American Clean Resources Group, Inc. - Annual Report: 2012 (Form 10-K)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Year Ended December 31, 2012

Commission File Number: 000-14319

STANDARD GOLD HOLDINGS, INC.

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

611 Walnut Street, Gadsden, Alabama 35901

(Address of Principal Executive Offices)

Issuer’s telephone number including area code: (888) 960-7347

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

Securities registered under Section 12(g) of the Exchange Act:

COMMON STOCK, $0.001 PAR VALUE

Title of Class

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

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

Indicate by check mark whether the issuer (1) has 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 (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K x.

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. (Check one):

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

The Registrant’s revenues for its most recent fiscal year: None.

As of June 30, 2012, the Registrant’s non-affiliates owned shares of its common stock having an aggregate market value of approximately $8,983,751 (based upon the closing sales price of the Registrant’s common stock on that date on the OTCQB).

On April 11, 2013 there were 56,406,318 shares of common stock issued and outstanding, which is the Registrant’s only class of voting stock.

Documents Incorporated by Reference: None.

STANDARD GOLD HOLDINGS, INC.

Annual Report on Form 10-K

For the Year Ended December 31, 2012

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains both historical statements and statements that are forward-looking in nature. Historical statements are based on events that have already happened. Certain of these historical events provide some basis to our management, with which assumptions are made relating to events that are reasonably expected to happen in the future. Management also relies on information and assumptions provided by certain third party operators of our projects as well as assumptions made with the information currently available to predict future events. These future event predictions, or forward-looking statements, include (but are not limited to) statements related to the uncertainty of the quantity or quality of probable ore reserves or tailings grades, the fluctuations in the market price of such reserves, as well as gold, silver and other precious minerals derived from our tailings, general trends in our operations or financial results, plans, expectations, estimates and beliefs. You can identify forward-looking statements by terminology such as “may,” “could,” “should,” “anticipate,” “believe,” “estimate,” “continue,” “expect,” “intend,” “plan,” “predict,” “potential” and similar expressions and their variants. These forward-looking statements reflect our judgment as of the date of this Annual Report with respect to future events, the outcome of which is subject to risks, which may have a significant impact on our business, operating results and/or financial condition. Readers are cautioned that these forward-looking statements are inherently uncertain. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein. We undertake no obligation to update forward-looking statements. The risks identified in PART I Item 1A, among others, may impact forward-looking statements contained in this Annual Report.

ITEM 1. DESCRIPTION OF BUSINESS

OVERVIEW

Standard Gold Holdings, Inc. (“we,” “us,” “our,” “Standard Gold,” “Corporation,” or the “Company”) is an exploration stage company with offices in Gadsden, Alabama.

Standard Gold Holdings, Inc. (formerly known as Standard Gold, Inc.) was incorporated in the State of Colorado on July 10, 1985. On September 29, 2009, we completed a share exchange agreement with Hunter Bates Mining Corporation, a Minnesota corporation (“Hunter Bates”) and certain of its shareholders, in which Hunter Bates’ shareholders exchanged all of their capital securities into similar capital securities of ours (the “Hunter Bates Share Exchange”) and we adopted the business model of Hunter Bates of minerals exploration and mining. Accordingly, the Hunter Bates Share Exchange represented a change in control and Hunter Bates became a wholly owned subsidiary of Standard Gold.

Prior to September 29, 2009, Wits Basin Precious Minerals Inc., a Minnesota corporation and public reporting company quoted on the Pink Sheets under the symbol “WITM” (“Wits Basin”) was the majority shareholder of Hunter Bates. Hunter Bates was formed in April 2008 to acquire the prior producing gold mine properties (consisting of land, buildings, equipment, mining claims and permits) located in Central City, Colorado, known as the “Bates-Hunter Mine.” On April 29, 2011 we transferred our entire interest and related debt of the Bates-Hunter Mine, to Wits Basin in exchange for the cancellation of a promissory note issued by Hunter Bates payable in favor of Wits Basin in the approximate amount of $2.5 million.

On March 15, 2011, we closed a series of transactions, whereby we acquired certain assets of Shea Mining & Milling, LLC (“Shea Mining”), which assets include land, buildings, a dormant milling facility, abandoned milling equipment, water permits, mine tailings, mine dumps and the assignment of a note payable, a lease and a contract agreement with permits. We completed the Shea Exchange Agreement to acquire the Shea assets and develop a custom permitted processing toll milling services business of precious minerals. Toll milling is a process whereby mined material is crushed and ground into fine particles to ease the extraction of any precious minerals contained therein, such as gold, silver, lead, zinc and copper, and rare earth metals. Custom milling and refining can include many different processes to extract precious metals from carbon or concentrates. These toll-processing services also distill, dry, mix, or mill chemicals and bulk materials on a contractual basis and provide a chemical production outsourcing option for industrial companies, which lack the expertise, capacity, or regulatory permits for in-house production.

We have had initial discussions with the Nevada Department of Natural Resources (“NDEP”) regarding application for the permits necessary to conduct custom permitted processing toll milling activities and construction of the required additional buildings to commence operations. Before formal application for the permits, NDEP suggested that we take the following actions: (i) retain a Nevada Certified Environmental Manager (“CEM”) to perform a site characterization on the tailings and test for the potential release of pollutants, (ii) perform site characterizations on “once through” and “twice through” tailings and test for potential release of pollutants and acid generation potential, (iii) perform Meteoric Profile II water testing on ground water directly below the mill as well as surrounding wells located off site, and (iv) determine baseline values of water contamination using the Meteoric Profile II results. NDEP requested that the Company delay any new construction planned for “metal extraction” until after the permits are in place. We have also hired Allstate-Nevada Environmental Management, Inc., to assist us with obtaining an NDEP Water Pollution Control Permit (WPCP) and to help us fulfill all the requirements of NDEP including the site characterization and Meteoric Profile II analysis, as well as advise on the overall site cleanup and assisting with any other NDEP requirements.

In March 2013, we completed surveys and testing of the Tonopah property required for the application of our required permits. After completion of the survey, it was determined the property is 1186 acres. We retained Advanced Surveying & Professional Services as our Professional Land Surveyor (“PLS”) on February 5, 2013. The scope of work our PLS completed includes: (i) setting a total of Nineteen (19) permanent monuments at angle points along lines, (ii) setting Eight (8) permanent monuments locating US Hwy 95, (iii) recording a professional map indicating longitude and latitude for all corners, and (iv) providing a digital map accessible in AutoCad software.

Upon funding, our business plan is to purchase equipment and build out a facility to serve as a custom permitted processing toll milling facility (which includes an analytical lab, pyrometallugircal plant, and hydrometallurgical recovery plant) located in Tonopah, Nevada and potentially conduct National Instrument 43-101 studies at Tonopah and Manhattan. The Tonopah, Nevada facilities, if completed, would also serve as a custom permitted processing toll milling facility for any future mining properties we could develop or form a joint venture with.

On December 10, 2012, the Company filed Two (2) Statements of Correction with the state of Colorado correcting the Second Amended and Restated Articles that had been incorrectly amended in part on March 15, 2011 and in full on March 25, 2011. After the correct Articles of Incorporation were reinstated by the Statements of Correction, the Company filed Articles of Amendment with the state of Colorado on January 4, 2013 to correct and define the Series A Preferred Stock once all board approval and documentation were complete. The Series A Preferred Stock has a liquidation preference of Ten Million Dollars ($10,000,000), payable only upon certain liquidity events or upon achievement of a market value of our equity equaling Two Hundred Million Dollars ($200,000,000) or more. Additional details regarding the Series A Preferred Stock can be found in our Articles of Amendment, which were filed with the Colorado Secretary of State on January 4, 2013 and in the Form 8-K filed with the Commission on March 13, 2013.

The Company moved its domicile from Colorado to Nevada. Due to the similarity of the name of another Nevada corporation, the Company had to change its name from Standard Gold, Inc. to Standard Gold Holdings. Inc. The domiciliation and name change were effective on March 5, 2013. We determined that, due to a lack of connection to Colorado, it was in the best interest of the Company to move its domicile to Nevada.

TOLL MILLING AND THE SHEA EXCHANGE AGREEMENT

On March 15, 2011, in an effort to enter the precious metal toll milling business, we entered into an exchange agreement by and between us, Shea Mining, Afignis, LLC, Leslie Lucas Partners, LLC, Wits Basin and Alfred A. Rapetti (the “Shea Exchange Agreement”) whereby we acquired certain assets from Shea Mining, which assets include those located in Tonopah, Nevada (financed through a note payable assigned to us), mine dumps, a property lease and a contract agreement in exchange for 35,000,000 shares of our unregistered shares. The Shea Exchange Agreement did not include any operable toll milling equipment, employees or operational processes and therefore has been accounted for as a purchase of a group of assets. We have done initial internal metallurgical testing on some of the source materials at Tonopah, but have not done comprehensive metallurgical testing on all of them.

Pursuant to the assignment of a note payable, we executed an Assignment and Assumption of Loan Documents and Loan Modification Agreement, by and between us, Shea Mining and NJB Mining, Inc. (the “Loan Modification Agreement”), dated March 15, 2011, for those assets located in Tonopah, Nevada (“Tonopah”), consisting of land, buildings, mining tailings, a dormant milling facility, abandoned milling equipment and water permits. The land encompasses 1,174 deeded acres, one of the largest private land holdings in Esmeralda County, Nevada. Approximately 334 acres of this land has sitting on it an estimated 2.2 million tons of tailings known as the Millers Tailings from the historic gold rush of Goldfield and Tonopah, Nevada.

The Tonopah property was subject to an existing $2.5 million first deed of trust, which was in default at the time of the Shea Exchange Agreement and included accrued interest of $375,645, which was also assumed in the transaction. As part of the assignment, NJB Mining, Inc. (“NJB”) modified the related note to allow us until May 14, 2011 to refinance this mortgage, which was subsequently extended numerous times. On July 7, 2011, we issued 555,556 shares of our unregistered common stock to NJB as a partial principal payment of $500,000 (valued at a $0.90 per share). As of August 31, 2011, we were still in default under the terms of the Loan Modification Agreement, and therefore entered into a forbearance agreement with NJB, (the “NJB Forbearance Agreement”), in which we agreed to issue an additional 200,000 shares of common stock valued at $180,000 and pay interest aggregating $52,952 prior to October 1, 2011 to NJB. In exchange, NJB agreed to forbear from initiating legal proceedings, including forbearance of the deed of trust and enforcement of its collection remedies. The NJB Forbearance Agreement further provided for additional extensions up through December 9, 2011; subject to the issuance of additional 1,500,000 shares of common stock, $141,497 payments of additional accrued interest amounts and subject to the issuance of additional 5,000,000 shares of common stock upon default. On December 9, 2011, Pure Path Capital Management Company, LLC. (“Pure Path”) purchased the Loan Modification Agreement and the NJB Forbearance Agreement directly from NJB. On December 21, 2011, we entered into an amended and restated forbearance agreement with Pure Path (the “A&R Forbearance”). Pure Path provided an additional extension to stay any action of the A&R Forbearance until June 8, 2012; such extension was provided without additional consideration. If not paid by June 8, 2012, or another agreement was not executed, the Company was required to issue Five Million (5,000,000) shares to Pure Path. The Company did not pay the balance of the mortgage on June 8, 2012 and pursuant to the terms of the A&R Forbearance Agreement, the Company was required to issue Five Million (5,000,000) shares to Pure Path. The Five Million (5,000,000) shares were approved for issuance by the Board of Directors on October 9, 2012 and were issued to Pure Path on December 6, 2012. Pure Path has granted us an extension until April 30, 2013 without any additional consideration as we negotiate the terms of a longer forbearance extension.

In connection with the Shea Exchange Agreement, we also were assigned the ownership of approximately a six square mile section of mine dump material in Manhattan, Nevada (“Manhattan”).

The other assets we acquired consisted of a property lease, which allowed us the use of an assay lab property and the associated water permits, (with a right to purchase for $6 million) and a contract agreement, which allowed us the use of processing permits, located in Amargosa Valley, Nevada (“Amargosa”). We were required to pay a monthly base rent of $17,500 on this lease and $5,000 on the contract agreement. In January 2012, the landlord of the Amargosa lease caused to have served a Five Day Notice To Pay Rent Or Quit due to default in the monthly $17,500 lease payments. The Company began immediate communications with the landlord, which resulted in a delay of further actions by the landlord to pursue any remedies. Then on February 9, 2012, the landlord caused to have served an Order For Summary Eviction (“Eviction”) due to continued default in lease payments. Effective with the Eviction, a total of $87,500 lease payments remain unpaid as well as $23,000 of contract payments and $10,500 of late fees required pursuant to the terms of the lease. On February 10, 2012, the Beatty County Sheriff completed the Eviction at Amargosa and we as such, no longer have access to the assay lab or permits at Amargosa.

As previously mentioned, pursuant to the Shea Exchange Agreement, we issued a total of 35 million shares of our common stock to the equity holders of Shea Mining in exchange for certain of their assets, resulting in those holders owning an ownership interest of approximately 87% of our then currently outstanding common stock (approximately 56% ownership interest on a fully diluted basis). We also agreed to indemnify Shea Mining from any liabilities arising after March 15, 2011 out of the Loan Modification Agreement or the loan agreements referenced therein.

Simultaneous with these transactions, pursuant to the Shea Exchange Agreement, Wits Basin exchanged 19,713,544 shares of our common stock it held for 10 million shares of “Series A Preferred Stock.” The Series A Preferred Stock has a liquidation preference of Ten Million Dollars ($10,000,000), payable only upon certain liquidity events or upon achievement of a market value of our equity equaling Two Hundred Million Dollars ($200,000,000) or more. Additional details regarding the Series A Preferred Stock can be found in our Articles of Amendment, which are on file with the Colorado Secretary of State.

Additionally, we obtained the right to transfer our entire interest and related debt of the Bates-Hunter Mine, at any time prior to June 13, 2011, to Wits Basin in exchange for the cancellation of a promissory note issued by Hunter Bates payable in favor of Wits Basin in the approximate amount of $2.5 million. On April 29, 2011, our Board of Directors approved this transfer back to Wits Basin due to the following: (1) the amount of liabilities directly attached to the Bates-Hunter Mine, (2) the prior failed attempts to drain the single mine shaft, (3) the metallurgical results of the approximately 12,000 feet drilling program, (4) its location at approximately 9,000 feet in elevation and (5) the estimated capital required to simply begin sampling below ground. The Company filed a Form 8-K with the Commission on May 5, 2011, regarding the transfer.

Furthermore, Wits Basin had entered into certain commitments which involved shares of our common stock and as a result of their exchange of substantially all of the Standard Gold common stock they held for Series A Preferred, they could no longer honor those commitments. In consideration of Wits Basin agreeing to the exchange, the Company agreed to enter into two stock option agreements as follows: (1) the Company granted to one of Wits Basin’s major lenders a replacement stock option, on substantially the same terms as the stock option issued by Wits Basin, to purchase 1,299,000 shares of the Company’s common stock at an exercise price of $1.00 per share expiring on December 14, 2014 and (2) the Company granted to Wits Basin a replacement stock option, expiring on December 19, 2014, to purchase up to 630,000 shares of the Company’s common stock, at an exercise price of $0.50 per share.

We have had initial discussions with the Nevada Department of Natural Resources (“NDEP”) regarding application for the permits necessary to conduct custom permitted processing toll milling activities and construction of the required additional buildings to commence operations. Before formal application for the permits, NDEP suggested that we take the following actions: (i) retain a Nevada Certified Environmental Manager (“CEM”) to perform a site characterization on the tailings and test for the potential release of pollutants, (ii) perform site characterizations on “once through” and “twice through” tailings and test for potential release of pollutants and acid generation potential, (iii) perform Meteoric Profile II water testing on ground water directly below the mill as well as surrounding wells located off site, and (iv) determine baseline values of water contamination using the Meteoric Profile II results. NDEP requested that the Company delay any new construction planned for “metal extraction” until after the permits are in place. We have also hired Allstate-Nevada Environmental Management, Inc., to assist us with obtaining an NDEP Water Pollution Control Permit (WPCP) and to help us fulfill all the requirements of NDEP including the site characterization and Meteoric Profile II analysis, as well as advise on the overall site cleanup and assisting with any other NDEP requirements.

In March 2013, we completed surveys and testing of the Tonopah property required for the application of our required permits. We retained Advanced Surveying & Professional Services as our Professional Land Surveyor (“PLS”) on February 5, 2013. The scope of work our PLS completed includes: (i) setting a total of Nineteen (19) permanent monuments at angle points along lines, (ii) setting Eight (8) permanent monuments locating US Hwy 95, (iii) recording a professional map indicating longitude and latitude for all corners, and (iv) providing a digital map accessible in AutoCad software.

Upon funding, our business plan is to purchase equipment and build out a facility to serve as a custom permitted processing toll milling facility (which includes an analytical lab and hydrometallurgical recovery plant) located in Tonopah, Nevada and potentially conduct National Instrument 43-101 studies at Tonopah and Manhattan. One or both of these facilities, if completed, would also serve as a custom permitted processing toll milling facility for any future mining properties we could develop or form a joint venture with.

PRODUCTS AND SERVICES

As of December 31, 2012, our plan is to complete all requirements for NDEP permitting so we may begin using the existing facilities on the Tonopah property to conduct custom permitted processing toll milling operations. In March 2013, we completed the survey of the Tonopah property required for the NDEP permitting.

EMPLOYEES

As of December 31, 2012, we did not have any employees. All operations are conducted by the Company’s officers, directors and independent contractors.

FINANCIAL INFORMATION IN INDUSTRY SEGMENTS

During the year ended December 31, 2012, our operations included one reportable segment: that of the development of the related services of custom permitted processing toll milling.

AVAILABLE INFORMATION

We make available free of charge, through our Internet web site at www.standardgoldmining.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material, or furnish it to the Securities and Exchange Commission (“SEC”). You can also request a free copy of the above filings by writing or calling us at:

Standard Gold Holdings, Inc.

611 Walnut Street

Gadsden, Alabama 35901

(888) 960-7347

ITEM 1A. RISK FACTORS

RISKS RELATING TO OUR CAPITAL STOCK

INVESTORS MAY BE UNABLE TO ACCURATELY VALUE OUR COMMON STOCK.

Investors often value companies based on the stock prices and results of operations of other comparable companies. Currently, we do not believe another public gold exploration company exists that is directly comparable to our size and scale. Prospective investors, therefore, have limited historical information about the property held by us upon which to base an evaluation of our performance and prospects and an investment in our common stock. As such, investors may find it difficult to accurately value our common stock.

BECAUSE OF BECOMING PUBLIC BY MEANS OF A REVERSE ACQUISITION, WE MAY NOT BE ABLE TO ATTRACT THE ATTENTION OF MAJOR BROKERAGE FIRMS.

Additional risks may exist since we became public through a “reverse acquisition.” Security analysts of major brokerage firms may not provide coverage of the Company. No assurance can be given that brokerage firms will want to conduct any offerings on behalf of the Company in the future.

WE DO NOT INTEND TO PAY DIVIDENDS FOR THE FORESEEABLE FUTURE.

We have never declared or paid any dividends on our common stock. We intend to retain all of our earnings, if any, for the foreseeable future to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. Our board of directors retains the discretion to change this policy.

OUR SERIES A PREFERRED STOCK HAS A SIGNIFICANT LIQUIDATION PREFERENCE.

The Series A Preferred Stock has a liquidation preference of Ten Million Dollars ($10,000,000), payable only upon certain liquidity events or upon achievement of a market value of our equity equaling Two Hundred Million Dollars ($200,000,000) or more. Upon any liquidation, dissolution or winding up of the Corporation, and after paying or adequately providing for the payment of all its obligations, the remainder of the assets of the Corporation shall be distributed, either in cash or in kind, first pro rata to the holders of the Series A Preferred Stock in an amount equal to the Liquidation Value; then, to any other series of Preferred Stock, until an amount to be determined by a resolution of the Board of Directors prior to issuances of such Preferred Stock, has been distributed per share, and, then, the remainder pro rata to the holders of the Common Stock.

Although there are requirements that must be met before the liquidation preference is payable to holders of the Series A Preferred Stock, if we are successful in the operation of our business and our market value increases, or if we consummate a change of control transaction that requires payment of the Ten Million Dollar ($10,000,000) liquidation preference (plus accrued interest), there may be significantly less funds remaining after the payment of the liquidation preference for holders of our common stock.

RISKS RELATING TO OUR FINANCIAL CONDITION

WE CURRENTLY DO NOT HAVE ENOUGH CASH TO FUND OPERATIONS, DEBT REDUCTION OR POTENTIAL ACQUISITIONS DURING 2013.

We have very limited funds, and such funds are not adequate to develop our current business plan, or even to satisfy our existing working capital requirements. As of December 31, 2012, we had only approximately $94 of cash and cash equivalents and with an expected cash expenditure of approximately $7,360,594 in debt that is already past due and the remainder that will become due in 2013 (assuming some or all of such debt is not converted into equity prior to such date), we will be required to raise additional funds to effectuate our current business plan for custom permitted processing toll milling and to satisfy our working capital requirements. Without significant additional capital, we will be unable to start operations. With respect to our proposed custom permitted processing toll milling operations, the costs and ability to successfully operate have not been fully verified because none of our proposed tolling operations have been run recently and we may incur unexpected costs or delays in connection with starting operations. The cost of designing and building our operations and of finding new toll milling sources can be extensive and will require us to obtain additional financing, and there is no assurance that we will have the resources necessary or the financing available to attain operations or to acquire the new toll milling sources necessary for our long-term business. Our ultimate success will depend on our ability to raise additional capital. Additionally, such additional capital may not be available to us at acceptable terms or at all. Further, if we increase our capitalization and sell additional shares of our capital stock, your ownership position in our Company will be subject to dilution. In the event that we are unable to obtain additional capital, we may be forced to cease our search for additional business opportunities, reduce our operating expenditures or to cease operations altogether.

WE ARE A DEVELOPMENT AND EXPLORATION STAGE COMPANY WITH LITTLE HISTORY OF OPERATIONS AND WE EXPECT TO INCUR LOSSES FOR THE FORESEEABLE FUTURE.

We are a development and exploration stage company, and have yet to commence active operations. As of December 31, 2012, we have incurred an aggregate net loss of $28,077,815 since our incorporation. We have no prior operating history from which to evaluate our success, or our likelihood of success in operating our business, generating any revenues, or achieving profitability. These operations provide a limited basis for you to assess our ability to commercialize our product candidates and the advisability of investing in our securities. We have generated no revenue to date and there can be no assurance that our plans for custom permitted processing toll milling will be successful, or that we will ever attain significant sales or profitability. Also, toll milling is a new area of business for us, and our management team has little experience in custom permitted processing toll milling operations. Although we intend to hire knowledgeable and experienced employees and/or consultants with significant experience in toll milling operations, there is no guarantee that we will reach profitability in the near future, if at all. As a development and exploration stage company, we are subject to unforeseen costs, expenses, problems and difficulties inherent in new business ventures.

OUR INDEPENDENT AUDITORS HAVE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

The financial statements for each of these periods were prepared assuming that we would continue as a going concern. We have had net losses for each of the years ended December 31, 2012 and 2011, and we have an accumulated deficit as of December 31, 2012. In the view of our independent auditors, these conditions raise substantial doubt about our ability to continue as a going concern. Furthermore, since we do not expect to generate any significant revenues from operations for the foreseeable future, our ability to continue as a going concern depends, in large part, on our ability to raise additional capital through equity or debt financing transactions. If we are unable to raise additional capital, we may be forced to discontinue our business.

RISKS RELATED TO THE COMPANY

WE HAVE VERY LIMITED ASSETS.

Our assets to be used in the development of a toll mining service have not yet been utilized and there can be no guarantee that we will be successful in utilizing these assets going forward. We do not anticipate having any revenues from this property for the foreseeable future. Additionally, this property, without adequate funding, may never produce any significant revenues.

OUR ASSETS ARE ENCUMBERED UNDER A FORBEARANCE AGREEMENT.

The Tonopah property was subject to an existing $2.5 million first deed of trust which was in default at the time of the Shea Exchange Agreement, which was also assumed in the transaction. As part of the assignment, NJB Mining modified the related note to allow us numerous extensions. As of August 31, 2011, we were still in default under the terms of the note, and therefore entered into a forbearance agreement with NJB, in which NJB agreed to forbear from initiating legal proceedings, including forbearance of the deed of trust and enforcement of its collection remedies. The NJB Forbearance Agreement further provided for additional extensions up through December 9, 2011. On December 9, 2011, Pure Path Capital Management Company purchased the note and the NJB Forbearance Agreement directly from NJB. On December 21, 2011, we entered into an amended and restated forbearance agreement with Pure Path (the “A&R Forbearance”). Pure Path provided an additional extension to stay any action of the A&R Forbearance until June 8, 2012; such extension was provided without additional consideration. If not paid by June 8, 2012 or another agreement is not executed, the Company would be required to issue Five Million (5,000,000) shares of its common stock to Pure Path. The Company did not pay the balance of the mortgage on June 8, 2012 and pursuant to the terms of the A&R Forbearance Agreement, the Company was required to issue Five Million (5,000,000) shares to Pure Path. The Five Million (5,000,000) shares were approved for issuance by the Board of Directors on October 9, 2012 and were issued to Pure Path on December 6, 2012. Pure Path has granted us an extension until April 30, 2013 without any additional consideration as we negotiate the terms of a longer forbearance extension.

OUR MANAGEMENT TEAM MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR BUSINESS STRATEGIES.

If our management team is unable to execute on our business strategies, then our development would be materially and adversely affected. In addition, we may encounter difficulties in effectively managing the budgeting, forecasting and other process control issues presented by any future growth. We may seek to augment or replace members of our management team or we may lose key members of our management team, and we may not be able to attract new management talent with sufficient skill and experience.

OUR SUCCESS IN THE FUTURE MAY DEPEND ON OUR ABILITY TO ESTABLISH AND MAINTAIN STRATEGIC ALLIANCES, AND ANY FAILURE ON OUR PART TO ESTABLISH AND MAINTAIN SUCH RELATIONSHIPS WOULD ADVERSELY AFFECT OUR MARKET PENETRATION AND REVENUE GROWTH.

We may be required to establish strategic relationships with third parties in the mining and toll milling industries. Our ability to establish strategic relationships will depend on a number of factors, many of which are outside our control, such as the suitability of property relative to our competitors, or the quality grade of precious minerals found in our tailings. We can provide no assurance that we will be able to establish other strategic relationships in the future.

In addition, any strategic alliances that we establish, will subject us to a number of risks, including risks associated with sharing proprietary information, loss of control of operations that are material to developed business and profit-sharing arrangements. Moreover, strategic alliances may be expensive to implement and subject us to the risk that the third party will not perform its obligations under the relationship, which may subject us to losses over which we have no control or expensive termination arrangements. As a result, even if our strategic alliances with third parties are successful, our business may be adversely affected by a number of factors that are outside of our control.

RISKS RELATING TO OUR BUSINESS

WE WILL REQUIRE ADDITIONAL FINANCING TO CONTINUE TO FUND OUR CUSTOM PERMITTED PROCESSING TOLL MILLING INTERESTS.

Substantial additional financing will be needed in order to fund the current plan to begin toll milling services or maintain and develop the Tonopah property. Our means of acquiring investment capital is limited to private equity and debt transactions. We have no significant sources of currently available funds to engage in additional development. Without significant additional capital, we will be unable to fund our current property interests or effectuate our current business plan for custom permitted processing toll milling and mining services. See “—Risks Relating to Our Financial Condition – We Currently Do Not Have Enough Cash to Fund Operations, Debt Reduction or Potential Acquisitions During 2013.”

OUR PERFORMANCE MAY BE SUBJECT TO FLUCTUATIONS IN MINERAL PRICES.

The profitability of any new custom permitted processing toll milling services could be significantly affected by changes in the market price of minerals. Demand for minerals can be influenced by economic conditions and attractiveness as an investment vehicle. Other factors include the level of interest rates, exchange rates and inflation. The aggregate effect of these factors is impossible to predict with accuracy.

In particular, mine production and the willingness of third parties such as central banks to sell or lease gold affects the supply of gold. Worldwide production levels also affect mineral prices. In addition, the price of gold, silver and other precious minerals have, on occasion, been subject to very rapid short-term changes due to speculative activities.

ESTIMATES REGARDING THE QUANTITY OF PRECIOUS METALS IN OUR TAILINGS OR THE ORE OF OTHERS THAT WE PROCESS ARE SUBJECT TO SIGNIFICANT RISK AND MAY NEGATIVELY AFFECT OUR FINANCIAL RESULTS.

Currently, we have no contracts with other mine owners and we currently do not have any mines of our own, therefore we cannot make any estimates regarding probable reserves in connection with any of these sources of minerals, and any estimates relating to possible reserves are subject to significant risks. We have done initial internal metallurgical testing on some of the source materials at Tonopah, but have not done comprehensive metallurgical testing on all of them. The tonnage and grade of the tailings that we propose to process have not been fully verified. Therefore, we cannot be certain of the level of recovery of valuable metals we can attain in our custom permitted processing toll milling operations from the Tonopah mine tailings. Furthermore, we are pursuing contracts with owners of potentially valuable minerals, but we cannot make any estimates regarding probable recovery rates in connection with any of these sources of minerals, and any estimates relating to possible recoveries are subject to significant risks. Therefore, no assurance can be given of the size or grades recovered that are planned to supply our custom permitted processing toll milling operations.

OUR CUSTOM PERMITTED PROCESSING TOLL MILLING OPERATIONS ARE SUBJECT TO ENVIRONMENTAL REGULATIONS AND PERMITTING, WHICH COULD RESULT IN THE INCURRENCE OF ADDITIONAL COSTS AND OPERATIONAL DELAYS.

All phases of our operations are subject to current environmental protection regulation. There is no assurance that future changes in environmental regulation, such as greenhouse gas emissions, carbon footprint and the like, will not adversely affect our project. With respect to our custom permitted processing toll milling operations, some of our proposed operations will require additional permits, which could incur additional cost and may delay startup and cash flow. In addition, each toll milling mineral source must be fully permitted for its own operation, a process over which we have no control.

OUR CUSTOM PERMITTED PROCESSING TOLL MILLING OPERATIONS WILL REQUIRE US TO DEPEND ON THIRD PARTIES AND OTHER ELEMENTS BEYOND OUR CONTROL, WHICH COULD RESULT IN HARM TO OUR BUSINESS.

Our custom permitted processing toll milling operations will rely largely on mineral material produced by others, but we have no control over their operations. Delivery of ore to our processing facilities is also subject to the risks of transportation, including trucking operations run by others, regulations and permits, fuel cost, weather, and road conditions. Toll milling requires that the mineral producer and the mineral processor agree on the grade of the incoming mineral, which can be a source of conflict between parties. Any disagreements with mineral producers, or problems with the delivery of ore, could result in additional costs, disruptions and other problems in the operation of our business.

U.S. FEDERAL LAWS

Under the U.S. Resource Conservation and Recovery Act, companies such as ours may incur costs for generating, transporting, treating, storing, or disposing of hazardous waste. Our custom permitted processing toll milling operations may produce air emissions, including fugitive dust and other air pollutants, from stationary equipment, storage facilities, and the use of mobile sources such as trucks and heavy construction equipment which are subject to review, monitoring and/or control requirements under the Federal Clean Air Act and state air quality laws. Permitting rules may impose limitations on our production levels or create additional capital expenditures in order to comply with the rules.

The U.S. Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (CERCLA) imposes strict joint and several liability on parties associated with releases or threats of releases of hazardous substances. The groups who could be found liable include, among others, the current owners and operators of facilities which release hazardous substances into the environment and past owners and operators of properties who owned such properties at the time the disposal of the hazardous substances occurred. This liability could include the cost of removal or remediation of the release and damages for injury to the surrounding property. We cannot predict the potential for future CERCLA liability with respect to our property.

THE GLOBAL FINANCIAL CRISIS MAY HAVE IMPACTS ON OUR BUSINESS AND FINANCIAL CONDITION THAT WE CURRENTLY CANNOT PREDICT.

The continued credit crisis and related instability in the global financial system has had, and may continue to have, an impact on our business and our financial condition. We may face significant challenges if conditions in the financial markets do not improve. Our ability to access the capital markets may be severely restricted at a time when we would like, or need, to access such markets, which could have an impact on our flexibility to react to changing economic and business conditions. The credit crisis could have an impact on any potential lenders or on our customers, causing them to fail to meet their obligations to us.

ITEM 2. DESCRIPTION OF PROPERTIES

On March 15, 2011, in an effort to enter the precious metal toll milling business, we completed the Shea Exchange Agreement, whereby we acquired the Tonopah property, consisting of land, buildings, mining tailings, a dormant milling facility, abandoned milling equipment and water permits. We currently do not have any mines.

Our corporate office is located at 611 Walnut Street, Gadsden, Alabama 35901. We are using the office space of the Company’s secretary, Tina Gregerson. We believe that our current facilities are adequate for our current needs.

ITEM 3. LEGAL PROCEEDINGS

The Company is currently in arbitration with Mark Dacko, the Company’s former Chief Financial Officer. The Company and Mr. Dacko are in dispute regarding his employment with the Company as well as the details of his termination. The date of the arbitration hearing is tentatively scheduled for June 11, 2013. 

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PRICE RANGE OF COMMON STOCK

Our common stock is quoted on the OTCBB under the symbol “SDGR.” As of April 12, 2013, the last closing sale price of our common stock as reported by OTCBB was $0.28 per share. The following table sets forth for the periods indicating the range of high and low closing sale prices of our common stock:

The quotations from the OTCBB above reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not reflect actual transactions.

RECORD HOLDERS

As of April 12, 2013 there were approximately 149 record holders of our common stock, excluding shareholders holding securities in “street name.”

DIVIDENDS

We have never paid cash dividends on our common stock and have no present intention of doing so in the foreseeable future. Rather, we intend to retain all future earnings to provide for the growth of our Company. Payment of cash dividends in the future, if any, will depend, among other things, upon our future earnings, requirements for capital improvements and financial condition.

RECENT SALES OF UNREGISTERED SECURITIES

In addition to the sales of unregistered securities that we reported in Quarterly Reports on Form 10-Q and Current Reports on Form 8-K during fiscal year ended 2012, we made the following sales of unregistered securities during the quarter ended December 31, 2012:

On December 6, 2012, we issued One Million Four Hundred Thousand (1,400,000) shares of unregistered common stock to Afignis, LLC pursuant to a Settlement Agreement and Five Million (5,000,000) shares of common stock to Pure Path Management Company, LLC pursuant to the A & R Forbearance Agreement.

On December 28, 2012, we issued Two Million (2,000,000) shares of common stock to Pure Path Management Company, LLC to settle a portion of the debt the Company owes to Pure Path.

Sales of the securities identified above were made pursuant to privately negotiated transactions that did not involve a public offering of securities and, accordingly, we believe that these transactions were exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof and rules promulgated thereunder. Based on representations from the above-referenced lender, we have determined that such lender was “accredited investors” (as defined by Rule 501 under the Securities Act) and were acquiring the shares for investment and not distribution, and that they could bear the risks of the investment and could hold the securities for an indefinite period of time. The lender received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration or an available exemption from such registration. All of the foregoing securities are deemed restricted securities for purposes of the Securities Act.

The following discussion should be read in conjunction with the Financial Statements of the Company and notes thereto included elsewhere in this Annual Report. See “Consolidated Financial Statements and Supplementary Data.”

Cautionary Notice Regarding Forward Looking Statements

Readers are cautioned that the following discussion contains certain forward-looking statements and should be read in conjunction with the “Special Note Regarding Forward-Looking Statements” appearing at the beginning of this Annual Report.

The information contained in Item 7 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. This filing contains a number of forward-looking statements, which reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks to be discussed in our Annual Report on form 10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Overview of the Company

We have had initial discussions with the Nevada Department of Natural Resources (“NDEP”) regarding application for the permits necessary to conduct custom permitted processing toll milling activities and construction of the required additional buildings to commence operations. Before formal application for the permits, NDEP suggested that we take the following actions: (i) retain a Nevada Certified Environmental Manager (“CEM”) to perform a site characterization on the tailings and test for the potential release of pollutants, (ii) perform site characterizations on “once through” and “twice through” tailings and test for potential release of pollutants and acid generation potential, (iii) perform Meteoric Profile II water testing on ground water directly below the mill as well as surrounding wells located off site, and (iv) determine baseline values of water contamination using the Meteoric Profile II results. NDEP requested that the Company delay any new construction planned for “metal extraction” until after the permits are in place. We have also hired Allstate-Nevada Environmental Management, Inc., to assist us with obtaining an NDEP WPCP and to help us fulfill all the requirements of NDEP including the site characterization and Meteoric Profile II analysis, as well as advise on the overall site cleanup and assisting with any other NDEP requirements.

In March 2013, we completed surveys and testing of the Tonopah property required for the application of our required permits. After completion of the survey, it was determined the property is 1186 acres. We retained Advanced Surveying & Professional Services as our Professional Land Surveyor (“PLS”) on February 5, 2013. The scope of work our PLS completed includes: (i) setting a total of Nineteen (19) permanent monuments at angle points along lines, (ii) setting Eight (8) permanent monuments locating US Hwy 95, (iii) recording a professional map indicating longitude and latitude for all corners, and (iv) providing a digital map accessible in AutoCad software.

Upon funding, our business plan is to purchase equipment and build out a facility to serve as a custom permitted processing toll milling facility (which includes an analytical lab and hydrometallurgical recovery plant) located in Tonopah, Nevada and potentially conduct National Instrument 43-101 studies at Tonopah and Manhattan. One or both of these facilities, if completed, would also serve as a custom permitted processing toll milling facility for any future mining properties we could develop or form a joint venture with.

The Company re-domiciled from Colorado to Nevada in March 2013. We determined that, due to a lack of connection to Colorado, it was in the best interest of the Company to move its domicile to Nevada.

Standard Gold Holdings, Inc. (formerly known as Standard Gold, Inc. and Princeton Acquisitions, Inc.) was incorporated in the State of Colorado on July 10, 1985. On September 29, 2009, we completed a share exchange agreement with Hunter Bates Mining Corporation, a Minnesota corporation (“Hunter Bates”) and certain of its shareholders, in which Hunter Bates’ shareholders exchanged all of their capital securities into similar capital securities of ours (the “Hunter Bates Share Exchange”) and we adopted the business model of Hunter Bates of minerals exploration and mining. Accordingly, the Hunter Bates Share Exchange represented a change in control and Hunter Bates became a wholly owned subsidiary of Standard Gold.

Prior to September 29, 2009, Wits Basin Precious Minerals Inc., a Minnesota corporation and public reporting company quoted on the Pink Sheets under the symbol “WITM” (“Wits Basin”) was the majority shareholder of Hunter Bates. Hunter Bates was formed in April 2008 to acquire the prior producing gold mine properties (consisting of land, buildings, equipment, mining claims and permits) located in Central City, Colorado, known as the “Bates-Hunter Mine.”

On March 15, 2011, we closed a series of transactions, whereby we acquired certain assets of Shea Mining & Milling, LLC (“Shea Mining”), which assets include land, buildings, a dormant milling facility, abandoned milling equipment, water permits, mine tailings, mine dumps and the assignment of a note payable, a lease and a contract agreement with permits. We completed the Shea Exchange Agreement in order to offer toll milling services of precious minerals. Toll milling is a process whereby mined material is crushed and ground into fine particles to ease the extraction of any precious minerals contained therein, such as gold, silver, lead, zinc and copper, and rare earth metals. Custom milling and refining can include many different processes to extract precious metals from carbon or concentrates. These toll-processing services also distill, dry, mix, or mill chemicals and bulk materials on a contractual basis and provide a chemical production outsourcing option for industrial companies which lack the expertise, capacity, or regulatory permits for in-house production.

RESULTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2012 COMPARED TO THE YEAR ENDED DECEMBER 31, 2011.

Revenues

We had no revenues from operations for the years 2012 and 2011. Furthermore, we do not anticipate having any significant future revenues until we have sufficiently funded operations.

Operating Expenses

General and administrative expenses were $1,469,355 for 2012 as compared to $10,180,018 for 2011. Of the $1,469,355 in 2012, we recorded $265,000 of compensation expense relating to options as compared with $6,835,006 of compensation expenses related to stock option vesting and $690,000 from the termination of an investment agent agreement in 2011. We anticipate that future compensation expenses will increase and that certain operating expenses will continue to increase for fiscal 2013 as we continue to build the infrastructure to proceed with custom processing tolling milling services and possible entrance into other properties.

Depreciation and amortization expenses were $0 for 2012 as compared to $29,623 for 2011, which primarily represents depreciation of fixed assets for the Bates-Hunter Mine. We transferred the depreciable assets related to the Bates-Hunter Mine back to Wits Basin on April 29, 2011 and will no longer be recording any depreciation expenses specifically related to the Bates-Hunter Mine. Should we acquire other mine properties or begin custom permitted processing toll milling services, then we would resume recording depreciation expense.

During 2012, the Company recognized a loss on the disposition of assets related to impaired equipment held at Amargosa. The Company no longer has access to the equipment as a result of the eviction from Amargosa in February 2012.

Other Income and Expenses

Interest Expense

Interest expense for 2012 was $1,262,188 compared to 2011, which was $4,134,310. The 2012 and 2011 amounts relate to the interest due on the following notes payable: (i) the Cdn $6,750,000 limited recourse promissory note for the Bates-Hunter Mine, which was interest-free until January 1, 2010, and from such date accrued interest at 6% per annum, (ii) in April 2009, we entered into a 12% Convertible Debenture with Cabo Drilling (America) Inc., in the principal amount of $511,590, (iii) in August 2009, Hunter Bates issued a note payable in favor of Wits Basin (at which time held 100% of the equity interest in Hunter Bates) in the principal amount of $2,500,000 in consideration of various start-up and developments costs and expenses incurred by Wits Basin on its behalf while Hunter Bates and Gregory Gold were consolidated, wholly owned subsidiaries of Wits Basin, (iv) the short-term notes payable, (v) the convertible notes we entered into during 2011 plus the amortization of the value assigned to additional beneficial conversion features and warrants issued, and (vi) the amortization of debt issuance costs.

The elimination of items (i-iii) described above contributed to the significant decreases from the 2011 amounts. The non-cash interest expense for the year ended December 31, 2012 was $883,848 compared to $3,608,314 for the same period in 2011.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is a measure of an entity’s ability to secure enough cash to meet its contractual and operating needs as they arise. We have funded our operations and satisfied our capital requirements through advances from Pure Path Capital Management, LLC. We do not anticipate generating sufficient net positive cash flows from our operations to fund the next Twelve (12) months. We had a working capital deficit of $7,351,603 at December 31, 2012. Cash and cash equivalents were $94 at December 31, 2012, representing a decrease of $526 from the cash and cash equivalents of $620 at December 31, 2011.

We receive monthly payments of $529 from American Tower Corporation for a cellular tower located on our Tonopah land.

Our cash reserves will not be sufficient to meet our operational needs and thus, we need to raise additional capital to pay for our operational expenses and provide for capital expenditures. Our basic operational expenses are estimated at approximately $45,000 per month and we continue to have debt service commitments, which include $2,047,728 (plus accrued interest) due to Pure Path under the A&R Forbearance Agreement and $ 2,118,427 (plus accrued interest) if none of the convertible note holders convert any portion of their notes payable. Above the basic operational expenses, we estimate that we need approximately $3,000,000 to begin limited tolling operations. If we are not able to raise additional working capital, we may have to cease operations altogether.

For the years ended December 31, 2012 and 2011, we had net cash used in operating activities of $359,103 and $1,480,170 respectively. The decrease in 2012 is due primarily from the decrease in cash being expended for operations in Nevada.

For the years ended December 31, 2012 and 2011, we had net cash used in investing activities of $0 and $1,062,014, respectively. The amount in 2011 was due to the funds required to enter into the Shea Exchange Agreement, the Company did not have any such similar expenses in 2012.

For the years ended December 31, 2012 and 2011, we had net cash provided by financing activities of $358,577 and $2,542,650 respectively. During 2012 we entered into a short-term notes payable, resulting in cash proceeds of $358,577. During 2011, we issued six-month convertible promissory notes resulting in gross cash proceeds of $2,482,500 and received cash proceeds of $101,139 from the sale and exercise of stock options and warrants.

The following table summarizes our debt as of December 31, 2012:

Summary

Our existing sources of liquidity will not provide cash to fund operations and make the required payments on our debt service for the next twelve months. Our ability to continue as a going concern is dependent entirely on raising funds through the sale of equity or debt. We will continue our attempt to raise additional capital. Some of the possibilities available to us are through private equity transactions, to develop a credit facility with a lender or the exercise of options and warrants. However, such additional capital may not be available to us at acceptable terms or at all. In the event that we are unable to obtain additional capital, we would be forced to cease operations altogether.

Off-Balance Sheet Arrangements

During the year ended December 31, 2012, we did not engage in any off balance sheet arrangements as defined in item 303(a)(4) of the SEC’s Regulation S-K.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Table of Contents

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Standard Gold Holdings, Inc. (an exploration stage company)

We have audited the accompanying consolidated balance sheets of Standard Gold Holdings, Inc. (formerly Standard Gold, Inc.) (an exploration stage company) as of December 31, 2012 and 2011, and the related consolidated statements of operations, shareholders’ equity (deficit) and cash flows for the years ended December 31, 2012 and 2011, and the period from September 28, 2004 (inception of exploration stage) to December 31, 2012. Standard Gold Holdings, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Standard Gold Holdings, Inc. as of December 31, 2012 and 2011, and the results of its operations and its cash flows for the years ended December 31, 2012 and 2011, and the period from September 28, 2004 (inception of exploration stage) to December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company had net losses for the years ended December 31, 2012 and 2011 and had an accumulated deficit at December 31, 2012. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Moquist Thorvilson Kaufmann LLC

Edina, Minnesota

April 15, 2013

STANDARD GOLD HOLDINGS, INC.

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

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

STANDARD GOLD HOLDINGS, INC.

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

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

STANDARD GOLD HOLDINGS, INC.

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

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

STANDARD GOLD HOLDINGS, INC.

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

STANDARD GOLD HOLDINGS, INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 and 2011

NOTE 1 – NATURE OF BUSINESS

Standard Gold Holdings, Inc. (formerly known as Standard Gold, Inc. and Princeton Acquisitions, Inc.) was incorporated in the State of Colorado on July 10, 1985 as a blind pool or blank check company. On September 29, 2009, we completed a share exchange agreement with Hunter Bates Mining Corporation, a Minnesota corporation (“Hunter Bates”) and certain of its shareholders, in which Hunter Bates’ shareholders exchanged all of their capital securities into similar capital securities of ours (the “Hunter Bates Share Exchange”) and we adopted the business model of Hunter Bates of minerals exploration and mining. Accordingly, the Hunter Bates Share Exchange represented a change in control and Hunter Bates became a wholly owned subsidiary of Standard Gold.

Prior to September 29, 2009, Wits Basin Precious Minerals Inc., a Minnesota corporation and public reporting company quoted on the Pink Sheets under the symbol “WITM” (“Wits Basin”) was the majority shareholder of Hunter Bates. Hunter Bates was formed in April 2008 to acquire the prior producing gold mine properties (consisting of land, buildings, equipment, mining claims and permits) located in Central City, Colorado, known as the “Bates-Hunter Mine.” We had not engaged in any exploration or mining activities at the Bates-Hunter Mine properties and on April 29, 2011, we transferred all of our interests of Hunter Bates back to Wits Basin in order to develop the toll milling business as described below. See Note 11 – Transfer of Bates-Hunter Mine for further discussion regarding the transfer of the Bates-Hunter Mine.

On March 15, 2011, we closed a series of transactions, whereby we acquired certain assets of Shea Mining & Milling, LLC (“Shea Mining”). The exchange agreement was by and between us, Shea Mining, Afignis, LLC, Leslie Lucas Partners, LLC, Wits Basin and Alfred A. Rapetti (the “Shea Exchange Agreement”) whereby we acquired certain assets from Shea Mining, which assets include those located in Tonopah, Nevada, of land, buildings, a dormant milling facility, abandoned milling equipment, water permits and mine tailings (financed through a note payable assigned to us), mine dumps, a property lease and a contract agreement in exchange for 35,000,000 shares of our unregistered shares. The Shea Exchange Agreement did not include any operable toll milling equipment, employees or operational processes and therefore has been accounted for as a purchase of a group of assets. We completed the Shea Exchange Agreement to acquire the Shea Mining assets and develop a toll milling services business of precious minerals. Toll milling is a process whereby mined material is crushed and ground into fine particles to ease the extraction of any precious minerals contained therein, such as gold, silver, lead, zinc and copper, and rare earth metals. See Note 3 – Acquisition of Shea Milling and Mining Assets for a detailed discussion.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, assuming we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the year ended December 31, 2012, we incurred losses from operations of $1,510,280. At December 31, 2012, we had an accumulated deficit of $28,077,815 and a working capital deficit of $7,351,603. Our ability to continue as a going concern is dependent on our ability to raise the required additional capital or debt financing to meet short and long-term operating requirements. During the fiscal year of 2012, we received net cash proceeds of $358,577 from the issuance of short-term promissory notes. We believe that private placements of equity capital and/or additional debt financing will be needed to fund our long-term operating requirements. We may also encounter business endeavors that require significant cash commitments or unanticipated problems or expenses that could result in a requirement for additional cash. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. We are continuing to pursue external financing alternatives to improve our working capital position. If we are unable to obtain the necessary capital, we may have to cease operations.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The 2011 consolidated financial statements include the accounts of Standard Gold, Inc., and our wholly-owned subsidiary Hunter Bates Mining Corporation (and its wholly owned subsidiary Gregory Gold Producers, Inc.). All significant intercompany transactions and balances have been eliminated in the 2011 consolidation. Effective April 29, 2011, Standard Gold transferred its entire ownership in Hunter Bates to Wits Basin and subsequently became a single reporting entity. The 2012 financial statements include only the accounts of Standard Gold.

Cash and Cash Equivalents

We include as cash equivalents: (a) certificates of deposit, and (b) all other investments with maturities of three months or less, which are readily convertible into known amounts of cash. We maintain our cash in high-quality financial institutions. The balances, at times, may exceed federally insured limits.

Shea Milling and Mining Assets

We have recorded the fair value of the Shea Milling and Mining assets as an aggregate amount. The assets include the mine tailings and dumps, the land, water rights and the milling facility (the buildings and equipment). None of the assets have been put into production as we recently completed surveys in March 2013 and are currently conducting testing required to allow us to evaluate and operate our equipment. As such, we will continue to classify them under a single listing.

Property, Plant and Equipment

Property and equipment are recorded at cost and depreciated, once placed in service, using the straight-line method over estimated useful lives as follows:

Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. As items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operating income.

Mineral Properties

Mineral property acquisition costs are recorded at cost and are deferred until the viability of the property is determined. No properties have reached the development stage at this time. Exploration, mineral property evaluation, option payments, related acquisition costs for mineral properties acquired under an option agreement, general overhead, administrative and holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. When reserves are determined for a property and a bankable feasibility study is completed, subsequent exploration and development costs on the property would be capitalized. If a project were to be put into production, capitalized costs would be depleted on the unit of production basis.

Management reviews the net carrying value of each mineral property as changes may materialize with a property or at a minimum, on an annual basis. Where information and conditions suggest impairment, estimated future net cash flows from each property are calculated using estimated future prices, proven and probable reserves and value beyond proven and probable reserves, and operating, capital and reclamation costs on an undiscounted basis. If it is determined that the future cash flows are less than the carrying value, a write-down to the estimated fair value is made with a charge to loss for the period. Where estimates of future net cash flows are not available and where other conditions suggest impairment, management assesses if the carrying value can be recovered.

Management's estimates of gold prices, recoverable reserves, probable outcomes, operating capital and reclamation costs are subject to risks and uncertainties that may affect the recoverability of mineral property costs.

See Note 11 – Transfer of Bates-Hunter Mine for a discussion regarding the transference of the Bates-Hunter Mine properties.

Long-Lived Assets

We will periodically evaluate the carrying value of long-lived assets to be held and used, including but not limited to, mineral properties, mine tailings, mine dumps, capital assets and intangible assets, when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose. Impairment charges were $40,925 and $0 during the years ended December 31, 2012 and 2011, respectively. See Note 11 – Transfer of Bates-Hunter Mine for a discussion regarding the transference of the Bates-Hunter Mine assets.

Segment Reporting

We have a single operating segment of custom permitted processing toll milling.

Revenue Recognition and Deferred Revenue

As of December 31, 2012, we have recorded no revenues from custom permitted processing toll milling.

Use of Estimates

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Off Balance Sheet Arrangements

As of December 31, 2012, we did not have any off-balance sheet activities (including the use of structured finance or special purpose entities) or any trading activities in non-exchange traded commodity contracts that have a current or future effect on our financial condition, changes in the financial condition, revenues or expenses, results of operation, liquidity, capital expenditures or capital resources that are material to our investors.

Financial Instruments

The carrying amounts for all financial instruments approximates fair value. The carrying amounts for cash and cash equivalents, accounts payable and accrued liabilities approximated fair value because of the short maturity of these instruments. The fair value of short-term debt approximated the carrying amounts based upon our expected borrowing rate for debt with similar remaining maturities and comparable risk.

Net Loss per Common Share

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the periods presented. Diluted net loss per common share is determined using the weighted average number of common shares outstanding during the periods presented, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of options, warrants and conversion of convertible debt. In periods where losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

Income Taxes

Income taxes are accounted for based upon an asset and liability approach.  Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements.  Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.

Accounting guidance requires the recognition of a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.  For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority.  The Company believes its income tax filing positions and deductions will be sustained upon examination and accordingly, no reserves, or related accruals for interest and penalties have been recorded at December 31, 2012 and 2011. The Company recognizes interest and penalties on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense.

The Company intended to be included in the consolidated federal income tax return of Wits Basin until March 15, 2011. At that time, we no longer were a consolidated entity for tax reporting as Wits Basin held only approximately 4% of our common stock. The tax provision included in the accompanying consolidated financial statements is calculated as if the Company filed separate federal and state income tax returns. Deferred taxes are provided on temporary differences between book and tax basis of assets and liabilities, which will have a future impact on taxable income. The Company has recorded a full valuation allowance against the net deferred tax asset due to the uncertainty of realizing the related benefits.

NOTE 3 – ACQUISITION OF SHEA MILLING AND MINING ASSETS

On March 15, 2011, we entered into an exchange agreement by and between us, Shea Mining, Afignis, LLC, Leslie Lucas Partners, LLC, Wits Basin and Alfred A. Rapetti (the “Shea Exchange Agreement”) whereby we acquired certain assets from Shea Mining, which assets include those located in Tonopah (financed through a note payable assigned to us), mine dumps, a property lease and a contract agreement in exchange for Thirty-Five Million (35,000,000) shares of our unregistered shares. The Shea Exchange Agreement did not include any operable toll milling equipment, employees or operational processes and therefore has been accounted for as a purchase of a group of assets. We completed the Shea Exchange Agreement to acquire the Shea assets and develop a toll milling services business of precious minerals.

Pursuant to the assignment of a note payable, we executed an Assignment and Assumption of Loan Documents and Loan Modification Agreement, by and between us, Shea Mining and NJB Mining, Inc. (the “Loan Modification Agreement”), dated March 15, 2011, for those assets located in Tonopah, Nevada (“Tonopah”), consisting of land, buildings, mining tailings, a dormant milling facility, abandoned milling equipment and water permits. The land encompasses One Thousand One Hundred Seventy-Four (1,174) deeded acres, one of the largest private land holdings in Esmeralda County, Nevada. Approximately Three Hundred Thirty-Four (334) acres of this land has sitting on it an estimated Two Million Two Hundred Thousand (2,200,000) tons of tailings known as the Millers Tailings from the historic gold rush of Goldfield and Tonopah, Nevada.

The Tonopah property was subject to an existing $2,500,000 first deed of trust which was in default at the time of the Shea Exchange Agreement and included accrued interest of $375,645 which was also assumed in the transaction. As part of the assignment, NJB Mining, Inc. (“NJB”) modified the related note to allow us until May 14, 2011 to refinance this mortgage, which was subsequently extended numerous times. As of August 31, 2011, we were still in default under the terms of the Loan Modification Agreement, and therefore entered into a forbearance agreement with NJB, (the “NJB Forbearance Agreement”), in which NJB agreed to forbear from initiating legal proceedings, including forbearance of the deed of trust and enforcement of its collection remedies. The NJB Forbearance Agreement further provided for additional extensions up through December 9, 2011. On December 9, 2011, Pure Path Capital Management Company, LLC (“Pure Path”) purchased the Loan Modification Agreement and the NJB Forbearance Agreement directly from NJB. On December 21, 2011, we entered into an amended and restated forbearance agreement with Pure Path (the “A&R Forbearance”), whereby Pure Path extended the provisions of the NJB Forbearance Agreement. Pure Path provided an additional extension to stay any action of the A&R Forbearance until June 8, 2012; such extension was provided without additional consideration. If not paid by June 8, 2012 or another agreement is not executed, the Company would be required to issue Five Million (5,000,000) shares of its common stock to Pure Path. The Company did not pay the balance of the mortgage on June 8, 2012 and pursuant to the terms of the A&R Forbearance Agreement, the Company was required to issue Five Million (5,000,000) shares to Pure Path. The Five Million (5,000,000) shares were approved for issuance by the Board of Directors on October 9, 2012 and were issued to Pure Path on December 6, 2012. Pure Path has granted us an extension until April 30, 2013 without any additional consideration as we negotiate the terms of a longer forbearance extension.

In connection with the Shea Exchange Agreement, we also were assigned the ownership of approximately a Six (6) square mile section of mine dump material in Manhattan, Nevada (“Manhattan”).

The other assets we acquired consisted of a property lease, which allowed us the use of an assay lab property and the associated water permits, (with a right to purchase for $6,000,000) and a contract agreement, which allowed us the use of processing permits, located in Amargosa Valley, Nevada (“Amargosa”). We paid a monthly base rent of $17,500 on this lease and $5,000 monthly on the contract agreement. In January 2012, the landlord of the Amargosa lease caused to have served a Five (5) Day Notice To Pay Rent Or Quit due to default in the monthly $17,500 lease payments. The Company began immediate communications with the landlord, which resulted in a delay of further actions by the landlord to pursue any remedies. Then on February 9, 2012, the landlord caused to have served an Order For Summary Eviction (“Eviction”) due to continued default in lease payments. Effective with the Eviction, a total of $112,500 in lease and contract payments remain unpaid as well as $10,500 in late fees required pursuant to the terms of the lease. On February 10, 2012, the Beatty County Sheriff completed the Eviction at Amargosa and we as such, no longer have access to the assay lab or permits at Amargosa. As a result, all remaining equipment at Amargosa with an aggregate value of $40,925 was written off as impaired

Pursuant to the Shea Exchange Agreement, we issued a total of Thirty-Five Million (35,000,000) shares of our common stock to the equity holders of Shea Mining in exchange for certain of their assets, resulting in those holders owning an ownership interest of approximately Eighty-Seven Percent (87%) of our then currently outstanding common stock (approximately Fifty-Six Percent (56%) ownership interest on a fully diluted basis). Alfred A. Rapetti, a member of our Board of Directors and our former Chief Executive Officer, was granted an irrevocable voting proxy for half of the shares issued to the Shea Mining equity holders, which continues until the affected shares are publicly sold after a period of at least Six (6) months, and thereafter in accordance with all applicable securities laws. In August 2011, these rights were transferred to Blair Mielke, a former director of the Company. All but 110,000 shares of such voting rights have since been canceled by the respective holders. We also agreed to indemnify Shea Mining from any liabilities arising after March 15, 2011 out of the Loan Modification Agreement or the loan agreements.

The purchase consideration of the assets acquired was calculated as follows:

In conformity with accounting principles generally accepted in the United States of America, cost of acquiring a group of assets is allocated to the individual assets within the group based on the relative fair values of the individual assets.

The table below sets forth the final purchase price allocation. The fair value of the mineral properties and property and equipment was determined based on level 3 inputs using cost and market value approaches.

Simultaneous with these transactions, pursuant to the Shea Exchange Agreement, Wits Basin exchanged Nineteen Million Seven Hundred Thirteen Thousand Five Hundred Forty-Four (19,713,544) shares of our common stock it held for Ten Million (10,000,000) shares of our Series A Preferred Stock. The Series A Preferred Stock has a liquidation preference of Ten Million Dollars ($10,000,000), payable only upon certain liquidity events or upon achievement of a market value of our equity equaling $200,000,000 or more. Additional details regarding the Series A Preferred Stock can be found in our Articles of Amendment, which were filed with the Colorado Secretary of State on January 4, 2013. Additionally, we obtained the right to transfer our entire interest and related debt of the Bates-Hunter Mine, at any time prior to June 13, 2011, to Wits Basin in exchange for the cancellation of a promissory note issued by Hunter Bates payable in favor of Wits Basin in the approximate amount of $2,500,000. On April 29, 2011, our Board of Directors approved this transfer effective April 29, 2011. See Note 11 – Transfer of Bates-Hunter Mine for a discussion regarding the transference of the Bates-Hunter Mine and related assets and liabilities.

Furthermore, Wits Basin had entered into certain commitments which involved shares of our common stock and as a result of their exchange of substantially all of the Standard Gold common stock they held for Series A Preferred, they could no longer honor those commitments. In consideration of Wits agreeing to the exchange, the Company agreed to enter into Two (2) stock option agreements as follows: (1) the Company granted to one of Wits Basin’s major lenders a replacement stock option, on substantially the same terms as the stock option issued by Wits Basin, to purchase One Million Two Hundred Ninety-Nine Thousand (1,299,000) shares of the Company’s common stock at an exercise price of One Dollar ($1.00) per share expiring on December 14, 2014 (of which the holder exercised on 10,000 shares of the option with a payment of $10,000 during 2011) and (2) the Company granted to Wits Basin a replacement stock option, expiring on December 19, 2014, to purchase up to Six Hundred Thirty Thousand (630,000) shares of the Company’s common stock, at an exercise price of Fifty Cents ($0.50) per share.

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

After we consummated the Shea Exchange Agreement, we purchased some miscellaneous assets for use at the Amargosa property. Due to non-payment of lease obligations at Amargosa in 2012, we lost access to this equipment rendering it totally impaired. Therefore, we have written off the equipment in its entirety.

Components of our property, plant and equipment are as follows:

NOTE 5 – DEBT ISSUANCE COSTS

We recorded debt issuance costs with respect to legal services incurred relating to the various promissory notes issued. Debt issuance costs are being amortized on a straight-line basis (which approximates the effective interest method) over the term of the corresponding debt.

The following table summarizes the amortization of debt issuance costs:

(1) See Note 11 – Transfer of Bates-Hunter Mine for a discussion regarding the transference of the Bates-Hunter Mine related debt issuance costs.

NOTE 6 – SHORT-TERM NOTES PAYABLE

The following table summarizes the Company’s short-term notes payable:

(1)  Secured by a personal guarantee of Stephen D. King, our CEO at the time.

(2) On December 9, 2011, Pure Path Capital Management Company, LLC (“Pure Path”) purchased the Loan Modification Agreement and the NJB Forbearance Agreement directly from NJB. On December 21, 2011, we entered into an amended and restated forbearance agreement with Pure Path (the “A&R Forbearance”), whereby Pure Path extended the provisions of the NJB Forbearance Agreement. Pure Path has provided additional extensions to stay any action of the A&R Forbearance until April 30, 2013; such extensions were provided without additional consideration.

The Company has placed in escrow the following: (i) a Deed in Lieu of Foreclosure, (ii) Water Rights Deed and (iii) a Bill of Sale. Should the Company not meet the requirements of the April 30, 2013 deadline, Pure Path has the right to take immediate title to the assets located in Tonopah and interest in all leases, contracts and permits related to ownership, occupancy and operation of said assets. We are still in negotiations with Pure Path in order to complete definitive documents to release the A&R Forbearance and structure a new note. If such arrangements are not agreed to, we could lose the Tonopah property.

Summary

The following table summarizes the short-term notes payable activity in 2012:

The weighted average interest rate on short-term notes payable at December 31, 2012 was 12.4%.

NOTE 7 – CONVERTIBLE NOTES PAYABLE

Beginning in January 2011 through November 2011, we entered into six-month convertible promissory notes with accredited investors (the “CP Notes”). The terms of the CP Notes are: (i) accrue interest at 6% per annum (ii) include the right to convert into our common stock at any time, at a price of $0.50 per share, and (iii) the issuance of a two-year stock purchase warrant, with an exercise price of $0.50 per share, at a rate of two warrants per $1 of the CP notes.

In June 2012, the Board authorized a reduction in the exercise of the warrant exercise price, from $0.50 to $0.25 per share for any additional CP Notes entered into, but still at a rate of two warrants per $1 of CP Notes. The Company entered into one such CP Note during June 2012 of $25,000.

The warrants created an aggregate debt discount of $1,489,253. In addition, due to proceeds allocated between the debt and warrants, beneficial conversion charges were created totaling an additional debt discount of $1,074,066. Both discounts were amortized over the six-month term of each of the respective CP Notes.

For the year ended December 31, 2012, we recorded $131,651 of amortization of the value assigned to the additional beneficial conversion feature of the CP Notes and $149,181 amortization of warrant debt discount. As of December 31, 2012, there is no remaining unamortized debt discount.

During June 2012, one of the note holders assigned an aggregate $500,000 of CP Notes and accrued interest to Pure Path in a private transaction. On June 28, 2012, Pure Path converted $478,186 of principal and $21,814 of accrued interest related to these notes into 1,000,000 shares of unregistered common stock.

In addition to the aforementioned Pure Path conversion, through December 31, 2012, another convertible note holder converted $3,076 of principal plus $6,924 of accrued interest into 20,000 shares of our common stock.

The following table summarizes the Company’s convertible notes:

NOTE 8 – SHAREHOLDERS’ EQUITY

Preferred Stock

Simultaneous with the Shea Exchange Agreement, Wits Basin exchanged Nineteen Million Seven Hundred Thirteen Thousand Five Hundred Forty-Four (19,713,544) shares of our common stock it held for Ten Million (10,000,000) shares ($.001 par value each) of "Series A Preferred Stock" with an original issue price of One Dollar ($1.00) per share.

Attributes of Series A Preferred Stock include but are not limited to the following:

Distribution in Liquidation

The Series A Preferred Stock has a liquidation preference of Ten Million Dollars ($10,000,000), payable only upon certain liquidity events or upon achievement of a market value of our equity equaling Two Hundred Million Dollars ($200,000,000) or more. Upon any liquidation, dissolution or winding up of the Corporation, and after paying or adequately providing for the payment of all its obligations, the remainder of the assets of the Corporation shall be distributed, either in cash or in kind, first pro rata to the holders of the Series A Preferred Stock in an amount equal to the Liquidation Value (as described below); then, to any other series of Preferred Stock, until an amount to be determined by a resolution of the Board of Directors prior to issuances of such Preferred Stock, has been distributed per share, and, then, the remainder pro rata to the holders of the Common Stock. Upon the occurrence of any Liquidation Event (as defined below), each holder of Series A Preferred Stock will receive a payment equal to the Original Issue Price for each share of Series A Preferred Stock held by such holder (the “Liquidation Value”). A “Liquidation Event” will have occurred when:

• The Corporation has an average market capitalization (calculated by adding the value of all outstanding shares of Common Stock valued at the Corporation’s closing sale price on the OTCBB or other applicable bulletin board or exchange, plus the value of the outstanding Series A Preferred Stock at the Original Issues Price per share) of Two Hundred Million Dollars ($200,000,000) or more over any Ninety (90) day period. The holders of the Series A Preferred Stock would have the right, for Thirty (30) days after the end of such qualifying Ninety (90) day measurement period, to require the Corporation to purchase the Series A Preferred Stock for an amount equal to the Liquidation Value.

• Any Liquidity Event in which the Corporation receives proceeds of Fifty Million Dollars ($50,000,000) or more. For purposes hereof, a “Liquidity Event” means any (a) liquidation, dissolution or winding up of the Corporation; (b) acquisition of the Corporation by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger, share exchange, share purchase or consolidation) provided that the applicable transaction shall not be deemed a liquidation unless the Corporation’s stockholders constituted immediately prior to such transaction hold less than Fifty Percent (50%) of the voting power of the surviving or acquiring entity; or (c) the sale, lease, transfer or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries.

Written notice of any Liquidation Event (the “Liquidation Notice”) shall be given by mail, postage prepaid, or by facsimile to non-U.S. residents, not less than Five (5) days prior to the anticipated payment date state therein, to the holders of record of Series A Preferred Stock, such notice to be addressed to each such holder at its address as shown by the records of the Corporation. The Liquidation Notice shall state (i) the anticipated payment date, and (ii) the total Liquidation Value available for distribution to Series A Preferred Stock shareholders upon the occurrence of the Liquidation Event.

Redemption

The Series A Preferred Stock may be redeemed in whole or in part as determined by a resolution of the Board of Directors at any time, at a price equal to the Liquidation Value.

Voting Rights

Shares of Series A Preferred Stock shall have no rights to vote on any matter submitted to a vote of shareholders, except as required by law, in which case each share of Series A Preferred Stock shall be entitled to one vote.

Conversion Rights

Holders of Series A Preferred Stock will have no right to convert such shares into any other equity securities of the Company.

Common Stock Issuances

During fiscal year 2011, we issued the following shares of our unregistered common stock:

During fiscal year 2012, we issued the following shares of our unregistered common stock:

Option Grants

We have one stock option plan: the 2010 Stock Incentive Plan, as amended (the “Plan”). Stock options, stock appreciation rights, restricted stock and other stock and cash awards may be granted under the Plan. In general, options vest over a period ranging from immediate vesting to five years and expire 10 years from the date of grant. Effective January 21, 2011, the Company’s Board of Directors (the “Board”) authorized an amendment to the 2010 Stock Incentive Plan, to increase the number of options available for granting under the Plan from 3,000,000 to 13,500,000 and authorized the Company to file an S-8 Registration Statement with the U.S. Securities and Exchange Commission (subsequently filed on January 27, 2011, File No. 333-171906) for the registration of the shares available in the Plan. On March 15, 2011, with the closing of the Shea Exchange Agreement a “change of control” event was deemed to have occurred and 13,500,000 previously granted stock options vested in full. Effective July 25, 2011, the Plan was amended to increase the total shares of stock which may be issued under the Plan from 13,500,000 to 14,500,000. As of December 31, 2012, an aggregate of 6,200,000 shares of our common stock are available to be granted under our Plan.

During fiscal year 2011, we granted the following stock options:

During 2012, we granted the following stock options:

The Company uses the Black-Scholes pricing model as a method for determining the estimated fair value for stock awards. Compensation expense for stock awards is recognized on a straight-line basis over the vesting period of service awards and for performance based awards, the Company recognizes the expense when the performance condition is probable of being met.

In determining the compensation cost of the stock awards granted during fiscal 2012 and 2011, the fair value of each grant had been estimated on the date of grant using the Black-Scholes pricing model and the weighted average assumptions used in these calculations are summarized below:

The Company reviews its current assumptions on a periodic basis and adjusts them as necessary to ensure an accurate valuation. The risk-free interest rate is based on the Federal Reserve Board’s constant maturities of the U.S. Treasury bond obligations with terms comparable to the expected life of the options at their issuance date. The Company uses historical data to estimate expected forfeitures, expected dividend yield, expected volatility of the Company’s stock and the expected life of the options.

We recorded $265,000 and $6,835,006 related to compensation expense for the years ended December 31, 2012 and 2011, respectively. All compensation expense is included in general and administrative expense. There was no tax benefit from recording this non-cash expense due to our income tax valuation allowance and due to a portion of the options being incentive stock options. The compensation expense had a $0.01 and $0.18 per share impact on the loss per share for the years ended December 31, 2012 and 2011, respectively. As of December 31, 2012, there was no unrecognized compensation expense.

The following tables summarize information about the Company’s stock options:

A summary of the Company’s nonvested options at December 31, 2012, and changes during the year ended December 31, 2012, is presented below:

 The following tables summarize information about stock options outstanding and exercisable at December 31, 2012:

(1) The aggregate intrinsic value in the table represents the difference between the closing stock price on December 31, 2012 and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their options on December 31, 2012. No options were exercised during 2012. During the year ended December 31, 2011 an aggregate of 90,665 options were exercised resulting in $51,139 of gross proceeds.

Stock Warrants

For warrants granted to non-employees in exchange for services, we recorded the fair value of the equity instrument using the Black-Scholes pricing model unless the value of the services is more reliably measurable.

During fiscal 2011, we granted the following warrant issuances:

During fiscal 2012, we issued a two-year warrant to purchase 50,000 shares of common stock at an exercise price of $0.50 per share in connection with a convertible promissory note (the allocated fair value of the warrant was calculated to be $7,116).

During 2012, Pure Path exercised warrants to purchase 1,000,000 shares of the Company’s unregistered common stock in exchange for a $250,000 reduction in their short term advances consisting of $238,729 of principal and $11,271 of accrued interest. Pure Path received these warrants in a private transaction from Tina Gregerson. (See Note 10- Related Party Transactions)

Using the Black-Scholes pricing model, the following assumptions were used to calculate the fair value of the stock purchase warrants granted, for which the fair value of the services were not more reliably measurable: (i) during 2012: dividend yield of 0%, risk-free interest rate of 2.0%, expected life equal to the contractual life of two years, and volatility of 153% and (ii) during 2011: dividend yield of 0%, risk-free interest rate of 2.0%, expected life equal to the contractual life between two and five years, and volatility of 148% to 158%.

The Company reviews its current assumptions on a periodic basis and adjusts them as necessary to ensure an accurate valuation. The risk-free interest rate is based on the Federal Reserve Board’s constant maturities of the U.S. Treasury bond obligations with terms comparable to the contractual term of the warrants at their issuance date. The Company uses historical data to estimate expected dividend yield and volatility of the Company’s stock.

The following table summarizes information about the Company’s stock purchase warrants outstanding at December 31, 2012:

The aggregate intrinsic value of the 11,126,878 outstanding and exercisable warrants at December 31, 2012 was $0. The intrinsic value is the difference between the closing stock price on December 31, 2012 and the exercise price, multiplied by the number of in-the-money warrants had all warrant holders exercised their warrants on December 31, 2012.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is subject to legal proceedings in the normal course of business. Management believes these proceedings will not have a material adverse effect on the financial statements.

The Company is currently in arbitration with Mark Dacko, the Company’s former Chief Financial Officer. The Company and Mr. Dacko are in dispute regarding his employment with the Company as well as the details of his termination. The date of the arbitration hearing is tentatively scheduled for June 11, 2013.

Consulting Agreement

In May 2011, the Company entered into an agreement with a consultant to operate and manage a future toll milling facility in Clark County, Nevada as well as to perform other services, as requested by the Company. The term of the agreement is for Two (2) years and may be renewed by mutual agreement of the parties.  In return for these services, the Company has agreed to the following compensation throughout the term of this agreement:

As of December 31, 2012, the Company has not yet constructed a toll milling facility.  In 2012, the Company did not issue any stock to the consultant and made none of the $10,000 monthly payments due the consultant. At December 31, 2012, the Company has accrued $183,790 and $458,250 for the future issuance of the common stock and unpaid monthly cash payments, respectively.

NOTE 10 – RELATED PARTY TRANSACTIONS

Afignis, LLC

Pursuant to the Shea Exchange Agreement on March 15, 2011, by and between us, Shea Mining, Afignis, LLC, Leslie Lucas Partners, LLC, Wits Basin and Alfred A. Rapetti, we acquired certain assets from Shea Mining in exchange for Thirty-Five Million (35,000,000) shares of our unregistered shares. Those shares were issued equally to the Shea Mining members of Afignis, LLC and Leslie Lucas Partners, LLC. Sharon Ullman, our Chief Executive Officer and a member of our Board, is the Manager of Afignis, LLC. In December 2012, Afignis converted $140,000 of debt acquired from Shea into 1,400,000 shares of unregistered common stock.

Tina Gregerson/Pure Path

Tina Gregerson was appointed to our board of directors on October 1, 2012 and was appointed to chair the Company’s Compensation Committee. Ms. Gregerson is also a member and director of Pure Path. Ms. Gregerson holds 170,000 shares of our common stock, which she received as a distribution from Leslie Lucas Partners, LLC. Ms. Gregerson assigned all of her convertible promissory notes and the associated warrants to Pure Path in a private transaction in June 2012. Pure Path currently holds an aggregate 9,000,000 shares of our common stock. During the year ended December 31, 2012, (1) Pure Path converted $478,186 of principal and $21,814 of accrued interest relating to the convertible promissory notes assigned from Tina Gregerson into 1,000,000 shares of unregistered common stock; (2) Pure Path received 1,000,000 shares from the exercise of warrants in exchange for a $250,000 reduction in their short-term loan facility ($238,729 of principal plus $11,271 accrued interest); of which Pure Path still has $87,556 due in short-term advances and $78 of accrued interest as of December 31, 2012; (3) Pure Path was issued 2,000,000 shares of unregistered common stock in exchange for a $200,000 ($191,494 of principal plus $8,506 accrued interest) reduction in their short-term loan facility and (4) Pure Path received 5,000,000 shares of unregistered common stock in accordance with the A&R Forbearance Agreement. As of December 31, 2012, the Company is also indebted to Pure Path in the amount of $21,814 and $671 related to convertible promissory notes and associated accrued interest.

Michael Markiewicz

Michael Markiewicz was appointed to our board of directors on July 2, 2012 and was appointed to serve on the Company’s Compensation and Audit Committees. Mr. Markiewicz is a partner with Fogel Neale Partners, LLC and is the Chief Financial Officer of Pure Path. Mr. Markiewicz holds voting rights for a percentage of Pure Path’s shares of common stock equal to his ownership position in Pure Path. Markiewicz Enterprises, a company owned by Michael Markiewicz, received $10,000 in consulting fees from us in 2012.

Midwest Investment Partners LLC

Blair Mielke, a former member of our Board, is also a Managing Member of Midwest Investment Partners LLC (“Midwest”). Through September 27, 2012, Midwest was holding the voting rights of the 17,500,000 Leslie Lucas Partners, LLC shares of our common stock until such time as the shares were sold in the public markets in accordance with all applicable Federal and state securities laws. As of December 31, 2012 all but 110,000 of these proxy shares have been revoked. Additionally, during 2011, the Company entered into two six-month 6% convertible promissory notes (as described in Note 7 – Convertible Promissory Notes) with Midwest, aggregating $75,000.  At December 31, 2012, the aggregate outstanding balance on these notes was $75,000.  In connection with these notes, Midwest was also granted two-year stock purchase warrants to purchase up to 150,000 shares of the Company’s common stock at $0.50 per share. Mr. Mielke resigned from the Board of Directors on September 27, 2012.

NOTE 11 – TRANSFER OF BATES-HUNTER MINE

Pursuant to the terms of the March 15, 2011 Shea Exchange Agreement, Standard Gold held the right, at any time prior to June 13, 2011, to transfer its entire interest and related debt of the Bates-Hunter Mine to Wits Basin. The Bates-Hunter Mine interests consisted of: the Hunter Bates Mining Corporation, a Minnesota corporation and its wholly owned subsidiary of Gregory Gold Producers, Inc., a Colorado corporation (which held property, plant, equipment, mining rights and permits for exploration work performed in Central City, Colorado); a Twelve Percent (12%) secured convertible debenture in the principal amount of $511,590 (convertible into shares of Wits Basin common stock) held by Cabo Drilling (America) Inc., a Washington corporation; a long-term limited recourse promissory note to the sellers of the Bates-Hunter Mine in the principal amount of $6,750,000 Canadian Dollars; and the long-term note payable issued by Hunter Bates in favor of Wits Basin in the principal amount of $2,500,000.

Effective April 29, 2011, our Board of Directors approved the transfer as specified in the Shea Exchange Agreement and served notice to Wits Basin that it was exercising its right. The following was transferred:

The Company recorded approximately $3,466,000 of additional paid-in capital as a result of the transfer of assets and liabilities.

After the consummation of the Shea Exchange Agreement, the Company’s management decided to exercise its right to transfer this mining asset due to the following: (1) the amount of liabilities directly attached to the Bates-Hunter Mine, (2) the prior failed attempts to drain the single mine shaft, (3) the metallurgical results of the approximately Twelve Thousand (12,000) feet drilling program, (4) its location at approximately Nine Thousand (9,000) feet in elevation and (5) the estimated capital required to simply begin sampling below ground.

NOTE 12 – INCOME TAXES

The components of income tax expense for the years ended December 31, 2012 and 2011 consist of the following:

Reconciliations between the statutory rate and the effective tax rate for the years ended December 31, 2012 and 2011 consist as follows:

Significant components of the Company's estimated deferred tax assets and liabilities as of December 31, 2012 and 2011 are as follows:

As of December 31, 2012, we had approximately $7,759,000 of federal net operating loss carry forwards. These carry forwards, if not used, will begin to expire in 2028. Future utilization of our net operating loss carry forwards is subject to certain limitations under Section 382 of the Internal Revenue Code. We believe that the issuance of our common stock in exchange for the Shea Mining and Milling properties in March of 2011 resulted in an "ownership change" under the rules and regulations of Section 382. Accordingly, our ability to utilize our net operating losses generated prior to this date is limited to approximately $1,000,000 annually.

As of December 31, 2012, we do not believe any of our net operating loss carry forward consists of deductions generated by the exercise of warrants or options to purchase our stock. In the future, the stock options referenced in the above table of deferred tax items may be exercised and we may receive a tax deduction. To the extent that the tax deduction is included in a net operating loss carry forward and is in excess of amounts recognized for book purposes, no benefit will be recognized until the loss carry forward is recognized. Upon utilization and realization of the carry forward, the corresponding change in the deferred asset and valuation allowance will be recorded as additional paid-in capital.

We provide for a valuation allowance when it is more likely than not that we will not realize a portion of the deferred tax assets. We have established a valuation allowance against our net deferred tax asset due to the uncertainty that enough taxable income will be generated in those taxing jurisdictions to utilize the assets. Therefore, we have not reflected any benefit of such deferred tax assets in the accompanying financial statements. Our net deferred tax asset and valuation allowance increased by $207,000 in the year ended December 31, 2012.

We reviewed all income tax positions taken or that we expect to be taken for all open years and determined that our income tax positions are appropriately stated and supported for all open years. The Company is subject to U.S. federal income tax examinations by tax authorities for years after 2009 due to unexpired net operating loss carryforwards originating in and subsequent to that year. The Company may be subject to income tax examinations for the various taxing authorities which vary by jurisdiction.

NOTE 13 – EARNINGS (LOSS) PER SHARE

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the periods presented. Diluted net loss per common share is determined using the weighted average number of common shares outstanding during the periods presented, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of options, warrants and conversion of convertible debt. In periods where losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

The following table provides a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share for the years ended December 31:

NOTE 14 – SUPPLEMENTAL CASH FLOW INFORMATION

NOTE 15 – SUBSEQUENT EVENTS

Resignation or appointment of board members and officers

On February 28, 2013, the Board of Directors appointed Joseph Rosamilia as Chief Financial Officer of the Company.

Effective January 24, 2013, Clyde Smith resigned from the Board of Directors.

On January 3, 2013, the Company announced that Mark Dacko was no longer serving as Chief Financial Officer of the Company. The exact date of his departure is disputed.

Subsidiary companies

On January 7, 2013, Tonopah Milling and Metals Group, Inc., a Nevada corporation, was formed as the Company’s wholly owned subsidiary. On January 10, 2013, Tonopah Milling and Metals Group, Inc. formed Two (2) wholly owned subsidiary companies, Tonopah Resources, Inc., a Nevada corporation, and Tonopah Custom Processing, Inc., a Nevada corporation.

Increase in Authorized Shares

Effective March 4, 2013, the Company’s Board of Directors approved and the holders of a majority of the outstanding shares of the Company approved an increase in the authorized shares of the Company’s common stock to 500,000,000.

Series A Preferred Shares

On December 10, 2012, the Company filed Two (2) Statements of Correction with the state of Colorado correcting the Second Amended and Restated Articles that had been incorrectly amended in part on March 15, 2011 and in full on March 25, 2011. After the correct Articles of Incorporation were reinstated by the Statements of Correction, the Company filed Articles of Amendment with the state of Colorado on January 4, 2013 to correct and define the rights and preferences of the Series A Preferred Stock once all board approval and documentation were complete.

Move from Colorado to Nevada

Effective March 5, 2013, the Company moved its domicile from Colorado to Nevada.

Conversion of Unsecured Note

A holder of Two (2) convertible promissory notes converted their notes on January 18, 2013. The note holder converted a Convertible Promissory Note executed on June 16, 2011 in the total amount of $21,913 at a per share price of Fifty Cents ($0.50) into Forty-Three Thousand Eight Hundred Twenty-Seven (43,827) shares of the Company’s common stock and converted a Convertible Promissory Note executed on June 30, 2011 in the total amount of $21,867 at a per share price of Fifty Cents ($0.50) into Forty-Three Thousand Seven Hundred Thirty-Five (43,735) shares of the Company’s common stock.

Settlement of Al Rapetti’s Debt

As of December 31, 2012, Mr. Rapetti was owed a total of $410,967 by the Company. In 2013, Mr. Rapetti assigned his receivables to third parties. Such amounts were settled with the third parties through the issuance of a total of Two Million (2,000,000) shares of restricted common stock. As a result of these transactions, the Company currently no longer owes any money to Mr. Rapetti.

Additional Short-term Loans from Pure Path

Pure Path has loaned the Company an aggregate of $94,651 since December 31, 2012, in a series of six-month loans that accrue interest at a rate of 12.5% per annum.

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosures. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance the objectives of the control system are met.

Under the supervision of, and the participation of, our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Annual Report on Form 10-K 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 in Securities and Exchange Commission rules and forms, and is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were not effective as of December 31, 2012, because of the identification of the material weaknesses in internal control over financial reporting described below. Notwithstanding the material weaknesses that existed as of December 31, 2012, our Chief Executive Officer and Chief Financial Officer have each concluded that the consolidated financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, the financial position, results of operations and cash flows of the Company and its subsidiaries in conformity with accounting principles generally accepted in the United States of America (“GAAP”). We are currently taking steps to remediate such material weaknesses as described below.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a set of processes designed by, or under the supervision of, a company’s principal executive and principal financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It should be noted that any system of internal control, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting based on criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), as of December 31, 2009.

As a result of our continued material weaknesses described below, management has concluded that, as of December 31, 2012, our internal control over financial reporting was not effective based on the criteria in “Internal Control-Integrated Framework” issued by COSO.

Material Weaknesses in Internal Control over Financial Reporting

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment, management identified the following control deficiencies, which were previously identified, that still represent material weaknesses at December 31, 2012:

We are in the process of establishing certain steps in response to the identification of these material weaknesses that should result in certain changes in our internal control over financial reporting, but due to the Company’s limited funds and inability to add certain staff personnel, the changes may be limited and may also not be completely effective. There were no additional material weaknesses noted during the quarter ended December 31, 2012.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended December 31, 2012, there was a change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There was a change in the Chief Financial Officer position.

ITEM 9B. OTHER INFORMATION

None.

PART III

Set forth below are the names of all directors and executive officers of the Company, their respective ages and all positions and offices with the Company held by each person as of March 31, 2013:

Sharon L. Ullman was appointed to our board of directors on March 18, 2011, in connection with the Shea Exchange Agreement. Effective December 16, 2011, Ms. Ullman was appointed to serve as the Company’s interim Chief Executive Officer and Executive Chairperson of the Board. On October 9, 2012, the Board of Directors voted to remove “Interim” from her title and approve her position as Chief Executive Officer and Chairman of the Board. Since June 2010, Ms. Ullman has served as the Managing Member of Afignis, LLC, a company engaged in the development of mining, natural resource and agricultural opportunities in emerging markets.  Afignis holds approximately 35% of our outstanding common stock.  Ms. Ullman has also served as the founder and CEO of S. L. Ullman & Associates, Inc., a private consulting firm active in philanthropic activities and government relations, since 2007.  She attended CCNY/Baruch College.

Alfred A. Rapetti was appointed to our board of directors on September 14, 2010 and was appointed as our Chief Executive Officer on January 21, 2011. Effective December 16, 2011, Mr. Rapetti resigned as the Company’s Chief Executive Officer, but remains a member of the Board. Mr. Rapetti has over 40 years of experience in investment banking, merchant banking, venture capital and serial entrepreneurship. From 2007 through 2010, Mr. Rapetti was an independent consultant. From 2005 through 2006, Mr. Rapetti was the executive vice-chairman and owner of Avantair, Inc. From 1995 through 2004, Mr. Rapetti was with Stamford Capital Group, Inc., acquiring over $6 billion of companies over a nine year period involving some 225 transactions including Great Dane Holdings, Falcon Building Products, Sithe Energies and Clark-Sweibel. Individually as an entrepreneur, Mr. Rapetti created/owned a major leasing company in addition to starting/running the largest nuclear safety firm in the world servicing 14 U.S. nuclear utilities and four foreign governments. Mr. Rapetti has a B.S. in nuclear engineering and marine engineering from SUNY Maritime College and M.S. in nuclear engineering from New York University.

Tina Gregerson was appointed to our board of directors on September 27, 2012, and serves on the Compensation Committee and as Chairman of the Compensation Committee. She was also appointed Secretary of the Company on November 29. 2012. Since 1981, Tina Gregerson has owned and served as the CEO of Personnel Staffing, Inc., one of Alabama’s largest independent staffing companies. Under Tina’s leadership, Personnel Staffing has grown to produce over 96 million dollars in annual revenue and now operates five Alabama branches, one Texas branch, and one branch in Tennessee. Personnel Staffing won the Best Minority-Owned Business Award for 2008 for 26+ employees, named by The Birmingham Business Journal. In 1994, Ms. Gregerson’s company was recognized as Business of the Year by the Alabama Business Woman Association. In 2010, Ms. Gregerson sold her financing company, The Signature Group, to North Carolina Mutual Life. She is also the owner of Gregerson Management Services. Ms. Gregerson currently serves on the Board of Directors for Capstone Bank of Tuscaloosa, the Executive Board for the National Independent Staffing Association, and the Executive Board of Staffing CEO’s. She has also served as the Chairperson for the Gadsden Chamber of Commerce and on the Chamber Board for five years and was a member of the Riverview Regional Medical Center Board of Trustees for two years. For her continued leadership, dedication and service to the community Ms. Gregerson received commendation from the Governor of Alabama in August of 2011.

Michael Markiewicz was appointed to our board of directors on July 2, 2012, and serves on the Board’s Audit Committee. Mr. Markiewicz has over 30 years of experience in public accounting and wealth management. He is a certified public accountant, personal financial specialist and certified financial planner. Mr. Markiewicz is a partner with Fogel Neale Partners, LLC and is the Chief Financial Officer of Pure Path Capital Management Company LLC, both since 2011. From 2008 to 2011, Mr. Markiewicz was a senior manager with CBIZ MHM Family Office Services; from 2006 to 2008 a director at Marks, Paneth and Shron; and from 2004 to 2006 a director at JH Cohn LLP. Mr. Markiewicz has a B.A. in Economics and Sociology from Tufts University and a M.B.A. and M.S. in Accounting from Northeastern University.

Joseph Rosamilia was appointed Chief Financial Officer on February 28, 2013. Mr. Rosamilia has Fifteen (15) years of commercial and investment banking experience. At predecessor companies of JPMorgan Chase, he set up and managed groups in Asia, Europe, and the United States.  At the bank, Mr. Rosamilia was also responsible for multi-million dollar credit portfolios requiring risk analysis and management of a broad spectrum of products including currency and interest-rate swaps, foreign exchange, direct bank loans, lines of credit, bankers’ acceptances, and letters of credit. He served as an account officer for large multinational corporations, including corporations involved in global trading of precious and non-precious metals, as well as in metals and mining. Subsequently, Mr. Rosamilia has spent over a decade consulting and operating early stage private companies. He was the CFO of an Internet content framework development company in New York and the CFO of a United States based company promoting exports to China.  He holds a Master of Business Administration, with a concentration in finance, from the Wharton School of the University of Pennsylvania and a Bachelor of Arts in Asian Studies from Colgate University. He speaks Japanese fluently and has a knowledge of German. Mr. Rosamilia is a former member of the United States Chamber of Commerce in Tokyo, Japan.

Effective September 27, 2012, Blair Mielke resigned from the Board of Directors.

On February 11, 2012, Manfred E. Birnbaum resigned from the Board of Directors.

There is no family relationship between any director and executive officer of the Company.

CODE OF ETHICS

We adopted a Code of Ethics that applies to our principal executive officer, principal financial officer and persons performing similar functions on October 5, 2012.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our director, officer and holders of more than 10% of our common stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Based solely upon our review of such filings, we are not aware of any failures by such persons to make any such filings on a timely basis.

AUDIT COMMITTEE, COMPENSATION COMMITTEE AND FINANCIAL EXPERT

The Company does have a formal audit committee, but currently does not have a financial expert. The audit committee consists of Mr. Michael Markiewicz and Ms. Sharon Ullman. There was one audit committee meeting held during 2012. Financial information relating to quarterly reports was disseminated to all board members for review. The audited financial statements for the years ended December 31, 2012 and 2011 were provided to each member of the board in which any concerns by the members were directed to management and the auditors.

The Company has a compensation committee comprised of Ms. Ullman and Ms. Tina Gregerson. There were no compensation committee meetings during 2012.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table summarizes the compensation of each name executive for the fiscal years ended December 31, 2012 and 2011 awarded to or earned by (i) each individual serving as our principal executive officer and principal financial officer of the Company and (ii) each individual that served as an executive officer of the Company at the end of such fiscal years who received compensation in excess of $100,000.