UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 10-Q   (Mark One)  X. QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended December 31, 2012  OR  . TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from __________ to ______________  Commission File Number333-119566   BRAZIL GOLD CORP. (Exact name of registrant as specified in its charter)   Nevada98-0430746State or other jurisdiction of(I.R.S. Employerincorporation or organizationIdentification No.)  850 Third Avenue, Suite 16C, NYC, NY 10022 (Address of principal executive offices) (Zip Code)  Registrants telephone number, including area code: 1-212-994-9875   Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X. No .  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.  Large accelerated filer.Accelerated filer.Non-accelerated filer. (Do not check if a smaller reporting company)Smaller reporting companyX.  Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes . No X.  Number of shares outstanding of the registrants class of common stock as of June 28, 2013:  118,789,850      PART I  FINANCIAL INFORMATIONPageItem 1.  Interim Financial Statements (Unaudited)3Balance Sheets4Interim Statements of Operations5Interim Statement of Other Comprehensive Income (Loss)6Interim Statements of Cash Flows7Interim Statement of Stockholders (Deficit)8Notes to Interim Financial Statements9Item 2. Managements Discussion and Analysis27Item 3. Quantitative and Qualitative Disclosure about Mark Rise28Item 4. Controls and Procedures28Item 4(A) T. Controls and Procedures28PART II  OTHER INFORMATIONItem 1. Legal Proceedings-Not Applicable29Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Not Applicable29Item 3. Defaults upon Senior Securities Not Applicable29Item 4. Removed and Reserved29Item 5. Other Information29Item 6. Exhibits29SIGNATURES29   2     PART I - FINANCIAL INFORMATION   ITEM 1. FINANCIAL STATEMENTS    Brazil Gold Corp.    December 31, 2012 and 2011   Index to the financial statements ContentsPage(s)Balance Sheets at December 31, 2012 (Unaudited) and June 30, 20124Statements of Operations for the Three Months Ended December 31, 2012 and 2011 (Unaudited)5Statements of Operations for the Nine Months Ended December 31, 2012 and 2011 (Unaudited)6Statement of Stockholders Deficit for the Period Ended December 31, 2012 (Unaudited)7Statements of Cash Flows for the Nine Months Ended December 31, 2012 and 2011 (Unaudited)8Notes to the Financial Statements (Unaudited)9   3    Brazil Gold Corp.Balance SheetsDecember 31,
2012June 30,
2012(Unaudited)ASSETSCURRENT ASSETS:Cash$-$-Prepaid expenses-167Other current assets1,3821,382Total Current Assets1,3821,549PROPERTY AND EQUIPMENTProperty and equipment1,5241,524Accumulated depreciation(1,138)(916)Property and Equipment, net386608Total Assets$1,768$2,157LIABILITIES AND STOCKHOLDERS' DEFICITCURRENT LIABILITIES:Accounts payable$115,829$220,471Accrued expenses24,42818,806Advances payable42,94042,940Derivative liability29,653176,867Convertible debentures - stockholder, net170,523101,289Note payable - related party-77,888Total Current Liabilities383,373638,261NON-CURRENT LIABILITIES:Notes payable - related party184,192-Total Non-Current Liabilities184,192-Total Liabilities567,565638,261STOCKHOLDERS' DEFICIT:Preferred stock at $0.001 par value: 10,000,000 shares authorized;
none issued or outstanding--Common stock at $0.001 par value: 250,000,000 shares authorized;
72,140,483 and 54,200,159 shares issued and outstanding, respectively72,14054,650Additional paid-in capital5,602,5265,518,482Accumulated deficit(6,240,463)(6,209,236)Total Stockholders' Deficit(565,797)(636,104)Total Liabilities and Stockholders' Deficit$1,768$2,157See accompanying notes to the financial statements.   4    Brazil Gold Corp.Statements of OperationsFor the ThreeFor the ThreeMonths EndedMonths EndedDecember 31, 2012December 31, 2011(Unaudited)(Unaudited)NET REVENUES$-$-OPERATING EXPENSES:Consulting fees60,00045,680Professional fees40,0002,364Compensation-16,807General and administrative expenses11127,971Total operating expenses100,11192,822LOSS FROM OPERATIONS(100,111)(92,822)OTHER (INCOME) EXPENSE:Derivative expense82,167-Interest expense82,79436,904Loss on settlement of debt7,722-Change in fair value of derivative liability(396,517)(117,280)Other (income) expense, net(223,833)(80,376)INCOME (LOSS) FROM OPERATIONSBEFORE INCOME TAX PROVISION123,722(12,446)INCOME TAX PROVISION--NET INCOME (LOSS)$123,722$(12,446)NET INCOME (LOSS) PER COMMON SHARE- BASIC AND DILUTED:$(0.00)$(0.00)Weighted average common shares outstanding
- basic and diluted64,773,48154,650,159See accompanying notes to the financial statements.   5    Brazil Gold Corp.Statements of OperationsFor the SixFor the SixMonths EndedMonths EndedDecember 31, 2012December 31, 2011(Unaudited)(Unaudited)NET REVENUES$-$-OPERATING EXPENSES:Consulting fees60,000127,045Professional fees122,27711,350Compensation-43,666General and administrative expenses9,72250,791Total operating expenses191,999232,852LOSS FROM OPERATIONS(191,999)(232,852)OTHER (INCOME) EXPENSE:Derivative expense124,46959,939Interest expense118,820142,712Loss on settlement of debt7,722-Change in fair value of derivative liability(411,783)(117,280)Other (income) expense-(36)Other (income) expense, net(160,772)85,335LOSS FROM OPERATIONSBEFORE INCOME TAX PROVISION(31,227)(318,187)INCOME TAX PROVISION--NET LOSS$(31,227)$(318,187)NET LOSS PER COMMON SHARE- BASIC AND DILUTED:$(0.00)$(0.01)Weighted average common shares outstanding
- basic and diluted61,137,60554,633,059See accompanying notes to the financial statements.   6    Brazil Gold Corp.Statement of Stockholders' DeficitFor the Interim Period Ended September 30, 2012(Unaudited)Accumulated
Other
ComprehensiveIncomeCommon Stock, $0.001 Par Value(Loss)
ForeignNumberAdditional
Paid-inAccumulatedCurrency
TranslationTotal
Stockholders'of
SharesAmount
$Capital
$Deficit
$Gain (Loss)
$Deficit
$Balance, June 30, 201036,000,00036,000723,099(2,448,263)5,531(1,683,633)Common stock issued in settlement of Coach  convertible debt10,000,00010,0002,290,000--2,300,000Common stock issued for consulting services and  cash1,000,0001,00018,800--19,800Common stock issued for services155,15915516,912--17,067Settlement of related party debt
and common stock compensation675,000675141,075--141,750Common stock issued for compensation6,370,0006,3702,178,110--2,184,480Beneficial conversion feature--59,702--59,702Comprehensive income (loss):Net loss---(3,304,621)-(3,304,621)Foreign currency translation loss----(114)(114)Total comprehensive income (loss)-----(3,304,735)Balance, June 30, 201154,200,15954,2005,427,698(5,752,884)5,417(265,569)Common stock issued for services--49,817--49,817Common stock issued with convertible debentures450,00045035,550--36,000Write off of foreign currency translation gain (loss)--5,417-(5,417)-Net loss---(456,352)-(456,352)Balance, June 30, 201254,650,15954,6505,518,482(6,209,236)-(636,104)Common stock issued upon conversion of convertible debentures17,490,32417,49084,044--101,534Net loss---(31,227)-(31,227)Balance, December 30, 201272,140,48372,1405,602,526(6,240,463)-(565,797)See accompanying notes to the financial statements.   7    Brazil Gold Corp.Statements of Cash FlowsFor the SixFor the SixMonths EndedMonths EndedDecember 31, 2012December 31, 2011(Unaudited)(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(31,227)$(318,187)Adjustments to reconcile net loss to net cash used in operating activitiesDepreciation expense222222Convertible notes issued for services120,000-Amortization of discount on convertible debt113,536100,000Loss on settlement of debt7,722-Stock based compensation-43,666Derivative expense124,46959,939Change in fair value of derivative liabilities(411,783)(117,280)Common stock issued for interest-36,000Changes in operating assets and liabilities:Prepaid expenses16710,355Other current assets-(1,382)Accounts payable738120,239Accrued expenses6,5463,242NET CASH USED IN OPERATING ACTIVITIES(69,610)(63,186)CASH FLOWS FROM INVESTING ACTIVITIES:Collection of related party receivables-4,249NET CASH PROVIDED BY INVESTING ACTIVITIES-4,249CASH FLOWS FROM FINANCING ACTIVITIES:Advances from (repayments to) related parties-(45,621)Note payable - related party-3,141Proceeds from convertible debentures69,610100,000NET CASH PROVIDED BY FINANCING ACTIVITIES69,61057,520NET CHANGE IN CASH-(1,417)Cash at beginning of period-1,417Cash at end of period$-$-SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:Interest paid$-$-Income tax paid$-$-See accompanying notes to the financial statements.   8   Brazil Gold Corp. December 31, 2012 and 2011 Notes to the Financial Statements (Unaudited)  Note 1 - Organization and Operations  Brazil Gold Corp. (Formerly " Dynamic Alert Limited")  Dynamic Alert Limited (the Company) was incorporated in the State of Nevada, on June 17, 2004.  On December 22, 2009, as amended February 25, 2010, pursuant to the provisions of Articles of Merger, Dynamic Alert Limited, and its wholly-owned subsidiary, Brazil Gold Corp., a Nevada Corporation which was incorporated on November 3, 2009, were merged, with Dynamic Alert Limited being the surviving entity. In connection with such merger, on March 15, 2010, the Companys name was changed from Dynamic Alert Limited to Brazil Gold Corp.  Since inception up until November, 2009 the Company engaged in the business of providing its customers with security professionals, who in turn would provide personal protection as needed, as well as selling a selection of personal security products. The Company changed its status from a development stage company to an operating company on June 30, 2008. Management realized that the results of operations from security products and services were lack-luster, and it was decided to change the Companys business focus and plan for other strategic opportunities and discontinue the security operations with effect from January 1, 2010. 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 May 19, 2010, the Company 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). 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.  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, were rescinded.  As a result of such rescission, 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.  The Company is currently inactive and is evaluating possible new ventures and acquisitions.  Note 2 - Summary of Significant Accounting Policies  Basis of Presentation  Unaudited Interim Financial Information  The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (SEC) to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.  Interim results are not necessarily indicative of the results for the full year.  These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended June 30, 2012 and notes thereto contained in the Companys Annual Report on Form 10-K filed with the SEC on March 21, 2013.  Fiscal Year End  The Company elected June 30th as its fiscal year end date upon its formation.  Reclassification  Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses.  9    Use of Estimates and Assumptions  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  The Companys significant estimates and assumptions include the fair value of financial instruments; income tax rate, income tax provision, deferred tax assets and the valuation allowance of deferred tax assets, and the assumption that the Company will continue as a going concern.  Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.  Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.  Actual results could differ from those estimates.  Fair Value of Financial Instruments  The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards Codification (Paragraph 820-10-35-37) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:  Level 1Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.Level 2Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.Level 3Pricing inputs that are generally observable inputs and not corroborated by market data.  Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.  The carrying amounts of the Companys financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable, accrued expenses and advances payable approximate their fair values because of the short maturity of these instruments.  The Companys Level 3 financial liabilities consist of the derivative liability of  the Companys secured convertible promissory notes issued to Southridge Partners II, LP. $125,000 of these notes were issued in Fiscal 2011, and $189,610 have been issued in fiscal 2012 through the end of this fiscal quarter. The derivative warrants issued in connection with these convertible promissory notes issued on July 6, 2011, July 29, 2011 and August 25, 2011. There is no current market for these securities such that the determination of fair value requires significant judgment or estimation.  The Company valued the automatic conditional conversion, re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, with the assistance of a valuation specialist, for which management understands the methodologies.  These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date.  10     Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.  It is not, however, practical to determine the fair value of related party receivables, related party payables and note payable - related party, if any, due to their related party nature.  Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis  Level 3 Financial Liabilities  Derivative Warrant Liabilities  The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative warrant liability at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative warrant liability.  Carrying Value, Recoverability and Impairment of Long-Lived Assets  The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Companys long-lived assets, which include property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  At the balance sheet date, the Company has an immaterial amount of these assets.  Cash Equivalents  The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.  Property and Equipment  Property and equipment is recorded at cost. Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of three (3) to five (5) years.  Upon sale or retirement of furniture and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.  Derivative Instruments  The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Paragraph 810-10-05-4 of the Codification and Paragraph 815-40-25 of the Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.  In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.  The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.   11    The Company utilizes the Lattice model that values the liability of the derivatives based on a probability weighted discounted cash flow model with the assistance of the third party valuation firm.  The reason the Company picks the Lattice model is that in many cases there may be multiple embedded features or the features of the bifurcated derivatives may be so complex that a Black-Scholes valuation does not consider all of the terms of the instrument.  Therefore, the fair value may not be appropriately captured by simple models.  In other words, simple models such as Black-Scholes may not be appropriate in many situations given complex features and terms of conversion option (e.g., combined embedded derivatives).  The Lattice model is based on future projections of the various potential outcomes. The Lattice model analyzed the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e. stock price, exercise price, volatility, etc.).  Projections were then made on the underlying factors which led to potential scenarios.  Probabilities were assigned to each scenario based on management projections.  This led to a cash flow projection and a probability associated with that cash flow.  A discounted weighted average cash flow over the various scenarios was completed to determine the value of the derivatives.                Related Parties  The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.  Pursuant to Section 850-10-20 the Related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 8251015, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.  The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the  financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.  Commitment and Contingencies  The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the  financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur.  The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.  If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements.  If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.  Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.  Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Companys financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Companys business, financial position, and results of operations or cash flows.  12    Revenue Recognition  The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.  Stock-Based Compensation for Obtaining Employee Services  The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Companys most recent private placement memorandum (PPM), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  The fair value of options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows:  · Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding.  Pursuant to Paragraph 718-10-50-2 of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments.  Pursuant to paragraph 718-10-S99-1, it may be appropriate to use thesimplified method ,i.e., expected term = ((vesting term + original contractual term) / 2) , if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.  · Expected volatility of the entitys shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  · Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company  s current dividend yield as the best estimate of projected dividend yield for periods within the expected contractual life of the option and similar instruments.  · Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option and similar instruments.  13    The Companys policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award.  Equity Instruments Issued to Parties other than Employees for Acquiring Goods or Services  The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Subtopic 505-50 of the FASB Accounting Standards Codification (Subtopic 505-50).  Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.  If shares of the Company are thinly traded the use of share prices established in the Companys most recent private placement memorandum (PPM), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  The fair value of option or warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model.  The ranges of assumptions for inputs are as follows:  · Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holders expected exercise behavior into the fair value (or calculated value) of the instruments.  The Company uses historical data to estimate holders expected exercise behavior.  If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.  · Expected volatility of the entitys shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  · Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company  s current dividend yield as the best estimate of projected dividend yield for periods within the expected contractual life of the option and similar instruments.  · Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option and similar instruments.   14    Pursuant to Paragraphs 505-50-25-8, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached.  A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments).  Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic.  Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions.  Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a stock option that the counterparty has the right to exercise expires unexercised.  Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should be recorded.  Income Tax Provision  The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.  The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25) with regards to uncertainty income taxes.  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.  Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In managements opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.   15    Uncertain Tax Positions  The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the interim period ended December 31, 2012 or 2011.  Tax Returns Remaining subject to IRS Audits  It is not practicable to determine amounts of interest and/or penalties related to income tax matters that will be due as of June 30, 2012 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, 2012, and has not recognized interest and/or penalties in the accompanying statement of operations for the year ended June 30, 2012. However, management believes that the Company will not have a significant impact on its financial position and results of its operations and cash flows as a result of this uncertainty.  Net Income (Loss) per Common Share  Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.  Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock options and warrants.  The following table shows the potentially outstanding dilutive common shares excluded from the diluted net loss per share calculation as they were anti-dilutive:  Potentially Outstanding Dilutive
Common SharesFor the Interim
Period Ended
December 31,
2012For the Interim
Period Ended
December 31,
2011Convertible debentures385,601,3592,040,816Stock options1,153,8451,153,845Warrants issued with convertible debentures3,250,0003,250,000Total potentially outstanding dilutive common shares390,005,2046,444,661  Cash Flows Reporting  The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (Indirect method) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.  The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.   16    Subsequent Events  The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued.  Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.  Recently Issued Accounting Pronouncements  In January 2013, the FASB issued ASU No. 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities". This ASU clarifies that the scope of ASU No. 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities." applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification or subject to a master netting arrangement or similar agreement. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013.  In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The ASUadds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2013.  In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No. 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date."  This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013.  In March 2013, the FASB issued ASU No. 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013.  In March 2013, the FASB issued ASU 2013-07,Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entitys governing documents from the entitys inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entitys inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entitys expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted.  Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.  Note 3  Going Concern  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.  17    As reflected in the accompanying financial statements, the Company had an accumulated deficit at December 31, 2012, a net loss and net cash used in operating activities for the interim period then ended. These factors raise substantial doubt about the Companys ability to continue as a going concern.  While the Company is attempting to commence operations and generate sufficient revenues, the Companys cash position may not be sufficient enough to support the Companys daily operations.  Management intends to raise additional funds by way of a public or private offering.  Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern.  While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon the Companys ability to further implement its business plan and generate sufficient revenues.  The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  Note 4  Property and Equipment  Property and equipment, stated at cost, less accumulated depreciation consisted of the following:  Estimated Useful
Life (Years)December 31,
2012June 30,
2012Computer equipment5$1,042$1,042Furniture and fixture74824821,5241,524Less accumulated depreciation(1,138)(916)$386$608  Depreciation Expense  Depreciation expense for the six month periods ended December 31, 2012 and 2011 was $222 for each period.  Note 5  Advances Payable  As ofDecember 31, 2012, the Company had a total of $42,940, in advances payable to unrelated third parties for expenses paid on behalf of the Company in conjunction with the rescinded acquisition agreement.  These balances are non-interest bearing and due on demand.   18    Note 6  Convertible Debentures - Stockholder  Converted debentures to Southridge consisted of the following:  December 31,
2012June 30,
2012Note issued July 6, 2011 with interest at 8% per annum, $40,005 of principal converted during the interim period ended December 31, 2012. Principal and interest are currently past due.$9,995$50,000Note issued July 29, 2011 with interest at 8% per annum. Principal and interest are currently past due.25,00025,000Note issued August 25, 2011 with interest at 8% per annum. Principal and interest are currently past due.25,00025,000Note issued June 20, 2012 with interest at 8% per annum. Principal and interest are currently past due.25,00025,000Note issued July 23, 2012 with interest at 8% per annum. Principal and interest are currently past due.62,500-Note issued August 1, 2012 with interest at 8% per annum. Principal and interest are currently past due.5,000-Note issued August 21, 2012 with interest at 8% per annum. Principal and interest are currently past due.2,110-Note issued September 26, 2012 with interest at 8% per annum. Principal and interest are currently past due.40,000-Note issued October 18, 2012 with interest at 8% per annum. Principal and interest are currently past due.20,000-Note issued November 1, 2012 with interest at 8% per annum. Principal and interest are currently past due.20,000-Note issued November 8, 2012 with interest at 8% per annum. Principal and interest are payable on November 30, 2013.20,000-Note issued December 1, 2012 with interest at 8% per annum. Principal and interest are currently past due.20,000-314,610125,000Less unamortized discount.(144,077)(23,711)Convertible notes, net of discount$170,523$101,289  The July 6, 2011, July 29, 2011 and the August 25, 2011 included a stock warrant for each note in the amount of 384,615 shares of the Companys common stock, or 1,153,845 in the aggregate. The Principal plus any interest shall be convertible into common stock of the Company at seventy percent (70%) of the average of two (2) low closing bid prices for the five (5) trading days prior to conversion of the Notes.  The June 20, 2012, July 23, 2012, August 1, 2012, August 21, 2012 September 26, 2012, October 18, 2012, November 1, 2012, November 18, 2012 and December 1, 2012 notes shall be convertible into common stock of the Company at seventy percent (60%) of the average of two (2) low closing bid prices for the five (5) trading days prior to conversion of the Notes.  19    Note 7  Derivative Financial Instruments  The Companys derivative financial instruments are embedded derivatives associated with the Companys convertible debentures. The Companys convertible debentures issued to Southridge Partners II, LP, are hybrid instruments which contain an embedded derivative feature which would individually warrant separate accounting as a derivative instrument under Paragraph 815-10-05-4.  The embedded derivative feature includes the conversion feature and the warrants attached to certain Notes. Pursuant to Paragraph 815-10-05-4, the value of the embedded derivative liability have been bifurcated from the debt host contract and recorded as a derivative liability resulting in a reduction of the initial carrying amount (as unamortized discount) of the notes, which are amortized as debt discount to be presented in other (income) expenses in the statements of operations using the effective interest method over the life of the notes.  The compound embedded derivatives within the notes have been valued using a layered discounted probability-weighted cash flow approach, recorded at fair value at the date of issuance; and marked-to-market at each reporting period end date with changes in fair value recorded in the Companys statements of operations as change in the fair value of derivative instrument.  As of December 31, 2012, the estimated fair value of derivative liabilities for the conversion feature was $28,499.  As of December 31, 2012, the estimated fair value of derivative liabilities for the warrants was $1,154.  Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis  Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets:


|                                             |  |                |        |  |                              |   |   |         |  |   |         |  |  |       |        |  |  |   |       
|-------------------------------------------- |  | -------------- | ------ |  | ---------------------------- | - | - | ------- |  | - | ------- |  |  | ----- | ------ |  |  | - | ------
|                                             |  |                |        |  | Fair Value Measurement Using
|                                             |  | Carrying
Value |        |  | Level 1                      |   |   | Level 2 |  |   | Level 3 |  |  | Total
|Derivative liabilities on conversion feature |  | $              | 28,499 |  |                              | $ | - |         |  | $ | -       |  |  | $     | 28,499 |  |  | $ | 28,499
|Derivative liabilities on warrants           |  |                | 1,154  |  |                              |   | - |         |  |   | -       |  |  |       | 1,154  |  |  |   | 1,154 
|Total derivative liabilities                 |  | $              | 29,653 |  |                              | $ | - |         |  | $ | -       |  |  | $     | 29,653 |  |  | $ | 29,653

Summary of the Changes in Fair Value of Level 3 Financial Liabilities  The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the interim period ended December 31, 2012:  Fair Value Measurement Using Level 3 InputsConversion FeatureWarrantsBalance, June 30, 2012$105,329$71,538Total gains or losses (realized/unrealized)257,071-Included in net (income) loss(341,399)(70,384)Included in other comprehensive income--Purchases, issuances and settlements(49,500)-Transfers in and/or out of Level 3--Balance, December 31, 2012$28,499$1,154  Note 8  Notes Payable - Related Party  Between April 1, 2011 and June 24, 2011, The President and Chief Operating Officer of the Company, Phillip Jennings, advanced the Company $77,884 in eight installments in the form of a promissory note (Jennings Note).  The Jennings Note was due on demand and had borne interest at 8% per annum.  On November 8, 2012, the Company issued promissory notes with its then Chief Executive Officer, Chief Financial Officer, Legal Counsel and Accountant totaling $105,380, which were originally recorded as accounts payable. In addition the Jennings Note was converted to these notes.  The notes mature on December 31, 2014 and bear interest at 1% per annum.  20    Note 9  Equity Purchase Agreement  Southridge Partners II, LP Agreement  The Company entered into an equity purchase agreement (the Equity Purchase Agreement) with Southridge Partners II, LP (Southridge) on July 6, 2011.  Pursuant to the Equity Purchase Agreement, Southridge committed to purchase up to $10,000,000 of the Companys common stock, over a period of time terminating on the earlier of: (i) 24 months from the effective date of a registration statement to be filed in connection therewith or (ii) the date on which Southridge has purchased shares of common stock pursuant to this agreement for an aggregate maximum purchase price of $10,000,000; such commitment is subject to certain conditions. The purchase price to be paid by Southridge will be 92% of the price of the common stock on the date the purchase price is calculated under the Equity Purchase Agreement.  The maximum amount that the Company is entitled to put in any one notice is such number of shares of common stock as equals the lesser of $500,000 or 250% of the average of the dollar volume of Company common stock for the 20 trading days preceding the put, provided that the number of put shares to be purchased by Southridge shall not exceed the number of such shares that, when aggregated with all other shares and securities of the Company then owned by Southridge beneficially or deemed beneficially owned by Southridge, would result in Southridge owning more than 9.99% of all of the Companys common stock as would be outstanding on such closing date.  The Company will not be entitled to put shares to Southridge:  · unless there is an effective registration statement under the Securities Act to cover the resale of the shares by Southridge; · unless the common stock continues to be quoted on the OTC Bulletin Board and has not been suspended from trading; · if an injunction shall have been issued and remain in force, or action commenced by a governmental authority which has not been stayed or abandoned, prohibiting the purchase or the issuance of the shares to Southridge; · if the Company has not complied with their obligations and are otherwise in breach of or in default under, the Equity Purchase Agreement, our registration rights agreement (the Registration Rights Agreement) with Southridge or any other agreement executed in connection therewith with Southridge; · since the date of the filing of the Companys most recent filing with the Securities and Exchange Commission no event that had or is reasonably likely to have a Material Adverse Effect (as defined in the Equity Purchase Agreement) has occurred; and · to the extent that such shares would cause Southridges beneficial ownership to exceed 9.99% of our outstanding shares.  The Equity Purchase Agreement further provides that Southridge is entitled to customary indemnification from the Company for any losses or liabilities it suffers as a result of any breach of any provisions of the Equity Purchase Agreement or the Registration Rights Agreement, or as a result of any lawsuit brought by a third-party arising out of or resulting from Southridge's execution, delivery, performance or enforcement of the Equity Purchase Agreement or the Registration Rights Agreement or from material misstatements or omissions in the prospectus accompanying the registration statement for the resale of the shares issued to Southridge.  As a condition for the execution of the Equity Purchase Agreement, the Company issued to Southridge, 450,000 shares of its restricted common stock pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933.   As of the date of this filing, the Company has not filed a Registration Statement with the Securities and Exchange Commission  Note 10  Stockholders Deficit  Shares Authorized  Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is Two Hundred and Sixty Million (260,000,000) shares of which Ten Million (1,000,000) shares shall be Preferred Stock, par value $0.001 per share, and Two Hundred and Fifty Million (250,000,000) shares shall be Common Stock, par value $0.001 per share.  Common Stock  On December 31, 2010, the Company issued 3,000,000 shares of its common stock for compensation valued at $0.40 per share or $1,200,000.  On April 8, 2011, the Company issued 1,000,000 shares of common stock to a consultant for $19,600 in services and $200 in cash.  The common stock was issued at its fair market value of $0.0198 on the date of issuance.  21    On April 14, 2011, the Company issued 3,370,000 shares of its common stock for compensation valued at $984,480.  On April 14, 2011, the Company issued 675,000 shares of its common stock for the conversion of related party debt of $141,750.  On May 6, 2011, the Company issued 155,159 shares of its common stock at $0.11 per share, in conformity with the defined conversion formula in the term sheet, for legal and due diligence services.  In connection with the issuance of the convertible debentures during the fiscal year ended June 30, 2012, the Company issued 450,000 shares of its common stock valued at $0.08 per share, the price of the Companys common stock on the date of issuance or $36,000, which was recorded as interest expense.  On August 2, 2012, the Company issued 4,372,407 shares of its common stock for the conversion of $26,300 of convertible debt and $4,307 of accrued interest.  On November 1, 2012, the Company issued 4,373,034 shares of its common stock for the conversion of $7,880 of convertible debt and $997 of accrued interest.  On November 21, 2012, the Company issued 4,371,600 shares of its common stock for the conversion of $3.300 of convertible debt and $219 of accrued interest.  On December 12, 2012, the Company issued 4,373,233 shares of its common stock for the conversion of $2,525 of convertible debt and $230 of accrued interest.  2010 Stock Incentive and Compensation Plan  Adoption of 2010 Stock Incentive and Compensation Plan  On January 7, 2010, the Board of Directors of the Company adopted the 2010 Stock Incentive and Compensation Plan, whereby the Board of Directors authorized 8,000,000 shares of the Companys common stock to be reserved for issuance (the 2010 Stock Incentive Plan). The purpose of the 2010 Stock Incentive Plan is to advance the interests of the Company by providing an incentive to attract, retain and motivate highly qualified and competent persons who are important to the Company and upon whose efforts and judgment the success of the Company is largely dependent. Grants to be made under the 2010 Stock Incentive Plan are limited to the Companys employees, including employees of the Companys subsidiaries, the Companys directors and consultants to the Company. The recipient of any grant under the 2010 Stock Incentive Plan, and the amount and terms of a specific grant, is determined by the board of directors.  Should any option granted or stock awarded under the 2010 Stock Incentive Plan expire or become un-exercisable for any reason without having been exercised in full or fail to vest, the shares subject to the portion of the option not so exercised or lapsed will become available for subsequent stock or option grants.  January 7, 2010 Issuance  On January 7, 2010, the board approved and granted options for employees to purchase 2,750,00 shares of the Company's common stock with an exercise price of $0.56 per share expiring two (2) years from the date of grant exercisable, in whole or in part, according to the following vesting schedule:  · Twenty five percent (25%) of the total number of shares granted under the option scheme vested immediately as January 7, 2010, the date they were approved at the board meeting; a further twenty-five percent (25%) were vested on July 6, 2010.  · The remaining Fifty percent (50%) of the shares granted under the option scheme shall vest pro rata every six (6) months, on the same date of the month as the date of grant of the option, over the following twelve (12) months of continuous service as a director, employee or consultant.   22    The Company estimated the fair value of the options granted to be $383,562, which was estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted-average assumptions:  January 7, 2010Expected life (year)1.00Expected volatility (*)341.1%Risk-free rate(s)0.5%Expected dividends0.00%  * Volatility was determined by using the average daily annual volatility during the quarter as provided by Bloomberg LLP.  July 1, 2010 Issuance  On July 1, 2010, the board approved and granted options for a director to purchase 500,000 shares of the Company's common stock with an exercise price at $0.56 per share expiring two (2) years from the date of grant exercisable, in whole or in part, according to the following vesting schedule:  · Twenty five percent (25%) of the total number of shares granted under the option scheme vested immediately as July 1, 2010, the date they were approved at the board meeting; a further twenty-five percent (25%) on January 1, 2011.  · The remaining fifty percent (50%) of the shares granted under the option scheme shall vest pro rata every six (6) months, on the same date of the month as the date of grant of the option, over the following twelve (12) months of continuous service as a director.  The Company estimated the fair value of the options granted to be $477,498, which was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:  July 1, 2010Expected life (year).99Expected volatility (*)341.1%Risk-free rate(s)0.5%Expected dividends0.00%  * Volatility was determined by using the average daily annual volatility during the quarter as provided by Bloomberg LLP.   23    Summary of the Companys Stock Option Activities  The table below summarizes the Companys stock option activities:  Number of
Option
SharesExercise
Price Range
Per ShareWeighted
Average
Exercise PriceFair Value
at Date
of GrantAggregate
Intrinsic
ValueBalance, June 30, 20102,750,000$0.56$0.56$-$-Granted500,0000.560.56-Canceled----Exercised----Expired----Balance, June 30, 20113,250,000$0.56$0.56$$-Granted----Canceled----Exercised(2,750,000)0.560.56-Expired----Balance, June 30, 2012500,000$0.56$0.56$$-Granted-Exercised----Expired(500,000)0.560.56-Balance, December 31, 2012-$-$-$$-  Note 11  Subsequent Events  The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.   The Management of the Company determined that there were reportable subsequent events to be disclosed as follows:  Issuance of Convertible Debentures  On January 1, 2013 the Company issued to SC Advisors, an 8% Convertible Promissory Note in the principal amount of Twenty Thousand Dollars ($20,000), with interest at 8% per annum and a maturity date of June 30, 2013.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  On January 25, 2013 the Company issued to Southridge, an 8% Convertible Promissory Note in the principal amount of Five Thousand Dollars ($5,000), with interest at 8% per annum and a maturity date of July 31, 2013.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  24    On February 1, 2013 the Company issued to SC Advisors, an 8% Convertible Promissory Note in the principal amount of Twenty Thousand Dollars ($20,000), with interest at 8% per annum and a maturity date of July 31, 2013.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  On February 20, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Eleven Thousand Nine Hundred and Forty-Two Dollars ($11,942), with interest at 8% per annum and a maturity date of November 30, 2013. The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  On February 20, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Eight Thousand Dollars ($8,000), with interest at 8% per annum and a maturity date of November 30, 2013.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  On March 1, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Twenty Thousand Dollars ($20,000), with interest at 8% per annum and a maturity date of August 13, 2013.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  On March 1, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Four Thousand Dollars ($4,000), with interest at 8% per annum and a maturity date of January 31, 2014.   The Principal plus any interest shall be convertible into common stock of the Company at eighty percent (80%) of the average of the closing bid prices for the five (5) trading days prior to conversion of the Note.  On March 8, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Ten Thousand Dollars ($10,000), with interest at 8% per annum and a maturity date of December 31, 2013.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  On April 1, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Twenty Thousand Dollars ($20,000), with interest at 8% per annum and a maturity date of December 31, 2013.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  On April 1, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Four Thousand Dollars ($4,000), with interest at 8% per annum and a maturity date of February 28, 2014.   The Principal plus any interest shall be convertible into common stock of the Company at eighty percent (80%) of the average of the closing bid prices for the five (5) trading days prior to conversion of the Note.  On May 1, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Ten Thousand Dollars ($10,000), with interest at 8% per annum and a maturity date of March 31, 2014.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  On May 1, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Twenty Thousand Dollars ($20,000), with interest at 8% per annum and a maturity date of October 31, 2013.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  On May 1, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Four Thousand Dollars ($4,000), with interest at 8% per annum and a maturity date of February 28, 2014.   The Principal plus any interest shall be convertible into common stock of the Company at eighty percent (80%) of the average of the closing bid prices for the five (5) trading days prior to conversion of the Note.  On June 1, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Four Thousand Dollars ($4,000), with interest at 8% per annum and a maturity date of February 28, 2014.   The Principal plus any interest shall be convertible into common stock of the Company at eighty percent (80%) of the average of the closing bid prices for the five (5) trading days prior to conversion of the Note.  25    On June 1, 2013 the Company issued to Southridge an 8% Convertible Promissory Note in the principal amount of Twenty Thousand Dollars ($20,000), with interest at 8% per annum and a maturity date of November 30, 2013.   The Principal plus any interest shall be convertible into common stock of the Company at fifty percent (50%) of the lowest closing bid prices for the twenty (20) trading days prior to conversion of the Note.  Issuance of Common Stock for Conversion of Convertible Debt  From January 1, 2013 through June 28, 2013, Southridge converted $57,385 of convertible debt into 59,736,935 shares of Company stock.   26    ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION  Management's Discussion and Analysis of Financial Condition and Results of Operations  We incorporated as Dynamic Alert Limited (referred to herein as Brazil Gold, we, us, our and similar terms) on June 17, 2004, in the State of Nevada. On December 22, 2009, as amended February 25, 2010, pursuant to the provisions of Articles of Merger, Dynamic Alert Limited, and its wholly-owned subsidiary, Brazil Gold Corp., a Nevada corporation which was incorporated on November 3, 2009, were merged, with Dynamic Alert Limited (the Company) being the surviving entity. In connection with such merger, our name was changed from Dynamic Alert Limited to Brazil Gold Corp. on March 15, 2010.  On March 15, 2010, the Companys ticker symbol on OTCBB was changed to BRZG. Our principal executive offices are located at 850 3rd  Avenue, NYC, Suite 16C, NY  10022.  Our telephone number is 212-994-9875.  Our fiscal year end is June 30.  Since inception until November 2009, we attempted to build a business that assisted consumers with their security needs.  Our goal had been to help our customers create and implement a personalized security plan by offering a three-fold service.  Our first focus was to assist our clients in developing personalized security plans.  Our second focus was to source and market personal security products.  Our third focus was to provide personal protection on an as-needed basis.  We were actively seeking to add new products and/or services that we could offer.  The results were lack-luster, so it was decided to change our business focus and look for other opportunities and discontinue the security operation with effect from January 1, 2010.  Therefore, we started reviewing mineral exploration and other opportunities with the objective of bringing revenue to the Company.  To date, these operations have not been fruitful and the company is currently in the process of evaluating its business model.  Material Changes in Financial Condition  At December 31, 2012, we had a working capital deficit of ($381,595), compared to a working capital deficit of ($636,104), at June 30, 2012.  At December 31, 2012, our total assets consisted of cash of $nil, other assets of $1,382, and capital assets of $386.  This compares with total assets at June 30, 2012 consisting of cash of $nil, prepaid expenses of $167, other assets of $1,382, and capital assets of $608.  At December 31, 2012, our total current liabilities decreased to $383,363 from $638,261 at June 32, 2011, a decrease of $254,898. The decrease was due to a decreases in the derivative liability of $147,214, a decrease in accounts payable mainly due to the assignment of certain related party liabilities to convertible notes of $105,380 and was partially offset by an increased balance of convertible debentures of $69,234.  Since our existing cash balance is $nil, we do not have sufficient funds to carry out normal operations over the next three (3) months.  Our short and long-term survival is dependent on funding from sales of securities as necessary or from shareholder loans, and thus, to the extent that we require additional funds to support our operations or the expansion of our business, we may attempt to sell additional equity shares or issue debt.  Any sale of additional equity securities will result in dilution to our stockholders.  Recent events in worldwide capital markets may make it more difficult for us to raise additional equity or capital.  There can be no assurance that additional financing, if required, will be available to us or on acceptable terms.  Result of Operations  We recognized nil revenue for the three-month periods ended December 31, 2012 and December 31, 2011  We have recognized $45,964 in revenue from inception.  Our short and long term survival is dependent on funding from sales of securities as necessary or from shareholder loans.  Material Changes in Results of Operations  For The Three Months Ended December 31, 2012, Compared To The Three Months Ended December 31, 2011.  There were no revenues during the three months ending December 31, 2012 and the three months ended December 31, 2011.  For the three months ended December 31, 2012, operating expenses were $100,111 compared to $92,822 during the three months ended December 31, 2011.  The increase was principally due to an increase in professional fees and consulting fees partially offset by reduced stock based compensation on share options granted and lower general and administrative expenses.  Operating expenses during the three months ended December 31, 2012, consisted of, professional fees of $40,000 (2011: $2,364), general and administrative expense of $111 (2011: $27,971) and consulting fees of $60,000 (2011: $45,680)  27    During the three month period ended December 31, 2012, we recognized net income of $123,722 compared to a net loss of $12,446 for the three-month period ended December 31, 2011.  The net gain of $136,138 was due principally to the reduction of the derivative liability.  For The Six Months Ended December 31, 2012, Compared To The Six Months Ended December 31, 2011.  There were no revenues during the six months ending December 31, 2012 and the six months ended December 31, 2011.  For the six months ended December 31, 2012, operating expenses were $191,999 compared to $232,852 during the six months ended December 31, 2011.  The decrease was principally due to a decrease in consulting fees. general and administrative expense and stock based compensation on share options granted, partially offset by increased professional fees.  Operating expenses during the six months ended December 31, 2012, consisted of, professional fees of $122,277 (2011: $11,350), general and administrative expense of $9,722 (2011: $50,791) consulting fees of $60,000 (2011: $127,045) and stock based compensation of $nil (2011:$ 43,666)  During the six month period ended December 31, 2012, we recognized a net loss of $31,227 compared to a net loss of $318,187 for the six month period ended December 31, 2011. The decreased loss of $286,960 was due to a reduced derivative liability.  Off-Balance Sheet Arrangements  We currently do not have any off-balance sheet arrangements.  ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.  As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.  ITEM 4. CONTROLS AND PROCEDURES  As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the 1934 Act).  Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.   ITEM 4T. CONTROLS AND PROCEDURES  Management's Quarterly Report on Internal Control over Financial Reporting.  Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.  Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.  Management's assessment of the effectiveness of the small business issuer's internal control over financial reporting is as of the quarter ended December 31, 2012.  We believe that our internal control over financial reporting was not effective due to material weaknesses in the system of internal control.  Specifically, management identified the following control deficiency:  · The Company uses accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  28    This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting.  Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.  There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  PART II  OTHER INFORMATION   ITEM 1. LEGAL PROCEEDINGS  None.   ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  None.   ITEM 3. DEFAULTS UPON SENIOR SECURITIES  None.   ITEM 4. REMOVED AND RESERVED  None.   ITEM 5. OTHER INFORMATION  None.   ITEM 6. EXHIBITS  Pursuant to Rule 601 of Regulation S-B, the following exhibits are included herein.  Exhibit Number Description  31.1 CERTIFICATION OF CEO PURSUANT TO 18 U.S.C. ss. 1350, SECTION 302 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, SECTION 906      SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 28th  day of June, 2013.   BRAZIL GOLD CORP.   Date:  June 28, 2013By:/s/Conrad HussName:Conrad HussTitle:Director, Chief Executive Officer, Secretary, Chief Financial Officer   29