Pacific Gold & Royalty 10-Q 2011 Q2 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 June 30, 2011

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 August 15, 2011, the Company had outstanding 745,732,651 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	13
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	15
ITEM 4.	Controls and Procedures	15
PART II
ITEM 1.	Legal Proceedings	17
ITEM 1A	Risk Factors	17
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
ITEM 3.	Defaults Upon Senior Securities	17
ITEM 4.	Submission of Matters to a Vote of Security Holders	17
ITEM 5.	Other Information	17
ITEM 6.	Exhibits	17

2

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

Pacific Gold Corp.
Consolidated Balance Sheets  (Unaudited)
	June 30, 2011		December 31, 2010
ASSETS
Current Assets:
Cash	$	9,466	$	29,432
Accounts Receivable		-		-
Inventory		26,197		26,197
Prepaid Expenses		2,798		-
Total Current Assets		38,461		55,629
Mineral Rights, Plant and Equipment
Mineral rights, net		425,845		409,845
Plant and Equipment, net		552,853		611,636
Water Rights and Wells		90,000		90,000
Land		13,670		13,670
Total Mineral Rights, Plant and Equipment, net		1,082,368		1,125,151
Other Assets:
Deposits		11,625		10,051
Reclamation Bond		196,780		196,780
Total Other Assets		208,405		206,831
TOTAL ASSETS	$	1,329,234	$	1,387,611
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable	$	643,757	$	861,571
Accrued Expenses		667,551		610,988
Notes Payable - Related Parties		322,088		274,720
Total Current Liabilities		1,633,396		1,747,279
Long Term Liabilities:
Accrued Interest  - Shareholder		103,500		188,185
Notes Payable - Shareholder		2,070,031		1,881,846
Accrued Interest - Promissory Notes		16,314		-
Promissory Notes		677,540		90,000
Total Liabilities		4,500,781		3,907,310
Stockholders' Deficit:
Preferred Stock - $0.001 par value; 5,000,000 shares authorized, no shares outstanding at December 31, 2010, and June 30, 2011		-		-
Common Stock - $0.001 par value; 500,000,000 shares authorized, 745,732,651, and 743,732,651 shares issued and outstanding at June 30, 2011 and December 31, 2010 respectively		745,732		743,732
Additional Paid-in Capital		22,597,475		22,539,475
Accumulated Deficit		(26,514,754)		(25,802,906)
Total Stockholders' Deficit		(3,171,547)		(2,519,699)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,329,234	$	1,387,611

See accompanying notes to the consolidated financial statements

3

Pacific Gold Corp.
Consolidated Statements of Operations (Unaudited)
	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2011		2010		2011		2010
Revenue:
Total Revenue	$	-	$	-	$	-	$	-
Production Costs
Production Costs		-		-		-		-
Depreciation		39,043		67,297		78,948		137,532
Gross Margin		(39,043)		(67,297)		(78,948)		(137,532)
Operating Expenses:
General and Administrative		398,483		99,886		575,299		240,448
(Gain) / Loss on Sale of Assets		(14,500)		1,740		(14,500)		1,740
Total Operating Expenses		383,983		101,626		560,799		242,188
Net Loss from Operations		(423,026)		(168,923)		(639,747)		(379,720)
Other Income/(Expenses)
Gain on Extinguishment of Debt		-		-		13,882		-
Foreign Exchange Gain / (Loss)		(991)		-		(14,840)		-
Interest Expense		(68,637)		(52,363)		(122,211)		(107,388)
Other Income		102		-		51,069		-
Total Other Income /(Expenses)		(69,526)		(52,363)		(72,100)		(107,388)
Net Income/(Loss)	$	(492,552)	$	(221,286)	$	(711,847)	$	(487,108)
Basic and Diluted Earnings/(Loss) per Share	$	(0.0007)	$	(0.0003)	$	(0.0010)	$	(0.0008)
Weighted Average Shares Outstanding:
Basic and Diluted		745,732,651		691,524,041		745,456,406		578,609,303

See accompanying notes to the consolidated financial statements

4

Pacific Gold Corp.
Consolidated Statements of Cash Flows (Unaudited)
	Six Months Ended
	June 30, 2011		June 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(711,847)	$	(487,108)
Adjustments to Reconcile Net Loss to Net Cash
Depreciation and Depletion		78,948		137,532
Non-cash Portion of Interest Paid on Convertible Debt		-		4,978
(Gain) / Loss on Sales of Equipment		(14,500)		1,740
Changes in:
Prepaid Expenses		(2,798)		-
Accounts Payable		(157,814)		52,744
Accrued Expenses		56,562		63,651
Accrued Interest		119,814		94,092
NET CASH USED IN OPERATING ACTIVITIES		(631,635)		(132,371)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases and Development of Property and Equipment		(36,165)		(16,000)
Net Decrease / (Increase) in Deposits		(1,574)		8,886
Proceeds from Sale of Equipment		14,500		17,000
NET CASH PROVIDED BY /(USED) IN INVESTING ACTIVITIES		(23,239)		9,886
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Related Party Debt		47,368		117,281
Proceeds from Promissory notes		587,540		-
NET CASH PROVIDED/(USED) IN FINANCING ACTIVITIES		634,908		117,281
NET CHANGE IN CASH		(19,966)		(5,204)
CASH AT BEGINNING OF PERIOD		29,432		8,585
CASH AT END OF PERIOD	$	9,466	$	3,381
Cash paid during the year for:
Interest	$	-	$	-
Income Taxes	$	-	$	-
Non-cash financing and investing activities:
Stock Issued for Settlement Payment	$	60,000	$	-
Accrued Interest added to Related Party Note Principal	$	188,185	$	-
Conversion of Notes Payable	$	-	$	60,000

See accompanying notes to the consolidated financial statements

5

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 2010 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. All significant inter-company accounts and transactions have been eliminated.

Reclassification of Accounts

Certain accounts in the prior period have been reclassified to conform to June 30, 2011 financial statements presentation.

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 June 30, 2011.

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 quarter ended June 30, 2011.

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 June 30, 2011, there were no accounts receivable.

6

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 June 30, 2011 of $26,197 consisting of metals inventory and stockpile ore.

The major classes of inventories as of June 30, 2011, and December 31, 2010 were:

Finished Goods	$	0
Stockpile Ore		26,197
Total	$	26,197

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 quarter ended June 30, 2011 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.”)

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.

7

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 quarter ended June 30, 2011, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. As of June, 2011 the Company had 6,250,000 potentially dilutive common stock equivalents.

Advertising.  

The Company’s policy is to expense advertising costs as incurred.  For the quarter ended June 30, 2011 the Company incurred $4,438 in 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.

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.

8

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.

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 quarter ended June 30, 2011.  SFAS No. 123(R) is now found as ASC Topic 718.

9

Recently issued accounting pronouncements

Recent accounting updates that the Company has adopted or that will be required to adopt in the future are summarized below.

On June 30, 2011, the Company adopted updates issued by the Financial Accounting Standards Board (FASB) to the authoritative hierarchy of GAAP. These changes establish the FASB Accounting Standards CodificationTM (ASC) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Consolidated Financial Statements.

The Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

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 six and three month period ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. 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, 2010.

NOTE 3 – PLANT AND EQUIPMENT

During the six months ended June 30, 2011 the Company reviewed its equipment requirements and modified its plant.  The Company purchased processing equipment for a total cost of $20,165, and disposed of redundant equipment for total proceeds of $14,500.

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 June 30, 2011 and December 31, 2010 consisted of the following:

PLANT AND EQUIPMENT	June 30, 2011		December 31, 2010
Building	$	795,355	$	795,355
Accumulated Depreciation		(465,578)		(423,844)
Equipment		875,170		947,275
Accumulated Depreciation		(652,094)		(707,150)
	$	552,853	$	611,636

For the quarter ended June 30, 2011 and June 30, 2010 depreciation expense was $39,043 and $67,297, respectively.

NOTE 4 – MINERAL RIGHTS

Mineral rights at June 30, 2011 and December 31, 2010 consisted of the following:

MINERAL RIGHTS	June 30, 2011		December 31, 2010
Nevada Rae Gold – Morris Land	$	165,158	$	165,158
Accumulated Depletion		(120)		(120)
Fernley Gold – Lower Olinghouse		112,145		106,145
Pilot Mountain Resources – Project W		118,767		108,767
Pacific Metals – Graysill Claims		29,895		29,895
	$	425,845	$	409,845

10

As of June 30, 2011 and December 31, 2010 the amount allocated to undeveloped mineral rights was $10,000.

NOTE 5 – SHAREHOLDER NOTE PAYABLE/RELATED PARTY TRANSACTIONS

As of June 30, 2011 Pacific Gold owes $2,070,031 in principal to a company owned by the Chief Executive Officer. The amount due is represented by a promissory note accruing interest at 10% per year. The note is due on January 2, 2013 and is convertible into shares of common stock of Pacific Gold at $0.05 per share. Interest expense on the loan for the quarters ended June 30, 2011 and June 30, 2010 was $51,750 and $47,047, respectively. Including interest the balance on the loan at June 30, 2011 was $2,173,531.

Pacific Gold owes its executives $127,440 and $136,636 in short term notes payable reflected in the accrued expenses for the periods ended June 30, 2011, and December 31, 2010, respectively. These short term notes are interest free and due on demand.

Pacific Gold owes $322,088 to related parties in short term notes payable. These short term notes are interest free and due on demand.

NOTE 6 – PROMISSORY NOTES

During the six months ended June 30, 2011, the Company received total proceeds of $587,540 from five individuals. The notes agreements are dated April 1, 2011 and accrue interest at a rate of 10% per annum from the date of the agreements. The principal and accrued interest are due on December 31, 2013.

As of June 30, 2011 Pacific Gold owes $693,854 in promissory notes and accrued interest.

A summary of the notes is as follows:

Balance at January 01, 2010	$	25,000
Proceeds Received		65,000
Interest Accrued		-
Payments		-
Balance at December 31, 2010	$	90,000
Proceeds Received		587,540
Interest Accrued		16,314
Payments		-
Balance at June 30, 2011	$	693,854

Note 7 – COMMON STOCK AND PREFERRED STOCK

For the six months ended June 30, 2011, 2,000,000 common shares were issued as part of the settlement payment disclosed in Note 9 (Legal Proceedings).

In 2010, 53,535,353 common shares were issued for conversion of Series E convertible notes.

In 2010, 322,727 total of the company’s preferred shares were converted into 322,727,000 common shares.

In 2010, 2,000,000 common stock shares were issued as a royalty payment of $20,000 for rent on behalf of the Company’s subsidiary, Nevada Rae Gold.

NOTE 8 - 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.

11

On June 2, 2011 the Company’s subsidiary, Nevada Rae Gold (“NRG”) entered into a lease agreement to lease a 75% interest in 45 mining claims in Lander County, Nevada. NRG has 45 days to perform due diligence on the claims and then must pay an annual advance royalty of $15,000. The advance royalty is credited to and recoverable from the production rental amounts. The royalty on production of gold 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 June 30, 2011:

Year ended	Total
December 31, 2011	$	35,000
December 31, 2012		35,000
December 31, 2013		35,000
December 31, 2014		35,000
Thereafter		35,000
Total	$	175,000

NOTE 9 – LEGAL PROCEEDINGS

The Company filed an action against Platoro West Inc. (“Platoro”), Wolfranium Resource Corporation, William Sheriff and other parties in order to quiet title to certain unpatented mining claims located in Mineral County, Nevada, on April 15, 2011, in the County of Washoe, Case Number CV11-01181. On April 26, 2011, Platoro filed an action against Pilot Mountain, entitled Verified Complaint for Damages and to Quiet Title and Expunge Cloud Upon Title in the District Court, Mineral County, Case Number 9438. The Company believes that the action of Platoro in the District Court should be consolidated with the Company’s action to quiet title because the issues are basically the same. In June 2011 the parties agreed for Platoro to withdraw its complaint in Mineral County and file a counter claim in Washoe county.

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 10 – GOING CONCERN

The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of June 30, 2011, the Company had an accumulated deficit of ($26,514,754) negative working capital of ($1,594,936) and negative cash flows from operations of ($631,635) raising substantial doubt about its ability to continue as a going concern.  During the quarter ended June 30, 2011, the Company financed its operations through issuance of debt.

NOTE 11 – SUBSEQUENT EVENTS

On August 10, 2011 the Company issued a promissory note to a private investor for $219,000. The note accrues interest at a rate of 10% per annum. The note is convertible at $0.07 per share, and due on December 31, 2013.

On August 2, 2011 the Company’s subsidiary NRG completed its due diligence on the B&B claims lease that it entered into on June 2, 2011 and closed the transaction.

Subsequent to quarter end, The Company’s CEO has loaned $140,800 to the Company in non-interest bearing short term loans.

The company evaluated subsequent events throughthe filing date of August 15, 2011.

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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 second quarter of 2011 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 June 30, 2011.  

Operating expenses for the quarter ended June 30, 2011, totaled $383,983.  The Company incurred labor, fuel and productions costs associated with the various mining activities. Equipment operating costs, tools and materials of $38,500 were incurred primarily to prepare the plant and equipment at Black Rock Canyon for operations.  Legal and professional fees of $48,483 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 $37,463.  Interest expense totaled $68,637 for the quarter. 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 June 30, 2010.

Operating expenses for the quarter ended June 30, 2010, totaled $101,626.  The Company incurred labor, fuel and productions costs associated with the various mining activities. Equipment operating costs, tools and materials of $3,765 were incurred primarily to prepare the plant and equipment at Black Rock Canyon for operations.  Legal and professional fees of $33,535 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 $11,121.  Interest expense totaled $52,363 for the quarter; of this amount, $4,978 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.

Liquidity and Capital Resources

Since inception to June 30, 2011, we have funded our operations from the sale of securities, issuance of debt and loans from a shareholder. At June 30, 2011, we had unsecured loans from a shareholder in an aggregate amount of $2,173,531 including accrued interest. The note bears interest at the rate of 10% .The note is due on January 02, 2013.

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As of June 30, 2011, our assets totaled $1,329,234, which consisted primarily of mineral rights, land and water rights, and related equipment. Our total liabilities were $4,500,781 which primarily consisted of note payable to a shareholder of $2,070,031, accounts payable and accrued expenses of $1,311,308, notes payable to related parties of $322,088, and promissory notes of $677,540. We had an accumulated deficit of $26,514,754 and a working capital deficit of $1,594,936 at June 30, 2011.

For the six months ended June 30, 2011, the Company has received additional net proceeds of $47,368 from related party notes payable. The notes are due on demand and are interest free.

For the six months ended June 30, 2011, the Company issued additional $587,540 in promissory notes to non – related parties. The promissory notes are due on December 31, 2013. Interest expense on the promissory notes is accrued at a rate of 10% per annum. Interest accrued on the notes for the six months ended June 30, 2011 was $16,314.

On August 10, 2011 the Company issued a promissory note to a private investor for $219,000. The note accrues interest at a rate of 10% per annum. The note is convertible at $0.07 per share, and due on December 31, 2013.

Subsequent to quarter end, The Company’s CEO has loaned $140,800 to the Company in non-interest bearing short term loans.

Our independent auditors, in their report on the financial statements, have indicated that the Company has experienced recurring losses from operations and may not have enough cash and working capital to fund its operations beyond the very near term, which raises substantial doubt about our ability to continue as a going concern. Management has made a similar note in the financial statements.  As indicated herein, we have need of capital for the implementation of our business plan, and we will need additional capital for continuing our operations.  We do not have sufficient revenues to pay our expenses of operations.  Unless the company is able to raise working capital, it is likely that the Company either will have to cease operations or substantially change its methods of operations or change its business plan.

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 June 30, 2011. 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 effective as of June 30, 2011.  Since the end of the last quarter, our disclosure controls and procedures have been changed such that they now 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 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.

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

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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 has assigned a priority to the short-term and long-term improvement of our internal control over financial reporting. Notwithstanding this commitment, given the limited operations and consequently the limited revenues and capital resources, the Board of Directors and management are not now able to engage additional personnel to remedy the processes that would eliminate the issues that may arise due to the absence of separation of duties within the financial reporting functions.  Therefore, there is not specific timing for the remediation procedures.  Additionally, the Board of Directors will work with management to continuously review controls and procedures to identified deficiencies and implement remediation 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

The Company filed an action against Platoro West Inc. (“Platoro”), Wolfranium Resource Corporation, William Sheriff and other parties in order to quiet title to certain unpatented mining claims located in Mineral County, Nevada, on April 15, 2011, in the County of Washoe, Case Number CV11-01181. On April 26, 2011, Platoro filed an action against Pilot Mountain, entitled Verified Complaint for Damages and to Quiet Title and Expunge Cloud Upon Title in the District Court, Mineral County, Case Number 9438. The Company believes that the action of Platoro in the District Court should be consolidated with the Company’s action to quiet title because the issues are basically the same. In June 2011 the parties agreed for Platoro to withdraw its complaint in Mineral County and file a counter claim in Washoe county.

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 six months ended June 30, 2011, the Company issued 2,000,000 shares of common stock as part of a settlement agreement. The Shares were valued at $60,000 based upon the closing price of our common stock at the grant date.

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. *

101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Labels Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

*    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:	August 15, 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	August 15, 2011
Robert Landau
/s/ Mitchell Geisler	Secretary, Treasurer and Director	August 15, 2011
Mitchell Geisler

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