ITEM 1 DESCRIPTION OF BUSINESS
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 800 Bellevue Way, Suite 400, Bellevue, WA, USA 98004. Our telephone number is 425-637-3080. 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.
It is for this reason that on November 13, 2009, the Company entered into a Letter of Intent with Rusheen Handels AG, a Swiss corporation ("Rusheen") for the acquisition by the Company of Rusheen's 99% ownership interest in its Brazilian subsidiary Amazônia Capital e Participaçơes Ltda. (“Amazonia”) in exchange for (a) 44 million restricted shares of the Company's common stock and a 2.5% net smelter return royalty on mineral production from Amazonia mineral claims located in Brazil. Amazonia is the owner of numerous poly-metallic mineral claims covering approximately 824,411 hectares (2,037,119 acres) in three states in the Tapajos Greenstone Belt in the Amazon Basin of Brazil. The primary mineral target is gold, but copper, nickel, iron ore, manganese and tin are also found in the area. The legal claims are located in three western states: Amazonas, Mato Grosso and Rondonia.
The consideration to be payable to Rusheen for transfer of the Amazonia ownership stake is 44 million restricted shares in the common stock of the Company, and a 2.5% NSR on mineral production from the Amazonia claims.
The agreement to acquire Rusheen's ownership interest in Amazonia was contingent on the parties entering into a written definitive acquisition agreement, approval by both parties' board of directors and upon the completion of a due diligence investigation by each party.
On March 15, 2010 Dynamic Alert Ltd. (the “Company”) announced its change-of-name to Brazil Gold Corp., and new trading symbol “BRZG”, effective immediately. This change of name to Brazil Gold Corp. was made to more accurately reflect the new focus and vision of the Company - to be an explorer for precious metals, most significantly gold, in Brazil upon the successful completion of the due diligence to acquire Amazonia as more fully set out above. This name change was achieved by combining the business of the Company and its subsidiary Brazil Gold Corp., which was specifically set up to protect this name.
On May19, 2010, Brazil Gold Corp., entered into an Acquisition Agreement (the “Acquisition Agreement”) with Rusheen whereby the Company was to acquire all of Rusheen’s ownership units in “Amazonia”, , which represents 99% of all of the issued and outstanding share capital of Amazonia. The acquisition of all of Rusheen’s ownership units in Amazonia was to be in exchange for 44 million shares of the Company’s common stock. Amazonia has previously granted a 2.5% net smelter return royalty (“Royalty”) to Rusheen relating to its mineral claims as described below, which will remain in place following the closing of the Acquisition Agreement. As a condition to closing the Acquisition Agreement, the Company will be cancelling 44 million restricted shares that were returned as this transaction was not consummated successfully as mentioned below.
Amazonia is the registered owner of 102 claims covering approximately 860,000 hectares of mineral rights located in the three states of Amazonas, Mato Grosso and Rondonia in the Tapajos Greenstone Belt in the Amazon Basin of Brazil. The primary mineral target is gold, however copper, nickel, iron ore, manganese and cassiterite (tin) are also found in the area. Most properties are near existing roads and rivers, which have access to international ports, and small mining and farming communities with access to fuel, energy and manpower - all conditions suitable for low-cost bulk tonnage mining.
Unfortunately, the size of the package of the mineral claims resulted in a lengthy due diligence exercise and upon completion and signing the definitive agreement on May 19, 2010, as set out above, the market conditions had changed, resulting in great difficulty in raising sufficient funds to conduct exploration work on the extensive mineral claims. It was for this reason that the parties agreed to rescind the agreement retroactive to June 1, 2010 in order to allow Rusheen to pursue other financing options with non-related third parties. It is for this reason that we are once more evaluating possible acquisitions; however as of the date of the filing of this annual report, we do not have any firm target.
It is for this reason on September 15, 2010, the Company, effective as of June 1, 2010, entered into a Mutual Rescission Agreement and General Release between the Company and Rusheen, pursuant to which the parties agreed that all agreements constituting and comprising the acquisition of Amazonia entered into on May 19, 2010, as amended and consummated on June 1, 2010, were rescinded. As a result of such rescission, all of the 99% interest in the issued and outstanding share capital of Amazonia held by Brazil Gold Corp. was transferred back to Rusheen and Rusheen now owns 99% of the issued and outstanding ownership units of Amazonia. Furthermore, the 44,000,000 shares of the Company’s common stock that were issued in connection with the Acquisition Agreement were returned to the Company and will be cancelled.
Principal Products and Services
We are reviewing exploration and other opportunities with the objective of bringing revenue to the Company. However, as at the time of the June 30, 2010 year end, we do not have any firm target.
The Market
None at present.
Competition and Competitive Strategy
We are presently unknown in the industry. Our competitive position is not measurable.
Governmental Controls and Approvals
We are reviewing exploration and other opportunities with the objective of bringing revenue to the Company, so we are not able to highlight any Government controls or approvals required.
Existing or Probable Government Regulations
We are reviewing exploration and other opportunities with the objective of bringing revenue to the Company, so we are not able to highlight any Government regulations that may impact such venture.
Research and Development Activities and Costs
None
Compliance with Environmental Laws
We are reviewing exploration and other opportunities with the objective of bringing revenue to the Company, so we are not able to highlight any.
Employees
We have no employees at the present time. Our officers and directors are responsible for all planning, developing and operational duties, and will continue to do so throughout the early stages of our growth.
We have no intention of hiring employees until our business has been successfully launched and we have sufficient, reliable revenue flow from our operations.
Risk Related to our Business
You should carefully consider the following risk factors and all other information contained herein as well as the information included in this Annual Report in evaluating our business and prospects. The risks and uncertainties described below are not the only ones we face. Additional unknown risks and uncertainties, or that we currently believe are immaterial, may also impair our business operations. If any of the following risks occur, our business and financial results could be harmed. You should refer to the other information contained in this Annual Report, including our financial statements and the related notes.
We Have a Limited Operating History.
We have a limited operating history. Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. No assurance can be given that we may be able to operate on a profitable basis.
We may Require Significant Additional Financing and There is No Assurance that such Funds will be Available as, if and when Needed.
We have raised in excess of $1.5 million which was, along with our limited sales, sufficient to fund our operations for the last twelve (12) months.
Inability Of Our Officers And Directors To Devote Sufficient Time To The Operation Of Our Business May Limit Our Success.
Presently, our officers and directors allocate only a portion of their time to the operation of our business. Should our business develop faster than anticipated, our officers may not be able to devote sufficient time to the operation of our business to ensure that it continues as a going concern. Even if our management’s lack of sufficient time is not fatal to our existence, it may result in our limited growth and success.
Unproven Profitably Due to Lack of Operating History Makes an Investment in Us an Investment in an Unproven Venture.
We were formed on June 17, 2004. Since our date of inception, we have not had significant revenues or operations and we have few assets. Due to our lack of operating history, the revenue and income potential of our business is unproven. If we cannot successfully implement our business strategies, we may not be able to generate sufficient revenues to operate profitably. Since our resources are very limited, insufficient revenues would result in termination of our operations, as we cannot fund unprofitable operations unless additional equity or debt financing is obtained.
Our Independent Auditors’ Report States that there is a Substantial Doubt that we will be able to Continue as a Going Concern.
Our independent auditors, Jewett, Schwartz, Wolfe & Associates., Certified Public Accountants, state in their audit report, that since we have negative working capital and a stockholders’ deficit and losses to date of approximately $2,448,000, there is a substantial doubt that we will be able to continue as a going concern.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTIES.
We rent furnished office space at 800 Bellevue Way, Suite 400, Bellevue, WA, U.S.A.
We do not have any manufacturing plants and have minimal equipment for the operation of our business.
We do not have any investments or interests in any real estate.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
We are not currently party to any legal proceedings, nor are we aware of any contemplated or pending legal proceedings against us.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
We have not yet held our annual shareholders’ meeting or submitted any matters to a vote of shareholders during the fiscal year to which this Annual Report pertains.
PART II
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market for Common Equity and Related Stockholder Matters
(a) Market Information
Our shares of common stock, par value $0.001 per share, are quoted on the OTC Bulletin Board under the symbol “BRZG”.
Fiscal Year Ended June 30, 2010
Quarter Ended
September 30, 2009
December 31, 2009
March 31, 2010
June 30, 2010
High
$ 0.07
$0.68
$0.90
$ 1.16
Low
$ 0.06
$ 0.06
$0.55
$0.34
Fiscal Year Ended June 30, 2009
Quarter Ended
September 30, 2008
December 31, 2008
March 31, 2009
June 30, 2009
High
$2.15
$2.70
$1.20
$1.18
Low
$0.05
$0.65
$0.20
$0.07
(b) Holders
As of September 2, 2010, there were approximately 39 holders of record of our common stock.
(c) Dividend Policy
We have never declared or paid dividends on our common stock. We intend to retain earnings, if any, to support the development of our business and therefore do not anticipate paying cash dividends for the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs.
(d) Securities authorized for issuance under equity compensation plans
None.
RECENT SALES OF UNREGISTERED SECURITIES
On May 19, 2010, we, entered into an Acquisition Agreement with Rusheen whereby the Company was to acquire all of Rusheen’s ownership units in “Amazonia”, which represented 99% of all of the issued and outstanding share capital of Amazonia. The acquisition of all of Rusheen’s ownership units in Amazonia was exchanged for 44 million unregistered shares of the Company’s common stock.
As described more particularly above under Item 1 “Description of Business”, the parties agreed to rescind the agreement retroactive to June 1, 2010 in order to allow Rusheen to pursue other financing options with non-related third parties. As a result of such rescission, all of the 99% interest in the issued and outstanding share capital of Amazonia held by Brazil Gold Corp. was transferred back to Rusheen and the 44,000,000 shares of the Company’s common stock that were issued in connection with the Acquisition Agreement were returned to the Company and cancelled.
USE OF PROCEEDS FROM SALE OF REGISTERED SECURITIES
Not applicable.
DESCRIPTION OF SECURITIES
Common Stock
Each record holder of common stock is entitled to one vote for each share held in all matters properly submitted to the stockholders for their vote. Cumulative voting for the election of directors is not permitted by the By-Laws of the Company.
Holders of outstanding shares of common stock are entitled to such dividends as may be declared from time to time by the Board of Directors out of legally available funds; and, in the event of liquidation, dissolution or winding up of the affairs of the Company, holders are entitled to receive, ratably, the net assets of Brazil Gold available to stockholders. Holders of outstanding shares of common stock have no preemptive, conversion or redemptive rights. To the extent that additional shares of Brazil Gold’s common stock are issued, the relative interest of the existing stockholders may be diluted.
Stock Purchase Warrants
None.
Stock Purchase Options
On January 7, 2010, the Board of Directors of Brazil Gold Corp. adopted a 2010 Stock Option Plan, which plan authorizes the issuance of up to ten percent (10%) of the Company’s total issued and outstanding shares of common stock to the Company’s officers, directors, employees, advisors and consultants.
On January 7, 2010, the Company’s Board of Directors also granted to officers and directors under the above plan options to purchase a total of 2.75 million shares at an exercise price per share of $0.56 of which 25% were vested immediately and the remainder at six months intervals.
ITEM 6.
ITEM 6. MANAGEMENT’S PLAN OF OPERATION.
Since inception until November 2009, we attempted to build a business that assisted consumers with their security needs. 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. We have generated only $45,694 in revenues from the sale of such products and services since our inception. Management realized that 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 and accordingly the Company has disclosed activities relating to such business as discontinued operations in the accompanying financial statements. Considering this fact, we started reviewing mineral exploration and other opportunities with the objective of bringing revenue to the Company. However, there are no revenues generated from continuing operations for the year ended June 30, 2010.
Plan of Operation for the Next Twelve (12) Months
The following discussion of the plan of operation, financial condition, results of operations, cash flows and changes in financial position should be read in conjunction with our most recent financial statements and notes appearing elsewhere in this Form 10-K; our March 2010 10-Q filed May 17, 2009, our December 2009 10-Q/A filed May 17, 2009, and our September 2009 10-Q/A filed November 13, 2009.
Our continuing operations are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurances that we will be successful, which would in turn significantly affect our ability find the right new exploration or other project and then roll-out of the respective business plan. If not, we will likely be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy our working capital and other cash requirements.
Continuing lackluster performance of the U.S. economy has had an effect on our ability to attract long-term financing for our operations.. The current status of U.S. economy has also made it more difficult to find investors that either have capital to invest or is willing to put capital at risk by investing in our company. We anticipate that both effects of the current economic climate will continue to hinder our abilities to become a profitable company and to grow our operations.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Full Fiscal Years
At June 30, 2010, we had a working capital deficit of $1,685,128 (June 30, 2009: $13,954), At June 30, 2010 our assets consisted of cash of $8,125, prepaid expenses of $5,000 advances receivable of $13,111,and capital assets of $1,495. This compared to our assets as of June 30, 2009, consisting of cash of $170, prepaid expenses of $679 and capital assets of $823.
At June 30, 2010, our total current liabilities increased to $1,711,364 ($14,803 as at June 30, 2009).
We recognized $3,840 in revenue from the sale of security products and services for the year ended June 30, 2010 (June 30, 2009: $3,120). Cost of goods sold for the year ended June 30, 2010 were $Nil. (June 2009: $585), resulting in a gross profit of $3,840 (June 2009: $2,535). This has been disclosed as discontinued operations in the accompanying financial statements.
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.
Result of Operations
For the year ended June 30, 2010, operating expenses were $2,303,174 ( $29,471 for the year end June 30, 2009), this included a write-off of note receivable of $1,347,112 as there is a substantial doubt as to the collectability of a note receivable for funds advanced to a third party now that the Company has rescinded its agreement with that party. Operating expenses for the year end June 30, 2010, consisted of professional fees of $132,128. (June 2009: $28,009), office and administration costs of $26,162 (June 2009: $1,462), consulting fees of $215,419 (June 2009: nil), the allowance year to date for stock-based compensation in the form of stock options $518,195 (June 2009: $nil), a $20,639 Beneficial Conversion Feature relating to the convertible debenture that arose in the current financial year; depreciation $29 (June 2009: nil), and marketing and travel of $43,490 (June 2009 nil).
We recognized a gain on sale of assets of $377 for the year ended June 30, 2010 compared with a loss on sale of assets of $149 for the year ended June 30, 2009. There were interest expenses of $58,717 relating to the convertible loan and interest receivable of $54,287 for the year ended June 30, 2010, versus Nil for both payable and receivable for the June 30, 2009 year end.
From inception to June 30, 2010 we have incurred an accumulated deficit of $2,448,263 (June 30, 2009: $144,869).
Coach Capital LLC had committed to provide up to $2 million to meet our operational needs of which approximately $1.4 million was advanced by the June 30, 2010 year-end. Subsequent to the June 30, 2010 year-end, Coach Capital LLC informed us that they would not advance additional funds to us.
As of September 30, 2010, our net cash balance is approximately $1,986. We do not have any lending arrangements in place with banking or financial institutions and we do not anticipate that we will be able to secure these funding arrangements in the near future. . We may attempt to sell additional equity shares or issue debt to support our operations. Any sale of additional equity securities will result in dilution to our stockholders. There can be no assurance that additional financing will be available to us or, if available to us, on acceptable terms.
We believe our market risk exposures arise primarily from exposures to fluctuations in interest rates and exchange rates. We presently only transact business in Canadian and United States Dollars. We believe that the exchange rate risk surrounding our future transactions will not materially or adversely affect our future earnings. We do not use derivative financial instruments to manage risks or for speculative or trading purposes.
Off Balance Sheet Arrangements.
None.
ITEM 7.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements required by this Item begin on Page of this Form 10-K, and include (1) Report of Independent Registered Public Accounting Firm; (2) Balance Sheets; (3) Statements of Operations, Statements of Cash Flows, Statement of Stockholders’ Deficit; and (4) Notes to Financial Statements.
BRAZIL GOLD CORP.
(formerly Dynamic Alert Limited)
FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
JUNE 30, 2010
Page
Reports of Independent Registered Public Accounting Firm
to
Financial Statements:
Balance Sheets
Statements of Operations
Statements of Other Comprehensive Income (Loss)
Statements of Cash Flows
Statement of Changes in Stockholders’ (Deficit)
Notes to Financial Statements
to
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Brazil Gold Corp.
(formerly Dynamic Alert Limited)
We have audited the accompanying balance sheet of Brazil Gold Corp. formerly Dynamic Alert Limited (the Company) as of June 30, 2010 and the related statements of operations, stockholders’ deficit and comprehensive income, and cash flows for the year ended June 30, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Brazil Gold Corp. (formerly Dynamic Alert Limited) for the year ended June 30, 2009, were audited by other auditors whose report thereon, dated September 21, 2009, expressed an unqualified opinion with an emphasis of matter as to going concern.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Brazil Gold Corp. (formerly Dynamic Alert Limited) as of June 30, 2010 and the results of its operations and its cash flows for the year ended June 30, 2010 in conformity with accounting principles generally accepted in the United States of America.
These accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 3, the Company has negative working capital and a stockholders’ deficit and losses to date of approximately $2.5 million. These conditions raise substantial doubts about the Company’s ability to continue as a going concern. Management’s plans to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
200 South Park Road, Suite 150 • Hollywood, Florida 33021 • Main 954.922.5885 • Fax 954.922.5957 • www.jsw-cpa.com
Member - American Institute of Certified Public Accountants • Florida Institute of Certified Public Accountants
Private Companies Practice Section of the AICPA • Registered with the Public Company Accounting Oversight Board of the SEC
Report of Independent Registered Public Accounting Firm
Board of Directors
Stockholders of Brazil Gold Corp.
Dynamic Alert Limited
We have audited the accompanying balance sheet of Brazil Gold Corp. (formerly Dynamic Alert Limited) as of June 30, 2009, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentations. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Brazil Gold Corp. (formerly Dynamic Alert Limited) as of June 30, 2009 and the related statements of operations, and cash flows for the year ended June 30, 2009, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3, the Company has negative working capital and a stockholders’ deficit and has losses to date, which raise substantial doubts about its ability to continue as a going concern. Management’s plan in regard to this matter is also explained in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Schumacher & Associates, Inc.
Certified Public Accountants
7931 S. Broadway, #314
Littleton, CO 80122
September 21, 2009
BRAZIL GOLD CORP.
(formerly Dynamic Alert Limited)
BALANCE SHEET
June 30,
June 30,
ASSETS
Current
Cash and cash equivalent
$
8,125
$
Prepaid expenses
5,000
Advances receivable - related party (Note 5)
13,111
-
Total Current Assets
26,236
Furniture and Equipment, net of depreciation of $29 and $2,879 respectively for the June 30, 2010 and 2009 years.
1,495
TOTAL ASSETS
$
27,731
$
1,672
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
LIABILITIES
Current
Accounts payable
$
58,579
$
5,803
Accrued liabilities
14,000
9,000
Advances payable (Note 6)
53,116
-
Due to related parties (Note 5)
112,383
-
Convertible debenture - net of discount (Note 7)
1,473,286
Total Current Liabilities
1,711,364
14,803
TOTAL LIABILITIES
1,711,364
14,803
STOCKHOLDERS’ (DEFICIT)
Capital Stock
Authorized: (Note 8)
250,000,000 common shares, par value $0.001 per share
10,000,000 preferred shares, par value $0.001 per share
Issued and outstanding: 80,000,000 common shares
80,000
80,000
Additional paid-in capital
679,099
45,585
Accumulated other comprehensive income/(loss)
5,531
6,153
Accumulated deficit
(2,448,263)
(144,869)
Total Stockholders’ Deficit
(1,683,633)
(13,131)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
$
27,731
$
1,672
The accompanying notes are an integral part of these statements.
BRAZIL GOLD CORP.
(formerly Dynamic Alert Limited)
STATEMENTS OF OPERATIONS
Year ended
June 30,
Year ended
June 30,
Revenue
$
-
$
-
Expenses
Depreciation
-
Marketing and travel
43,490
-
Office and administration
26,162
1,462
Professional Fees
132,128
28,009
Consulting
215,419
-
Write-off of note receivable (Note 4)
1,347,112
-
Stock based compensation (Note 10)
518,195
-
Beneficial conversion feature Note 7)
20,639
-
Total Expenses
2,303,174
29,471
Operating Loss
(2,303,174)
(29,471)
Other Income (Expenses)
Interest Income
54,287
-
Interest Expense
(58,717)
-
Gain on sale of assets
(149)
Total Other Income (Expenses)
(4,053)
(149)
Net Loss from Continuing Operations
(2,307,227)
(29,620)
Discontinued Operations (Note 11)
Net Income (Loss) from discontinued operations
3,833
(6,068)
Net Loss For The Year
$
(2,303,394)
$
(35,688)
Net income (loss) per common share:
Basic And Diluted Loss from Continuing Operations
$
(0.03)
$
(0.00)
Basic And Diluted Income (Loss) from Discontinued Operations
$
0.00
$
(0.00)
Weighted Average Number of Shares Outstanding
80,000,000
80,000,000
The accompanying notes are an integral part of these statements.
BRAZIL GOLD CORP.
(formerly Dynamic Alert Limited)
STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS)
Year ended
June 30,
Year ended
June 30,
Net Loss
$
(2,303,394)
$
(35,688)
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustment
(622)
(83)
Other Comprehensive Loss
$
(2,304,016)
(35,771)
The accompanying notes are an integral part of these statements.
BRAZIL GOLD CORP.
(formerly Dynamic Alert Limited)
STATEMENTS OF CASH FLOWS
Year ended
June 30,
Year ended
June 30
Cash Flows from Operating Activities
Net (loss) for the year
$
(2,303,394)
$
(35,688)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities
(Gain) Loss on sale of assets
(377)
Write off of note receivable
1,347,112
-
Depreciation and beneficial conversion feature
20,668
1,471
Stock based compensation
518,195
-
Currency remeasurement loss
(622)
(83)
Advances receivable - related party
(13,111)
-
Prepaid expenses
(4,321)
(263)
Note receivable
(1,347,112)
-
Accounts payable and accrued expenses
57,776
7,096
Due to related parties
112,383
-
Advances payable
53,116
-
Accrued interest related to convertible debenture
58,717
-
Net Cash Used in Operating Activities
(1,500,970)
(27,318)
Cash Flows from Investing Activities
Additions to furniture and equipment
(1,524)
-
Disposal of furniture and equipment
1,200
-
Net Cash Provided by Investing Activities
(324)
-
Cash Flows From Financing Activities
Capital contributions
20,850
Proceeds from convertible debenture / notes payable
1,488,399
Net Cash Provided by Financing Activities
1,509,249
(Increase (Decrease) in Cash during the Year
7,955
(26,733)
Cash, Beginning Of Year
26,903
Cash, End Of Year
$
8,125
$
Supplemental Disclosure of Non-cash Financing and Investing Activities:
Beneficial conversion feature
$
94,469
$
-
Supplemental Disclosure Of Cash Flow Information
Cash paid for:
Interest
$
-
$
-
Income taxes
$
-
$
-
The accompanying notes are an integral part of these statements.
BRAZIL GOLD CORP.
(formerly Dynamic Alert Limited)
STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICIT)
For Years ended June 30, 2010 and 2009
BRAZIL GOLD CORP.
(formerly Dynamic Alert Limited)
NOTES TO FINANCIAL STATEMENTS
June 30, 2010 and 2009
1.
NATURE AND CONTINUENCE OF OPERATIONS
a)
Organization
Dynamic Alert Limited (“the Company”) was incorporated in the State of Nevada, United States of America, 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. On March 15, 2010, the Company’s ticker symbol on OTCBB was changed to “BRZG”
b)
Nature of Operations and Change in Business
Since inception, the Company had engaged in and contemplated certain ventures and acquisitions, most of which were either not successful or consummated. Since inception up until November, 2009 the Company was engaged in business of providing its customers with security professionals, who in turn will 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. Accordingly, the Company has disclosed these activities as discontinued operations in the accompanying financial statements. Effective January 1, 2010, the Company started reviewing mineral exploration and other opportunities with the objective of generating revenue for the Company.
On May19, 2010, Brazil Gold Corp., entered into an Acquisition Agreement (the “Acquisition Agreement”) with Rusheen Handels AG, a Swiss corporation ("Rusheen") whereby the Company was to acquire all of Rusheen’s ownership units in “Amazonia” (ACP), , which represents 99% of all of the issued and outstanding share capital of Amazonia. The acquisition of all of Rusheen’s ownership units in Amazonia was to be in exchange for 44 million shares of the Company’s common stock. Amazonia has previously granted a 2.5% net smelter return royalty (“Royalty”) to Rusheen relating to its mineral claims as described below, which will remain in place following the closing of the Acquisition Agreement. As a condition to closing the Acquisition Agreement, the Company will be cancelling 44 million restricted shares that were returned as this transaction was not consummated successfully pursuant to the terms of the Acquisition Agreement.
Unfortunately, the size of the package of the mineral claims resulted in a lengthy due diligence exercise and upon completion and signing the definitive agreement on May 19, 2010, as set out above, the market conditions had changed, resulting in great difficulty in raising sufficient funds to conduct exploration work on the extensive mineral claims. It was for this reason that the parties agreed to rescind the agreement retroactive to June 1, 2010 in order to allow Rusheen to pursue other financing options with non-related third parties.
On September 15, 2010, the Company, effective as of June 1, 2010, entered into a Mutual Rescission Agreement and General Release between the Company and Rusheen, pursuant to which the parties agreed that all agreements constituting and comprising the acquisition of Amazonia entered into on May 19, 2010, as amended and consummated on June 1, 2010, were rescinded. As a result of such rescission, all of the 99% interest in the issued and outstanding share capital of Amazonia held by Brazil Gold Corp. was transferred back to Rusheen and Rusheen now owns 99% of the issued and outstanding ownership units of Amazonia. Furthermore, the 44,000,000 shares of the Company’s common stock that were issued in connection with the Acquisition Agreement were returned to the Company and will be cancelled.
There were no revenues generated from these business activities and operations for the year ended June 30, 2010. Currently the Company is evaluating possible new ventures and acquisitions. As of June 30, 2010 , the Company does not have any firm target and is in the process of arranging additional equity and debt financing.
2.
SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements. The financial statements are stated in United States of America dollars and have been prepared following the accrual basis of accounting.
a)
Income Taxes
The Company uses the asset and liability method of accounting of income taxes pursuant to the provisions of FASB ASC 740 “Income Taxes”. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
The amount of unrecognized tax benefits as of June 30, 2010, was $0. There have been no material changes in unrecognized tax benefits since June 30, 2010.
The Company is subject to income taxes in the U.S. federal jurisdiction, and the State of Nevada. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply.
The Company is subject to ongoing tax exposures, examinations and assessments in various jurisdictions. Accordingly, the Company may incur additional tax expense based upon the outcomes of such matters. In addition, when applicable, the Company will adjust tax expense to reflect the Company’s ongoing assessments of such matters which require judgment and can materially increase or decrease its effective rate as well as impact operating results. The Company is not in compliance with the filing of federal and applicable state income tax returns for the years ended June 30, 2010 and prior. The Company’s tax years from 2005 and forward are subject to examination by the United States federal and applicable state tax authorities due to the carry forward of unutilized net operating losses. The Company is not currently under examination by any federal or state tax authorities.
Current income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, amounts available to offset future taxable income may be limited.
It is not practicable to determine amounts of interest and/or penalties related to income tax matters that will be due as of June 30, 2010 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 June 30, 2010, and has not recognized interest and/or penalties in the accompanying statement of operations for the year ended June 30, 2010. 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.
b)
Basic and Diluted Loss per Share
Basic loss per common share is computed pursuant to the provisions of FASB ASC 260 “Earnings per Share” by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At June 30, 2010, the Company issued stock option grants to members of management and board of directors. These options were exercisable at $.56 per share. Due to the income that would be derived, should all options be exercised, these options are considered to be anti-dilutive.
The following stock options were not included in the computation of diluted earnings per share because the effect of conversion would be anti-dilutive:
Earnings of Potential Common Stock
Stock options granted
1,375,000
c)
Fair Value of Financial Instruments
The Company records fair value of monetary and nonmonetary instruments in accordance with ASC 820 Fair Value Measurements and Disclosures The ASC establishes a framework for measuring fair value, establishes a fair value hierarchy based on inputs used to measure fair value, and expands disclosure about fair value measurements. Adopting this statement has not had an effect on the Company’s financial condition, cash flows, or results of operations.
In accordance with ASC 820, the financial instruments have been categorized, based on the degree of subjectivity inherent in the valuation technique, into a fair value hierarchy of three levels, as follows:
Level 1. Inputs are unadjusted, quoted prices in active markets for identical instruments at the measurement date (e.g. U.S. Government securities and active exchange traded equity securities.
Level 2. Inputs (other than quoted prices included within Level 1) that are observable for the instrument either directly or indirectly (e.g. certain corporate and municipal bonds and certain preferred stocks). This includes (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are observable for the instruments, and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3. Inputs that are unobservable. Unobservable inputs reflect the reporting entity’s subjective evaluation about the assumptions market participants would use in pricing the financial instruments (e.g. certain structured securities and privately held investments).
As of June 30, 2010 the Company does not possess any long-term monetary or nonmonetary financial instruments whose fair value is measured on a recurring basis. The Company possesses financial instruments of a short-term nature, such as cash, prepaid expenses, advances receivable, accounts payable accrued liabilities, advances payable and convertible debenture, whose fair value can be approximated due to their short maturity.
d)
Revenue Recognition
The company has had minimal revenue to date. It is the Company’s policy that revenues are recognized pursuant to the provisions of FASB ASC 605 “Revenue Recognition”, when persuasive evidence of an arrangement exists, delivery has occurred (or service has been performed), the sales price is fixed and determinable and collectability is reasonably assured.
e)
Foreign Currency Translations
The Company discloses foreign currency matters pursuant to the provisions of FASB ASC 830. The Company uses the U.S. dollar as its functional currency. The Company’s reporting currency is the U.S. dollar. All transactions initiated in other currencies are re-measured into the functional currency as follows:
Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date,
i) Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date:
ii) Non-monetary assets and liabilities, and equity at historical rates, and
iii) Revenue and expense items at the average rate of exchange prevailing during the period.
Gains and losses on re-measurement are included in determining net income for the period
Translation of balances from the functional currency into the reporting currency is conducted as follows:
Assets and liabilities at the rate of exchange in effect at the balance sheet date,
i) Assets and liabilities at the rate of exchange in effect at the balance sheet date;
ii) Equity at historical rates, and
iii) Revenue and expense items at the average rate of exchange prevailing during the period.
Translation adjustments resulting from translation of balances from functional to reporting currency are accumulated as a separate component of shareholders’ equity as a component of comprehensive income or loss.
f)
Use of Estimates
The preparation of the Company’s financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.
g)
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.
h)
Furniture and Equipment
Property and equipment are recorded at cost and depreciated over their estimated useful lives. The Company uses the straight-line method of depreciation.
A summary of the estimated useful lives follows:
Computer equipment 3 years
Furniture 5 years
Expenditures for maintenance and repairs which do not materially extend the useful lives of property and equipment are charged to earnings. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in earning.
i)
Advertising
The Company expenses the cost of advertising when incurred. Advertising expenses are included with marketing and travel in the accompanying statements of operations. The Company recorded $43,490 and $Nil as advertising expenses during the years ended June 30, 2010 and 2009, respectively.
j)
Stock based compensation
The Company accounts for the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values. Under authoritative guidance issued by the Financial Accounting Standards Board (FASB), companies are required to estimate the fair value or calculated value of share-based payment awards on the date of grant using an option-pricing model. The value of awards that are ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s statements of income. The Company uses the Black-Scholes Option Pricing Model to determine the fair-value of stock-based awards.
The Company utilizes the simplified method to estimate expected term for “plain vanilla” stock options (as defined by Section 718-10-S99) which is calculated using parameters of as the vesting period plus the original contractual option divided by two.
k) Concentrations
Financial instruments that potentially subject the company to concentrations of credit risk consist principally of cash and cash equivalents. At June 30, 2010, the Company had $8,125 US Funds in deposit in a business bank account which is insured by agencies of the U.S. Government.
l)
Legal Costs and Contingencies
In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received.
If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss if recovery is also deemed probable.
m) Reclassification
Certain amounts previously reported have been reclassified to conform to current presentation.
n)
Recent Accounting Pronouncements
In June 2009, the FASB issued Statement No. 168 (an update of ASC 105), “The FASB Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162 (FAS 168)”. The Codification became the source of authoritative Generally Accepted Accounting Principle (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities Exchange Commissions (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of SFAS 168, the Codification superseded all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification became non-authoritative. SFAS 168 was effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of SFAS 168 did not affect the Company’s financial position, results of operations, or cash flows.
In August 2009, the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10, ÒFair Value Measurements and Disclosures-OverallÓ. The update provides clarification that in circumstances, in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update. The adoption of this standard did not have a material impact on the Company’s financial position and results of operations.
In October 2009, the FASB has published ASU 2009-13, ÒRevenue Recognition (Topic 605)-Multiple Deliverable Revenue ArrangementsÓ, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. The guidance in this update is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The adoption of this standard is not expected to have any impact on the Company’s financial position and results of operations.
In January 2010, the FASB has published ASU 2010-06 ÒFair Value Measurements and Disclosures (Topic 820): - Improving Disclosures about Fair Value Measurements. ASU No. 2010-06 clarifies and improves disclosure requirements related to fair value measurements and disclosures. The new disclosures and clarifications are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosure about purchases, sales, issuances, and settlement in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The amendments in this Update are effective for interim and annual periods ending on or after December 15, 2009, and should be applied on a retrospective basis. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.
In February 2010, the FASB issued ASU 2010-09, "Subsequent Events (Topic 855) - Amendments to Certain Recognition and Disclosure Requirements." ASU 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirements that an SEC filer disclose the date through which subsequent events have been evaluated. ASC 2010-09 was effective upon issuance and has been adopted by the Company.
In April 2010, the FASB issued Accounting Standard Update No. 2010-13 ÒStock CompensationÓ (Topic 718). ASU No.2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The amendments in this Update should be applied by recording a cumulative-effect adjustment to the opening balance of retained earnings. The cumulative-effect adjustment should be calculated for all awards outstanding as of the beginning of the fiscal year in which the amendments are initially applied, as if the amendments had been applied consistently since the inception of the award. The cumulative-effect adjustment should be presented separately. Earlier application is permitted. The adoption of this guidance has not had and is not expected to have a material impact on the Company’s consolidated financial statements.
Other ASUs not effective until after June 30, 2010 are not expected to have a significant effect on the Company’s financial position or results of operations.
3.
BASIS OF PRESENTATION - GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern. However, the Company has negative working capital and a stockholders’ deficit and has losses to date of approximately $2,448,000. These matters raise substantial doubt about the Company’s ability to continue as a going concern. In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon the Company’s ability to meet its financing requirements, raise additional capital, and the success of its future operations. The Company is seeking additional means of financing to fund its business plan. There is no assurance that the Company will be successful in raising sufficient funds to assure the eventual profitability of the Company. Management believes that actions planned and presently being taken to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern. The financial statements do not include any adjustments that might result from these uncertainties.
4.
NOTE RECEIVABLE
The Company carries its note receivable at cost or loan balance, subject to the valuation procedures as described below. The book value of these financial instruments is representative of their fair values. This note is for funds advanced to Rusheen Handels AG, a Swiss corporation (“Rusheen”), with whom the Company was in negotiations and doing due diligence to acquire Rusheen’s 99% interest in its Brazilian subsidiary Amazônia .
As at June 30, 2010, the Company had advanced $1,292,825 to Rusheen under a note receivable arrangement (none in 2009). The notes are uncollateralized and bear interest as 12% effective January 2, 2010. There is no set maturity date. Interest is accrued at 12% per annum, not compounded and calculated monthly on the note receivable as earned. Imputed interest of $54,287 was recorded as at June 30, 2010.
As per the Company’s accounting policy, the Company will maintain a valuation for certain loans that are delinquent, have significant collateral deficiencies or have other attributes that reduce their collectability potential. The valuation account is netted against notes receivable. At June 30, 2010, management determined to write-off $1,347,112 including imputed interest towards this note receivable, as the agreement to acquire the Brazilian company was rescinded and repayment of such note receivable, imputed interest and a sundry receivable are substantially doubtful and considered impaired.
5.
DUE FROM/TO RELATED PARTIES
As of June 30, 2010 the Company had a total of $75,000 in accrued consulting fees as due to officers of the Company These balances are unsecured, non-interest bearing, due on demand and do not follow any specific repayment terms.
As of June 30, 2010, the Company had a total of $37,383 in advances payable to officers of the Company for expenses paid on behalf of the Company. These balances are unsecured, non-interest bearing, due on demand and do not follow any specific repayment terms.
As of June 30, 2010, the Company had a total of $13,111 in accounts receivable from a related party. This balance was a result of overpayment to the related party in relation to expenses paid on behalf of the Company. This balance is unsecured, non-interest bearing, due on demand and does not follow any specific repayment terms.
6.
ADVANCES PAYABLE
As of June 30, 2010, the Company had a total of $53,116 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 unsecured, non-interest bearing, due on demand and do not follow any specific repayment terms.
7.
CONVERTIBLE DEBENTURE
The Company entered into an agreement with an unrelated third-party for an aggregate loan facility that is not to exceed $2 million, allowing for draw-downs. In the form of convertible promissory note, for value received, on July 2, 2011 being the Maturity Date, these advances must be repaid, or the promissory note holder may convert the outstanding plus interest accrued at the rate of 12% per annum, calculated monthly and not compounded into shares of common stock in the company converted at an agreed conversion rate, which shall allow the convertible promissory note holder to convert the amounts advanced plus interest at the lesser of $1.00 per share and the average weighted trading price for the 20-day period prior to the conversion date.
This note was made up of two categories: Funds advanced to Rushhen Handel AG as disclosed in Note 4 above and funds advanced to the company for its running expenses being: $1,261,000 and $227,399 respectively. In addition interest accrued to the end of June 30, 2010 is $58,717.
The beneficial conversion feature has been deducted from the total amount owed, of $94,469 and shown as additional paid up capital. This beneficial conversion feature has been amortized over the life of the convertible debenture, which amounts to $20,639, for the year ended June 30, 2010.
8.
EQUITY
The Company’s authorized preferred stock consists of 10,000,000 shares with a par value of $.001 per share. There were no issued and outstanding preferred shares as of June 30, 2010.
The Company’s authorized common stock consists of 250,000,000 shares with a par value of $0.001 per share. At June 30, 2010, the Company has 80,000,000 shares of common stock issued and outstanding.
In May 2010 the Company entered into an Acquisition Agreement to acquire 99% of the outstanding shares of ACP. As part of the acquisition, the Company issued 44,000,000 shares to ACP as contingent consideration for acquiring the 99% interest in ACP. In September 2010 the Acquisition Agreement was rescinded retroactive with effect from June 1, 2010, and the 44,000,000 shares were returned to the Company. The Company intends to cancel these 44,000,000 shares. As a result of this rescission, the Company has disclosed 44,000,000 shares of common stock as issued and then rescinded in the accompanying statements of stockholders’ equity (deficit) at June 30, 2010.
The beneficial conversion feature of the convertible debenture shown in note 7 totalling $94,469 has been included as additional paid up capital. The Company has recorded $518,195 as stock based compensation for the options granted - refer to note 10. During 2010, the Company also received $20,850 in cash towards capital contributions.
9.
INCOME TAXES
The Company is subject to U.S. federal and state income taxes. The Company has had losses to date, and therefore has paid no income tax.
Deferred income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax purposes. The Company’s deferred tax assets consist entirely of the benefit from net operating loss (NOL) carry-forwards. The net operating loss carry forwards expire in various years through 2029. The Company’s deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the net operating loss carry-forwards. Net operating loss carry-forwards may be further limited by a change in company ownership and other provisions of the tax laws.
The Company’s deferred tax assets, valuation allowance, and change in valuation allowance are as follows:
Period Ending
Estimated NOL Carry-forward
NOL Expires
Estimated Tax Benefit from NOL
Valuation Allowance
Change in Valuation Allowance
Net Tax Benefit
June 30, 2009
144,869
Various
56,499
(56,499)
(19,378)
-
June 30, 2010
2,303,394
898,324
(898,324)
(841,725)
-
Federal and state income taxes at the statutory rate are reconciled to the Company’s actual income taxes as follows:
Income tax benefit at statutory rate resulting from net operating
loss carry forward
(39%)
Deferred income tax valuation allowance
39%
Actual tax rate
0%
10.
STOCK BASED COMPENSATION
The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation. Under the fair value recognition provisions of the pronouncement, stock-based compensation cost is measure at the grant date based on the value of the award granted, using the Black-Scholes option pricing model, and recognized over the period in which the award vests. The stock-based compensation expense included in general and administrative expenses for the twelve months ended June 30, 2010 and 2009 was $518,194and Nil, respectively. Remaining compensation expense relating to nonvested options is $538,597and will be recognized within the 12 months.
The 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 scheme vested immediately as January 7, 2010, the date they were approved at the board meeting: and
·
The remaining seventy-five percent (75%) of the shares granted under the option scheme shall vest pro rate every six (6) months, on the same date of the month as the date of grant of the option, over the following eighteen (19) months of continuous status as a director, employee or consultant.
During the quarter ended June 30, 2010, the Company recognized stock based compensation expense in the amount of $132,833for the vested portion of options issued January 7, 2010.
In April 2010 the Company granted 250,000 stock options for compensation in conjunction with the Acquisition of ACP. These shares had an exercise price of $.90 and began vesting on April 6, 2010. These options were cancelled in response to the September 2010 rescission agreement regarding the acquisition of ACP and accordingly these options are not included in the Company’s stock option compensation expense for the year ended June 30, 2010.
In April 2010 the Company granted 50,000 stock options compensation to the Company’s general counsel. These shares have an exercise price of $1.00 and do not begin to vest until July 19, 2010. Accordingly, these options are not included in the Company’s stock option compensation expense for the year ended June 30, 2010.
The Company uses the Black-Scholes option valuation model to value stock options granted. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model requires management to make estimates which are subjective and may not be representative of actual results. Changes in assumptions can materially affect estimates of fair values. For purposes of the calculation, the following assumptions were used:
Risk free interest rate
1.62%
Expected dividend yield
0.0%
Expected stock price volatility
110.00%
Expected Life of options
3.24 years
The following table summarizes the activity under the Company’s stock option plan:
Shares
Weighted Average Exercise Price
Balance, June 30, 2009
-
-
Options granted for the period
3,00,000
$0.59
Options cancelled
250,000
$0.90
Options exercised
-
-
Balance, June 30, 2010
2,750,000
$0.56
Options vested at June 30, 2010
687,500
$0.56
11. DISCONTINUED OPERATIONS
The Company’s attempts over the past years to build a business that assists consumers with their security needs had not come to fruition so management decided to change the business focus and look for other opportunities. Therefore, management decided to discontinue its security business and reflect such discontinuance in its operating statement and cash flow statements effective January1, 2010.
Management decided on that date to focus on new business development in the form of mineral exploration. However this business venture was also not successfully consummated subsequent to the balance sheet date.
During the year ending June 30, 2010 and 2009, the Company had $3,840 and $3,120 in revenue, respectively, related to its discontinued operations.
The Company did not have significant assets and liabilities relating to discontinued operations as held for sale as of June 30, 2010 and 2009.
12.
SUBSEQUENT EVENTS
In accordance with the guidance offered in ASC Topic 855, formerly SFAS 165 - “Subsequent Events”, the Company has evaluated its activities through the date the financial statements were available to be issued, and determined that there were no reportable subsequent events, except as disclosed below:
On July 1, 2010, the Company announced the appointment of Phillip Jennings as President and Chief Operating Officer of the Company effective immediately.
At a meeting of the Board of Directors dated July 23, 2010, the Board approved a grant of a total of three million (3,000,000) restricted shares of the Company’s common stock to Phillip E Jennings and Lisa S. Boksenbaum, with two million (2,000,000) going to Mr. Jennings, or his assigns, and one million (1,000,000) going to Ms. Boksenbaum.
On September 15, 2010, the Company, effective as of June 1, 2010, entered into a Mutual Rescission Agreement and General Release between the Company and Rusheen, pursuant to which the parties agreed that all agreements constituting and comprising the acquisition of Amazonia entered into on May 19, 2010, as amended and consummated on June 1, 2010, were rescinded. As a result of such rescission, all of the 99% interest in the issued and outstanding share capital of Amazonia held by Brazil Gold Corp. was transferred back to Rusheen and Rusheen now owns 99% of the issued and outstanding ownership units of Amazonia. Furthermore, the 44,000,000 shares of the Company’s common stock that were issued in connection with the acquisition were returned to treasury. The accounts of the Company reflect such rescission as at June 30, 2010.
ITEM 8
ITEM 8
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 8A. Controls and procedures
Evaluation of disclosure controls and procedures.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management as appropriate, to allow timely decisions regarding required disclosure.
An evaluation was performed under the supervision and with the participation of our management, including the chief executive officer and the chief financial officer, of the effectiveness of the design and operation of our disclosure procedures. Based on management's evaluation as of the end of the period covered by this Annual Report, our principal executive officer and chief financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) were sufficiently effective to ensure that the information required to be disclosed by us in the reports that we file under the Exchange Act is gathered, analyzed and disclosed with adequate timeliness, accuracy and completeness.
Management’s Annual 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) of 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.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.
Our management, with the participation of the President, evaluated the effectiveness of the Company’s internal control over financial reporting as of June 30, 2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. Based on that evaluation, our management concluded that, as of June 30, 2010, 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 has installed 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.
Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weaknesses through various steps.
This Annual 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.
Changes in internal controls
There have been no changes in our internal control over financial reporting identified in connection with the evaluation described above that occurred during our last fiscal quarter that has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.
ITEM 8B. Other Information
None
PART III
ITEM 9.
ITEM 9.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE, COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Directors and Executive Officers
The following table sets forth the names, ages and positions of our current directors and executive officers.
Name
Age
Office Held
Thomas E Sawyer, Ph. D.
Chairman of the Board, CEO
Phillip E Jennings
President, COO
Hiro Mitscuhi
Director
J Roland Vetter
CFO
Lisa Boksenbaum
General Council
Dr. Thomas E. Sawyer - Chairman & Chief Executive Officer:
On November 13, 2009 Dr. Thomas E. Sawyer, 76, was appointed as Chief Executive Officer.
Dr Sawyer has been Senior Scientific Advisor to three U.S. Presidents, and has been an innovator and entrepreneur in telecom hardware. Since 2007, he has been the Chairman of the Board and CEO of Innova Enterprises, Inc., of Sandy, Utah, a company that develops oil purification technology to reduce waste oil and extend useful life of engines and engine components. From 2002 through 2005, he was President and Chief Executive Officer of TeleCom, Inc., and from 1998 through 2002, he served as Director and Chief Technology Officer of Global Light Telecommunications, Inc. Dr. Sawyer has also been the President and Chief Executive Officer of Sawyer Technologies, LLC, since 2002, which provides consulting services for international high net worth entities and individuals, projects in the fields of mining, gas and oil, telecommunications, green energy and clean technologies and health care.
Dr. Sawyer obtained a B.Sc. (Engineering) from UCLA, a M.A. (Business and Urban Affairs) from Occidental College, a Ph.D. (Clinical Psychology) from Florida State and a Ph.D. (Management) from Walden University. Dr. Sawyer performed Graduate Research (Public Affairs) at Coro Foundation and has completed other graduate studies at the University of Utah, the University of Southern California and the California Institute of Technology.
Dr. Sawyer is a member of the Board of Directors of Chief Consolidated Mining Company, which is a SEC-publicly registered company.
Phillip E. Jennings: President and Chief Operating Officer:
On December 22, 2009 the Company announced the appointment of Phillip E. Jennings as Vice President and a Director of the Company. He was promoted to President and Chief Operating Officer on July1, 2010.
Mr. Jennings, 68, is an investment banker with significant experience in financing and merger and acquisition activities over the past thirty years. He has created and financed companies in the resource and technology sectors in Asia and South America, as well as the U.S. Throughout his career, Mr. Jennings has been a leader in applying new technology to existing businesses to increase efficiency and profitability.
In 1992, Mr. Jennings was CEO and founder of Teleres, a joint venture with Dow Jones & Co. and AEGON USA that created the first national online real estate system. In 1997, he created a similar company in China (Soufun.com) which has grown to be the largest in the world in that industry. He has significant experience and connections in the South American resource business where, since 2001, he has been involved in using tertiary recovery technology methodology in oil and gas exploration in Colombia. His time in South America led him to become the founder of two ventures using leading-edge technology to identify and map landmines and to distribute water-purifying devices to local communities in Colombia that have been negatively affected by war and the accompanying explosive remnants of such conflict. To enhance those efforts, he recently co-founded Molecular Resonance Corporation (MRC) to research and develop an electromagnetic spectroscopy system for the airborne detection of Improvised Explosive Devices using sensors developed by Lawrence Livermore National Laboratory combined with MRC proprietary technology. Mr. Jennings is also the founder of Brazil Gold Corp., a U.S.-based privately-held mineral exploration company active in South America. He currently sits on the board of directors of quant fund managers First Forge Capital LLC, and is a member of the board of directors and the CEO of Avalon Holding Group Inc., a SEC-listed company.
Mr. Jennings was born and educated in the United States, graduating from Oklahoma State University with a degree in Business Administration. He attended the University of Mexico for graduate studies. He is a former U.S. Marine Captain.
Mr. Hiro Mitsuchi, Non-Executive Director;
On April 7, 2010 the Company announced the appointment of Mr. Hiro Mitsuchi to its Board of Directors.
Mr. Mitsuchi, 72, brings significant expertise to the Company as an international financier with a wealth of experience in mining and mineral exploration. Mr. Mitsuchi was a thirty year executive with Sumitomo Corporation as the General Manager of Sumitomo Australia Development Pty. Ltd. (SADP) a consortium of eleven major Sumitomo companies including Sumitomo Bank, Sumitomo Metal Mining Co. and NEC from 1972 to 1979, reporting directly to the Chairman of SADP, Mr. Tsutomo Sumitomo. Sumitomo Corporation, through its subsidiaries and joint ventures has been involved in the mining industry throughout the world.
Mr. Mitsuchi was also the General Manager Overseas Operations of Sumitomo Corporation, Tokyo. He has served as a director and advisory director for numerous international organizations, including energy resources, real estate development, and technical systems development.
In addition to his involvement in the international business world, Mr. Mitsuchi has been a Visiting Fellow at the Woodrow Wilson School of Princeton University and a Professor of International Business at Toyo Gakuen University in Tokyo. He was awarded honorary citizenship in the city of New Orleans, the city of Nashville, the state of Arkansas and the state of Oklahoma for his contribution in promoting direct investments from Japan to the U.S., as well as promoting the mutual understanding between the U.S. and Japan.
Mr. Mitsuchi divides his time between his home in Tokyo and traveling to the U.S., Europe, and Australia in his capacity as an advisor and lecturer. Prior to his appointment to the Board of Brazil Gold, Mr. Mitsuchi was a member of the Company's Advisory Board.
Officers:
J. Roland Vetter - Chief Financial Officer:
J. Roland Vetter was appointed Chief Financial Officer, effective December 8, 2009.
Mr. Vetter, 58, is a senior executive with a significant background in mergers and acquisitions and in growing start-up companies, particularly in the mining, manufacturing and technology sectors. He has considerable experience in the mining sector in both North & South America (Mexico & Brazil).
Mr. Vetter is most recently the Chief Financial Officer of Golden Phoenix Mining Inc, a publicly-traded Nevada-based mining exploration company. In 2005, he was named President & CFO of International Gold Resources, Inc. a US-listed company, after structuring the successful reverse take-over of a private US mining group with exploration interests in Brazil and the Yukon. From 1998 to 2003, he was the President, CFO and director of Cardinal Minerals Inc., a US mining group looking into acquiring a producing silver/copper mine in Mexico, and the Chief Financial Officer of Globetech Ventures Corp, a TSX-listed company with mining exploration operations in Amapa state in Brazil. Prior to 1998, Mr. Vetter was Financial Services Director for the Zimco Group, part of the New Mining Business Division of Anglo American Corporation and a former Chairman of the Anglo American Audit Liaison Committee. The Zimco Group comprised twelve distinct operations involved in mining and manufacturing. During his Zimco tenure, he served on the board of directors of Darmag Ltd., and was Strategic Advisor to the Zaaiplaats Tin Mine Ltd., both Zimco Group publicly-listed companies.
Mr. Vetter was born and educated in Johannesburg, South Africa, and attended the University of the Witwatersrand in South Africa, where he obtained his Bachelor of Commerce and Bachelor of Accounting degrees. He is a Member of both the Canadian and South African Institute of Chartered Accountants.
Lisa Boksenbaum - General Counsel
Lisa Boksenbaum has served as the Company’s General Counsel since April 2010. Ms. Boksenbaum is an attorney with 12 years of diverse corporate law experience, both in private practice and as in-house counsel for public companies. From 2006 until joining Brazil Gold, Ms. Boksenbaum was a sole practitioner with a business law practice serving private corporations and small-cap public companies. From 2003 until 2006, Ms. Boksenbaum served as General Counsel for GoldSpring, Inc. (now Comstock Mining), a publicly traded mining company with headquarters in Nevada.
Ms. Boksenbaum earned her law degree from the University of Washington School of Law and her B.A. in political science from the University of Washington in Seattle.
Significant Employees
None.
Family Relationships
None.
Involvement in Certain Legal Proceedings
None.
Compliance with Section 16(a) of the Securities Exchange Act.
Based solely upon a review of Forms 3 and 4 furnished to the company under Rule 16a-3(e) of the Securities Exchange Act during its most recent fiscal year and Forms 5 furnished to the company with respect to its most recent fiscal year and any written representations received by the company from persons required to file such forms, the following persons - either officers, directors or beneficial owners of more than ten percent of any class of equity of the company registered pursuant to Section 12 of the Securities Exchange Act - failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act during the most recent fiscal year or prior fiscal years:
Name
# of Late Reports
# of Transactions Not Timely Reported
# of Failures to File a Required Report
Thomas Sawyer - CEO, Director
N/A
N/A
Phillip Jennings - President, Director
N/A
N/A
Hiro Mitsuchi - Director
N/A
N/A
Lisa Boksenbaum - General Counsel
N/A
N/A
Code of Ethics
We have not yet prepared a written code of ethics and employment standards. We have only recently commenced operations. We expect to implement a Code of Ethics during the current fiscal year.
Corporate Governance; Audit Committee Financial Expert
We currently do not have an audit committee financial expert or an independent audit committee expert due to the fact that our Board of Directors currently does not have an independent audit committee. Our Board of Directors currently has only one (1) independent member, and thus, does not have the ability to create a proper independent audit committee.
ITEM 10.
ITEM 10. EXECUTIVE COMPENSATION.
The Company started compensating directors and executives as consultants, to prepare for the acquisition of the Brazilian exploration company and the following compensation was paid and accrued to June 30, 2010, including stock options expensed:
Name
Office Held
Compensation
Thomas E Sawyer, Ph. D
Sawyer Technologies LLC.
Chairman of the Board, Chief Executive Officer
$ 225,434
Phillip E Jennings
PEJ Consulting
President, and Chief Operating Officer
$ 144,217
J. Roland Vetter
Chief Financial Officer
$ 184,217
Lisa Boksenbaum
General Council
$ 13,000
The Company started compensating directors and executives as consultants, to prepare for the acquisition of the Brazilian exploration company and the following compensation was paid and accrued to September 30, 2010, including stock options expensed:
Name
Office Held
Compensation
Thomas E Sawyer, Ph. D
Sawyer Technologies LLC.
Chairman of the Board, Chief Executive Officer
$ 291,472
Phillip E Jennings
PEJ Consulting
President, and Chief Operating Officer
$ 198,236
J. Roland Vetter
Chief Financial Officer
$ 238,236
Lisa Boksenbaum
General Council
$ 28,000
Compensation of Directors
We currently do not compensate our directors for their time spent on our behalf, but they are entitled to receive reimbursement for all out of pocket expenses incurred for attendance at our Board of Directors meetings.
Pension and Retirement Plans
Currently, we do not offer any annuity, pension or retirement benefits to be paid to any of our officers, directors or employees, in the event of retirement. There are also no compensatory plans or arrangements with respect to any individual named above which results or will result from the resignation, retirement or any other termination of employment with us, or from a change in our control.
Employment Agreements
We do not have written employment agreements.
Audit Committee
Presently, our Board of Directors is performing the duties that would normally be performed by an audit committee. We intend to form a separate audit committee, and plan to seek potential independent directors. In connection with our search, we plan to appoint an individual qualified as an audit committee financial expert.
ITEM 11.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth certain information, as of September 30, 2010, with respect to any person (including any “group”, as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) who is known us to be the beneficial owner of more than five percent (5%) of any class of our voting securities, and as to those shares of our equity securities beneficially owned by each of our directors, our executive officers and all of our directors and executive officers and all of our directors and executive officers as a group. Unless otherwise specified in the table below, such information, other than information with respect to our directors and officers, is based on a review of statements filed, with the Securities and Exchange commission (the “Commission”) pursuant to Sections 13 (d), 13 (f), and 13 (g) of the Exchange Act with respect to our Common Stock. As of September 30, 2010, there were 39,000,000 shares of Common Stock outstanding.
The number of shares of Common Stock beneficially owned by each person is determined under the rules of the Commission and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which such person has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within sixty (60) days after the date hereof, through the exercise of any stock option, warrant or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion herein of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.
The table also shows the number of shares beneficially owned as of September 30, 2010, by each of the individual directors and executive officers and by all directors and executive officers as a group.
Title of Class
Name and Address of Beneficial Owner
Amount and Nature of Beneficial Ownership
Percent
of Class1
Common
Thomas E Sawyer, Ph D.
Director, Chairman of the Board
Chief Executive Officer
P.O. Box 900788 Sandy, Utah 84090
0%
Common
Phillip E Jennings
Director, President, Secretary, Treasurer
Chief Operating Officer
6536 102nd PL NE, Kirkland, WA 98033
2,000,000
5.12%
Common
Hiro Mitsuchi
Director
800 Bellevue Way, Suite 400 Bellevue, WA 98004
0%
Common
J. Roland Vetter
Chief Financial Officer
189 Talisman Ave, Vancouver BC V5Y2L6
0%
Common
Lisa Boksenbaum, General Council
1,000,000
2.56%
Common
Significant shareholders, directors and officers as a group (5)
-3,000,000-
7.68*%
(1) Percent of Ownership is calculated in accordance with the Securities and Exchange Commission’s Rule 13(d) - 13(d)(1)
ITEM 12.
ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Other than the stock transactions disclosed below, we have not entered into any transactions in which any of our directors, executive officers, or affiliates, including any member of an immediate family, had or are to have a direct or indirect material interest.
We have not sold any securities within the past three years without registering the securities under the Securities Act of 1933.
ITEM 13.
ITEM 13. EXHIBITS
Exhibit
Number Description
3.1 Articles of Incorporation*
3.2 By-laws*
31.1 Section 302 Certification - Chief Executive Officer
31.2 Section 302 Certification - President
31.3 Section 302 Certification - Chief Financial Officer
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - President.
32.3 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer10.1 Acquisition Agreement of ACP from Rusheen
10.2 Coach Capital loan agreement - up to $2 million
10.3 Rescission Agreement
*Incorporated by reference to our SB2 Registration Statement, file number 333-119566, filed on October 30, 2006.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees.
The aggregate fees billed by our auditor, Schumacher & Associates, Inc., during the years ended June 30, 2010 and 2009, for professional services rendered for the audit of our annual financial statements and for the reviews of the financial statements included in our Quarterly Reports on Form 10-QSB during that fiscal year was $15,650 and $10,050, respectively.
Audit Related Fees.
We incurred $37,144 to auditors for audit related fees during the fiscal years ended June 30, 2010 and $nil during the fiscal year ended June 30,2009.
Tax Fees.
We incurred nil fees to auditors for tax compliance, tax advice or tax compliance services during the fiscal years ended June 30, 2010 and 2009.
All Other Fees.
We did not incur any other fees billed by auditors for services rendered to us other than the services covered in "Audit Fees" for the fiscal years ended June 30, 2010 and 2009.
The Board of Directors has considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence.
Since there is no audit committee, there are no audit committee pre-approval policies and procedures.
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 14th day of October, 2010.
BRAZIL GOLD CORP.
Date: October 18 2010 By: /s/ Dr Thomas E Sawyer
Name: Dr. Thomas E. Sawyer
Title: Chairman of the Board/Chief Executive Officer, principal executive officer
Date: October 18 2010 By: /s/ Phillip E Jennings
Name:Phillip E Jennings
Title: Director, President, Secretary, Chief Operating Officer
Date: October 18, 2010 By: /s/ J Roland Vetter
Name: J Roland Vetter
Title: Chief Financial Officer, principal financial officer and principal accounting officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Dr. Thomas E. Sawyer
Name: Thomas E. Sawyer, Member of the Board of Directors
Date: October 19, 2010
By: /s/ Phillip Jennings
Name: Phillip Jennings, Member of the Board of Directors
Date: October 19, 2010
By: _________________________________________
Name: Hiro Mitsuchi, Member of the Board of Directors
Date: October 19, 201