Item
      6.
              Exhibits.
  
 Exhibit
                                
                                
                                
                                Incorporated by Reference
                                
                                Filed or
                                  FurnishedNo.
                                
                                Exhibit Description
                                
                                Form
                                
                                Date
                                
                                Number
                                
                                Herewith2.1
                                
                                Share
      Exchange Agreement dated July 23, 2008 **
                                
                                8-K
                                
                                7/29/08
                                
                                2.12.2
                                
                                Share
      Exchange Agreement dated May 5, 2009 **
                                
                                10-Q
                                
                                8/19/09
                                
                                2.23.1
                                
                                Certificate
      of Incorporation
                                
                                10-QSB
                                
                                6/7/06
                                
                                3.I3.2
                                
                                Certificate
      of Amendment – Increase in Capital
                                
                                10-QSB
                                
                                6/7/06
                                
                                3.13.3
                                
                                Certificate
      of Amendment – Effective Profitable Software
                                
                                10-QSB
                                
                                6/7/06
                                
                                3.13.4
                                
                                Certificate
      of Amendment – Money4Gold Holdings, Inc.
                                
                                8-K
                                
                                7/29/08
                                
                                3.13.5
                                
                                Certificate
      of Amendment – Increase in Capital
                                
                                10-K
                                
                                3/31/10
                                
                                3.53.6
                                
                                Certificate
      of Correction
                                
                                10-Q
                                
                                11/19/08
                                
                                3.23.7
                                
                                Certificate
      of Amendment – Increase in Capital
                                
                                10-Q
                                
                                8/19/09
                                
                                3.33.8
                                
                                Amended
      and Restated Bylaws
                                
                                10-Q
                                
                                5/20/09
                                
                                3.310.1
                                
                                2008
      Equity Incentive Plan*
                                
                                10-Q
                                
                                5/20/09
                                
                                4.110.2
                                
                                Amendment
      to the 2008 Equity Incentive Plan *
                                
                                
                                
                                
                                
                                
                                
                                Filed10.3
                                
                                Form
      of Stock Purchase Agreement – 2010 Private Placement
                                
                                
                                
                                
                                
                                
                                
                                Filed10.4
                                
                                Form
      of Registration Rights Agreement – 2010 Private Placement
                                
                                
                                
                                
                                
                                
                                
                                Filed10.5
                                
                                Oretsky
      Severance, Consulting and Release Agreement *
                                
                                10-K
                                
                                3/31/10
                                
                                10.1431.1
                                
                                Certification
      of Principal Executive Officer (Section 302)
                                
                                
                                
                                
                                
                                
                                
                                Filed31.2
                                
                                Certification
      of Principal Financial Officer (Section 302)
                                
                                
                                
                                
                                
                                
                                
                                Filed32.1
                                
                                Certification
      of Principal Executive Officer and Principal Financial Officer
      (Section 906)
                                
                                
                                
                                
                                
                                
                                
                                Furnished
  31
  *
Management compensatory plan or arrangement
 
 **The
confidential disclosure schedules are not filed in accordance with SEC Staff
policy, but will be provided to the Staff upon request.  Certain
material agreements contain representations and warranties, which are qualified
by the following factors:
 
 (i)
              the
      representations and warranties contained in any agreements filed with this
      report were made for the purposes of allocating contractual risk between
      the parties and not as a means of establishing facts;(ii)
              the
      agreement may have different standards of materiality than standards of
      materiality under applicable securities laws;(iii)
              the
      representations are qualified by a confidential disclosure schedule that
      contains nonpublic information that is not material under applicable
      securities laws;(iv)
              facts
      may have changed since the date of the agreements; and(v)
              only
      parties to the agreements and specified third-party beneficiaries have a
      right to enforce the agreements.
 
 Notwithstanding
the above, any information contained in a schedule that would cause a reasonable
investor (or that a reasonable investor would consider important in making a
decision) to buy or sell our common stock has been included. We have been
further advised by our counsel that in all instances the standard of materiality
under the federal securities laws will determine whether or not information has
been omitted; in other words, any information that is not material under the
federal securities laws may be omitted. Furthermore, information which may have
a different standard of materiality will nonetheless be disclosed if material
under the federal securities laws.
 
 Copies of
this report (including the financial statements) and any of the exhibits
referred to above will be furnished at no cost to our shareholders who make a
written request to Money4Gold Holdings, Inc., 200 E. Broward Boulevard, Suite
1200, Fort Lauderdale, Florida 33301 Attention: Mr. Daniel Brauser.
 
 32
  SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
 
 MONEY4GOLD
      HOLDINGS, INCMay 14,
      2010
              
              /s/ Douglas
      FeirsteinDouglas
      FeirsteinChief
      Executive Officer
                (Principal
      Executive Officer)May 14,
      2010
              
              /s/ Daniel
      BrauserDaniel
      BrauserChief
      Financial Officer
                (Principal
      Financial Officer)
 
 33