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 September 30, 2010





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 Number 333-119566





BRAZIL GOLD CORP.







(Exact name of registrant as specified in its charter)





Nevada

98-0430746State or other jurisdiction of

(I.R.S. Employerincorporation or organization

Identification No.)





800 Bellevue Way, Suite 400, Bellevue, WA, USA 98004


(Address of principal executive offices) (Zip Code)





Registrant’s telephone number, including area code:1-877-344-2729





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.





Larger accelerated filer                                                                                     Accelerated filer


Non-accelerated filer                                                                                     Smaller reporting company X





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


Yes     No  X





Number of shares outstanding of the registrant’s class of common stock as of November 12, 2010: 83,000,000


1


PART I – FINANCIAL INFORMATION
 
  Item 1.   Financial Statements                                                      (Unaudited)                                                      Page
  
 Balance Sheets
F-2Interim Statements of Operations
F-3Interim Statement of Other Comprehensive Income (Loss)
F-4Interim Statements of Cash Flows
F-5Interim Statement of Stockholders’ (Deficit)
F-6Notes to Interim Financial Statements
F-7 to F-12
 
  Item 2.  Management’s Discussion and Analysis                                                                                                                     15
  
 Item 3.  Quantitative and Qualitative Disclosure about Market Risk                                                                                      17
 
 Item 4.  Controls and Procedures                                                                                                                                                  17
 
 Item 4(A) T.  Controls and Procedures                                                                                                                                        17
 
 
 PART II – OTHER INFORMATION
 
 Item 1.  Legal Proceedings - Not Applicable                                                                                                                              18
 
 Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds - Not Applicable                                                    18
 
 Item 3.  Defaults upon Senior Securities – Not Applicable                                                                                                      18
 
 Item 4.  Removed and Reserved                                                                                                                                                    18
 
 Item 5.  Other Information                                                                                                                                                              18
 
 Item 6.  Exhibits                                                                                                                                                                                19
 
 SIGNATURES
 
  2
  
 PART I - FINANCIAL INFORMATION
 
 
 ITEM 1.                      FINANCIAL STATEMENTS
 
 
 
 BRAZIL GOLD CORP.
 
 INTERIM FINANCIAL STATEMENTS
 
 September 30, 2010
 
 (Unaudited)
 
 
 
 
 PageFinancial Statements:Balance Sheets
F-2Interim Statements of Operations
F-3Interim Statement of Other Comprehensive Income (Loss)
F-4Interim Statements of Cash Flows
F-5Interim Statement of Stockholders’ (Deficit)
F-6Notes to Interim Financial Statements
F-7 to F-12
 
 
  F-1
  BRAZIL GOLD CORP.
 
 BALANCE SHEETS
 
 September 30,

2010

(Unaudited)

June 30,

2010

(See Note 1)ASSETSCurrentCash and cash equivalent
$
1,521
$
8,125Prepaid expenses

19,544

5,000Advances receivable – related party (Note 5)

42,303

13,111Total Current Assets

63,368

26,236Furniture and Equipment, net of depreciation of $140 and $29 respectively

1,385

1,495TOTAL ASSETS
$
64,753
$
27,731LIABILITIES AND STOCKHOLDERS’ (DEFICIT)LIABILITIESCurrentAccounts payable
$
47,432
$
58,579Accrued liabilities

25,339

14,000Advances payable (Note 6)

53,116

53,116Due to related parties (Note 5)

145,213

112,383Convertible debenture – net of discount (Note 7)

1,819,391

1,473,286Total Current Liabilities

2,090,491

1,711,364TOTAL LIABILITIES

2,090,491

1,711,364STOCKHOLDERS’ (DEFICIT)Capital StockAuthorized:  (Note 10)250,000,000 common shares, par value $0.001 per share

10,000,000 preferred shares, par value $0.001 per shareIssued and outstanding:83,000,000 and 80,000,000 common shares respectively

83,000

80,000Additional paid-in capital

1,753,924

679,099Accumulated other comprehensive income/(loss)

5,417

5,531Accumulated (Deficit)

( 3,868,079)

(2,448,263)Total Stockholders’ (Deficit)

(2,025,738)

(1,683,633)TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
$
64,753
$
27,731
  The accompanying notes are an integral part of these statements
 
 F-2
  
 BRAZIL GOLD CORP.
 
 INTERIM STATEMENTS OF OPERATIONS
 
 (Unaudited)
 
 Three-month

Period ending

September 30, 2010

Three-month

Period ending

September 30, 2009Revenue
$
-
$
--

-ExpensesDepreciation

111

-Marketing and travel

9,162

-Office and administration

11,048

505Professional Fees

62,371

4,818Consulting

90,000

-Write-off of note receivable (Note 4)

160,114

-Stock based compensation (Note 8)

1,075,165

-Beneficial conversion feature

2,182

-Total Expenses

1,410,153

5,323Operating Loss

(1,410,153)

(5,323)Other Income and (Expenses)Interest Income

40,114

-Interest Expense

(49,777)

-Gain on sale of assets

-

377Total Other Income (Expenses)

(9,663)

377Net (Loss) from Continuing Operations

(1,419,816)
$
(4,946)Discontinued Operations (Note 9)Net Income (Loss) from discontinued operations

-

3,833Net (Loss) for the Period
$
(1,419,816)
$
(1,113)Net Income (Loss) per Common ShareBasic And Diluted Loss from Continuing Operations
$
(0.02)
$
NilBasic and Diluted Income from Discontinued Operations
$
Nil
$
NilWeighted Average Number of Shares Outstanding

82,282,609

80,000,000
 
  The accompanying notes are an integral part of these statements
 
 F-3
  
 
 
 BRAZIL GOLD CORP.
 
 INTERIM STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS)
 
 
 Three-month period ending September 30, 2010

Three-month period ending September 30, 2009Net Loss
$
(1,419,816)
$
(1,113)Other Comprehensive Income (Loss):Foreign Currency Translation Adjustment

(114)

-Other Comprehensive Loss
$
(1419,930)

(1,113)
 
  The accompanying notes are an integral part of these statements
 
 F-4
  BRAZIL GOLD CORP.
 
 INTERIM STATEMENTS OF CASH FLOWS
 (Unaudited)
 
 Three-month period ending

September 30, 2010

Three-month period ending

September 30, 2009Cash Flows from Operating ActivitiesNet (loss) for the period
$
(1,419,816)
$
(1,113)Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities(Gain) on sale of assets

-

(377)Write off of note receivable

160,114

-Depreciation and beneficial conversion feature

19,233

-Stock based compensation

1,075,165

-Currency remeasurement loss

(115)

-Advances receivable – related party

(29,192)

-Prepaid expenses

(14,544)

(1,327)Notes receivable

(160,114)

60,000Accounts payable and accrued expenses

192

(4,153)Due to related parties

32,829

-Advances payable

-

(60,000)Accrued interest related to convertible debenture

49,644

-Net Cash (Used in) Operating Activities

(286,604)

(6,970)Cash Flows from Investing ActivitiesAdditions to furniture and equipments

-

-Disposal of furniture and equipment

-

1,200Net Cash Provided by Investing Activities

-

1,200Cash Flows From Financing ActivitiesCapital contributions

-

5,600Proceeds from convertible debenture / notes payable

280,000

-Net Cash Provided by Financing Activities

280,000

5,600(Decrease) in Cash during the Period

(6,604)

(170)Cash, Beginning Of Period

8,125

170Cash, End Of Period
$
1,521
$
-Non-cash TransactionsBeneficial conversion feature
$
2,182
$
-Supplemental Disclosure Of Cash Flow InformationCash paid for:Interest
$
-
$
-Income taxes
$
-
$
-
  The accompanying notes are an integral part of these statements
 
 F-5
  BRAZIL GOLD CORP.
 
 STATEMENT OF STOCKHOLDERS’ (DEFICIT)
 For the Period from July 1, 2009 to September 30, 2010
 
 CAPITAL STOCKADDITIONAL

ACCUMULATEDPREFERRED


COMMON


PAID-IN
ACCUMULATED
COMPREHENSIVESHARES
AMOUNT
SHARES
AMOUNT
CAPITAL
(DEFICIT)
INCOME
TOTALBalance

as of June 30, 2009
-

-

80,000,000

80,000

45,585

(144,869)

6,153


(13,131)May 9, 2010 – shares issued as per Acquisition Agreement
-

-

44,000,000

44,000

-

-

-


44,000June 1, 2010 – shares returned as per Rescission Agreement
-

-

(44,000,000)

(44,000)

-

-

-


(44,000)Foreign currency translation adjustment
-

-

--

-

-

-

(622)


(622)Capital contributions
-

-

-

-

20,850

-

-


20,850Stock based compensation (Note 10)
-

-

-

-

518,195

-

-


518,195Beneficial conversion feature
-

-

-

-

94,469

-

-


94,469Net (loss) for the year
-

-
-


-

-

(2,303,394)

-


(2,303,394)Balance

As of June 30, 2010
-

-

80,000,000

80,000

679,099

(2,448,263)

5,531


(1,683,633)July 23, 2010 – shares issued as stock based compensation
-

-

3,000,000

3,000

897,000

-

-


900,000Foreign currency translation adjustment
-

-

-

-

-

-

(114)


(114)Stock-based compensation (Note 8)
-

-

-

-

175,165

-

-


175,165Beneficial conversion feature
-

-

-

-

2,660






2,660Net Loss for the period
-

-

-

-

-

(1,419,816)

-


(1,419,816)Balance,

as of September 30, 2010
-
$
-

83,000,000
$
83,000
$
1,753,924
$
(3,868,079)
$
5,417

$
(2,025,738)
 
 
  The accompanying notes are an integral part of these  statements.
 
 F-6
 
 BRAZIL GOLD CORP.
 
 NOTES TO INTERIM FINANCIAL STATEMENTS
 September 30, 2010
 (Unaudited)
  Note 1                 Basis of Presentation
 
 While the information presented in the accompanying interim  financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows in the interim periods presented.  Except as disclosed below, these interim  financial statements follow the same accounting policies and methods of their application as Brazil Gold Corp’s. (The “Company”) audited June 30, 2010 annual financial statements.  It is suggested that these interim  financial statements be read in conjunction with Brazil Gold Corp’s. June 30, 2010 audited financial statements.
 
 The information as of June 30, 2010 is taken from the audited financial statements of this date.
 
 Recent Accounting Pronouncements
 
 In August 2010, the FASB issued Accounting Standard Updates No. 2010-21 (ASU No. 2010-21) “Accounting for Technical Amendments to Various SEC Rules and Schedules” and No. 2010-22 (ASU No. 2010-22) “Accounting for Various Topics – Technical Corrections to SEC Paragraphs”.  ASU No 2010-21 amends various SEC paragraphs pursuant to the issuance of Release no. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies.  ASU No. 2010-22 amends various SEC paragraphs based on external comments received and the issuance of SAB 112, which amends or rescinds portions of certain SAB topics.  Both ASU No. 2010-21 and ASU No. 2010-22 are effective upon issuance.  The amendments in ASU No. 2010-21 and No. 2010-22 will not have a material impact on the Company’s financial statements.
 
 A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, management has not determined whether implementation of such proposed standards would be material to the Company’s consolidated financial statements.
 
 Note 2                 Going Concern
 
 The accompanying  financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates our continuation as a going concern.  However, the Company has negative working capital and a stockholders’ deficit and has losses to date of approximately $3,868,000.  These matters raise substantial doubt about our 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.
 
 Note 3                 Income Taxes
 
 We are subject to U.S. federal income taxes.  We have had losses to date, and therefore, have 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.  Our deferred tax assets consist entirely of the benefit from net operating loss (“NOL”) carry forwards.  Our deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the NOL carry forwards.  The net operating loss carry forward, if not used, will expire in various years through 2030.  NOL 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 BenefitJune 30, 2010

2,448,263

Various

954,823

(954,823)
(13,918)
—September 30, 2010

1,419,816

2030

553,728

(553,728)
(401,095)
-
 
 Income taxes at the statutory rate are reconciled to our actual income taxes as follows:
 Income tax benefit at statutory rate resulting from NOL carry forwards

(39%)Deferred income tax valuation allowance

39%Actual tax rate

0%
 
 F-7
 Note 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 this financial instrument is representative of its fair value.  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 Capital e Participaçơes Ltda. (“Amazonia”).
 
 As at September 30, 2010, the Company had advanced $1,381,000 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 $94,401 was recorded as at September 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 and September 30, 2010, management determined to write-off $1,507,226 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.
 
 
 Note 5                 Due to/from Related Parties
 
 As of September 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 September 30, 2010, the Company had a total of $70,213 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 September 30, 2010, the Company had a total of $42,303 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.
 
 F-8
 
 Note 6                 Advances Payable
 
 As ofSeptember 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.
 
 
 Note 7                 Convertible Debenture
 
 On January 2, 2010, 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 at its election the outstanding balance , plus interest accrued at the rate of 12% per annum, calculated monthly and not compounded, into shares of common  stock at the lesser of (a) $1.00 per share and (b) the average weighted trading price for the Company’s common stock during the 20-day period prior to the conversion date.
 
 This note was made up of two categories: Funds advanced to Rusheen Handel AG as disclosed in Note 4 above and funds advanced to the Company for its on going operating expenses being: $1,381,000 and $387,399,  respectively. In addition, interest accrued to the end of September 30, 2010 on the note was $108,361.
 
 The Company uses the Black-Scholes valuation model to value the convertible promissory notes.  The model requires management to make estimates which are subjective and may not be representative of actual results.  The guidance on beneficial conversions features applies to both convertible debt securities and convertible preferred stock.  A beneficial conversion feature is an embedded conversion right that is in the money, that is, the conversion feature enables the holder to obtain the underlying common stock at below market price.
 
 In addition, certain convertible instruments may have a contingently adjustable conversion ratio that is variable based on future events such as any of the following:
 
 ·
A liquidation or a change in control of the entity;
 ·
A subsequent round of financing at a price lower than the convertible instrument's original conversion price; or
 ·
An initial public offering at a share price lower than an agreed-upon amount.
 
 The beneficial conversion feature has been deducted from the total amount owed, of $97,129 and shown as additional paid up capital. This beneficial conversion feature has been amortized over the life of the convertible debenture, which amounts to $19,122, for the three month period ended September 30, 2010.
 
 F-9
 
 Note 8                 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 three months ended September 30, 2010 and 2009 was $175,165 and Nil, respectively.  Remaining compensation expense relating to nonvested options is $477,498 and will be recognized within the 18 months.
 
 On January 7, 2010, the board approved the 2010 Stock Incentive & Compensation Plan thereby reserving an additional 8,000,000 common shares for issuance to employees, directors and consultants, of which 2,750,00 were granted at $0.56 exercise price.
 
 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; a further twenty-five percent (25%) were vested on July 6, 2010 and
 ·
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.
 
 On July 1, 2010, the board approved and granted an additional 500,000 common shares  at a $0.56 exercise price to a director.
 
 The July 2010 options shall be exercisable, in whole or in part, according to the following vesting schedule:
 ·
Twenty five percent (25%) of the total number of shares granted under the option 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 and
 ·
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.
 
 During the quarter ended September 30, 2010, the Company recognized stock based compensation expense in the amount of $175,165 for the vested portion of options issued January 7, 2010 and July 1, 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.
 
 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 PriceBalance, June 30, 2010
2,750,000
$0.56Options granted for the period
500,000
$0.56Options cancelled
-
-Options exercised
-
-Balance, September 30, 2010
3,250,000
$0.56Options vested at September 30, 2010
1,500,000
$0.56
 
 
  F-10
 Note 9                 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 January 1, 2010.
 
 During the three month periods ending September 30, 2010 and 2009, the Company had $nil and $3,840 in revenue, respectively, related to its discontinued operations.
 
 Three month period ended

September 30, 2010
Three month period ended

September 30, 2009Revenue
$
-
$
3,840ExpensesOffice and administration

-

7Total Expenses

-

7Net income from Discontinued Operations
$
-
$
3,833
 
 The Company did not have significant assets and liabilities relating to discontinued operations as held for sale as of September 30, 2010 and 2009.
 
 
 Note 10                 Capital Stock
 
 The Company’s authorized preferred stock consists of 10,000,000 shares with a par value of $0.001 per share.  There were no issued and outstanding preferred shares as at September 30, 2010.
 
 The Company’s authorized common stock consists of 250,000,000 shares with a par value of $0.001 per share.  At September 30, 2010, the Company has 83,000,000 shares of common stock issued and outstanding.
 
 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.
 
 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.  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 the Company.  The accounts of the Company reflect such rescission as at June 30, 2010.
 
 F-11
 
 Note 11                 Subsequent Events
 
 The Company has evaluated all subsequent events through the date the financial statements were available to be issued.
 F-12
  
 ITEM 2.                      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
 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.
 
 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 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 (b) 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 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 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
 
 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 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.
 
 Material Changes in Financial Condition
 
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 At September 30, 2010, we had a working capital deficit of ($2,027,123), compared to a working capital deficit of ($1,685,128), at June 30, 2010.  At September 30, 2010, our total assets consisted of cash of $1,521, prepaid expenses of $19,544, advance receivable from a related party of $42,303, and capital assets of $1,385.  This compares with total assets at June 30, 2010 consisting of cash of $8,125, prepaid expenses of $5,000, advance receivable from a related party of $13,111, and capital assets of $1,495.  These material changes have arisen as a result of the Company having raised funds in the form of uncollateralized loan, As at September 30, 2010 $401,359 of the advances payable were uncollateralized with convertible promissory notes, bearing interest at 12% per annum, and due in full July 2011.  Refer to note 7 in the financial statements.
 
 These funds were advanced to Rusheen, so that Amazonia had working capital to fund its property taxes and on-going expenses to ensure it retains such mineral rights.  Refer to note 4 in the financial statements.
 
 At September 30, 2010, our total current liabilities increased to $2,090,491 from $1,711,364 at June 30, 2010.  During the three months ended September 30, 2010, accounts payable, accrued liabilities, and advances payable increased by $401,359.
 
 Since our existing cash balance is $1,521, 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 period ended September 30, 2010 (September 30, 2009: $3,840.  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.
 
 Material Changes in Results of Operations
 
 For The Three Months Ended September 30, 2010, Compared To The Three Months Ended September 30, 2009.
 
 There were no revenues from the discontinued operations of the sale of security products and services during the three months ending September 30, 2010, compared to $3,840 revenues during the three months ended September 30, 2009.
 
 For the three months ended September 30, 2010, operating expenses were $1,410,153 compared to $5,323 during the three months ended September 30, 2009.  The increase was principally due to an increase in our professional and consulting fees for due diligence work being carried out on the ACP operations in Brazil as well as stock based compensation on share options granted.
 
 Operating expenses during the three months ended September 30, 2010, consisted of depreciation of $111 (2009:nil),travel expenses $9,162 (2009:nil), office and administration of $11,048 (2009: $505), professional fees of $62,371, (2009: $4,818) consulting fees of $90,000 (2009: nil), write-off of note receivable of $160,114 (2009: nil), stock based compensation of $1,075,165 (2009:nil), and beneficial conversion feature of $2,182 (2009:nil).
 
 During the three month period ended September 30, 2010, we recognized a net loss of $1,419,816 compared to a net loss of $1,113 for the three-month period ended September 30, 2009.  The increased loss of $1,418,703 was due to an increase in our activities over the prior period as discussed above.
 
 Off-Balance Sheet Arrangements
 
 We currently do not have any off-balance sheet arrangements.
 
 
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 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 September 30, 2010.  We believe that our internal control over financial reporting was not effective due to material weaknesses in the system of internal control.  Specifically, management identified the following control deficiency:
 
 ·
The Company uses accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software.
 
 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
 This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting.  Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
 
 There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2010, 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.
 
 
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 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.
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 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
 31.2                     CERTIFICATION OF CFO PURSUANT TO 18 U.S.C. ss. 1350, SECTION 302
 32.1                     CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, SECTION 906
 32.2                     CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, SECTION 906
  19
  
 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 15 day of November, 2010.
 
 
 BRAZIL GOLD CORP.
 
 
 
 Date: November 15, 2010                                           By: /s/Dr. Thomas E. Sawyer
 Name: Dr. Thomas E. Sawyer
 Title: Chairman of the Board/Chief Executive Officer, principal executive officer and Secretary
 
 
 
 Date: November 15 2010                                           By: /s/ J Roland Vetter
 
 Name: J Roland Vetter
 Title: Chief Financial Officer/Principal Financial Officer, principal accounting officer
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