CONNEXUS CORP - FORM 10-Q

Attached files

file	filename
EX-32.2 - CONNEXUS CORP	exhibit322.htm
EX-31.1 - CONNEXUS CORP	exhibit311.htm
EX-32.1 - CONNEXUS CORP	exhibit321.htm
EX-31.2 - CONNEXUS CORP	exhibit3112.htm

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 March 31, 2010

[ ] 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.

(Formerly Dynamic Alert Limited)

(Exact name of registrant as specified in its charter)

Nevada		98-0430746
State or other jurisdiction of		(I.R.S. Employer
incorporation 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: (425) 637-3080

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 May 13, 2010: 80,000,000

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited)	Page

Balance Sheets	F-2

Interim Statements of Operations	F-3 to F-4

Interim Statements of Cash Flows	F-5

Interim Statement of Stockholders’ (Deficit)	F-6

Notes to Interim Financial Statements	F-7 to F-11

Item 2. Management’s Discussion and Analysis	13

Item 3. Quantitative and Qualitative Disclosure about Market Risk	15

Item 4. Controls and Procedures	15

Item 4(A) T. Controls and Procedures	15

PART II – OTHER INFORMATION

Item 1. Legal Proceedings - Not Applicable	16

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds - Not Applicable	16

Item 3. Defaults upon Senior Securities – Not Applicable	16

Item 4. Removed and Reserved	16

Item 5. Other Information	16

Item 6. Exhibits	16

SIGNATURES	17

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BRAZIL GOLD CORP.

(Formerly Dynamic Alert Limited)

(A Development Stage Company)

INTERIM FINANCIAL STATEMENTS

March 31, 2010

(Unaudited)

	Page

Financial Statements:

Balance Sheets	F-2

Interim Statements of Operations	F-3 to F-4

Interim Statements of Cash Flows	F-5

Interim Statement of Stockholders’ (Deficit)	F-6

Notes to Interim Financial Statements	F-7 to F11

BRAZIL GOLD CORP.

(Formerly Dynamic Alert Limited)

(A Development Stage Company)

BALANCE SHEETS

		March 31, 2010 (Unaudited)		June 30, 2009 (See Note 1)

ASSETS

Current
Cash	$	-	$	170
Prepaid expenses		125		679
Advances receivable (Note 4)		14,357		-
Total Current Assets		14,482		849

Computer Equipment		-		823
Website Developments costs		1,000		-
Note Receivable – (Note 5)		841,150		-

TOTAL ASSETS	$	856,632	$	1,672


LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

LIABILITIES

Current
Accounts payable	$	57,923	$	5,803
Accrued liabilities		23,700		9,000
Advances payable (Note 6)		66,461		-
Accounts payable, related parties (Note 7)		60,000		-
Convertible debenture – net of discount (Note 8)		830,237
Total Current Liabilities		1,038,321		14,803

TOTAL LIABILITIES		1,038,321		14,803

STOCKHOLDERS’ (DEFICIT)

Capital Stock
Authorized:
250,000,000 common shares, par value $0.001 per share 10,000,000 preferred shares, par value $0.001 per share
Issued and outstanding:
80,000,000 common shares		80,000		80,000
Additional paid-in capital		464,892		45,585
Accumulated comprehensive income		6,153		6,153
Accumulated (Deficit)		(215,710)		(144,869)
Accumulated (Deficit) during Development Stage		(517,024)		-
Total Stockholders’ (Deficit)		(181,689)		(13,131)

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT)	$	856,632	$	1,672

BRAZIL GOLD CORP.

(Formerly Dynamic Alert Limited)

(A Development Stage Company)

INTERIM STATEMENTS OF OPERATIONS

(Unaudited)

		Three-month Period ending March 31, 2010		Three-month Period ending March 31, 2009

Revenue	$	-	$	-
		-		-
Expenses
Marketing and travel		3,951		-
Office and administration		10,185		312
Professional Fees		19,121		3,475
Consulting		96,223		-
Stock based compensation		385,362		-
Beneficial conversion feature		2,182		-
		517,024		3,787

Net Operating Loss		(517,024)		(3,787)

Other Income and (Expenses)
Interest Income		19,150		-
Interest Expense		(19,150)		-
Gain on sale of assets		-		-
		-		-

Net (Loss) from Continuing Operations		(517,024)	$	(3,787)

Discontinued Operations (Note 10)
Net profit (loss) from discontinued operations		-		2,658

Net (Loss) for the Period	$	(517,024)	$	(1,129)

Basic And Diluted Loss Per Share	$	(0.01)	$	Nil


Weighted Average Number of Shares Outstanding		80,000,000		80,000,000

BRAZIL GOLD CORP

(Formerly Dynamic Alert Limited)

(A Development Stage Company)

INTERIM STATEMENTS OF OPERATIONS

(Unaudited)

		Nine-month Period ending March 31, 2010		Nine-month Period ending March 31, 2009		Cumulative Amounts from January 1, 2010 (Date of New Development Stage) to March 31, 2010

Revenue	$	-	$	-	$	-
		-		-		-
Expenses
Marketing and travel		5,726		-		3,951
Office and administration		15,357		4,554		10,185
Professional Fees		64,725		15,857		19,121
Consulting		118,723		-		96,223
Stock based compensation		385,362		-		385,362
Beneficial conversion feature		2,182		-		2,182
		592,075		20,411		517,024

Net Operating (Loss)		(592,075)		(20,411)		(517,024)

Other Income and (Expenses)
Interest Income		19,150		-		19,150
Interest Expense		(19,150)		-		(19,150)
Gain on sale of assets		377		-		-
		377		-		-

Net (Loss) from Continuing Operations		(591,698)		(20,411)		(517,024)

Discontinued Operations (Note 10)
Net Profit (Loss) from discontinued operations		3,833		(1,353)		-

Net (Loss) For The Period	$	(587,865)	$	(21,764)	$	(517,024)


Basic And Diluted Loss Per Share	$	(0.01)	$	Nil	$	(0.01)


Weighted Average Number of Shares Outstanding		80,000,000		80,000,000		80,000,000

BRAZIL GOLD CORP.

(Formerly Dynamic Alert Limited)

(A Development Stage Company)

INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)

		Nine-month period ending March 31, 2010		Nine-month period ending March 31, 2009		Cumulative Amounts from January 1, 2010 (Date of New Development Stage) to March 31, 2010

Cash Flows from Operating Activities
Net (loss) for the period	$	(587,865)	$	(21,764)	$	(517,024)
Adjustments to Reconcile Net Profit (Loss) to Net Cash Provided by (Used in) Operating Activities
Gain on sale of assets		(377)		-		-
Prepaid expenses		554		(126)		108
Stock based compensation		385,362		-		385,362
Depreciation and amortization		-		1,162		-
Beneficial conversion feature		2,182		-		2,182
Accounts payable and accrued liabilities		126,820		(5,036)		91,695
Net Cash (Used in) Operating Activities		(73,324)		(25,764)		(37,677)

Cash Flows from Investing Activities
Note receivables		(822,000)		-		(340,242)
Advances receivable		(14,357)		-		(14,357)
Additions to capital assets		(1,000)		-		(1,000)
Disposal of capital assets		1,200		-		-
Net Cash Provided by Investing Activities		(836,157)		-		(355,599)

Cash Flows From Financing Activities
Increase in additional paid-in capital		20,850		-		-
Increase in advances payable		66,461		-		48,276
Increase in convertible debenture		822,000				345,000
Foreign currency translation adjustment		-		(86)		-
Net Cash Provided by (Used in) Financing Activities		909,311		(86)		393,276

(Decrease) in Cash during the Period		(170)		(25,850)		-

Cash, Beginning Of Period		170		26,903		-

Cash, End Of Period	$	-	$	1,053	$	-

Non-cash Transactions
Beneficial conversion feature	$	13,095	$	-	$	13,095

Supplemental Disclosure Of Cash Flow Information
Cash paid for:
Interest	$	-	$	-		-
Income taxes	$	-	$	-	$	-

BRAZIL GOLD CORP.

(Formerly Dynamic Alert Limited)

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ (DEFICIT)

For the Period from July 1, 2008 to March 31, 2010

				CAPITAL STOCK							ACCUMULATED			ACCUMULATED
							ADDITIONAL				DEFICIT DURING			COMPRE-
	PREFERRED			COMMON			PAID-IN		ACCUMULATED		DEVELOPMENT			HENSIVE
	SHARES	AMOUNT		SHARES	AMOUNT		CAPITAL		(DEFICIT)		STAGE			INCOME (LOSS)	TOTAL
Balance, July 1, 2008	-	$	-	80,000,000	$	80,000	$	45,000	$	(109,181)	$	-	$	6,235	$	22,054

Foreign currency translation adjustment	-		-	-		-		-		-		-		(82)		(82)
Increase in additional paid-in capital	-		-	-		-		585		-		-		-		585
Net loss for the year	-		-	-		-		-		(35,688)		-		-		(35,688)

Balance June 30, 2009	-		-	80,000,000		80,000		45,585		(144,869)		-		6,153		(13,131)

Foreign currency translation adjustment	-		-	-		-		-		-		-		-		-
Capital contributions	-		-	-		-		20,850		-		-		-		20,850
Stock based compensation	-		-	-		-		385,362		-		-		-		385,362
Beneficial conversion feature	-		-	-		-		13,095		-		-		-		13,095
Net (loss) for the period	-		-	-		-		-		(70,841)		(517,024)		-		(587,865)

Balance, March 31, 2010	-	$	-	80,000,000	$	80,000	$	464,892	$	(215,710)	$	(517,024)	$	6,153	$	(181,689)

Note 1 Basis of Presentation

While the information presented in the accompanying interim consolidated 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 consolidated financial statements follow the same accounting policies and methods of their application as Brazil Gold Corp. (formerly Dynamic Alert Limited’s) audited June 30, 2009 annual financial statements. It is suggested that these interim consolidated financial statements be read in conjunction with Brazil Gold Corp. (formerly Dynamic Alert Limited’s) June 30, 2009 audited financial statements.

The information as of June 30, 2009 is taken from the audited financial statements of this date.

Note 2 Basis of Presentation – Going Concern

The accompanying consolidated 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 $733,000. 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 consolidated 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 consolidated 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 2009. 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 Benefit
June 30, 2009	144,869	Various	36,217	(36,217)	(8,922)	—
March 31, 2010	732,734	Various	183,184	(183,184)	(146,967)	-

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		(25%)
Deferred income tax valuation allowance		25%
Actual tax rate		0%

Note 4 Advances Receivable

As of March 31, 2010, the company had a total of $14,357 invested in advances receivable which are uncollateralized. The advances receivable are non-interest bearing.

The book value of these financial instruments is representative of their fair values. These advances are for funds advanced to Rusheen Handels AG, a Swiss corporation ("Rusheen"), with whom the Company is in negotiations and doing due diligence to acquire Rusheen’s 99% interest in its Brazilian subsidiary Amazônia Capital e Participações Ltda. (“ACP”).

Note 5 Note Receivable

The Company carries its note receivable at cost or loan balance, subject to the valuation procedures as described below. The book value of these financial instruments is representative of their fair values. These notes are for funds advanced to Rusheen Handels AG, a Swiss corporation ("Rusheen"), with whom the Company is in negotiations and doing due diligence to acquire Rusheen’s 99% interest in its Brazilian subsidiary Amazônia Capital e Participações Ltda. (“ACP”)

As of March 31, 2010, the company had a total of $822,000 invested in notes receivable. The notes are uncollateralized and bear interest at 12 % effective January 2, 2010. There is no set maturity date. Interest is accrued at 12% per annum, calculated monthly compounded on the notes receivable as earned. Imputed interest of $19,150 was recorded as of March 31, 2010.

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 March 31, 2010, management determined that no allowance was necessary.

Note 6 Advances Payable

As of March 31, 2010, the company had a total of $66,461 in advances payable that were uncollateralized, bear no interest, and are due on demand.

Note 7 Accounts payable, related parties

As of March 31, 2010, the company had a total of $60,000 in accounts payable to its officers for consulting fees.

Note 8 Convertible Debenture

As of March 31, 2010, the company had a total of $822,000 in advances payable. On January 2, 2010, the advances payable were collateralized with convertible promissory notes, bearing interest at 12% per annum, and due in full July 2011. Imputed interest of $19,150 was recorded as of March 31, 2010.

The face amount of convertible promissory notes and all interest accrued thereon may be converted, in whole or in part, any time following the Issuance Date in Holder’s sole discretion. Upon receipt the Company shall instruct the transfer agent to deliver stock certificates representing the number of shares of Common Stock issuable upon such conversion, as applicable. The holder of convertible promissory notes, is entitled to convert the face amount of such notes at anytime following the Issuance Date at the lesser of either $1.00 per share or the average weighted trading price for the 20-day period prior to the Conversion Date.

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 for the quarter ended March 31, 2010 is $13,095 which is recorded as a discount on the debt and amortized on a straight line basis over the life of the loan. For the quarter ending March 31, 2010 $2,182 was expensed to beneficial conversion feature.

Note 9 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 this pronouncement, stock-based compensation cost is measured 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 nine months ended March 31, 2010 and 2009 was $385,362 and Nil, respectively.

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 2,750,000 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; and

·	The remaining seventy-five percent (75%) of the shares granted under the option scheme shall vest pro rate every six (6) months, on the same date of the month as the date of grant of the option, over the following eighteen (18) months of continuous status as a director, employee or consultant.

During the period ended March 31, 2010 the Company recognized stock based compensation expense in the amount of $385,362 for the vested portion of options issued January 7, 2010.

The Company uses the Black-Scholes option valuation model to value stock options granted. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model requires management to make estimates which are subjective and may not be representative of actual results. Changes in assumptions can materially affect estimates of fair values. For purposes of the calculation, the following assumptions were used:

Risk free interest rate	1.62%
Expected dividend yield	0.0%
Expected stock price volatility	110.00%
Expected Life of options	3.24 years

The following table summarizes the activity under the Company’s stock option plan:

	Shares	Weighted Average Exercise Price
Balance, June 30, 2009	-	-
Options granted for the period	2,750,000	$0.56
Options cancelled	-	-
Options exercised	-	-
Balance, March 31, 2010	2,750,000	$0.56

Options vested at March 31, 2010	687,500	$0.56

Note 10 Discontinued Operations and New Developments

The Company’s attempts over the past years to build a business that assists consumers with their security needs had not come to fruition so management decided to change the business focus and look for other opportunities. Therefore, management decided to discontinue its security business and reflect such discontinuance in its operating statement and cash flow statements effective January1, 2010.

Management decided on that date to focus on new business development in the form of mineral exploration, having commenced its due diligence exercise in November 2009, which is still in progress, to acquire the a 99% ownership interest in a Brazilian subsidiary Amazônia Capital e Participações Ltda. (“ACP”) in exchange for restricted shares of the Company's common stock and a 2.5% net smelter return royalty on mineral production from ACP mineral claims located in Brazil. The primary mineral target is gold, however 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 Rondônia.

During the nine month period ending March 31, 2010 and the nine month period ending March31, 2009, the Company had $3,840 and $3,120 in revenue, respectively, related to its discontinued operations.

	Three-month Period ending March 31, 2010		Three-month Period ending March 31, 2009		Nine-month Period ending March 31, 2010		Nine-month Period ending March 31, 2009
Revenue	$	-	$	3,120	$	3,840	$	3,120

Expenses
Depreciation and amortization		-		388		-		1,163
Office and administration		-		74		7		238
Consulting		-		-		-		3,072
		-		462		7		4,473

Net Profit (Loss) from Discontinued Operations	$	-	$	2,658	$	3,833	$	(1,353)

Note 11 Subsequent Events

On April 06, 2010 Brazil Gold Corp. announced that it has entered into a bridge financing arrangement with a US-based private company for another $1,000,000, for an aggregate of up to $2,000,000 in funding. This was set up in order to be prepared upon the successful completion of the due diligence to acquire ACP that funding for up to $2,000,000 be available to allow the Company to commence with implementation of the operations and exploration strategy. Under the terms of the agreement the Company has the right to call upon funds for up to $2,000,000 by issuing convertible notes to the lender. The notes are convertible into shares of the Company’s common stock at prices ranging between $1.00 and $1.50 per common share. The securities to be issued under the agreement will not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent a registration or an applicable exemption from the registration requirements.

The Company has evaluated all subsequent events through the date the financial statements were available to be issued.

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

We incorporated as Dynamic Alert Limited (referred to herein as “we”, “us”, “our” and similar terms) on June 17, 2004, in the State of Nevada. Our name was changed from Dynamic Alert Limited to Brazil Gold Corp. on March 15, 2010. 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

Over the last two (2) years, we have continued to build a business that assists 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 now continued to review mineral exploration opportunities with the objective of bringing additional 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 Participações Ltda. (“ACP”) in exchange for (a) 44 million restricted shares of the Company's common stock and a 2.5% net smelter return royalty on mineral production from ACP mineral claims located in Brazil. ACP is the owner of numerous poly-metallic mineral claims covering approximately 824,411 hectares (2,037,119 acres) in three states in the Tapajos Greenstone Belt in the Amazon Basin of Brazil. The primary mineral target is gold, but copper, nickel, iron ore, manganese and tin are also found in the area. The legal claims are located in three western states: Amazonas, Mato Grosso and Rondonia.

The consideration to be payable to Rusheen for transfer of the ACP ownership stake is 44 million restricted shares in the common stock of the Company, and a 2.5% NSR on mineral production from the ACP claims.

The agreement to acquire Rusheen's ownership interest in ACP is 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. If the business combination is completed this will result in a change of control of the Company.

On January 7, 2010, the Board of Directors of Brazil Gold Corp. adopted a 2010 Stock Option Plan, which plan authorizes the issuance of up to ten percent (10%) of the Company’s total issued and outstanding shares of common stock to the Company’s officers, directors, employees, advisors and consultants.

On January 7, 2010, the Company’s Board of Directors also granted to officers and directors under the above plan options to purchase a total of 2.75 million shares at an exercise price per share of $0.56 of which 25% were vested immediately and the remainder at six months intervals.

On March 15, 2010 Dynamic Alert Ltd. (the “Company”) announced its change-of-name to Brazil Gold Corp., and new trading symbol “BRZG”, effective immediately. This change of name to Brazil Gold Corp. was made to more accurately reflect the new focus and vision of the Company – to be an explorer for precious metals, most significantly gold, in Brazil upon the successful completion of the due diligence to acquire ACP as more fully set out above. This name change was achieved by combining the business of the Company and its subsidiary Brazil Gold Corp., which was specifically set up to protect this name.

Material Changes in Financial Condition

At March 31, 2010, we had a working capital deficit of ($1,023,839), compared to a working capital deficit of ($13,954), at June 30, 2009. At March 31, 2010, our total assets consisted of notes receivable of $841,150, advances receivable of $14,357, website development of $1,000 and prepaid expenses of $125. This compares with total assets at June 30, 2009 consisting of cash of $170, prepaid expenses of $679 and capital assets of $823. These material changes have arisen as a result of the Company having raised funds in the form of uncollateralized loans, As at March 31, 2010 $822,000 of the advances payable were collateralized with convertible promissory notes, bearing interest at 12% per annum, and due in full July 2011. Refer to note 5 in the financial statements.

These funds advanced to Rusheen, a Swiss corporation, with whom the Company is in negotiations and doing due diligence to acquire Rusheen’s 99% interest in its Brazilian subsidiary Amazônia Capital e Participações Ltda. (“ACP”), so that ACP has working capital to fund its property taxes and on-going expenses to ensure it retains such mineral rights. Refer to note 5 in the financial statements.

At March 31, 2010, our total current liabilities increased to $1,038,321 from $14,803 at June 30, 2009. During the 9 months ended March 31, 2010, accounts payable, accrued liabilities, and advances payable increased by $193,281.

We recognized $3,840 in revenues from discontinued operations during the nine months ending March 31, 2010.

As we do not have an existing cash balance, 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.

Material Changes in Results of Operations

For The Three Months Ended March 31, 2010, Compared To The Three Months Ended March 31, 2009.

There were no revenues from the discontinued operations of the sale of security products and services during the three months ending March 31, 2010, compared to $3,120 revenues during the three months ended March 31, 2009.

For the three months ended March 31, 2010, operating expenses were $517,024 compared to $3,787 during the three months ended March 31, 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 March 31, 2010, consisted of professional fees of $19,120, (2009: $3,475) consulting fees of $96,223 (2009: nil) office and administration expenses of $10,185, (2009: $387) travel expenses $3,951 (2009: nil) stock based compensation of $385,362 (2009:nil), and beneficial conversion feature of $2,182 (2009:nil).

During the three month period ended March 31, 2010, we recognized a net loss of $517,024 compared to a net loss of $1,129 for the three-month period ended March 31, 2009. The increased loss of $515,895 was due to an increase in our activities over the prior period as discussed above.

For The Nine Months Ended March 31, 2010, Compared To The Nine Months Ended March 31, 2009.

There was $3,840 revenue from our discontinued operations of the sale of security products and services during the nine months ending March 31, 2010, compared to $3,120 revenues during the nine months ended March 31, 2009.

For the nine months ended March 31, 2010, operating expenses were $592,075 compared to $20,411 during the nine months ended March 31, 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 nine months ended March 31, 2010, consisted of professional fees of $64,725, (2009: $15,857) consulting fees of $118,723 (2009: nil) office and administration expenses of $15,357, (2009: $4,554), travel expenses of $5,726 (2009: nil), stock based compensation of $385,362 (2009:nil), and beneficial conversion feature of $2,182 (2009:nil).

During the nine month period ended March 31, 2010, we recognized a net loss of $587,865 compared to a net loss of $21,764 for the nine month period ended March 31, 2009. The increased loss of $566,101 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.

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 for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Management's assessment of the effectiveness of the small business issuer's internal control over financial reporting is as of the quarter ended March 31, 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 March 31, 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.

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

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

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 14 day of May, 2010.

BRAZIL GOLD CORP.

Date: May 14, 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: May 14 2010 By: /s/ J Roland Vetter

Name: J Roland Vetter

Title: Chief Financial Officer/Principal Financial Officer, principal accounting officer

Attached files

CONNEXUS CORP Reports

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