Pacific Gold & Royalty 10-Q 2010 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended March 31, 2010

Commission File Number       000-32629

PACIFIC GOLD CORP.

 (Exact name of registrant as specified in charter)

Nevada	98-0408708
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

848 N. Rainbow Blvd. #2987, Las Vegas, Nevada	89107
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code       (416) 214-1483

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yeso   Nox

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yesx   Noo

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 definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

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

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

As of June 22, 2011, the Company had outstanding 745,732,649 shares of its common stock, par value $0.001.

TABLE OF CONTENTS

ITEM NUMBER AND CAPTION		PAGE
PART I
ITEM 1.	Consolidated Financial Statements	3
ITEM 2.	Management’s Discussion and Analysis of Financial Condition And Results of Operations	17
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	19
ITEM 4.	Controls and Procedures	19
PART II
ITEM 1.	Legal Proceedings	21
ITEM 1A	Risk Factors	21
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
ITEM 3.	Defaults Upon Senior Securities	21
ITEM 4.	Submission of Matters to a Vote of Security Holders	21
ITEM 5.	Other Information	21
ITEM 6.	Exhibits	21

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PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

Pacific Gold Corp.
Consolidated Balance Sheets (Unaudited)
	March 31, 2010		December 31, 2009
ASSETS
Current Assets:
Cash	$	485	$	8,585
Restricted Cash		-		-
Inventory		30,222		30,222
Prepaid Expenses		-		-
Total Current Assets		30,707		38,807
Mineral Rights, Plant and Equipment
Mineral rights, net		345,530		342,530
Plant and Equipment, net		839,048		909,283
Water Rights and Wells		90,000		90,000
Land		13,670		13,670
Total Mineral Rights, Plant and Equipment, net		1,288,248		1,355,483
Other Assets:
Deposits		9,656		18,542
Reclamation Bond		196,780		196,780
Total Other Assets		206,436		215,322
TOTAL ASSETS	$	1,525,391	$	1,609,612
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable	$	807,594	$	786,327
Accrued Expenses		487,090		475,983
Accrued Interest		47,046		-
Convertible Debentures - Short-Term Portion		303,790		-
Notes Payable - Related Parties		98,267		-
Notes Payable – Shareholder		1,881,846		1,881,846
Total Current Liabilities		3,625,633		3,144,156
Long Term Liabilities:
Convertible Debentures		-		329,877
Derivative Liability		-		-
Total Liabilities		3,625,633		3,474,033
Stockholders' Deficit:
Preferred Stock - $0.001 par value; 5,000,000 shares authorized, no shares outstanding at March 31, 2010, 322,728 shares issued and outstanding at December 31, 2009		-		323
Common Stock - $0.001 par value; 500,000,000 shares authorized, 691,227,599, and 365,470,296 shares issued and outstanding at March 31, 2010 and December 31, 2009 respectively		691,228		365,470
Additional Paid-in Capital		22,291,980		22,587,414
Accumulated Deficit		(25,083,450)		(24,817,628)
Total Stockholders' Deficit		(2,100,242)		(1,864,421)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,525,391	$	1,609,612

See accompanying notes to the consolidated financial statements

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Pacific Gold Corp.
Consolidated Statements of Operations (Unaudited)
	Quarter Ended
	March 31, 2010		March 31, 2009
Revenue:
Total Revenue	$	-	$	-
Production Costs
Production Costs		-		-
Depreciation		70,235		88,036
Gross Margin		(70,235)		(88,036)
Operating Expenses:
General and Administrative		140,562		317,689
Total Operating Expenses		140,562		317,689
Net Loss from Operations		(210,797)		(405,725)
Other Income/(Expenses)
Interest Expense		(55,025)		(101,004)
Change in Fair Value of Derivative Liability		-		(8,344)
Total Other Income /(Expenses)		(55,025)		(109,348)
Net Income/(Loss)		(265,822)		(515,073)
Basic and Diluted Earnings/(Loss) per Share	$	(0.001)	$	(0.003)
Weighted Average Shares Outstanding:
Basic and Diluted		466,803,646		188,681,439

See accompanying notes to the consolidated financial statements

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Pacific Gold Corp.
Consolidated Statements of Cash Flows (Unaudited)
	For the Quarter Ended
	March 31, 2010		March 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(265,822)	$	(515,073)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Depreciation and Depletion		70,235		88,039
Amortization		-		24,500
Change in Fair Value of Derivative Liability		-		8,344
Non-cash Portion of Interest Paid on Convertible Debt		3,914		41,966
Common Stock Issued for Services		-		100,000
Changes in:
Accounts Payable		21,267		24,892
Accrued Expenses		11,107		176,589
Accrued Interest		47,046		34,875
NET CASH (USED) IN OPERATING ACTIVITIES		(112,253)		(15,866)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases and Development of Property and Equipment		(3,000)		(3,000)
Proceeds from Restricted Cash Account		-		20,267
Net Decrease in Deposits		8,886		-
NET CASH PROVIDED BY INVESTING ACTIVITIES		5,886		17,267
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Related Party Debt		98,267		-
NET CASH PROVIDED BY FINANCING ACTIVITIES		98,267		-
NET CHANGE IN CASH	$	(8,100)	$	1,401
CASH AT BEGINNING OF PERIOD		8,585		1,000
CASH AT END OF PERIOD	$	485	$	2,401
Cash paid during the year for:
Interest		-		-
Income Taxes		-		-
Non-cash financing and investing activities:
Conversion of Notes Payable	$	30,000	$	226,895

See accompanying notes to the consolidated financial statements

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Pacific Gold Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Pacific Gold Corp. (“Pacific Gold”) was originally incorporated in Nevada on December 31, 1996 under the name of Demand Financial International, Ltd.  On October 3, 2002, Demand Financial International, Ltd. changed its name to Blue Fish Entertainment, Inc.  On August 5, 2003, the name was changed to Pacific Gold Corp. Pacific Gold is engaged in the identification, acquisition, and development of prospects believed to have gold mineralization. Pacific Gold through its subsidiaries currently owns claims, property and leases in Nevada and Colorado.

Basis of Presentation

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S dollars, the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in Pacific Gold’s Annual Report filed with the SEC on Form 10-K. The Company’s fiscal year-end is December 31. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure contained in the audited financial statements for 2009 as reported in the Form 10-K have been omitted.

Principle of Consolidation

The consolidated financial statements include all of the accounts of Pacific Gold Corp. and its wholly-owned subsidiaries, Nevada Rae Gold, Inc., Fernley Gold, Inc., Pilot Mountain Resources, Inc. and Pacific Metals Corp. As well, the consolidated financial statements include the accumulated loss of Oregon Gold Inc. up to the date of its disposal, August 27, 2009.All significant inter-company accounts and transactions have been eliminated.

Significant Accounting Principles

Use of Estimates and Assumptions  

In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenue and expenses in the statement of expenses.  Actual results could differ from those estimates.

Cash and Cash Equivalents  

For purposes of the statement of cash flows, Pacific Gold considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  The Company has no cash in excess of FDIC federally insured limits as of March 31, 2010.

Revenue Recognition.  

Pacific Gold recognizes revenue from the sale of gold when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collection is reasonably assured, which is determined when it places a sale order of gold from its inventory on hand with the refinery. There were no sales in the three months ended March 31, 2010.

Accounts Receivable/Bad Debt.   

The allowance for doubtful accounts is maintained at a level sufficient to provide for estimated credit losses based on evaluating known and inherent risks in the receivables portfolio.  Management evaluates various factors including expected losses and economic conditions to predict the estimated realization on outstanding receivables.  As of March 31, 2010, there were no accounts receivable.

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Inventories

Inventories are stated at the lower of average cost or net realizable value.  Costs included are limited to those directly related to mining. There was inventory as of March 31, 2010 of $30,222 consisting of metals inventory and stockpile ore.

The major classes of inventories as of March 31, 2010, and December 31, 2009 were:

Finished Goods	$	0
Stockpile Ore		30,222
Total	$	30,222

Property and Equipment. 

Property and equipment are valued at cost.  Additions are capitalized and maintenance and repairs are charged to expense as incurred.  Gains and losses on dispositions of equipment are reflected in operations.  Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are 2 to 10 years.

Mineral Rights

All mine-related costs, other than acquisition costs, are expensed prior to the establishment of proven or probable reserves. Reserves designated as proven and probable are supported by a final feasibility study, indicating that the reserves have had the requisite geologic, technical and economic work performed and are legally extractable at the time of reserve determination.  Once proven or probable reserves are established, all development and other site-specific costs are capitalized.  

Capitalized development costs and production facilities are depleted using the units-of-production method based on the estimated gold which can be recovered from the ore reserves processed.  There has been no change to the estimate of proven and probable reserves.  Lease development costs for non-producing properties are amortized over their remaining lease term if limited.  Maintenance and repairs are charged to expense as incurred.

We did not conduct any mining in the three months ended March 31, 2010 and thus we did not amortize any of our mineral rights.

Impairment of Long-Lived Assets.

The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be appropriate. Pacific Gold assesses recoverability of the carrying value of the asset by estimating the undiscounted future net cash flows, which depend on estimates of metals to be recovered from proven and probable ore reserves, and also identified resources beyond proven and probable reserves, future production costs and future metals prices over the estimated remaining mine life.  If undiscounted cash flows are less that the carrying value of a property, an impairment loss is recognized based upon the estimated expected future net cash flows from the property discounted at an interest rate commensurate with the risk involved.  If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value.  

The fair value of an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.  The present value of the estimated asset retirement costs is capitalized as part of the carrying amount of the long-lived asset.  For Pacific Gold, asset retirement obligations primarily relate to the abandonment of ore-producing property and facilities.

We review the carrying value of our interest in each mineral claim on a quarterly basis to determine whether impairment has incurred in accordance with ASC 360 (formerly SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”)

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Where information and conditions suggest impairment, we write-down these properties to net recoverable amount, based on estimated discounted future cash flows. Our estimate of gold price, mineralized materials, operating capital, and reclamation costs are subject to risks and uncertainties affecting the recoverability of our investment in property, plant, and equipment. Although we have made our best estimate of these factors based on current conditions, it is possible that changes could occur in the near term that could adversely affect our estimate of net cash flows expected to be generated from our operating properties and the need for possible asset impairment write-downs.

Where estimates of future net operating cash flows are not available and where other conditions suggest impairment, we assess if carrying value can be recovered from net cash flows generated by the sale of the asset or other means.

Income taxes.  

Pacific Gold recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered.  Pacific Gold provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

In July 2006, the FASB issued Interpretation No. 48 (FIN No. 48), “Accounting for Uncertainty in Income Taxes.” This interpretation requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. FIN No. 48 was effective for fiscal years beginning after December 15, 2006. The Company adopted the provisions of FIN 48, on January 1, 2007. FIN 48 requires the recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. Adoption of this new standard did not have a material impact on our financial position, results of operations or cash flows. This interpretation is now found under ASC Topic 740, “Accounting for Uncertainty in Tax Positions”.

Loss per Share.  

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities.  For the three months ended March 31, 2010, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. As of March 31, 2010 the Company had 35,310,202 potentially dilutive common stock equivalents.

Advertising.  

The Company’s policy is to expense advertising costs as incurred.  For the three months ended March 31, 2010 the Company didn’t incur advertising costs.

Environmental Remediation Liability.  

The Company has posted a bond with the State of Nevada in the amount required by the State of Nevada equal to the maximum cost to reclaim land disturbed in its mining process.  The bond requires a quarterly premium to be paid to the State of Nevada Division of Minerals. The Company is current on all payments.  Due to its investment in the bond and the close monitoring of the State of Nevada, the Company believes that it has adequately mitigated any liability that could be incurred by the Company to reclaim lands disturbed in its mining process.

Financial Instruments. 

The Company’s financial instruments, when valued using market interest rates, would not be materially different from the amounts presented in the consolidated financial statements.

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Convertible Debentures.

Convertible debt is accounted for under the guidelines established by APB Opinion No. 14 “Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants”  under the direction of Emerging Issues Task Force (EITF) 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios,  EITF 00-27 Application of Issue No 98-5 to Certain Convertible Instruments and EITF 05-8 Income Tax Consequences of Issuing Convertible Debt with Beneficial Conversion Features. The Company records a beneficial conversion feature (BCF) related to the issuance of convertible debt that have conversion features at fixed or adjustable rates that are in-the-money when issued and records the fair value of warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to paid-in-capital. The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of SFAS No. 123R, (now ASC Topic 718), except that the contractual life of the warrant is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense. For a conversion price change of a convertible debt issue, the additional intrinsic value of the debt conversion feature, calculated as the number of additional shares issuable due to a conversion price change multiplied by the previous conversion price, is recorded as additional debt discount and amortized over the remaining life of the debt.

The Company accounts for modifications of its Embedded Conversion Features (ECF’s) in accordance with EITF 06-6 which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment pursuant to EITF 96-19.”Debtor’s Accounting for a Modification or Exchange of Debt Instruments”.

Equity Instruments Issued with Registration Rights AgreementThe Company accounts for these penalties as contingent liabilities, applying the accounting guidance of SFAS No. 5, “Accounting for Contingencies” (Now ASC Topic 450). This accounting is consistent with views established by FASB Staff Positions FSP EITF 00-19-2 “Accounting for Registration Payment Arrangements”, which was issued December 21, 2006. Accordingly, the Company recognizes a liability when it becomes probable that they will be incurred and amounts are reasonably estimable.

In connection with the issuance of convertible note financing for gross proceeds of $2,440,000 in February 2007 and the $450,000 in October 2007, the Company was required to file a registration statement on Form SB-2 with the Securities and Exchange Commission in order to register the resale of the common stock under the Securities Act.  The Company filed that registration statement on April 9, 2007 and October 31, 2007 and those statements have been declared effective by the Securities and Exchange Commission (SEC).

Deferred Financing Fees

Deferred financing fees represent debt issuance costs withheld from the proceeds by the purchasers of the Company’s convertible notes payable. These fees are amortized to interest and financing expense over the lives of the related convertible notes.

Derivative Liability Related to Convertible Notes and Warrants

The derivative liability related to convertible notes and warrants arises because the conversion price of the Company’s convertible notes is discounted from the market price of the Company’s common stock. Thus, the number of shares that may be issued upon conversion of such notes is indeterminate, which gives rise to the possibility that the Company may not be able to fully settle its convertible note and warrant obligations by the issuance of common stock.

The derivative liability related to convertible notes and warrants is adjusted to fair value as of each date that a note is converted or a warrant is exercised, as well as at each reporting date, using the Black-Scholes pricing model. Any change in fair value between reporting dates that arises because of changes in market conditions is recognized as a gain or loss. To the extent the derivative liability is reduced as a consequence of the conversion of notes or the exercise of warrants, such reduction is recognized as additional paid-in capital as of the conversion or exercise date.

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Stock based compensation.

Effective January 1, 2006, the Company adopted SFAS 123(R),Share-Based Payment, (“SFAS 123(R)”).  SFAS 123(R) requires that the fair value compensation cost relating to share-based payment transactions be recognized in financial statements.  Under the provisions of SFAS 123(R), share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized over the employee’s requisite service period, which is generally the vesting period.   The fair value of the Company’s stock options is estimated using a Black-Scholes option valuation model.  The Company adopted the fair value recognition provisions of SFAS No. 123(R) using the modified prospective transition method.  Under this transition method, stock-based compensation cost is recognized beginning January 1, 2006, for all options granted after the date of adoption as well as the unvested portion of previously granted options based on the estimated fair value.  The impact of adopting SFAS No. 123(R) resulted in additional compensation expense for the year ended December 31, 2007 of $35,000. There were no stock options granted during the three months ended March 31, 2010.  SFAS No. 123(R) is now found as ASC Topic 718.

Recently issued accounting pronouncements

On January 1, 2009. The Company is currently evaluating the potential impact of SFAS No. 161 on the Company’s consolidated financial statements. SFAS No. 161 is now found as ASC Topic 815.

In June 2009, the Financial Accounting Standards Board (FASB) issued its final Statement of Financial Accounting Standards (SFAS) No. 168,  “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a Replacement of FASB Statement No. 162”.  SFAS No. 168 made the FASB Accounting Standards Codification (the Codification) the single source of U.S. GAAP used by nongovernmental entities in the preparation of financial statements, except for rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws, which are sources of authoritative accounting guidance for SEC registrants. The Codification is meant to simplify user access to all authoritative accounting guidance by reorganizing U.S. GAAP pronouncements into roughly 90 accounting topics within a consistent structure; its purpose is not to create new accounting and reporting guidance. The Codification supersedes all existing non-SEC accounting and reporting standards and was effective for the Company beginning July 1, 2009. Following SFAS No. 168, the Board will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead, it will issue Accounting Standards Updates (ASU). The FASB will not consider ASUs as authoritative in their own right; these updates will serve only to update the Codification, provide background information about the guidance, and provide the bases for conclusions on the change(s) in the Codification. SFAS No. 168 is now found as ASC Topic 105.

In August 2009, the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10, “Fair Value Measurements and Disclosures—Overall”.  The update provides clarification that in circumstances, in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update. The amendments in this ASU clarify that a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability and also clarifies  that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The guidance provided in this ASU is effective for the first reporting period, including interim periods, beginning after issuance.  The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations

In September 2009, the FASB issued ASU 2009-06, Income Taxes (Topic 740), ”Implementation Guidance on Accounting for Uncertainty in Income Taxes and Disclosure Amendments for Nonpublic Entities”,  which provides implementation guidance on accounting for uncertainty in income taxes, as well as eliminates certain disclosure requirements for nonpublic entities.  For entities that are currently applying the standards for accounting for uncertainty in income taxes, this update shall be effective for interim and annual periods ending after September 15, 2009. For those entities that have deferred the application of accounting for uncertainty in income taxes in accordance with paragraph 740-10-65-1(e), this update shall be effective upon adoption of those standards. The adoption of this standard is not expected to have an impact on the Company’s consolidated financial position and results of operations since this accounting standard update provides only implementation and disclosure amendments.  

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In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06 which is intended to improve disclosures about fair value measurements. The guidance requires entities to disclose significant transfers in and out of fair value hierarchy levels, the reasons for the transfers and to present information about purchases, sales, issuances and settlements separately in the reconciliation of fair value measurements using significant unobservable inputs (Level 3). Additionally, the guidance clarifies that a reporting entity should provide fair value measurements for each class of assets and liabilities and disclose the inputs and valuation techniques used for fair value measurements using significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). The Company has applied the new disclosure requirements as of January 1, 2010, except for the disclosures about purchases, sales, issuances and settlements in the Level 3 reconciliation, which will be effective for interim and annual periods beginning after December 15, 2010. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2010, the FASB issued ASU 2010-09 which requires that an SEC filer, as defined, evaluate subsequent events through the date that the financial statements are issued. The update also removed the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. The adoption of this guidance on January 1, 2010 did not have a material effect on the Company’s consolidated financial statements.

In March 2010, the FASB issued Accounting Standard Update No. 2010-11 “Derivatives and Hedging” (Topic 815). ASU No. 2010-11 update provides amendments to subtopic 815-15, Derivatives and hedging. The amendments clarify about the scope exception in paragraph 815-10-15-11 and section 815-15-25 as applicable to the embedded credit derivatives. The ASU is effective on the first day of the first fiscal quarter beginning after June 15, 2010. Therefore, for a calendar-year-end entity, the ASU becomes effective on July 1, 2010. Early application is permitted at the beginning of the first fiscal quarter beginning after March 5, 2010. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued Accounting Standard Update No. 2010-12. “Income Taxes” (Topic 740). ASU No.2010-12 amends FASB Accounting Standard Codification subtopic 740-10 Income Taxes to include paragraph 740-10-S99-4. On March 30, 2010 The President signed the Health Care & Education Affordable Care Act reconciliation bill that amends its previous Act signed on March 23, 2010. FASB Codification topic 740, Income Taxes, requires the measurement of current and deferred tax liabilities and assets to be based on provisions of enacted tax law. The effects of future changes in tax laws are not anticipated.” Therefore, the different enactment dates of the Act and reconciliation measure may affect registrants with a period-end that falls between March 23, 2010 (enactment date of the Act), and March 30, 2010 (enactment date of the reconciliation measure). However, the announcement states that the SEC would not object if such registrants were to account for the enactment of both the Act and the reconciliation measure in a period ending on or after March 23, 2010, but notes that the SEC staff “does not believe that it would be appropriate for registrants to analogize to this view in any other fact patterns.” The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued Accounting Standard Update No. 2010-13 “Stock Compensation” (Topic 718). ASU No.2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The amendments in this Update should be applied by recording a cumulative-effect adjustment to the opening balance of retained earnings. The cumulative-effect adjustment should be calculated for all awards outstanding as of the beginning of the fiscal year in which the amendments are initially applied, as if the amendments had been applied consistently since the inception of the award. The cumulative-effect adjustment should be presented separately. Earlier application is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued Accounting Standards Update No.2010-14, “Accounting for Extractive Activities – Oil & Gas”  (Topic 932). ASU No. 2010-14 amends FASB accounting Standard paragraph 932-10-S99-1 due to SEC release no. 33-8995 [FR 78], Modernization of Oil and Gas Reporting and provides update as to amendments to SEC Regulation S-X, Rule 4-10. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

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In July 2010, the FASB issued Accounting Standard Update No. 2010-20 (ASU No. 2010-20) “Receivables” (Topic 310). ASU No. 2010-20 provides financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. This update is intended to provide additional information to assist financial statement users in assessing an entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses. The amendments in this update apply to both public and nonpublic entities with financing receivables, excluding short-term trade accounts receivable or receivables measured at fair value or lower of cost or fair value. The objective of the amendments in ASU No. 2010-20 is for an entity to provide disclosures that facilitate financial statement users’ evaluation of (1) the nature of credit risk inherent in the entity’s portfolio of financing receivables, (2) How that risk is analyzed and assessed in arriving at the allowance for credit losses and (3) The changes and reasons for those changes in the allowance for credit losses. The entity must provide disclosures about its financing receivables on a disaggregated basis. For public entities ASU No. 2010-20 is effective for interim and annual reporting periods ending on or after December 15, 2010. For nonpublic entities ASU No. 2010-20 will become effective for annual reporting periods ending on or after December 15, 2011. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2010, the FASB issued Accounting Standard Updates No. 2010-21 (ASU No. 2010-21) “Accounting for Technical Amendments to Various SEC Rules and Schedules”  and No. 2010-22 (ASU No. 2010-22) “ Accounting for Various Topics – Technical Corrections to SEC Paragraphs ”.  ASU No 2010-21 amends various SEC paragraphs pursuant to the issuance of Release no. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies. ASU No. 2010-22 amends various SEC paragraphs based on external comments received and the issuance of SAB 112, which amends or rescinds portions of certain SAB topics.  Both ASU No. 2010-21 and ASU No. 2010-22 are effective upon issuance.  The amendments in ASU No. 2010-21 and No. 2010-22 will not have a material impact on the Company’s financial statements.

A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, Pacific Gold has not determined whether implementation of such proposed standards would be material to the Company’s consolidated financial statements.

NOTE 2 - INTERIM FINANCIAL STATEMENTS

The accompanying interim unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine and three month period ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010. For further information, refer to the financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

NOTE 3 – PLANT AND EQUIPMENT

During the three months ended March 31, 2010 the Company reviewed its equipment requirements and modified its plant.  No assets were sold during the three months ended March 31, 2010.

These assets are being depreciated on a straight-line basis over 2 to 10 years depending on the estimated useful life of the asset.

Plant and Equipment at March 31, 2010 and December 31, 2009 consisted of the following:

PLANT AND EQUIPMENT	March 31, 2010		December 31, 2009
Building	$	824,182	$	824,182
Accumulated Depreciation		(372,339)		(350,614)
Equipment		1,247,063		1,247,063
Accumulated Depreciation		(859,858)		(811,348)
	$	839,048	$	909,283

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For the three month ended March 31, 2010 and December 31, 2009 Depreciation expense was $70,235 and $88,036, respectively.

NOTE 4 – MINERAL RIGHTS

Mineral rights at March 31, 2010 and December 31, 2009 consisted of the following:

MINERAL RIGHTS	March 31, 2010		December 31, 2009
Nevada Rae Gold – Morris Land	$	135,074	$	135,074
Accumulated Depletion		(98)		(98)
Fernley Gold – Lower Olinghouse		92,025		89,025
Pilot Mountain Resources – Project W		91,994		91,994
Pacific Metals – Graysill Claims		26,535		26,535
	$	345,530	$	342,530

As of March 31, 2010 and December 31, 2009 the amount allocated to undeveloped mineral rights was $10,000.

NOTE 5 – SHAREHOLDER NOTE PAYABLE/RELATED PARTY TRANSACTIONS

Pacific Gold owes $1,881,846 to a shareholder as of March 31, 2010. The amount due is represented by a promissory note, with interest at 10%. At March 31, 2010, accrued interest on the note totaled $47,046. The notes were originally due on December 31, 2009, then extended to January 02, 2011 and subsequently extended to January 02, 2013. Interest expense on the loan for the three months ended March 31, 2010 and March 31, 2009 $47,046 and $34,875, respectively.

Pacific Gold owes its executives $285,328 and 239,356 in accrued salaries and short term notes as of March 31, 2010, and December 31, 2009, respectively. These amounts are reflected in the accrued expenses for the years ended March 31, 2010 and December 31, 2009.

Pacific Gold owes $60,591 to related parties in short term notes payable. These short term notes are interest free and due on demand.

NOTE 6 – DISCONTINUED OPERATIONS

On August 27, 2009 Pacific Gold Corp sold 100% of its equity interest in Oregon Gold comprising of 8,002,389 shares to an individual, Yinfang Yang. The Sale agreement calls for sale of 8,002,389 shares of Oregon Gold held by the Company and its Intercompany note receivable from Oregon Gold of $526,912 for a total consideration of $210,020.

Sale of Oregon Gold
Details of Consideration Received
Cash	$	153,534
Paid toward accrued Interest on Series D Convertible Notes		18,606
Commissions		30,000
Reduction  in accounts payable of Oregon Gold Prior to Sale		7,880
Total	$	210,020
Consideration applied
Consideration Received	$	210,020
Add: Investment in Oregon Gold*		326,533
Less: Note Receivable from Oregon Gold		(526,912)
Less: Selling Costs for commissions paid		(30,000)
Less: Reduction  in accounts payable of Oregon Gold prior to sale		(7,880)
Loss from Sale of Oregon Gold	$	(28,239)

* Investment account of Oregon Gold had a negative balance due to accumulated loss.

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NOTE 7 - FINANCING

Series E Note

On October 5, 2007 the Company sold a $450,000 in principal amount of discounted convertible debenture (“Debenture”) and a warrant to purchase common stock (“Warrant”) for an aggregate payment to the Company of $300,000, after deduction for the interest discount. The Debenture is due October 5, 2010, and has an effective simple interest rate of 16.7%, prepaid by original issue discount, with an effective interest rate of 14.47%.  The principal amount due may be converted into shares of common stock at any time by the holder at an initial conversion rate of $0.18 per share. The amount of principal that may be converted at any one time by the investor is limited to 9.99% of the outstanding number of shares of common stock of the Company immediately after the conversion. The Company has agreed to liquidated damages and other damages for failure to effect the conversion or to deliver the certificates. The conversion price will be subject to adjustment for regular corporate events and reduced to equal the selling price of, or exercise – conversion price for, common stock sold or issuable after October 5, 2007, at less than $0.18.  The conversion price also may be adjusted in the future based on the average of the last three conversions of the currently outstanding debentures issued in the February 2007 debenture offering, if the average is less than $.18. During 2008 the conversion price was readjusted to $0.0099 and the note was revalued at this time.

The Warrant may be exercised for an aggregate of 450,000 shares of common stock until October 5, 2010, at $0.18 per share. The warrants may be exercised by a holder at any one time for up to a maximum of 9.99% of the outstanding number of shares of common stock of the Company immediately after exercise.  The exercise price may be paid on a cashless basis in certain limited circumstances, and it will be subject to adjustment for regular corporate events and reduced to equal the selling price of, or exercise – conversion price for, common stock sold or issuable after October 5, 2007, at less than $0.18.

The proceeds from the notes have been discounted for the relative fair value of the warrants. All discounts will be amortized over the life of the notes.  

A summary of the carrying value of the notes is as follows:

Face value – Series E	$	450,000
Less: Relative fair value1 of:
Warrants		(72,956)
Beneficial Conversion Feature		(72,236)
Carrying amount of Series E note on October 5, 2007:	$	304,808
Amortization of Discounts to December 31, 2007		133,093
Carrying amount of Series E note on December 31, 2007	$	316,907
Amortization of Discounts to October 15, 2008		94,778
Carrying amount of Series E note on October 15, 2008		355,222
Extinguishment of Note on October 15, 2008		(355,222)
Revised face value on October 16, 2008	$	450,000
Less:  Relative fair value1 of:
Warrants		(491)
Beneficial Conversion Feature		(84,091)
Carrying amount of Series E note on October 16, 2008		365,418
Conversions to shares thru to December 31, 2008		(20,000)
Amortization of Discounts to December 31, 2008		12,302
Carrying amount of Series E note on December 31, 2008	$	357,720
Conversion to shares thru December 31, 2009		(120,000)
Amortization of Discounts to December 31, 2009		67,157
Carrying amount of Series E note on December 31, 2009	$	304,877
Conversion to shares thru March 31, 2010		(30,000)
Amortization of Discounts to March 31, 2010		3,914
Carrying amount of Series E note on March 31, 2010	$	278,791

1  Fair value was calculated using the Black-Scholes model with the following assumptions:  Expected life in years: 3; Estimated volatility: 90.6%; Risk-free interest rate: 2%; Dividend yield of 0%.

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Note 8 – COMMON STOCK AND PREFERRED STOCK

During the three months ended March 31, 2010, 3,030,303 common shares were issued for conversion of Series E convertible notes.

During the three months ended March 31, 2010, 322,728 total of the company’s preferred shares were converted into 322,728,000 common shares.

In 2009, 9,700,000 common shares were issued for conversion of Series C convertible notes.

In 2009, 172,948,690 common shares were issued for monthly installment payments due on the Series D convertible notes.

In 2009, 12,121,212 common shares were issued for conversion of Series E convertible notes.

In 2009, 10,000,000 common shares were issued for services to employees and consultants at a price of $0.01 per share.

In 2009, 322,728 preferred shares were issues for accrued liabilities to employees, and a related party at a price of $2.20 per share.

In 2008 there were 5,250,000 common shares issued for conversion of Series C convertible notes.

In 2008, 65,477,828 common shares were issued for monthly installment payments due on the Series D convertible notes.

In 2008, 2,020,202 common shares were issued for conversion of Series E convertible notes.

In 2008, 12,825,000 common shares were issued for services to employees and consultants ranging in price from $0.004 to $0.05 per share

NOTE 9 - OPERATING LEASES

The Company has leased approximately 440 acres of privately owned land adjacent to its staked prospects from Corporate Creditors Committee LLC, by lease dated October 1, 2003. The Company paid an advance royalty of $7,500 for the first year, which amount is increased by $2,500 in each of the next five years to be $20,000 in the sixth year.  For the last four years of the lease, the advance royalty is $20,000 per year.  If the lease is renewed, the annual advance royalty is $20,000.  The advance royalty is credited to and recoverable from the production rental amounts. The royalty is the greater of a 4% net smelter royalty or $0.50 per yard of material processed. The lease is for 10 years with a renewal option for another 10 years.

The following is a schedule by years of future minimum lease payments required under operating leases that have initial or remaining non-cancellable lease terms in excess of one year as of March 31, 2010:

Year ended	Total
December 31, 2010	$	20,000
December 31, 2011		20,000
December 31, 2012		20,000
December 31, 2013		20,000
Thereafter		20,000
Total	$	100,000

NOTE 10 – LEGAL PROCEEDINGS

Perry Crane initiated a Statement of Claim against the Company on August 7, 2007, for the amount of $149,087.  The Company has settled this claim with Perry Crane by a payment of $130,000 plus interest which was due on March 15, 2011. The Settlement amount plus interest for a total of $145,209 were paid out by March 10, 2011.

On April 30, 2008 Komatsu Equipment (“Komatsu”) filed an action against the Company in connection with repair work done on the Company’s trucks.  All invoices submitted to the Company have been accrued in its trade payables on the financial statements. The Company has settled this claim with Komatsu and has agreed to make a series of payments to Komatsu in 2011.

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From time to time the Company is involved in minor trade, employment and other operational disputes, none of which have or are expected to have a material impact on the current or future financial statements or operations.

NOTE 11 – SUBSEQUENT EVENTS

Subsequent to quarter end, the debenture holder of Series E note converted $30,000 in principal and interest into 3,030,303 shares of common stock. On June 21, 2010 the Company sold one piece of equipment for total proceeds of $17,000.

The company evaluated subsequent events through June 30, 2010.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

From time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Such forward-looking statements may be included in, but not limited to, press releases, oral statements made with the approval of an authorized executive officer or in various filings made by us with the SEC. Words or phrases "will likely result", "are expected to", "will continue", "is anticipated", "estimate", "project or projected", or similar expressions are intended to identify "forward-looking statements". Such statements are qualified in their entirety by reference to and are accompanied by the above discussion of certain important factors that could cause actual results to differ materially from such forward-looking statements.

Management is currently unaware of any trends or conditions other than those previously mentioned in this management's discussion and analysis that could have a material adverse effect on our consolidated financial position, future results of operations, or liquidity. However, investors should also be aware of factors that could have a negative impact on our prospects and the consistency of progress in the areas of revenue generation, liquidity, and generation of capital resources. These include: (i) variations in revenue, (ii) possible inability to attract investors for its equity securities or otherwise raise adequate funds from any source should the company seek to do so, (iii) increased governmental regulation, (iv) increased competition, (v) unfavorable outcomes to litigation involving the company or to which the company may become a party in the future and, (vi) a very competitive and rapidly changing operating environment.

The above identified risks are not all inclusive. New risk factors emerge from time to time and it is not possible for management to predict all of such risk factors, nor can it assess the impact of all such risk factors on the company's business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results.

The financial information set forth in the following discussion should be read with the consolidated financial statements of Pacific Gold included elsewhere herein.

Introduction

Pacific Gold is engaged in the identification, acquisition, and development of mining prospects believed to have known gold and/or tungsten mineralizations. The main objective is to identify, and develop commercially viable mineralizations on prospects over which the company has rights that could produce revenues. These types of prospects may also contain mineralization of metals often found with gold and/or tungsten which also may be worth processing. Development of commercially viable mineralization of any metal includes a high degree of risk which careful evaluation, experience and factual knowledge may not eliminate, and therefore, we may never produce any significant revenues.

Pacific Gold Corp. owns 100% of four operating subsidiaries; Nevada Rae Gold, Inc., Fernley Gold, Inc., Pilot Mountain Resources Inc., and Pacific Metals Corp. through which it holds various prospects in Nevada and Colorado. The Company intends to acquire through staking, purchasing and/or leasing arrangements additional prospects, from time to time, in which there may be gold, tungsten and/or other mineral deposit potential.

Nevada Rae Gold, Inc.

NRG has permitted the Black Rock Canyon Mine with the Bureau of Land Management (BLM), and the Nevada State Division of Environmental Protection (NDEP). NRG built a gravel screening facility at the Black Rock Canyon Mine. The plant is in good physical condition. The plant consists of a 60 foot by 90 foot by 30 foot steel building with offices, plumbing, electrical and a sloped floor for drainage, additionally the site has fuel storage, settling ponds, security offices and the entire are is fenced in for security along with exterior lighting and security camera’s that allow management remote access viewing of the site from any internet access point in the world. The plant equipment primarily consists of a grizzly hopper, conveyors, trommels, high gravity bowls, and a variety of pumps, cyclones and small equipment. The Company currently plans to rent or lease earth moving equipment including, bull dozers, haul trucks, excavators, front end loaders and other smaller pieces. The plant is serviced via power lines provided by NV Energy and via two water wells that the Company owns.

In the first quarter of 2010 the Company continued work on preparing the Black Rock Canyon Mine for production.

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In general, the operations will require the excavation of the gravel within the prospect.  Typically, the vegetation and minor soil cover will be stripped and side cast for future reclamation.  The mineralization bearing gravel will be dug with an excavator until bedrock is reached, and material will be prescreened and then hauled to the mill site. The mill area will be about three miles away from the mine site.  The mill site is equipped with two functioning wells for process water and is connected to the power grid.  The mill and trommel unit are set up on the private, fee land owned by the company.

Pilot Mountain Resources Inc.

In August 2005, Pacific Gold Corp. established a new subsidiary called Pilot Mountain Resources Inc. Pilot Mountain acquired Project W.  Project W is primarily a tungsten project located in Mineral County, Nevada. Elevated tungsten values occur throughout the area, and there are known mineral resources within the claim area. The property is located approximately 21 miles east of the town of Mina with access through an all-weather, county-maintained gravel road and a network of further trails. Mina is 168 miles south-east of Reno on Route 95. The claims are located at an average elevation of 6,500 feet.

Resource calculations from a feasibility study completed by Kaiser Engineers place the size of Project W at 9,061,600 tons, grading 0.386% Tungsten Tri-oxide (WO₃ ) of combined proven, probable and possible ore, or approximately 35,000 tons of WO₃ .

The terms of the acquisition of Project W call for Pilot Mountain Resources Inc. to pay to Platoro West a 2% gross royalty on all mineral sales from Project W. In addition to the claims, Pilot Mountain Resources Inc. received copies of previously prepared working documents and reports regarding Project W.

Fernley Gold, Inc.

Fernley Gold, Inc. entered into a lease agreement in 2004 for the right to mine the property and claims known as Butcher Boy and Teddy.  The property and claims are located 34 miles east of Reno, Nevada, just off highway I-80.  The area known for placer gold, and commonly referred to as the Olinghouse Placers, has a rich mining history.

Financial Condition and Changes in Financial Condition

The Company had no revenues from the sale of gold in the quarter ended March 31, 2010.  

Operating expenses for the quarter ended March 31, 2010, totaled $140,562.  The Company incurred labor, fuel and productions costs associated with the various mining activities. Equipment operating costs, tools and materials of $1,668 were incurred primarily to prepare the plant and equipment at Black Rock Canyon for operations.  Legal and professional fees of $17,808 were incurred for services performed with respect to acquisitions and mining prospect evaluation, as well as SEC reporting compliance and accounting fees.  The Company also incurred expenses related to geological studies, fieldwork, site visits, preparation of mining permit applications and consulting fees of $10,085.  Interest expense totaled $55,025 for the quarter; of this amount, $3,914 was a non-cash expense that included amounts for accelerated interest and interest on the Series E Convertible Debentures that were not paid out in cash. The remaining expenses relate to general administrative expenses. We believe we will incur substantial expenses for the near term as we build up operations at the Black Rock Canyon Mine and progress with our evaluations of future mining prospects.

The Company had no revenues from the sale of gold in the quarter ended March 31, 2009.  

Operating expenses for the quarter ended March 31, 2009, totaled $317,689.  The Company incurred labor, fuel and productions costs associated with the various mining activities. Equipment operating costs, tools and materials of $2,696 were incurred primarily to prepare the plant and equipment at Black Rock Canyon for operations.  Legal and professional fees of $16,512 were incurred for services performed with respect to acquisitions and mining prospect evaluation, as well as SEC reporting compliance and accounting fees.  The Company also incurred expenses related to geological studies, fieldwork, site visits, preparation of mining permit applications and consulting fees of $101,448.  Advertising and public relations expenses totaled $7,767.  Interest expense totaled $101,004 for the quarter; this amount, was a non-cash expense that included amounts for accelerated interest and interest on the Series C, D and E Convertible Debentures that were not paid out in cash. The remaining expenses relate to general administrative expenses. We believe we will incur substantial expenses for the near term as we build up operations at the Black Rock Canyon Mine and progress with our evaluations of future mining prospects.

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Liquidity and Capital Resources

Since inception to March 31, 2010, we have funded our operations from the sale of securities, issuance of debt and loans from a shareholder.  At March 31, 2010, we had unsecured loans from a shareholder in an aggregate amount of $1,881,846 including accrued interest. The notes bear interest at the rate of 10% and were originally due on December 31, 2009, then extended to January 02, 2011 and subsequently extended to January 02, 2013.  

As of March 31, 2010, our assets totaled $1,525,391, which consisted primarily of mineral rights, land and water rights, and related equipment. Our total liabilities were $3,625,633 which primarily consisted of notes payable and accrued interest to a shareholder of $1,928,892, accounts payable and accrued expenses of $1,294,683 convertible debt of $303,790. We had an accumulated deficit of $25,083,450. Pacific Gold had negative working capital at March 31, 2010 of $3,594,927.

On October 5, 2007 the Company sold $450,000 in principal amount of convertible debentures and warrants.  The debentures were due on October 5, 2010, and were paid in full with issuance of shares for conversion.  The debentures and warrants were sold, and the common stock issued on conversion and exercise was sold, under Section 4(2) of the Securities Act of 1933, as amended, on a private placement basis, to an institutional, accredited investor. The Company received $300,000 which was used for working capital.  During 2009 the Company issued 12,121,212 shares on conversion. During the three months ended March 31, 2010 the company issued an additional 3,030,303 shares on conversion.

For the three months ended March 31, 2010, the Company has issued an additional $60,691 in short term notes due to related parties. The notes are due on demand and are interest free.

The Company will require additional capital to fund operations at its mine site, begin operations at additional mine sites and to fund exploration and development of additionally acquired prospects unless operations generate sufficient revenues to support its business plan.  The Company does not have any identified sources of capital at this time.  Substantially all the assets of the Company are pledged to one of the holders of outstanding debentures which may make it difficult to obtain additional funding for operations and expansion.  Unless the Company finds needed capital, it will have to change its business objectives and operational plans and curtail some or all of its current operations. 

New Accounting Pronouncements

Pacific Gold does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company, or any of its subsidiaries’ operating results, financial position, or cash flow.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

N/A

ITEM 4.  CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), as appropriate to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, the Certifying Officers carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2010. Their evaluation was carried out with the participation of other members of the Company’s management. Based on an evaluation conducted by management, of the effectiveness of the design and operation of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15(e) management concluded that our disclosure controls and procedures were ineffective as of March 31, 2010.  Our disclosure controls and procedures did not ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act was (i) recorded, processed, summarized and reported within the time periods specified by the SEC rules, and (ii) the necessary information was not accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure as specified by the SEC rules and forms.

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Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that:

(a) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(b) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and

(c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce this risk.

Based on its assessment, management has concluded that the Company's disclosure controls and procedures and internal control over financial reporting are ineffective, based in part on the absence of separation of duties with respect to internal financial controls of the Company.

The Board of Directors and our audit committee have assigned a high priority to the short-term and long-term improvement of our internal control over financial reporting. The Company’s initial focus is to become current in its SEC filings, and the board has engaged the services of a new independent registered public accounting firm which will be reviewing our financial statements that are to be included in the 2010, and 2011 delinquent filings. Additionally, the Board of Directors will consider and work with management to devise a remediation program for the currently identified deficiencies within our internal controls over financial reporting and our disclosure controls and procedures.

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Perry Crane initiated a Statement of Claim against the Company on August 7, 2007, for the amount of $149,087.  The Company has settled this claim with Perry Crane by a payment of $130,000 plus interest which was due on March 15, 2011. The Settlement amount plus interest for a total of $145,209 were paid out by March 10, 2011.

On April 30, 2008 Komatsu Equipment (“Komatsu”) filed an action against the Company in connection with repair work done on the Company’s trucks.  All invoices submitted to the Company have been accrued in its trade payables on the financial statements. The Company has settled this claim with Komatsu and has agreed to make a series of payments to Komatsu in 2011.

From time to time the Company is involved in minor trade, employment and other operational disputes, none of which have or are expected to have a material impact on the current or future financial statements or operations.

ITEM 1A.  RISK FACTORS

N/A

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the quarter the Company issued 3,030,303 shares of common stock on conversion of the convertible debentures issued April 12, 2006.  The conversion rate was $0.0099 per share, and the Company did not receive any cash proceeds on conversion of the debentures.  The converted amount of the debentures during the quarter equaled a total of $30,000 in principal amount and original issue discount and interest.  Each exercise and conversion was made on the basis of an exempt transaction pursuant to Section 4(2) of the Securities Act of 1933, with an accredited investor.  The shares issued have been registered for resale.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. (Removed)

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

31.1

Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. *

31.2

Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. *

32.1

Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. *

*    Filed herewith

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)	PACIFIC GOLD CORP.
By:	/s/  Robert Landau
	Robert Landau, President
	(Chief Executive Officer)
Date:	June  28, 2011

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signatures	Title	Date
/s/ Robert Landau	Chief Executive Officer, Chief Financial Officer and Director	June 28, 2011
Robert Landau
/s/ Mitchell Geisler	Secretary, Treasurer and Director	June 28, 2011
Mitchell Geisler

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