UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended August 31, 2009



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

For the transition period from  to

Commission File No. 00-52720





GOLD BAG,
INC.

(Exact Name of Small Business Issuer as Specified in Its Charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 26-4205169                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|12830 Hillcrest Rd, Suite 111, Dallas, TX 75230-1547           |  | (972) 364-9096                      
|(Address of Principal Executive Offices)                       |  | (Issuers Telephone Number)         



(Former Name,
Former Address and Former Fiscal Year, if Changed Since Last Report)





Check whether the issuer
(1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting company |  | x

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS

DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes   ̈    No   ̈

The number
of shares outstanding of the Issuers Common Stock as of September 28, 2009 was 69,640,000.









---

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

In the opinion of management, the
accompanying unaudited financial statements included in this Form 10-Q reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented. The results of
operations for the periods presented are not necessarily indicative of the results to be expected for the full year.



|                                                                                                                                                                              |  |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -
|Unaudited Balance Sheet as of August 31, 2009 and Balance Sheet as of February 28, 2009                                                                                       |  | 3
|                                                                                                                                                                              | 
|Unaudited Statements of Operations for the three and six months ended August 31, 2009 and 2008 and for the period from December 
23, 2005 (inception) through August 31, 2009 |  | 4
|                                                                                                                                                                              | 
|Unaudited Statement of Stockholders Deficit for the period from December 23, 2005 (inception) through August 31, 2009                                                        |  | 5
|                                                                                                                                                                              | 
|Unaudited Statements of Cash Flows for the six months ended August 31, 2009 and 2008 and for the period from December 
23, 2005 (inception) through August 31, 2009           |  | 6
|                                                                                                                                                                              | 
|Notes to financial statements                                                                                                                                                 |  | 7



2



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GOLD BAG, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS



|                                                                                                           |  |                         |          |   |                  |   |          |  
|---------------------------------------------------------------------------------------------------------- |  | ----------------------- | -------- | - | ---------------- | - | -------- | -
|                                                                                                           |  | UnauditedAugust 31,2009 |          |   | February 28,2009 |  
|ASSETS                                                                                                     | 
|Current Assets:                                                                                            |  |                         |          |   |                  |   |          |  
|Cash                                                                                                       |  | $                       | 10,253   |   |                  | $ | 114,331  |  
|                                                                                                           |  |                         |          |   |                  |   |          |  
|Total current assets                                                                                       |  |                         | 10,253   |   |                  |   | 114,331  |  
|                                                                                                           |  |                         |          |   |                  |   |          |  
|                                                                                                           |  |                        
|Total assets                                                                                               |  | $                       | 10,253   |   |                  | $ | 114,331  |  
|                                                                                                           |  |                         |          |   |                  |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                       | 
|                                                                                                           |  |                        
|Current Liabilities:                                                                                       |  |                         |          |   |                  |   |          |  
|Accounts payable                                                                                           |  | $                       | 4,412    |   |                  | $ | 40,366   |  
|Accrued expenses                                                                                           |  |                         | 21,000   |   |                  |   | -        |  
|                                                                                                           |  |                         |          |   |                  |   |          |  
|                                                                                                           |  |                        
|Total current liabilities                                                                                  |  |                         | 25,412   |   |                  |   | 40,366   |  
|                                                                                                           |  |                         |          |   |                  |   |          |  
|                                                                                                           |  |                        
|Commitments and Contingencies                                                                              |  |                         |          |   |                  |   |          |  
|                                                                                                           |  |                        
|Stockholders Equity:                                                                                      |  |                         |          |   |                  |   |          |  
|Preferred stock - par value $0.00001; 100,000,000 shares authorized; no shares issued and outstanding      |  |                         | -        |   |                  |   | -        |  
|Common stock - par value $0.00001; 100,000,000 shares authorized; 69,640,000 shares issued and outstanding |  |                         | 696      |   |                  |   | 696      |  
|Additional paid-in capital                                                                                 |  |                         | 200,704  |   |                  |   | 200,704  |  
|Donated capital                                                                                            |  |                         | 17,559   |   |                  |   | 15,200   |  
|Deficit accumulated during development stage                                                               |  |                         | (234,118 | ) |                  |   | (142,635 | )
|                                                                                                           |  |                         |          |   |                  |   |          |  
|                                                                                                           |  |                        
|Total stockholders equity                                                                                 |  |                         | (15,159  | ) |                  |   | 73,965   |  
|                                                                                                           |  |                         |          |   |                  |   |          |  
|                                                                                                           |  |                        
|Total liabilities and stockholders equity                                                                 |  | $                       | 10,253   |   |                  | $ | 114,331  |  
|                                                                                                           |  |                         |          |   |                  |   |          |  



3



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GOLD BAG, INC.

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 2009 AND 2008 AND

FOR THE PERIOD FROM DECEMBER 23, 2005 (INCEPTION) THROUGH AUGUST 31, 2009



|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|--------------------------------------------- |  | ---------------------------- | ---------- | - | -------------------------- | - | ---------- | ------------------------------------ |  | - | ---------- | - |  | - | ---------- | - |  | - | -------- | -
|                                              |  | Three Months EndedAugust 31, |            |   | Six Months EndedAugust 31, |   |            | From InceptionthroughAugust 31, 2009 | 
|                                              |  | 2009                         |            |   | 2008                       |   |            | 2009                                 |  |   | 2008       |   | 
|Revenues                                      |  | $                            | -          |   |                            | $ | -          |                                      |  | $ | -          |   |  | $ | -          |   |  | $ | -        |  
|                                              |  |                              |            |   |                           
|Cost of revenues                              |  |                              | -          |   |                            |   | -          |                                      |  |   | -          |   |  |   | -          |   |  |   | -        |  
|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|                                              |  |                              |            |   |                           
|Gross profit                                  |  |                              | -          |   |                            |   | -          |                                      |  |   | -          |   |  |   | -          |   |  |   | -        |  
|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|                                              |  |                              |            |   |                           
|Operating expenses:                           |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|Sales and marketing                           |  |                              | 366        |   |                            |   | -          |                                      |  |   | 4,745      |   |  |   | -          |   |  |   | 4,745    |  
|General and administrative                    |  |                              | 35,448     |   |                            |   | 4,315      |                                      |  |   | 86,744     |   |  |   | 14,845     |   |  |   | 229,379  |  
|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|Total operating expenses                      |  |                              | 35,814     |   |                            |   | 4,315      |                                      |  |   | 91,489     |   |  |   | 14,845     |   |  |   | 234,124  |  
|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|                                              |  |                              |            |   |                           
|Operating loss                                |  |                              | (35,814    | ) |                            |   | (4,315     | )                                    |  |   | (91,489    | ) |  |   | (14,845    | ) |  |   | (234,124 | )
|                                              |  |                              |            |   |                           
|Interest income                               |  |                              | (1         | ) |                            |   | -          |                                      |  |   | (6         | ) |  |   | -          |   |  |   | (6       | )
|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|                                              |  |                              |            |   |                           
|Loss before taxes                             |  |                              | (35,813    | ) |                            |   | (4,315     | )                                    |  |   | (91,483    | ) |  |   | (14,845    | ) |  |   | (234,118 | )
|                                              |  |                              |            |   |                           
|Provision for income taxes                    |  |                              | -          |   |                            |   | -          |                                      |  |   | -          |   |  |   | -          |   |  |   | -        |  
|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|                                              |  |                              |            |   |                           
|Net loss                                      |  | $                            | (35,813    | ) |                            | $ | (4,315     | )                                    |  | $ | (91,483    | ) |  | $ | (14,845    | ) |  | $ | (234,118 | )
|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|                                              |  |                              |            |   |                           
|Loss per share, basic and diluted             |  | $                            | -          |   |                            | $ | -          |                                      |  | $ | -          |   |  | $ | -          |   |  |   |          |  
|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  
|                                              |  |                              |            |   |                           
|Weighted average number of shares outstanding |  |                              | 69,640,000 |   |                            |   | 69,640,000 |                                      |  |   | 69,640,000 |   |  |   | 69,640,000 |   |  |   |          |  
|                                              |  |                              |            |   |                            |   |            |                                      |  |   |            |   |  |   |            |   |  |   |          |  



4



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GOLD BAG, INC.

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED STATEMENT OF STOCKHOLDERS EQUITY

FOR PERIOD FROM DECEMBER 23, 2005 (INCEPTION) THROUGH AUGUST 31, 2009



|                                       |  |              |  |                          |     |                |   |                    |  |   |        |  |   |          |   |  |   |         |  
|-------------------------------------- |  | ------------ |  | ------------------------ | --- | -------------- | - | ------------------ |  | - | ------ |  | - | -------- | - |  | - | ------- | -
|                                       |  | Common Stock |  | AdditionalPaid InCapital |     | DonatedCapital |   | AccumulatedDeficit |  |   | Total  | 
|                                       |  | Shares       |  | Amount                   |     |                |   |                   
|                                       |  |              |  |                          |     |               
|Balance, December 23, 2005 (inception) |  | -            |  | $                        | -   |                | $ | -                  |  | $ | -      |  | $ | -        |   |  | $ | -       |  
|                                       |  |              |  |                          |     |               
|Donated services and rent              |  | -            |  |                          | -   |                |   | -                  |  |   | 800    |  |   | -        |   |  |   | 800     |  
|Shares issued in private placement     |  | 50,000,000   |  |                          | 500 |                |   | 4,500              |  |   | -      |  |   | -        |   |  |   | 5,000   |  
|Net loss                               |  | -            |  |                          | -   |                |   | -                  |  |   | -      |  |   | (17,235  | ) |  |   | (17,235 | )
|                                       |  |              |  |                          |     |                |   |                    |  |   |        |  |   |          |   |  |   |         |  
|Balance, February 28, 2006             |  | 50,000,000   |  |                          | 500 |                |   | 4,500              |  |   | 800    |  |   | (17,235  | ) |  |   | (11,435 | )
|                                       |  |              |  |                          |     |               
|Donated services and rent              |  | -            |  |                          | -   |                |   | -                  |  |   | 4,800  |  |   | -        |   |  |   | 4,800   |  
|Shares issued in private placement     |  | 19,640,000   |  |                          | 196 |                |   | 196,204            |  |   | -      |  |   | -        |   |  |   | 196,400 |  
|Net loss                               |  | -            |  |                          | -   |                |   | -                  |  |   | -      |  |   | (34,943  | ) |  |   | (34,943 | )
|                                       |  |              |  |                          |     |                |   |                    |  |   |        |  |   |          |   |  |   |         |  
|Balance, February 28, 2007             |  | 69,640,000   |  |                          | 696 |                |   | 200,704            |  |   | 5,600  |  |   | (52,178  | ) |  |   | 154,822 |  
|                                       |  |              |  |                          |     |               
|Donated services and rent              |  | -            |  |                          | -   |                |   | -                  |  |   | 4,800  |  |   | -        |   |  |   | 4,800   |  
|Net loss                               |  | -            |  |                          | -   |                |   | -                  |  |   | -      |  |   | (24,965  | ) |  |   | (24,965 | )
|                                       |  |              |  |                          |     |                |   |                    |  |   |        |  |   |          |   |  |   |         |  
|Balance, February 29, 2008             |  | 69,640,000   |  |                          | 696 |                |   | 200,704            |  |   | 10,400 |  |   | (77,143  | ) |  |   | 134,657 |  
|                                       |  |              |  |                          |     |               
|Donated services and rent              |  | -            |  |                          | -   |                |   | -                  |  |   | 4,800  |  |   | -        |   |  |   | 4,800   |  
|Net loss                               |  | -            |  |                          | -   |                |   | -                  |  |   | -      |  |   | (65,492  | ) |  |   | (65,492 | )
|                                       |  |              |  |                          |     |                |   |                    |  |   |        |  |   |          |   |  |   |         |  
|Balance, February 28, 2009             |  | 69,640,000   |  |                          | 696 |                |   | 200,704            |  |   | 15,200 |  |   | (142,635 | ) |  |   | 73,965  |  
|                                       |  |              |  |                          |     |               
|Donated services and rent              |  | -            |  |                          | -   |                |   | -                  |  |   | 2,359  |  |   | -        |   |  |   | 2,359   |  
|Net loss                               |  | -            |  |                          | -   |                |   | -                  |  |   | -      |  |   | (91,483  | ) |  |   | (91,483 | )
|                                       |  |              |  |                          |     |                |   |                    |  |   |        |  |   |          |   |  |   |         |  
|Balance, August 31, 2009               |  | 69,640,000   |  | $                        | 696 |                | $ | 200,704            |  | $ | 17,559 |  | $ | (234,118 | ) |  | $ | (15,159 | )
|                                       |  |              |  |                          |     |                |   |                    |  |   |        |  |   |          |   |  |   |         |  



5



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GOLD BAG, INC.

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED STATEMENTS OF CASH FLOWS

FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 2009 AND 2008 AND

FOR THE PERIOD FROM DECEMBER 23, 2005 (INCEPTION) THROUGH AUGUST 31, 2009



|                                                                               |  |                            |          |   |                                   |   |         |   |  |   |          |  
|------------------------------------------------------------------------------ |  | -------------------------- | -------- | - | --------------------------------- | - | ------- | - |  | - | -------- | -
|                                                                               |  | Six Months EndedAugust 31, |          |   | From InceptionthroughMay 31, 2009 |  
|                                                                               |  | 2009                       |          |   | 2008                              |   |        
|CASH FLOWS FROM OPERATING ACTIVITIES                                           |  |                            |          |   |                                   |   |         |   |  |   |          |  
|Net loss                                                                       |  | $                          | (91,483  | ) |                                   | $ | (14,845 | ) |  | $ | (234,118 | )
|Adjustments to reconcile net loss to net cash flows from operating activities: |  |                            |          |   |                                   |   |         |   |  |   |          |  
|Donated services and rent                                                      |  |                            | 2,359    |   |                                   |   | 2,400   |   |  |   | 17,559   |  
|Decrease in accounts payable                                                   |  |                            | (35,954  | ) |                                   |   | (1,890  | ) |  |   | 4,412    |  
|Increase in accrued expenses                                                   |  |                            | 21,000   |   |                                   |   | -       |   |  |   | 21,000   |  
|                                                                               |  |                            |          |   |                                   |   |         |   |  |   |          |  
|                                                                               |  |                            |         
|Net cash flows used in operating activities                                    |  |                            | (104,078 | ) |                                   |   | (14,335 | ) |  |   | (191,147 | )
|                                                                               |  |                            |          |   |                                   |   |         |   |  |   |          |  
|                                                                               |  |                            |         
|CASH FLOWS FROM FINANCING ACTIVITIES                                           |  |                            |          |   |                                   |   |         |   |  |   |          |  
|Proceeds from sale of common stock                                             |  |                            | -        |   |                                   |   | -       |   |  |   | 201,400  |  
|                                                                               |  |                            |          |   |                                   |   |         |   |  |   |          |  
|                                                                               |  |                            |         
|Net cash flows provided by financing activities                                |  |                            | -        |   |                                   |   | -       |   |  |   | 201,400  |  
|                                                                               |  |                            |          |   |                                   |   |         |   |  |   |          |  
|                                                                               |  |                            |         
|Decrease in cash                                                               |  |                            | (104,078 | ) |                                   |   | (14,335 | ) |  |   | 10,253   |  
|Cash, beginning of period                                                      |  |                            | 114,331  |   |                                   |   | 156,547 |   |  |   | -        |  
|                                                                               |  |                            |          |   |                                   |   |         |   |  |   |          |  
|Cash, end of period                                                            |  | $                          | 10,253   |   |                                   | $ | 142,212 |   |  | $ | 10,253   |  
|                                                                               |  |                            |          |   |                                   |   |         |   |  |   |          |  
|                                                                              
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                             | 
|                                                                               |  |                            |         
|Interest paid                                                                  |  | $                          | -        |   |                                   | $ | -       |   |  | $ | -        |  
|                                                                               |  |                            |          |   |                                   |   |         |   |  |   |          |  
|                                                                               |  |                            |         
|Income taxes paid                                                              |  | $                          | -        |   |                                   | $ | -       |   |  | $ | -        |  
|                                                                               |  |                            |          |   |                                   |   |         |   |  |   |          |  



6



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GOLD BAG, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1  BASIS OF PRESENTATION

The accompanying unaudited financial statements of Gold Bag, Inc., a Nevada corporation (the Company) have been
prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X for the three and six month periods ended August 31,
2009 and 2008 and reflect, in the opinion of management, all adjustments which are of a normal and recurring nature necessary for a fair presentation of the results for such periods. The foregoing financial statements do not include all information
and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to
financial statements for the year ended February 28, 2009 included in the Companys Form 10-K filed with the Securities and Exchange Commission on May 29, 2009. The interim unaudited financial statements should be read in conjunction
with the annual financial statements and accompanying notes. Operating results for the six months ended August 31, 2009 are not necessarily indicative of the results that may be expected for the year ending February 28, 2010.

NOTE 2  GOING CONCERN

The Company has been a development stage company and has incurred net operating losses of $234,118 since inception (December 23, 2005). The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern, which is dependent upon the Companys ability to establish itself as a profitable
business. Due to the start-up nature of the Companys business, the Company expects to incur losses as it expands. To date, the Companys cash flow requirements have been primarily met by debt and equity financings. The Company has raised
additional funds through a private equity investment in order to begin its business operations, but there is no assurance that such additional funds will be available for the Company to finance its operations should the Company be unable to realize
profitable operations. The financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.

NOTE 3  COMMITMENTS AND CONTINGENCIES

The Company entered into to a lease on February 8, 2009 for office space located at 12830 Hillcrest Rd., Suite 111, Dallas, Texas 75230-1547 for $525 per month. The initial term of the lease is for a
six-month period expired on August 31, 2009. The lease contains provisions to extend or terminate with a written 30-day notice. The parties mutually agreed to verbally extend the lease on a month to month basis.

We have a compensation agreement with Lance Ayers, our sole officer, under which he will receive a monthly salary of $7,000 to serve as
Chief Executive Officer for a nine-month period beginning January 19, 2009, after which his compensation arrangement will change to 10% of the Companys monthly gross revenue. The latter compensation will continue indefinitely at the
discretion of the Companys Board of Directors.



7



---

NOTES TO FINANCIAL STATEMENTS (Continued)



NOTE 4  SUBSEQUENT EVENTS

On September 21, 2009, the sole member of the Companys Board of Directors voted to approve an increase in the Companys
authorized shares of Common Stock from 100,000,000 shares to 250,000,000 shares, par value $0.00001. The Company filed a Schedule 14C Preliminary Information Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934 for the
purpose of giving notice to all shareholders that on or about October 22, 2009, in lieu of holding a special meeting of the Companys shareholders, the majority shareholder of the Company planned to vote to approve the increase in the
Companys authorized shares of Common Stock. Only the shareholders of record as of September 21, 2009 were entitled to receive notice.

(Remainder of page intentionally left blank.)



8



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

General

The following discussion and analysis provides information which management of the Company believes to be relevant to an assessment and understanding of the Companys results of operations and financial condition. This discussion
should be read together with the Companys financial statements and the notes to the financial statements, which are included in this report. This information should also be read in conjunction with the information contained in our Form 10-K
filed with the Securities and Exchange Commission (SEC) on May 29, 2009, including the audited financial statements and notes included therein. The reported results will not necessarily reflect future results of operations or
financial condition.

Caution Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors
could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this report. Forward-looking statements are often identified by words like believe, expect,
estimate, anticipate, intend, project and similar words or expressions that, by their nature, refer to future events.

In some cases, you can also identify forward-looking statements by terminology such as may, will, should, plans, predicts,
potential, or continue, or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual
results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, or achievements. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could
cause actual results to differ materially from historical results or our predictions. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements in an
effort to conform these statements to actual results.

Overview

Gold Bag, Inc. (the Company) was formed as a Nevada corporation on December 23, 2005 under the name Real Estate Referral
Center, Inc. to cater to the inexperienced buyer or seller of residential real estate who did not have a pre-existing established relationship with a realtor. The business plan called for us to locate a realtor for the client with the realtor paying
us a fee for that service. The Company was unsuccessful in developing this business plan.

In April 2009, we moved our
operations and changed our corporate address to 12830 Hillcrest Road, Suite 111, Dallas, TX 75230-1547. Simultaneously, Lance Ayers, the sole member of the Companys Board of Directors and majority shareholder, approved our new business
operations and changed our name to Gold Bag, Inc. to reflect our new business to purchase unwanted gold coins or



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broken jewelry, or other items containing precious metals, from the general public at a scrap value price. The precious metals will then be sold to a refinery where the items will be melted down
into pure form and sold at market price.

Also at the time of the name change to Gold Bag, Inc., we affected a forward stock
split on a 10:1 basis in order to establish a more liquid public market for our shares to trade (the Forward Split). Based upon 6,964,000 shares of Common Stock issued and outstanding on May 22, 2009, the Record Date used to
determine shareholders eligible to receive shares under the Forward Split, this action increased the outstanding shares of Common Stock by 900% bringing the total shares issued and outstanding after the Forward Split to 69,640,000. The Pay Date of
the Forward Split shares was May 29, 2009. At the open of the market on June 1, 2009, the Companys Common Stock began trading under its new symbol GBGI.

We are a development stage company. Our principal business activities will be (i) creating our website where customers can request an
informational packet to send us their unwanted items, (ii) identifying and entering into an agreement with a refinery; and (iii) promoting our Company through advertisements over the Internet, radio and television.

With the exception of funds raised in June 2006 [the SEC declared our Form SB-2 Registration Statement effective through which we sold
1,964,000 (19,640,000 post-Forward split) shares of our Common Stock at $0.10 per share raising $196,400], we are a company without revenues or operations; we have minimal assets and have incurred losses since inception. Our auditors have issued a
going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business operation for the next 12 months. Our ability to achieve and maintain profitability and positive cash flow is dependent upon (i) our
ability to attract customers who want to sell their unwanted coins or broken jewelry, (ii) the price at which we purchase the items, (iii) our ability to have the metals refined into a pure form, and (iv) our ability to sell the pure
form metals to a refinery or third party for a profit. We expect to generate revenues from the sale of the refined metals to a third party. The attached financial statements do not include any adjustments that might result from the uncertainty about
our ability to continue in business. As such, we may have to cease operations and investors may lose their investment.

We
developed our website, network infrastructure, and transaction processing system which are currently in the testing phase. Our website (www.goldbag.com) is not yet live. We intend to immediately initiate database and website testing
procedures to confirm quality control. We have secured three thousand mailers which include the outbound mailing envelope and the pre-printed, pre-paid return envelope. Our return pre-paid mailers have been inspected and approved by the U.S. Postal
Service. We have selected our primary preferred refinery. We are seeking to negotiate an agreement with the refinery and retain a third-party service provider to maintain our database. We expect to complete our testing procedures and finalize an
agreement with the refinery by December 31, 2009.

Liquidity

On December 27, 2005, the Company sold 5,000,000 (50,000,000 post-Forward split) shares of its Common Stock at $0.001 per share to its
officers for proceeds of $5,000.

On June 21, 2006, the SEC declared our Form SB-2 Registration Statement effective
through which we offered up to 2,000,000 (20,000,000 post-Forward split) shares of our Common Stock at $0.10 per share (the Offering). No underwriter was involved in the Offering. On July 31, 2006, we closed the Offering in which we
raised $196,400 by selling 1,964,000 (19,640,000 post-Forward split) shares of Common Stock to 55 individuals.



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Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Financial Statements and the related notes. This discussion contains
forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Our actual results and the timing of certain events could differ materially from those
anticipated in these forward-looking statements as a result of certain factors, including those set forth under Risks Relating to Our Business, contained in our Form 10-K filed with the SEC on May 29, 2009 and elsewhere in this
document. See Caution Regarding Forward-Looking Statements.

Material Changes in Financial Condition and Results of Operations

As of August 31, 2009, the Companys cash assets were $10,253, a decrease of $104,078 from February 28,
2009. Total liabilities decreased $14,954 from $40,366 at February 28, 2009 to $25,412 at August 31, 2009.

Comparison of Three
Month Periods Ended August 31, 2009 and 2008

No revenues were recorded during the three months ended August 31,
2009 and 2008. Operating expenses during the three months ended August 31, 2009 and 2008 were comprised of general and administrative expenses and sales and marketing expenses. Total general and administrative expenses of $35,448 for the three
months ended August 31, 2009 increased by $31,133 or 722% over the same period in 2008. Sales and marketing expenses totaling $366 were incurred during the three months ended August 31, 2009. These increases are attributed to costs
associated with increased activity related to the Companys business.

Comparison of Six Month Periods Ended August 31, 2009 and
2008

No revenues were recorded during the six months ended August 31, 2009 and 2008. Operating expenses during the
six months ended August 31, 2009 and 2008 were comprised of general and administrative expenses and sales and marketing expenses. Total general and administrative expenses of $86,744 for the six months ended August 31, 2009 increased by
$71,899 or 484% over the same period in 2008. Sales and marketing expenses totaling $4,745 were incurred for the six months ended August 31, 2009. These increases are attributed to costs associated with increased activity related to the
Companys business.

Off-Balance Sheet Arrangements

None.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and as such, is not required to provide the
information required under this item.



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Item 4. Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are
designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 (the Exchange Act) is recorded, processed, summarized and reported, within the time period specified
in the SECs rules and forms and is accumulated and communicated to Mr. Ayers, as appropriate, in order to allow timely decisions in connection with required disclosure.

Evaluation of Disclosure Controls and Procedures

Mr. Ayers is the
sole officer, director and employee of the Company. He has evaluated the effectiveness of the design and operation of our Companys disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act)
as of the end of the period covered by this quarterly report. Based on such evaluation, he concluded that the Companys disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. During the most recently completed
six month period ending August 31, 2009, there has been no significant change in the Companys internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting.

Changes in Internal Controls

During the six months ended August 31, 2009, there were no significant changes in internal controls of the Company, or other
factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Submission
of Matters to a Vote of Security Holders.

None.



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Item 5. Other Information.

On September 21, 2009, the sole member of the Companys Board of Directors voted to approve an increase in the Companys
authorized shares of Common Stock from 100,000,000 shares to 250,000,000 shares, par value $0.00001. The Company filed a Schedule 14C Preliminary Information Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934 for the
purpose of giving notice to all shareholders that on or about October 22, 2009, in lieu of holding a special meeting of the Companys shareholders, the majority shareholder of the Company planned to vote to approve the increase in the
Companys authorized shares of Common Stock. Only the shareholders of record as of September 21, 2009 were entitled to receive notice.

The sole member of the Companys Board of Directors is also the Companys largest shareholder with voting authority for 45,000,000 shares of Common Stock. These shareholdings represent
approximately 64.62% of the total outstanding votes of all issued and outstanding Common Stock of the Company and are sufficient to take the proposed actions on or about October 22, 2009. Dissenting shareholders do not have any statutory
appraisal rights because of the action taken. The sole member of the Companys Board of Directors and the majority shareholder has indicated that he will execute a written consent in favor of the proposed actions on behalf of the shares of the
Company that he owns and for which he has voting authority. The sole member of the Board of Directors does not intend to solicit any proxies or consents from any other shareholders in connection with this action.

Item 6. Exhibits.



|           |  |                 |  |                                                                                                                                          
|---------- |  | --------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNo. |  | Date            |  | Description                                                                                                                              
|3.1        |  | n/a             |  | Articles of Incorporation(1)                                                                                                             
|3.2        |  | n/a             |  | Bylaws(1)                                                                                                                                
|31.1       |  | October 6, 2009 |  | Certification of Chief Executive Officer and Principal Financial Officer of Periodic Report pursuant to Rule 13a-14a and Rule 14d-14(a).*
|32.1       |  | October 6, 2009 |  | Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350.*                            



|(1) | Filed as an exhibit to Form SB-2 filed with the SEC on June 2, 2006.
|--- | --------------------------------------------------------------------

|* | Filed herewith.
|- | ---------------



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

DATE: October 6, 2009



GOLD BAG, INC.By:

/S/    LANCE
AYERSLance Ayers, President, Chief Executive Officer, and Principal Financial Officer




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