Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

X . QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2013

. TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ______________

Commission File Number 333-119566

BRAZIL GOLD CORP.

(Exact name of registrant as specified in its charter)


Nevada	98-0430746
State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)

850 Third Avenue, Suite 16C, NYC, NY 10022

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code : 1-212-508-2175

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

Yes X . No .

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


Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

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

Yes . No X .

Number of shares outstanding of the registrant’s class of common stock as of March 3, 2014: 44,362,668


	Page

PART I – FINANCIAL INFORMATION	3

Item 1. Interim Financial Statements (Unaudited)	3

Balance Sheets	4

Interim Statements of Operations	7

Interim Statement of Stockholders’ (Deficit)	8

Interim Statements of Cash Flows
	9
Notes to Interim Financial Statements

Item 2. Management’s Discussion and Analysis	27

Item 3. Quantitative and Qualitative Disclosure about Mark Rise	28

Item 4. Controls and Procedures	28

Item 4(A) T. Controls and Procedures	28

PART II – OTHER INFORMATION	29

Item 1. Legal Proceedings- Not Applicable	29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds – Not Applicable	29

Item 3. Defaults upon Senior Securities – Not Applicable	29

Item 4. Removed and Reserved	29

Item 5. Other Information	29

Item 6. Exhibits	29

SIGNATURES	30

Brazil Gold Corp.

December 31, 2013 and 2012

Index to the financial statements


Contents	Page(s)

Balance Sheets at December 31, 2013 (Unaudited) and June 30, 2013	4

Statements of Operations for the Three Months Ended December 31, 2013 and 2012 (Unaudited)	5

Statements of Operations for the Six Months Ended December 31, 2013 and 2012 (Unaudited)	6

Statement of Stockholders’ Deficit for the Period from June 30, 2013 through December 31, 2013 (Unaudited)	7

Statements of Cash Flows for the Six Months Ended December 31, 2013 and 2012 (Unaudited)	8

Notes to the Financial Statements (Unaudited)	9

Brazil Gold Corp.

Balance Sheets


				December 31, 2013		June 30, 2013
				(Unaudited)
ASSETS
CURRENT ASSETS:
	Cash			$	659	$	5,552
	Prepaid expenses				-		-
	Other current assets				-		-
		Total Current Assets			659		5,552

NON-CURRENT ASSETS

	Investment in unconsolidated subsidiary- at cost				45,000		-

	Property and equipment				1,524		1,524
	Accumulated depreciation				(1,524)		(1,332)

		Property and Equipment, net			-		192
		Total Non-current assets			45,000		192
			Total Assets	$	45,659	$	5,744

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
	Accounts payable			$	115,828	$	115,828
	Accrued expenses				16,234		19,007
	Advances payable				42,940		42,940
	Derivative liability				497,577		565,007
	Convertible debentures, net				479,934		278,961
		Total Current Liabilities			1,152,513		1,021,743

	Note payable - related party				210,043		185,116
		Total Long-Term Liabilities			210,043		185,116
		Total Liabilities			1,362,556		1,206,859

STOCKHOLDERS' DEFICIT:
	Preferred stock at $0.001 par value: 10,000,000 shares authorized;
		none issued or outstanding			-		-
	Common stock at $0.001 par value: 10,000,000,000 shares authorized;
		663,523 and 128,790 shares issued and outstanding, respectively			664		129

	Additional paid-in capital				6,446,161		5,867,002

	Accumulated deficit				(7,763,722)		(7,068,246)
	Accumulated other comprehensive income (loss):
		Foreign currency translation gain (loss)			-		-
		Total Stockholders' Deficit			(1,316,898)		(1,201,115)
			Total Liabilities and Stockholders' Deficit	$	45,658	$	5,744

See accompanying notes to the financial statements.

Brazil Gold Corp.

Statements of Operations


			For the Three		For the Three
			Months Ended		Months Ended
			December 31, 2013		December 31, 2012
			(Unaudited)		(Unaudited)

NET REVENUES			$	-	$	-

OPERATING EXPENSES:
	Consulting fees			60,000		60,000
	Rent Expense			2,279		-
	Professional fees			8,825		40,000
	Compensation			7,500		-
	General and administrative expenses			85,167		111

		Total operating expenses		163,771		100,111

LOSS FROM OPERATIONS				(163,771)		(100,111)

OTHER (INCOME) EXPENSE:
	Derivative expense			-		82,167
	Interest expense			194,218		82,794
	Loss on settlement of debt			260,405		7,722
	Change in fair value of derivative liability			(282,673)		(396,517)
	Other (income) expense			-		-

		Other (income) expense, net		171,951		(223,833)

LOSS FROM OPERATIONS
	BEFORE INCOME TAX PROVISION			(335,722)		123,722

INCOME TAX PROVISION				-		-

NET LOSS				(335,722)		123,722

COMPREHENSIVE LOSS			$	(335,722)	$	123,722

NET LOSS PER COMMON SHARE
	- BASIC AND DILUTED:		$	(0.67)	$	1.91
	Weighted average common shares outstanding
		- basic and diluted		503,085		64,773

See accompanying notes to the financial statements.

Brazil Gold Corp.

Statements of Operations


			For the Six		For the Six
			Months Ended		Months Ended
			December 31, 2013		December 31, 2012
			(Unaudited)		(Unaudited)

NET REVENUES			$	-	$	-

OPERATING EXPENSES:
	Consulting fees			120,000		60,000
	Rent Expense			18,304		-
	Professional fees			26,355		122,277
	Compensation			22,500		-
	General and administrative expenses			94,096		9,722

		Total operating expenses		281,255		191,999

LOSS FROM OPERATIONS				(281,255)		(191,999)

OTHER (INCOME) EXPENSE:
	Derivative expense			142,137		124,469
	Interest expense			306,059		118,820
	Loss on settlement of debt			303,162		-
	Change in fair value of derivative liability			(337,137)		7,722
	Other (income) expense			-		-

		Other (income) expense, net		414,221		251,011

LOSS FROM OPERATIONS
	BEFORE INCOME TAX PROVISION			(695,476)		(443,010)

INCOME TAX PROVISION				-		-

NET LOSS				(695,476)		(443,010)

COMPREHENSIVE LOSS			$	(695,476)	$	(443,010)

NET LOSS PER COMMON SHARE
	- BASIC AND DILUTED:		$	(2.09)	$	(7.25)
	Weighted average common shares outstanding
		- basic and diluted		333,153		61,137

See accompanying notes to the financial statements.

Brazil Gold Corp.

Statement of Stockholders' Deficit

For the Interim Period Ended December 31, 2013

(Unaudited)


		Common Stock, $0.001 Par Value			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Gain (Loss)		Total Stockholders' Deficit


		Number of Shares	Amount
		Number of Shares	Amount

Balance, June 30, 2010		36,000	$	36	$	759,063	$	(2,448,263)	$	5,531	$	(1,683,633)


Common stock issued in settlement of Coach convertible debt		10,000		10		2,299,990		-		-		2,300,000

Common stock issued for consulting services and cash		1,000		1		19,799		-		-		19,800

Common stock issued for services		155		-		17,067		-		-		17,067

Settlement of related party debt and common stock compensation		675		1		141,749		-		-		141,750

Common stock issued for compensation		6,370		6		2,184,474		-		-		2,184,480

Beneficial conversion feature		-		-		59,702		-		-		59,702

Comprehensive income (loss):
	Net loss	-		-		-		(3,304,621)		-		(3,304,621)
	Foreign currency translation loss	-		-		-		-		(114)		(114)
	Total comprehensive income (loss)	-		-		-		-		-		(3,304,735)

Balance, June 30, 2011		54,200		54		5,481,844		(5,752,884)		5,417		(265,569)

Common stock issued for services		-		-		49,817		-		-		49,817

Common stock issued with convertible debentures		450		-		36,000		-		-		36,000

Write off of foreign currency translation gain (loss)		-		-		5,417		-		(5,417)		-

Net loss		-		-		-		(456,352)		-		(456,352)

Balance, June 30, 2012		54,650		55		5,573,077		(6,209,236)		-		(636,104)

Common stock issued upon conversion of convertible debentures		74,140		74		293,925		-		-		293,999

Net loss		-		-		-		(859,010)		-		(859,010)

Balance, June 30, 2013		128,790		129		5,867,002		(7,068,246)		-		(1,201,115)
								-		-
Common stock issued upon conversion of convertible debentures		534,733		535		579,159		-		-		579,694

Net loss		-		-		-		(695,476)		-		(695,476)

Balance, December 31, 2013		663,523	$	664	$	6,446,161	$	(7,763,722)	$	-	$	(1,316,898)

See accompanying notes to the financial statements.

Brazil Gold Corp.

Statements of Cash Flows


			For the Six		For the Six
			Months Ended		Months Ended
			December 31, 2013		December 31, 2012
			(Unaudited)		(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			$	(695,476)	$	(443,010)

Adjustments to reconcile net loss to net cash used in operating activities
	Depreciation expense			192		222
	Convertible notes issued for services			170,000		120,000
	Amortization of discount on convertible debt			291,709		113,536
	Accretion of original issue discount			5,952		-
	Loss on settlement of debt			303,162		-
	Stock based compensation			-		-
	Derivative expense			142,137		124,469
	Change in fair value of derivative liabilities			(337,137)		7,722
	Common stock issued for interest			-		-
	Changes in operating assets and liabilities:
		Prepaid expenses		-		167
		Other current assets		-		-
		Accounts payable		-		738
		Accrued expenses		(2,773)		6,546
						-
NET CASH USED IN OPERATING ACTIVITIES				(122,234)		(69,610)

CASH FLOWS FROM INVESTING ACTIVITIES:
	Investment in unconsolidated subsidiary			(45,000)		-

NET CASH PROVIDED BY INVESTING ACTIVITIES				(45,000)		-

CASH FLOWS FROM FINANCING ACTIVITIES:
	Amounts from (repayments to) related parties
	Accrued interest on notes payable converted			2,564		-
	Interest expense to related party			927		-
	Proceeds from convertible debentures			158,850		69,610

NET CASH PROVIDED BY FINANCING ACTIVITIES				162,341		69,610

EFFECT OF EXCHANGE RATE CHANGES ON CASH				-		-

NET CHANGE IN CASH				(4,894)		-

Cash at beginning of period				5,552		-

Cash at end of period			$	659	$	-

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
	Interest paid		$	-	$	-
	Income tax paid		$	-	$	-

See accompanying notes to the financial statements.

Brazil Gold Corp.

December 31, 2013 and 2012

Notes to the Financial Statements

(Unaudited)

Note 1 - Organization and Operations

Brazil Gold Corp. (Formerly " Dynamic Alert Limited")

Dynamic Alert Limited (“the Company”) was incorporated in the State of Nevada, on June 17, 2004. On December 22, 2009, as amended February 25, 2010, pursuant to the provisions of Articles of Merger, Dynamic Alert Limited, and its wholly-owned subsidiary, Brazil Gold Corp., a Nevada Corporation which was incorporated on November 3, 2009, were merged, with Dynamic Alert Limited being the surviving entity. In connection with such merger, on March 15, 2010, the Company’s name was changed from Dynamic Alert Limited to Brazil Gold Corp.

Since inception up until November, 2009 the Company engaged in the business of providing its customers with security professionals, who in turn would provide personal protection as needed, as well as selling a selection of personal security products. The Company changed its status from a development stage company to an operating company on June 30, 2008. Management realized that the results of operations from security products and services were lack-luster, and it was decided to change the Company’s business focus and plan for other strategic opportunities and discontinue the security operations with effect from January 1, 2010. Effective January 1, 2010, the Company started reviewing mineral exploration and other opportunities with the objective of generating revenue for the Company.

The Company is currently inactive and is evaluating possible new ventures and acquisitions.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation – Unaudited Interim Financial Information

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended June 30, 2013 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on December 31, 2013.

Fiscal Year End

The Company elected June 30 ^th as its fiscal year end date upon its formation.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The Company’s significant estimates and assumptions include the fair value of financial instruments; income tax rate, income tax provision, deferred tax assets and the valuation allowance of deferred tax assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:


Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable, accrued expenses and advances payable approximate their fair values because of the short maturity of these instruments.

The Company’s Level 3 financial liabilities consist of the derivative liability of the Company’s secured convertible promissory notes issued to institutional investors, and the derivative warrants issued in connection with these convertible promissory notes. There is no current market for these securities such that the determination of fair value requires significant judgment or estimation. The Company valued the automatic conditional conversion, re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, with the assistance of a valuation specialist, for which management understands the methodologies. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

Level 3 Financial Liabilities – Derivative Warrant Liabilities

The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative warrant liability at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative warrant liability.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. At the balance sheet date, the Company has an immaterial amount of these assets.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Investments

All investments are measured at fair value in the balance sheets. Unrealized gains or losses, if any, are included in the statements of operations.

The Company has no investment income.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of three (3) to five (5) years. Upon sale or retirement of furniture and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.

Derivative Instruments

The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Paragraph 810-10-05-4 of the Codification and Paragraph 815-40-25 of the Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

The Company utilizes the Lattice model that values the liability of the derivatives based on a probability weighted discounted cash flow model with the assistance of the third party valuation firm. The reason the Company picks the Lattice model is that in many cases there may be multiple embedded features or the features of the bifurcated derivatives may be so complex that a Black-Scholes valuation does not consider all of the terms of the instrument. Therefore, the fair value may not be appropriately captured by simple models. In other words, simple models such as Black-Scholes may not be appropriate in many situations given complex features and

terms of conversion option (e.g., combined embedded derivatives). The Lattice model is based on future projections of the various potential outcomes. The Lattice model analyzed the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e. stock price, exercise price, volatility, etc.). Projections were then made on the underlying factors which led to potential scenarios. Probabilities were assigned to each scenario based on management projections. This led to a cash flow projection and a probability associated with that cash flow. A discounted weighted average cash flow over the various scenarios was completed to determine the value of the derivatives.

Related Parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the Related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. adescription of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Commitment and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Revenue Recognition

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Stock-Based Compensation for Obtaining Employee Services

The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows:

Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph 718-10-50-2 of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments. Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method , i.e., expected term = ((vesting term + original contractual term) / 2) , if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company ’ s current dividend yield as the best estimate of projected dividend yield for periods within the expected contractual life of the option and similar instruments.

Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option and similar instruments.

The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award.

Equity Instruments Issued to Parties other than Employees for Acquiring Goods or Services

The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Subtopic 505-50 of the FASB Accounting Standards Codification (“Subtopic 505-50”).

Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of

equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of option or warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows:

Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical data to estimate holder’s expected exercise behavior. If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

Pursuant to Paragraphs 505-50-25-8, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic.

Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a stock option that the counterparty has the right to exercise expires unexercised.

Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should be recorded.

Income Tax Provision

The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the interim period ended December 31, 2013 or 2012.

Tax Returns Remaining subject to IRS Audits

It is not practicable to determine amounts of interest and/or penalties related to income tax matters that will be due as of December 31, 2013 as a result of non-filing of federal and state income tax returns and examination that may be conducted by federal and state tax authorities in the future. Accordingly, the Company had no accrual for interest or penalties on the Company’s balance sheet at December 31, 2013, and has not recognized interest and/or penalties in the accompanying statement of operations for the year ended December 31, 2013. However, management believes that the Company will not have a significant impact on its financial position and results of its operations and cash flows as a result of this uncertainty.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock options and warrants.

The following table shows the potentially outstanding dilutive common shares excluded from the diluted net loss per share calculation as they were anti-dilutive:


	Potentially Outstanding Dilutive Common Shares
	For the Interim Period Ended December 31, 2013	For the Interim Period Ended December 31, 2012
Convertible debentures	9,989,125	482,002

Stock options	2,308	2,308

Warrants issued with convertible debentures	-	6,500

Total potentially outstanding dilutive common shares	9,991,433	490,810

Cash Flows Reporting

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

Subsequent Events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recently Issued Accounting Pronouncements

In January 2013, the FASB issued ASU No. 2013-01, " Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities ". This ASU clarifies that the scope of ASU No. 2011-11, " Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. " applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification or subject to a master netting arrangement or similar agreement. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013.

In February 2013, the FASB issued ASU No. 2013-02, " Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. " The ASU adds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2013.

In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No. 2013-04, " Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date ." This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013.

In March 2013, the FASB issued ASU No. 2013-05, " Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity ." This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013.

In March 2013, the FASB issued ASU 2013-07, “Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting.” The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entity’s expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Note 3 – Going Concern

The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the financial statements, the Company had an accumulated deficit at December 31, 2013, a net loss and net cash used in operating activities for the fiscal year then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

While the Company is attempting to commence operations and generate sufficient revenues, the Company’s cash position may not be sufficient enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues.

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 4 – Investment

Effective July 22, 2013 the Company entered into a Securities Purchase Agreement (the “Agreement”) with FAL Minerals LLC (“FAL”). Pursuant to the Agreement the Company agreed to purchase from FAL, newly issued membership interests of FAL, representing twenty percent (20%) of the issued and outstanding membership interests of FAL (post issuance) (the “Interests”). The purchase price for the Interests is One Hundred Thousand ($100,000) Dollars, payable in twelve equal installments of $8,333 commencing August 1, 2013. The Interests will be issued pro rata (1/12 each month) by FAL to the Company upon each month closing. Pursuant to the Agreement the Company will receive fifteen (15%) percent of the gross proceeds from all royalty payments made to FAL. Such royalty payments are payable quarterly.

The Company accounts for its investment in FAL under the cost method and values its investment at the lower of cost or market. Upon investing $100,000, the Company will account for its investment under the equity method and will record its proportionate share of net income as gain or loss.

As of December 31, 2013, the Company had a total of $45,000 investment in FAL.

Note 5 – Property and Equipment

Property and equipment was fully depreciated as of the end of the calendar quarter.

Depreciation expense was $87 and $111 for the three month interim period ended December 31, 2013 and 2012, respectively.

Depreciation expense was $192 and $222 for the six month interim period ended December 31, 2013 and 2012, respectively.

Note 6 – Advances Payable

As of December 31, 2013, the Company had a total of $42,940, in advances payable to unrelated third parties for expenses paid on behalf of the Company in conjunction with the rescinded acquisition agreement. These balances are non-interest bearing and due on demand.

Note 7 – Convertible Debentures – Related Parties

Converted debentures to related parties consisted of the following:


		Balance at December 31, 2013		Balance at June 30, 2013
		Balance at December 31, 2013		Balance at June 30, 2013

Note issued June 20, 2012 with interest at 8% per annum. Principal and interest are past due at June 30, 2013	$	-	$	25,000
Note issued July 23, 2012 with interest at 8% per annum. Principal and interest are past due at June 30, 2013		62,500		62,500
Note issued August 1, 2012 with interest at 8% per annum. Principal and interest are currently past due		5,000		5,000
Note issued August 21, 2012 with interest at 8% per annum. Principal and interest are currently past due		2,110		2,110
Note issued September 26, 2012 with interest at 8% per annum. Principal and interest are currently past due		17,575		40,000
Note issued October 18, 2012 with interest at 8% per annum. Principal and interest are currently past due		20,000		20,000
Note issued November 1, 2012 with interest at 8% per annum. Principal and interest are currently past due		20,000		20,000
Note issued November 8, 2012 with interest at 8% per annum. Principal and interest are currently past due		20,000		20,000
Note issued December 1, 2012 with interest at 8% per annum. Principal and interest are currently past due		20,000		20,000
Note issued January 1, 2013 with no interest. Principal is currently past due		20,000		20,000
Note issued January 25, 2013 with no interest. Principal is currently past due		5,000		5,000
Note issued February 1, 2013 with no interest. Principal is payable on January 31, 2014		10,000		20,000
Note issued February 1, 2013 with no interest. Principal is currently past due		-		4,000
Note issued February 20, 2013 with no interest. Principal is due on November 30, 2013		535		8,000
Note issued February 20, 2013 with no interest. Principal is due on November 30, 2013		7,464		11,941
Note issued March 1, 2013 with no interest. Principal is past due		13,500		20,000
Note issued March 1, 2013 with no interest. Principal is due on January 31, 2014		-		4,000
Note issued March 8, 2013 with no interest. Principal is payable on December 31, 2013		-		10,000
Note issued April 1, 2013 with no interest. Principal is currently past due		20,000		20,000
Note issued April 1, 2013 with no interest. Principal is payable on February 28, 2014		-		4,000
Note issued April 9, 2013 with no interest. Principal is payable on March 31, 2014		-		10,000
Note issued May 1, 2013 with no interest. Principal is payable on October 31, 2013		20,000		20,000
Note issued May 1, 2013 with no interest. Principal is payable on May 31, 2014		-		4,000
Note issued June 1, 2013 with no interest. Principal is payable on November 30, 2013		20,000		20,000
Note issued June 1, 2013 with no interest. Principal is payable on May 31, 2014		-		4,000
Note issued June 13, 2013 with no interest. Principal is payable on May 31, 2014		25,000		25,000
Note issued July 1, 2013 with no interest. Principal is payable on December 31, 2013		20,000		-
Note issued July 2, 2013 with no interest. Principal is payable on December 31, 2013		20,000		-
Note issued July 24, 2013 with no interest. Principal is payable on May 31, 2014		33,000		-
Note issued August 1, 2013 with no interest. Principal is payable on January 31, 2014		20,000		-
Note issued August 15, 2013 with no interest. Principal is payable on March 31, 2014		20,000		-
Note issued September 1, 2013 with no interest. Principal is payable on February 28, 2014		20,000		-
Note issued September 17, 2013 with 10% interest. Principal and interest are payable on September 30, 2014		25,000		-
Note issued October 1, 2013 with no interest. Principal is payable on March 31, 2014		20,000		-


Note issued October 16, 2013 with 10% interest. Principal and interest are payable on April 17, 2014		50,000		-
Note issued October 23, 2013 with 10% interest. Principal and interest are payable on April 30, 2014		45,000		-
Note issued November 1, 2013 with no interest. Principal is payable on April 30, 2014		20,000		-
Note issued November 5, 2013 with 10% interest. Principal and interest are payable on November 30, 2014		18,000		-
Note issued December 1, 2013 with no interest. Principal is payable on May 31, 2014		20,000		-
Note issued December 6, 2013 with 8% interest. Principal and interest are payable on November 30, 2014		5,000		-
Note issued December 19, 2013 with no interest. Principal is payable on May 31,2014		7,500		-

		652,184		424,551
Less unamortized discount		(172,250)		(145,990)
Convertible debentures-net	$	479,934	$	278,561

The June 20, 2012, July 23, 2012, August 1, 2012, August 21, 2012 September 26, 2012, October 18, 2012, November 1, 2012, November 18, 2012 and December 1, 2012 notes are convertible into common stock of the Company at sixty percent (60%) of the average of two (2) low closing bid prices for the five (5) trading days prior to conversion of the Notes.

The January 1, 2013, January 25, 2013, February 1, 2013 $20,000, February 20, 2013, March 1, 2013 $20,000, March 8, 2013, April 1, 2013 $20,000, April 9, 2013, May 1, 2013 $20,000, June 1, 2013 $20,000, June 13, 2013, July 1, 2013, July 2, 2013, July 24, 2013, August 1, 2013, August 15, 2013, September 1, 2013, September 17, 2013, October 1, 2013, October 6, 2013, October 23, 2013, November 1, 2013, November 5, 2013, December 1, 2013, December 6, 2013 and December 19, 2013 notes are convertible into common stock of the Company at fifty percent (50%) of the average of the low closing bid prices for the twenty (20) trading days prior to conversion of the Notes.

Note 8 – Derivative Financial Instruments

The Company’s derivative financial instruments are embedded derivatives associated with the Company’s convertible debentures. The Company’s convertible debentures issued to institutional investors are hybrid instruments which contain an embedded derivative feature which would individually warrant separate accounting as a derivative instrument under Paragraph 815-10-05-4. The embedded derivative feature includes the conversion feature and the warrants attached to certain Notes. Pursuant to Paragraph 815-10-05-4, the value of the embedded derivative liability have been bifurcated from the debt host contract and recorded as a derivative liability resulting in a reduction of the initial carrying amount (as unamortized discount) of the notes, which are amortized as debt discount to be presented in other (income) expenses in the statements of operations using the effective interest method over the life of the notes.

The compound embedded derivatives within the notes have been valued using a layered discounted probability-weighted cash flow approach, recorded at fair value at the date of issuance; and marked-to-market at each reporting period end date with changes in fair value recorded in the Company’s statements of operations as “change in the fair value of derivative instrument”.

Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets:


	Carrying Value		Fair Value Measurement Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Derivative liabilities on conversion feature	$	382,274	$	-	$	-	$	382,274	$	382,274
Derivative liabilities on warrants		115,303		-		-		115,303		115,303
Total derivative liabilities	$	497,577	$	-	$	-	$	497,577	$	497,577

Summary of the Changes in Fair Value of Level 3 Financial Liabilities

The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the fiscal year ended December 31, 2013:


	Fair Value Measurement Using Level 3 Inputs
	Derivative liability		Total

Balance, June 30, 2013	$	565,007	$	565,007
Purchases, issuances and settlements		269,707		269,707
Total gains or losses (realized/unrealized)
Included in net (income) loss		(337,137)		(337,137)
Included in other comprehensive income		-		-
Transfers in and/or out of Level 3		-		-
Balance, December 31, 2013	$	497,577	$	497,577

Note 9 – Notes Payable - Related Party

Between April 1, 2011 and June 24, 2011, The President and Chief Operating Officer of the Company, Phillip Jennings, advanced the Company $77,884 in eight installments in the form of a promissory note (“Jennings Note”). The Jennings Note was due on demand and had borne interest at 8% per annum. On November 8, 2012, the Company issued promissory notes with its then Chief Executive Officer, Chief Financial Officer, Legal Counsel and Accountant totaling $105,380, which were originally recorded as accounts payable. In addition, the Jennings Note was converted into these notes. With accrued interest included, the notes total $186,043 at December 31, 2013. The notes mature on December 31, 2014 and bear interest at 1% per annum.

On July 1, 2013 the Company issued to its Chief Executive Officer a Promissory Note in the principal amount of Twenty Four Thousand Dollars ($24,000), with no interest. Principal is payable on demand.

The Notes total $210,043.

Note 10 – Equity Purchase Agreement

Southridge Partners II, LP Agreement

The Company entered into an equity purchase agreement (the “Equity Purchase Agreement”) with Southridge Partners II, LP (“Southridge”) on July 6, 2011. Pursuant to the Equity Purchase Agreement, Southridge committed to purchase up to $10,000,000 of the Company’s common stock, over a period of time terminating on the earlier of: (i) 24 months from the effective date of a registration statement to be filed in connection therewith or (ii) the date on which Southridge has purchased shares of common stock pursuant to this agreement for an aggregate maximum purchase price of $10,000,000; such commitment is subject to certain conditions. The purchase price to be paid by Southridge will be 92% of the price of the common stock on the date the purchase price is calculated under the Equity Purchase Agreement.

The maximum amount that the Company is entitled to put in any one notice is such number of shares of common stock as equals the lesser of $500,000 or 250% of the average of the dollar volume of Company common stock for the 20 trading days preceding the put, provided that the number of put shares to be purchased by Southridge shall not exceed the number of such shares that, when aggregated with all other shares and securities of the Company then owned by Southridge beneficially or deemed beneficially owned by Southridge, would result in Southridge owning more than 9.99% of all of the Company’s common stock as would be outstanding on such closing date.

The Company will not be entitled to put shares to Southridge:

unless there is an effective registration statement under the Securities Act to cover the resale of the shares by Southridge;

unless the common stock continues to be quoted on the OTC Bulletin Board and has not been suspended from trading;

if an injunction shall have been issued and remain in force, or action commenced by a governmental authority which has not been stayed or abandoned, prohibiting the purchase or the issuance of the shares to Southridge;

if the Company has not complied with their obligations and are otherwise in breach of or in default under, the Equity Purchase Agreement, our registration rights agreement (the “Registration Rights Agreement”) with Southridge or any other agreement executed in connection therewith with Southridge;

since the date of the filing of the Company’s most recent filing with the Securities and Exchange Commission no event that had or is reasonably likely to have a Material Adverse Effect (as defined in the Equity Purchase Agreement) has occurred; and

to the extent that such shares would cause Southridge’s beneficial ownership to exceed 9.99% of our outstanding shares.

The Equity Purchase Agreement further provides that Southridge is entitled to customary indemnification from the Company for any losses or liabilities it suffers as a result of any breach of any provisions of the Equity Purchase Agreement or the Registration Rights Agreement, or as a result of any lawsuit brought by a third-party arising out of or resulting from Southridge's execution, delivery, performance or enforcement of the Equity Purchase Agreement or the Registration Rights Agreement or from material misstatements or omissions in the prospectus accompanying the registration statement for the resale of the shares issued to Southridge.

As a condition for the execution of the Equity Purchase Agreement, the Company issued to Southridge, 450,000 shares of its restricted common stock pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933. As of the date of this filing, the Company has not filed a Registration Statement with the Securities and Exchange Commission

Note 11 – Stockholders’ Deficit

Shares Authorized

Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is Two Hundred and Sixty Million (260,000,000) shares of which Ten Million (1,000,000) shares shall be Preferred Stock, par value $0.001 per share, and Two Hundred and Fifty Million (250,000,000) shares shall be Common Stock, par value $0.001 per share.

On or about August 12, 2013, the Stockholders holding a majority voting rights of the Company’s Common Stock approved by written consent in lieu of a meeting of Stockholders: to amend and Restate the Amended Articles of Incorporation of the Corporation to specifically, amend ARTICLE FOUR of the Amended Articles of Incorporation of the Corporation in order to increase the number of shares of authorized capital stock to 960,000,000 shares, of which 950,000,000 shall be common stock and 10,000,000 shall be preferred stock of the Corporation, by filing with the Secretary of State of Nevada the Restated Articles of Incorporation.

Common Stock

The following stock issuances are listed taking into account the 1:1,000 reverse split.

In connection with the issuance of the convertible debentures during the fiscal year ended June 30, 2012, the Company issued 450 shares of its common stock valued at $0.08 per share, the price of the Company’s common stock on the date of issuance or $36,000, which was recorded as interest expense.

On August 2, 2012, the Company issued 4,372 shares of its common stock for the conversion of $26,300 of convertible debt and $4,307 of accrued interest.

On November 1, 2012, the Company issued 4,373 shares of its common stock for the conversion of $7,880 of convertible debt and $997 of accrued interest.

On November 21, 2012, the Company issued 4,371 shares of its common stock for the conversion of $3.300 of convertible debt and $219 of accrued interest.

On December 12, 2012, the Company issued 4,373 shares of its common stock for the conversion of $2,525 of convertible debt and $230 of accrued interest.

On January 3, 2013, the Company issued 4,371 shares of its common stock for the conversion of $1,912 of convertible debt and $230 of accrued interest.

On January 14, 2013, the Company issued 4,350 shares of its common stock for the conversion of $2,000 of convertible debt and $132 of accrued interest.

On January 29, 2013, the Company issued 6,582 shares of its common stock for the conversion of $2,600 of convertible debt and $164 of accrued interest.

On February 13, 2013, the Company issued 7,655 shares of its common stock for the conversion of $2,515 of convertible debt and $164 of accrued interest.

On February 26, 2013, the Company issued 792 shares of its common stock for the conversion of $968 of convertible debt and $3 of accrued interest.

On February 26, 2013, the Company issued 6,871 shares of its common stock for the conversion of $5,250 of convertible debt and $3,167 of accrued interest.

On March 7, 2013, the Company issued 7,439 shares of its common stock for the conversion of $19,750 of convertible debt and $39 of accrued interest.

On March 25, 2013, the Company issued 9,918 shares of its common stock for the conversion of $15,925 of convertible debt and $3,167 of accrued interest.

On April 8, 2013, the Company issued 8,669 shares of its common stock for the conversion of $9,075 of convertible debt and $27.85 of accrued interest.

On July 11, 2013, the Company issued 11,756 shares of its common stock for the conversion of $7,055 of convertible debt and $2,115 of accrued interest.

On July 18, 2013, the Company issued 11,851 shares of its common stock for the conversion of $9,200 of convertible debt and $44 of accrued interest.

On July 26, 2013, the Company issued 13,308 shares of its common stock for the conversion of $8,745 of convertible debt and $38 of accrued interest.

On August 27, 2013, the Company issued 6,293 shares of its common stock for the conversion of $1,875 of convertible debt and $328 of accrued interest.

On September 16, 2013, the Company issued 17,581 shares of its common stock for the conversion of $6,125 of convertible debt and $28 of accrued interest.

On October 2, 2013, the Company issued 32,000 shares of its common stock for the conversion of $8,000 of convertible debt.

On October 7, 2013, the Company issued 19,092 shares of its common stock for the conversion of $4,477 of convertible debt, $11 of accrued interest and $275 in legal fees.

On October 7, 2013, the Company issued 14,600 shares of its common stock for the conversion of $3,275 of convertible debt and $275 in legal fees.

On October 8, 2013, the Company issued 20,000 shares of its common stock for the conversion of $5,000 of convertible debt.

On October 16, 2013, the Company issued 25,000 shares of its common stock for the conversion of $2,500 of convertible debt.

On October 16, 2013, the Company issued 15,000 shares of its common stock for the conversion of $1,500 of convertible debt.

On October 16, 2013, the Company issued 23,950 shares of its common stock for the conversion of $2,120 of convertible debt and $275 in legal fees.

On October 22, 2013, the Company issued 50,000 shares of its common stock for the conversion of $5,000 of convertible debt.

On October 24, 2013, the Company issued 48,800 shares of its common stock for the conversion of $4,605 of convertible debt and $275 in legal fees.

On October 28, 2013, the Company issued 25,000 shares of its common stock for the conversion of $2,500 of convertible debt.

On November 1, 2013, the Company issued 48,800 shares of its common stock for the conversion of $5,275 of convertible debt and $375 in legal fees.

On November 13, 2013, the Company issued 50,000 shares of its common stock for the conversion of $4,725 of convertible debt and $275 in legal fees.

On December 6, 2013, the Company issued 94,000 shares of its common stock for the conversion of $4,700 of convertible debt.

2010 Stock Incentive and Compensation Plan as Amended

Adoption of 2010 Stock Incentive and Compensation Plan

On January 7, 2010, the Board of Directors of the Company adopted the 2010 Stock Incentive and Compensation Plan, whereby the Board of Directors authorized 8,000,000 shares of the Company’s common stock to be reserved for issuance (the “2010 Stock Incentive Plan”). The purpose of the 2010 Stock Incentive Plan is to advance the interests of the Company by providing an incentive to attract, retain and motivate highly qualified and competent persons who are important to the Company and upon whose efforts and judgment the success of the Company is largely dependent. Grants to be made under the 2010 Stock Incentive Plan are limited to the Company’s employees, including employees of the Company’s subsidiaries, the Company’s directors and consultants to the Company. The recipient of any grant under the 2010 Stock Incentive Plan, and the amount and terms of a specific grant, is, determined by the board of directors. Should any option granted or stock awarded under the 2010 Stock Incentive Plan expire or become un-exercisable for any reason without having been exercised in full or fail to vest, the shares subject to the portion of the option not so exercised or lapsed will become available for subsequent stock or option grants.

January 7, 2010 Issuance

On January 7, 2010, the board approved and granted options for employees to purchase 2,750,00 shares of the Company's common stock with exercise price at $0.56 per share expiring two (2) years from the date of grant exercisable, in whole or in part, according to the following vesting schedule:

Twenty five percent (25%) of the total number of shares granted under the option scheme vested immediately as January 7, 2010, the date they were approved at the board meeting; a further twenty-five percent (25%) were vested on July 6, 2010.

The remaining Fifty percent (50%) of the shares granted under the option scheme shall vest pro rata every six (6) months, on the same date of the month as the date of grant of the option, over the following twelve (12) months of continuous service as a director, employee or consultant.

The Company estimated the fair value of option granted, estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted-average assumptions:


		January 7, 2010
Expected life (year)		2.00

Expected volatility (*)		110.00

Risk-free rate(s)		0.5

Expected dividends		0.00

*As a newly formed entity it is not practicable for the Company to estimate the expected volatility of its share price. The Company selected five (5) comparable public companies listed on NYSE MKT and NASDAQ Capital Market within gold mining industry which the Company plans to engage in to calculate the expected volatility. The Company calculated those five (5) comparable companies’ historical volatility over the expected life and averaged them as its expected volatility.

April 19, 2010 Issuance

On April 19, 2010, the board approved and granted an additional 50 common shares with an exercise price of $1.00 per share expiring two (2) years from the date of grant exercisable, in whole or in part, to the internal general counsel.

The April 2010 options shall be exercisable, in whole or in part, according to the following vesting schedule:

Twenty five percent (25%) of the total number of shares granted under the option plan on July 7, 2010, the date they were approved at the board meeting; a further twenty-five percent (25%) on October 19, 2011 and

The remaining fifty percent (50%) of the shares granted under the option plan shall vest pro rata every six (6) months, on the same date of the month as the date of grant of the option, over the following twelve (12) months of continuous service as a director.

July 1, 2010 Issuance

On July 1, 2010, the board approved and granted options for a director to purchase 500,000 shares of the Company's common stock with exercise price at $0.56 per share expiring two (2) years from the date of grant exercisable, in whole or in part, according to the following vesting schedule:

Twenty five percent (25%) of the total number of shares granted under the option scheme vested immediately as July 1, 2010, the date they were approved at the board meeting; a further twenty-five percent (25%) on January 1, 2011.

The remaining fifty percent (50%) of the shares granted under the option scheme shall vest pro rata every six (6) months, on the same date of the month as the date of grant of the option, over the following twelve (12) months of continuous service as a director.

The Company estimated the fair value of option granted, estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:


	July 1, 2010
Expected life (year)	1.99

Expected volatility (*)	110.00

Risk-free rate(s)	0.5

Expected dividends	0.00

* As a newly formed entity it is not practicable for the Company to estimate the expected volatility of its share price. The Company selected five (5) comparable public companies listed on NYSE MKT and NASDAQ Capital Market within gold mining industry which the Company plans to engage in to calculate the expected volatility. The Company calculated those five (5) comparable companies’ historical volatility over the expected life and averaged them as its expected volatility.

Summary of the Company’s Stock Option Activities

The table below summarizes the Company’s stock option activities:


	Number of Option Shares	Exercise Price Range Per Share		Weighted Average Exercise Price		Fair Value at Date of Grant		Aggregate Intrinsic Value

Balance, June 30, 2012	500,000	$	0.56	$	0.56	$	-	$	-

Granted	-		-		-		-		-

Exercised	-		-		-		-		-

Expired	(500,00)		0.56		0.56		-		-

Balance, June 30, 2013	-	$	-	$	-	$	-	$	-

And December 31, 2013	-		-		-		-		-

Granted	-		-		-		-		-

Exercised	-		-		-		-		-

Expired	-		-		-		-		-

Balance, December 31, 2013	-	$	-	$	-	$	-	$	-

Vested and exercisable, December 31, 2013	-	$	-	$	-	$	-	$	-

Unvested, December 31, 2013	-	$	-	$	-	$	-	$	-

Note 12 – Subsequent Events

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were certain reportable subsequent events to be disclosed as follows:

Issuance of Note and Common Stock to Chief Executive Officer

On January 28, 2014, Brazil Gold Corp. entered into a promissory note in the principal amount of $36,000 payable to Conrad Huss (the “Note”), Chief Executive Officer, Secretary and Chief Financial Officer of the Corporation. The Note supersedes and replaces all prior notes between the Company and Mr. Huss and was issued in lieu of cash compensation for fiscal 2013.

The Note is convertible, at the option of the holder, into shares of Common Stock of the Company (an aggregate of 36,000 shares of Common Stock of the Company, which would equal approximately 97% of the outstanding shares of Common Stock), at the rate of $.001 per share of Common Stock of the Company.

See our Form 8-K filed on January 28, 2014 for further detail.

On January 28, 2014, Mr. Huss converted the Note into 36,000,000 shares of Common Stock of the Company. Please see the Form 3 filed on February 19, 2014 for the share issuance.

Reverse Split

During the most recent quarter, the Company effectuated a 1:1,000 reverse split. All information has been restated to reflect this reverse split.

Issuance of Convertible Debt

On January 1, 2014 the Company issued a Convertible Promissory Note in the principal amount of Twenty Thousand Dollars ($20,000), without interest and a maturity date of December 31, 2014. The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.

On February 1, 2014 the Company issued a Convertible Promissory Note in the principal amount of Twenty Thousand Dollars ($20,000), with ten percent, 10%, interest and a maturity date of April 1, 2014. The Principal plus any interest shall be convertible into common stock of the Company at sixty percent (60%) of the two low closing bid prices for the five (5) trading days prior to conversion of the Note.

On February 3, 2014 the Company issued a Convertible Promissory Note in the principal amount of Seven Thousand Dollars ($7,500), with ten percent, 10%, interest and a maturity date of December 31, 2014. The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the thirty (30) trading days prior to conversion of the Note.

On February 10, 2014 the Company issued a Convertible Promissory Note in the principal amount of Forty Five Thousand Dollars ($45,000), with ten percent, 10%, interest and a maturity date of February 28, 2015. The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the thirty (30) trading days prior to conversion of the Note.

Conversion of Debt

Between the balance sheet date and the date of this report, the Company issued the following shares for the conversion of debt:

On February 18, 2014, the Company issued 3,242,857 shares for the conversion of $5,400 and $275 for legal fees.

On February 21, 2014, the Company issued 4,171,429 shares for the conversion of $7,025 and $275 for legal fees.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Management's Discussion and Analysis of Financial Condition and Results of Operations

We incorporated as Dynamic Alert Limited (referred to herein as “Brazil Gold”, “we”, “us”, “our” and similar terms) on June 17, 2004, in the State of Nevada. On December 22, 2009, as amended February 25, 2010, pursuant to the provisions of Articles of Merger, Dynamic Alert Limited, and its wholly-owned subsidiary, Brazil Gold Corp., a Nevada corporation which was incorporated on November 3, 2009, were merged, with Dynamic Alert Limited (“the Company”) being the surviving entity. In connection with such merger, our name was changed from Dynamic Alert Limited to Brazil Gold Corp. on March 15, 2010. On March 15, 2010, the Company’s ticker symbol on OTCBB was changed to “BRZG”. Our principal executive offices are located at 850 3 ^rd Avenue, NYC, Suite 16C, NY 10022. Our telephone number is 212-508-2100. Our fiscal year end is June 30.

Since inception until November 2009, we attempted to build a business that assisted consumers with their security needs. Our goal had been to help our customers create and implement a personalized security plan by offering a three-fold service. Our first focus was to assist our clients in developing personalized security plans. Our second focus was to source and market personal security products. Our third focus was to provide personal protection on an as-needed basis. We were actively seeking to add new products and/or services that we could offer. The results were lack-luster, so it was decided to change our business focus and look for other opportunities and discontinue the security operation with effect from January 1, 2010. Therefore, we started reviewing mineral exploration and other opportunities with the objective of bringing revenue to the Company.

To date, these operations have not been fruitful and the company is currently in the process of evaluating its business model.

Material Changes in Financial Condition

At December 31, 2013, we had a working capital deficit of ($1,151,855), compared to a working capital deficit of ($1,016,191), at June 30, 2012. At December 31, 2013, our total assets consisted of cash of $659 and investment in an unconsolidated subsidiary of $45,000. This compares with total assets at June 30, 2013 consisting of cash of $5,552, and capital assets of $192.

At December 31, 2013, our total current liabilities increased to $1,152,513 from $1,021,743 at June 30, 2013, an increase of $103,770. The increase was due to an increased balance of convertible debentures of $200,973, partially offset by reduced derivative liability of $67,430 and accrued expenses of $2,773.

Since our existing cash balance is $659, we currently do not have sufficient funds to carry out normal operations over the next three (3) months. Our short and long-term survival is dependent on funding from sales of securities as necessary or from shareholder loans, and thus, to the extent that we require additional funds to support our operations or the expansion of our business, we may attempt to sell additional equity shares or issue debt. Any sale of additional equity securities will result in dilution to our stockholders. Recent events in worldwide capital markets may make it more difficult for us to raise additional equity or capital. There can be no assurance that additional financing, if required, will be available to us or on acceptable terms.

Result of Operations

We recognized nil revenue for the three-month and six month periods ended December 31, 2013 and December 31, 2012

We have recognized $45,964 in revenue from inception. Our short and long term survival is dependent on funding from sales of securities as necessary or from shareholder loans.

Material Changes in Results of Operations

For The Three Months Ended December 31, 2013, Compared To The Three Months Ended December 31, 2012

There were no revenues during the three months ending December 31, 2013 and the three months ended December 31, 2012.

For the three months ended December 31, 2013, operating expenses were $163,771 compared to $100,111 during the three months ended December 31, 2012. The increase was principally due to the following:

Rent expense was $2,279 due to the lease arrangement in New York City;

Professional fees were $31,175 lower due to reduced audit and legal fees;

Compensation expense was $7,500 higher due to payments to our Chief Executive Officer, who was hired in January 2013;

General and administrative expenses were $85,056 higher due principally to fees for a financing transaction, greater transfer agent fees and other expenses.

During the three month period ended December 31, 2013, we recognized a net loss of $335,722 compared to net income of $123,722 for the three-month period ended December 31, 2012. The increased loss of $459,444 was due principally to an increased loss on the settlement of debt of $252,683, reduced income from the fair value of the derivative liability of $113,844 and greater interest expense of $111,424 principally due to greater amortization of debt discount into interest expense.

For The Six Months Ended December 31, 2013, Compared To The Six Months Ended December 31, 2012

There were no revenues during the six months ending December 31, 2013 and the six months ended December 31, 2012.

For the six months ended December 31, 2013, operating expenses were $281,255 compared to $191,999 during the six months ended December 31, 2012. The increase of $89,256 was principally due to the following:

Consulting expense was $60,000 lower due to the beginning of the Consulting agreement in the second quarter of Fiscal 2013;

Rent expense was $18,304 due to the lease arrangement in New York City;

Professional fees were $95,922 lower due to reduced audit and legal fees;

Compensation expense was $22,500 higher due to payments to our Chief Executive Officer, who was hired in January 2013;

General and administrative expenses were $84,374 higher due principally to fees for a financing transaction, greater transfer agent fees and other expenses.

During the six month period ended December 31, 2013, we recognized a net loss of $695,476 compared to a net loss of $443,010 for the three-month period ended December 31, 2012. The increased loss of $252,466 was due principally to an increased loss on the settlement of debt of $303,162, greater interest expense of $187,239 principally due to greater amortization of debt discount into interest expense. These expenses were partially offset by increased income from the change in the fair value of derivative liability of $344,859

Off-Balance Sheet Arrangements

We currently do not have any off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the 1934 Act). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

ITEM 4T. CONTROLS AND PROCEDURES

Management's Quarterly Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed 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.

Management's assessment of the effectiveness of the small business issuer's internal control over financial reporting is as of the quarter ended December 31, 2013. We believe that our internal control over financial reporting was not effective due to material weaknesses in the system of internal control. Specifically, management identified the following control deficiency:

The Company uses accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2013, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. REMOVED AND RESERVED

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Pursuant to Rule 601 of Regulation S-B, the following exhibits are included herein.


Exhibit Number		Description

31.1		CERTIFICATION OF CEO PURSUANT TO 18 U.S.C. ss. 1350, SECTION 302
32.1		CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, SECTION 906

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 3rd day of March, 2014.

BRAZIL GOLD CORP.


Date: March 3, 2014	By:	/s/ Conrad Huss
	Name:	Conrad Huss
	Title:	Director, Chief Executive Officer, Secretary, Chief Financial Officer

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