0001079974-17-000584.txt : 20171222 0001079974-17-000584.hdr.sgml : 20171222 20171222141611 ACCESSION NUMBER: 0001079974-17-000584 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 41 CONFORMED PERIOD OF REPORT: 20170930 FILED AS OF DATE: 20171222 DATE AS OF CHANGE: 20171222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Brazil Minerals, Inc. CENTRAL INDEX KEY: 0001540684 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 392078861 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-55191 FILM NUMBER: 171272313 BUSINESS ADDRESS: STREET 1: RUA VEREADOR JOAO ALVES PRAES N* 95-A CITY: OLHOS D'AGUA STATE: D5 ZIP: 39398-000 BUSINESS PHONE: 2133216065 MAIL ADDRESS: STREET 1: 1443 EAST WASHINGTON BLVD. STREET 2: SUITE 278 CITY: PASADENA STATE: CA ZIP: 91104 FORMER COMPANY: FORMER CONFORMED NAME: Flux Technologies, Corp. DATE OF NAME CHANGE: 20120127 10-Q/A 1 bmix10qa1-9302017.htm

 
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q/A
(Amendment No. 1)
  
(Mark One)
 
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 
For the quarterly period ended September 30, 2017
 
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 000-55191
 
 
Brazil Minerals, Inc.
 
(Exact name of registrant as specified in its charter)
 
Nevada
 
39-2078861
(State or other jurisdiction of
 
(IRS Employer
incorporation or organization)
 
Identification No.)


Rua Vereador João Alves Praes, nº 95-A
Olhos D'Água, MG 39398-000, Brazil
(Address of principal executive offices)
 
(213) 590-2500
(Registrant's telephone number)
 
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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   No 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   No 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company", and "emerging growth company", in Rule 12b-2 of the Exchange Act.

Large accelerated filer
 
Accelerated filer
Non-accelerated filer  
 
Smaller reporting company
(Do not check if smaller reporting company)
 
Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes¨ Noþ
 
APPLICABLE ONLY TO CORPORATE ISSUERS
 
As of December 22, 2017 the registrant had 98,347,944 shares of common stock, par value $0.001 per share, issued and outstanding.
 
 

 
 
EXPLANATORY NOTE
 
Brazil Minerals, Inc. (the "Company") is filing this Amendment No. 1 on Form 10-Q/A (this "Amendment") to amend its Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, as originally filed with the Securities and Exchange Commission (the "SEC") on November 24, 2017 (the "Original Form 10-Q").  The purpose of this Amendment is to amend the Original Form 10-Q's XBRL exhibits to correct a technical problem. New certifications of the Chief Executive Officer and Chief Financial Officer are also being filed herewith.

Except for the amendments described above, this Amendment does not amend or otherwise update any other information in the Original Form 10-Q. This Amendment is not intended to, nor does it, reflect events occurring after the filing of the Original Form 10-Q, and does not modify or update the disclosures therein in any way other than as required to reflect the changes described above. Information not affected by this Amendment remains unchanged and reflects the disclosures made at the time the Original Form 10-Q was filed. Therefore, this Amendment should be read in conjunction with any documents incorporated by reference herein and the Company's other filings made with the SEC subsequent to the filing of the Original Form 10-Q.

 
 
 
 
 

 
 
 
 
PART II OTHER INFORMATION
 
Item 6.    EXHIBITS

(a)  Exhibits
 
   
   
   
101.INS –
XBRL Instance Document
   
101.SCH –
XBRL Taxonomy Extension Schema Document
   
101.CAL –
XBRL Taxonomy Extension Calculation Linkbase Document
   
101.DEF –
XBRL Taxonomy Extension Definition Linkbase Document
   
101.LAB –
XBRL Taxonomy Extension Label Linkbase Document
   
101.PRE –
XBRL Taxonomy Extension Presentation Linkbase Document

 
 
 
 

 
 
 
 


SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned there unto duly authorized.

 
BRAZIL MINERALS, INC.
 
 
 
 
 
Date: December 22, 2017
By:
/s/ Marc Fogassa
 
 
 
Marc Fogassa
 
 
 
Chief Executive Officer
 
 
 
 
 
 
 
 
 

EX-31.1 2 ex31_1.htm
 

Exhibit 31.1
  
CERTIFICATION

I, Marc Fogassa, the Chief Executive Officer and President of Brazil Minerals, Inc. (the "registrant"), certify that:

1.    
I have reviewed this quarterly report on Form 10-Q of the registrant for the quarter ended September 30, 2017;
 
2.    
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
 
3.    
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

a.  
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is prepared;

b.  
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c.  
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and

d.  
disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
 
 
a.    
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 
b.    
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date:  December 22, 2017
                     
                                                      
  /s/ Marc Fogassa
 
       Marc Fogassa
 
       President and Chief Executive Officer
 
      (principal executive officer)
 
EX-31.1 3 ex31_2.htm
 
 
Exhibit 31.2
 
CERTIFICATION

I, Marc Fogassa, Chief Financial Officer of Brazil Minerals, Inc. (the "registrant"), certify that:

1.    
I have reviewed this quarterly report on Form 10-Q of the registrant for the quarter ended September 30, 2017;
 
2.    
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
 
3.    
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

a.  
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is prepared;

b.  
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c.  
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and

d.  
disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
 
 
a.
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 
b.
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  December 22, 2017
 
                                              
  /s/ Marc Fogassa
 
       Marc Fogassa
 
       Chief Financial Officer
 
       (principal financial officer and accounting officer)
 
EX-32.1 4 ex32_1.htm
 
 
Exhibit 32.1



Certification of Chief Executive Officer and Principal Financial Officer
 Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Marc Fogassa, certify pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Brazil Minerals, Inc. for the quarter ended September 30, 2017 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 
 
 
Date:  December 22, 2017
By:
/s/ Marc Fogassa
 
 
 
Marc Fogassa
 
 
 
Chief Executive Officer
and Chief Financial Officer
 
 
 
(principal executive officer
and principal accounting and financial officer)
 
 
 
 
 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


EX-101.INS 5 bmix-20170930.xml XBRL INSTANCE DOCUMENT 0001540684 bmix:BmixparticipacoesltdMember 2016-09-30 0001540684 bmix:BrazilianReaisMember 2016-09-30 0001540684 2017-09-30 0001540684 us-gaap:MachineryAndEquipmentMember 2016-01-01 2016-09-30 0001540684 us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember 2016-01-01 2016-09-30 0001540684 bmix:UsBanksMember 2016-09-30 0001540684 bmix:BrazilianBanksMember 2016-09-30 0001540684 2016-12-31 0001540684 bmix:TwoHundredFortyFourThousandMember 2015-09-30 0001540684 bmix:ConvertablePromissoryNotePayableMember 2014-01-07 0001540684 bmix:TwoHundredFortyFourThousandMember 2016-09-30 0001540684 bmix:ConvertablePromissoryNotePayableMember 2015-01-01 2015-01-31 0001540684 2017-01-01 2017-09-30 0001540684 2016-01-01 2016-09-30 0001540684 us-gaap:CommonStockMember us-gaap:StockOptionMember 2015-01-01 2015-01-31 0001540684 us-gaap:CommonStockMember us-gaap:StockOptionMember 2015-01-01 2015-09-30 0001540684 us-gaap:CommonStockMember us-gaap:StockOptionMember 2016-01-01 2016-09-30 0001540684 us-gaap:MinimumMember 2015-01-01 2015-09-30 0001540684 us-gaap:MaximumMember 2015-01-01 2015-09-30 0001540684 us-gaap:MinimumMember 2016-01-01 2016-09-30 0001540684 us-gaap:MaximumMember 2016-01-01 2016-09-30 0001540684 2015-01-01 2015-12-31 0001540684 2017-12-22 0001540684 bmix:RSTRecursosMineraisLtdaMember 2014-01-01 2014-12-31 0001540684 bmix:RSTRecursosMineraisLtdaMember 2015-01-01 2015-12-31 0001540684 2015-09-30 0001540684 2015-12-31 0001540684 2016-09-30 0001540684 bmix:TwoHundredFortyFourThousandMember 2014-01-01 2014-01-31 0001540684 bmix:BrazilMiningIncMember 2015-01-01 2015-12-31 0001540684 us-gaap:SeriesAPreferredStockMember 2017-09-30 0001540684 us-gaap:SeriesAPreferredStockMember 2016-12-31 0001540684 us-gaap:SeriesBPreferredStockMember 2017-09-30 0001540684 us-gaap:SeriesCPreferredStockMember 2017-09-30 0001540684 us-gaap:SeriesBPreferredStockMember 2016-12-31 0001540684 us-gaap:SeriesCPreferredStockMember 2016-12-31 0001540684 2016-11-03 0001540684 2014-04-01 2014-04-30 0001540684 2014-03-01 2014-03-04 0001540684 2014-04-30 0001540684 2014-03-04 0001540684 us-gaap:ChiefExecutiveOfficerMember 2016-09-30 0001540684 bmix:ConsultantsMember 2016-09-30 0001540684 bmix:ConsultantsMember 2015-09-30 0001540684 us-gaap:CommonStockMember us-gaap:StockOptionMember 2015-01-31 0001540684 2016-07-30 0001540684 2017-07-01 2017-09-30 0001540684 2016-07-01 2016-09-30 xbrli:shares iso4217:USD iso4217:USD xbrli:shares xbrli:pure 0.9999 0.2 15000000 P10Y P3Y 70050 250000 250000 250000 86181478 64752286 1025 244000 244000 488000 .12 .12 0.0000 0.0000 0.0000 0.0017 0.0000 0.0000 0.8767 4.4600 1.7616 1.7600 1.1300 2.1753 3.1300 0.0007 0.0045 0.0012 3 0.0017 0.0013 0.0056 0.0072 P8M1D P3M P3Y P5Y P5Y P1Y P2Y 1300 0 10-Q/A true 2017-09-30 2017 Q3 98347944 Brazil Minerals, Inc. 0001540684 --12-31 No No Yes Smaller Reporting Company 20138 277094 200393 0 0 1210391 0.11 one-half of the stock and cash 43868 124680 145547 7139 64357 12002 244000 244000 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The purpose of the Company's acquisition of RST was due to the quality of its mineral assets, close proximity to the Company's MDB original diamond and gold processing plant, and attractive acquisition price. Pro-forma financial statements have not been provided as the assets, liabilities and operations of RST are not significant.</p> <p style="margin: 0pt"></p> 100000 192373 157381 2015-09-30 253995 157381 88175 193170 44854 231344 160214 0 0 bmxi 292611 137113 1 1 1 1 0.001 0.001 0.001 0.001 10000000 10000000 10000000 10000000 1 1 1 1 584 0 1047 200000 1 1 1 1 <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 1 &#8211; ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Organization and Description of Business</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Brazil Minerals, Inc. (&#34;BMIX&#34; or the &#34;Company&#34;) was incorporated as Flux Technologies, Corp. under the laws of the State of Nevada, U.S. on December 15, 2011. The Company, through subsidiaries, mines and sells diamonds, gold, sand and mortar. The Company, through subsidiaries, outright or jointly owns 10 mining concessions and 28 other mineral rights in Brazil, for diamonds, gold, sand and manganese. The Company, through subsidiaries, owns one large fixed plant and one modular mobile plant for diamond and gold processing and recovery, a sand processing and mortar plant, trucks and earth-moving capital equipment used for mining.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Principles of Consolidation</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements include the accounts of the Company and its 99.99% owned subsidiary, BMIX Participa&#231;&#245;es Ltda. (&#34;BMIXP&#34;), which includes the accounts of BMIXP's wholly-owned subsidiary, Minera&#231;&#227;o Duas Barras Ltda. (&#34;MDB&#34;).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2014, BMIXP acquired an initial 25% interest in RST Recursos Minerais Ltda. (&#34;RST&#34;), and during the first quarter of 2015, it acquired an additional 25% interest in RST, thus bringing its total ownership of RST to 50%. As of March 18, 2015, RST has been consolidated within the Company's financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 17, 2015, BMIXP incorporated Hercules Resources Corporation (&#34;HRC&#34;). On May 27, 2015, HRC formalized title to 99.99% of Hercules Brasil Comercio e Transportes Ltda. (&#34;Hercules Brasil&#34;). Thus, Hercules Brasil is a wholly owned subsidiary and has been consolidated within the Company's consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 27, 2016, upon approval by its Board of Directors, the Company entered into a stock purchase and sale agreement pursuant to which HRC transferred its 99.99% equity interest in Minera&#231;&#227;o Jupiter Ltda (&#34;MJL&#34;) to the Company which immediately thereafter sold such equity interest to Jupiter Gold Corporation (&#34;JGC&#34;), a newly created company, in exchange for all of the common stock of JGC. On December 16, 2016, the Securities and Exchange Commission (&#34;SEC&#34;) declared effective a Registration Statement filed by JGC for the sale of shares in a public offering in the U.S. As of September 30, 2017, the Company has ownership of approximately 58% of the equity of JGC. As such, the accounts and results of JGC and MJL have been included in the Company's consolidated financial statements. See Note 2 for more information.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All material intercompany accounts and transactions have been eliminated in consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Share Count</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All share and per share amounts have been restated to give effect to a 1-for-500 reverse split of the Company's common stock which was filed in the state of Nevada on December 15, 2016 and became effective on January 27, 2017.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Going Concern</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has limited working capital, has incurred losses in each of the past two years, and has not yet received material revenues from sales of products or services. These factors create substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The ability of the Company to continue as a going concern is dependent on the Company generating cash from its operations, from royalties, and/or from the sale of equity and/or debt securities. During the year ended December 31, 2016, the Company funded operations primarily through the sale of debt and equity securities and through the receipt of proceeds from revenues. Management's plan to fund its capital requirements and ongoing operations include an increase in cash received from sales of gold and rough diamonds recovered from a new modular processing and recovery plant. This modular plant is owned by JGC. Gold revenues are split on a 50% basis with JGC, while diamond revenues are kept 100% by the Company. There will likely be an opportunity to cut and polish certain of the larger rough diamonds recovered from such plant. Despite a processing loss of 50% to 60% in size in the cutting and polishing of a diamond, and the cost and time involved in such, cut and polished diamonds can sell for up to ten times or more of the sale price of rough diamonds of the same weight. Management's secondary plan to cover any shortfall is selling its equity securities, including common stock in the Company or common stock in JGC that it owns, and obtaining debt financing. There can be no assurance the Company will be successful in these efforts.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Interim Consolidated Financial Statements</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these consolidated financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2016. The results of operations for the three and nine months ended September 30, 2017 are not indicative of the results that may be expected for the full year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Basis of Presentation</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements of the Company have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles (&#34;GAAP&#34;) of the United States of America and are presented in U.S. dollars.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Use of Estimates</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 contingencies at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from those estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Fair Value of Financial Instruments</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows the guidance of Accounting Standards Codification (&#34;ASC&#34;) Topic 820 &#8211; Fair Value Measurement and Disclosure. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of our Company. Unobservable inputs are inputs that reflect our Company's assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1. Observable inputs such as quoted prices in active markets;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2017 and December 31, 2016, the Company does not have any level 2 or 3 assets or liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company's financial instruments consist of cash and cash equivalents, accounts receivable, taxes recoverable, prepaid expenses, inventory, deposits and other assets, accounts payable, accrued expenses, deferred revenue and convertible notes payable. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Cash and Cash Equivalents</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent that the funds are not being held for investment purposes. The Company's bank accounts are deposited in FDIC insured institutions. Funds held in U.S. banks are insured up to $250,000 and funds held in Brazilian banks are insured up to $250,000 Brazilian reais (translating into approximately $78,900 as of September 30, 2017).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Inventory</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory for the Company consists of diamonds, gold, ore stockpile, parts, supplies and related production costs and is stated at lower of cost or market. The amount of any write-down of inventories to net realizable value and all losses, are recognized in the period the write-down of loss occurs. At September 30, 2017 and December 31, 2016, inventory consisted primarily of rough ore stockpiled for further gold and diamonds recovery. No value was placed on sand.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Value-Added Taxes Receivable</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records a receivable for value added taxes recoverable from Brazilian authorities on goods and services purchased by its Brazilian subsidiaries. The Company intends to recover the taxes through the acquisition of capital equipment from sellers who accept tax credits as payments. On April 20, 2016, the Company's taxes receivable decreased by $50,496 with the recovery of such amount being used in the acquisition of a Mercedes Benz truck, through a state government program.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Property and Equipment</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment are stated at cost. Major improvements and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statements of operations as other gain or loss, net.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The diamond and gold processing plants, vehicles, and other machinery are depreciated over an estimated useful life of 10 years; and computer and other office equipment over an estimated useful life of 3 years. Accumulated depreciation as of September 30, 2017 and December 31, 2016, was $333,985 and $271,208 respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Mineral Properties</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Costs of exploration, carrying and retaining unproven mineral lease properties are normally expensed as incurred. Mineral property acquisition costs, including licenses and lease payments, are normally capitalized. Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company's rights. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. As of September 30, 2017 and December 31, 2016, the Company did not recognize any impairment losses related to mineral properties held.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Intangible Assets</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values, unless the values of neither the assets received nor the assets transferred are determinable within reasonable limits, in which case the assets received are measured based on the carrying values of the assets transferred. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Intangible assets consist of mineral rights awarded by the Brazilian national mining department (&#34;DNPM&#34;) and held by MDB, RST, BMIXP, and MJL.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Impairment of Long-Lived Assets</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For long-lived assets, such as property and equipment and intangible assets subject to amortization, the Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Revenue Recognition</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured. Typically, the Company records revenues upon delivery of the products to the customer. As of September 30, 2017 and December 31, 2016, the Company had deposits of $0 and $0, respectively, related to proceeds received for future diamond and gravel sales which have been recorded as customer deposits. See Note 4 and 6 for additional information related to these agreements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Costs of Goods Sold</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Included within costs of goods sold are the costs of cutting and polishing rough diamonds and costs of production such as diesel fuel, labor, machine rentals, and transportation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Stock-Based Compensation</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records stock-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation. ASC 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee's requisite service period. Under ASC 718, volatility is based on the historical volatility of our stock or the expected volatility of the stock of similar companies. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We use the Black-Scholes option-pricing model, which was developed for use in estimating the fair value of options. Option-pricing models require the input of highly complex and subjective variables including the expected life of options granted and the expected volatility of our stock price over a period equal to or greater than the expected life of the options. Because changes in the subjective assumptions can materially affect the estimated value of our employee stock options, it is management's opinion that the Black-Scholes option-pricing model may not provide an accurate measure of the fair value of our employee stock options. Although the fair value of employee stock options is determined in accordance with ASC Topic 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted a stock plan to attract, retain and motivate its directors, officers, employees, consultants and advisors. The Company's stock plan approved in 2013 provides for the issuance of up to 30,000 common shares for employees, consultants, directors, and advisors.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Foreign Currency</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company's Brazilian subsidiaries use the Brazilian Real, the currency of Brazil, as the functional currency. Resulting translation gains or losses are recognized as a component of accumulated other comprehensive income. Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations. Net foreign currency transaction losses included in the Company's consolidated statements of operations were negligible for all periods presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Income Taxes</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We account for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of September 30, 2017 and December 31, 2016, the Company's deferred tax assets had a full valuation allowance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Under ASC 740, a tax position is recognized as a benefit only if it is &#34;more likely than not&#34; that the tax position would be sustained in a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the &#34;more likely than not&#34; test, no tax benefit is recorded. The Company has identified the United States Federal tax returns as its &#34;major&#34; tax jurisdiction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Basic Income (Loss) Per Share</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company computes loss per share in accordance with ASC Topic 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. As of September 30, 2017, the Company's potentially dilutive securities relate to common stock issuable in connection with convertible notes payable, options and warrants. As of September 30, 2017, if all holders of preferred stock, convertible notes payable, options and warrants exercised their right to convert their securities to common stock, the common stock issuable would be in excess of the Company's authorized, but unissued shares of common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Other Comprehensive Income</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Other comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, other than net income and including foreign currency translation adjustments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Recent Accounting Pronouncements</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2015, the FASB issued Accounting Standard Update (&#34;ASU&#34;) 2015-03, Simplifying the Presentation of Debt Issuance Costs. This update requires capitalized debt issuance costs to be classified as a reduction to the carrying value of debt rather than a deferred charge, as is currently required. This update is effective for the Company for all annual and interim periods beginning after December 15, 2015 and is required to be adopted retroactively for all periods presented. The Company adopted this ASU with no impact on the accompanying consolidated financial statements as the issuance costs were already accounted for as a reduction of the carrying value of the debt.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2014, the FASB issued Accounting Standards Update (&#34;ASU&#34;) No. 2014-15, &#34;Presentation of Financial Statements Going Concern&#34;, which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. The guidance is not expected to have a material impact on the Company's financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update simplify the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The guidance is not expected to have a material impact on the Company's financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU 2016-02, Leases (Topic 840), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a public entity. Early adoption of the amendments in this standard is permitted for all entities and the Company must recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently in the process of evaluating the effect this guidance will have on its financial statements and related disclosures.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have reviewed other recent accounting pronouncements issued to the date of the issuance of these consolidated financial statements, and we do not believe any of these pronouncements will have a material impact on the Company.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 2 &#8211;ACQUISITIONS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>RST Recursos Minerais Ltda</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2014, the Company entered into an agreement to purchase 25% of the equity of RST for cash payments of 250,000 Brazilian Reais and the issuance of shares of the Company's common stock valued at 100,000 Brazilian Reais. In connection with this agreement the Company issued 2,858 shares of common stock with a value of $43,868 and made cash payments of $107,858. At December 31, 2014, the investment was accounted for using the equity method. Effective March 18, 2015, the Company purchased an additional 25% of RST from a third party for $400,000 Brazilian Reais or $124,680. Under the terms of the agreement, the Company is to make monthly payments ranging from $75,000 Brazilian Reais to $100,000 Brazilian Reais beginning March 25, 2015. As of December 31, 2015, all required payments had been made. In December 2015, the 2,858 shares of common stock previously issued with a value of $43,868 were returned to the Company. The Company reversed the initial amount of the investment recorded upon return.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of the additional 25% acquired, the Company owns 50% of RST and has consolidated the operations in the Company as of March 18, 2015. The remaining 50% ownership is held by Brazil Mining, Inc. (&#34;BMI&#34;), a Marshall Islands corporation which is deemed to be controlled by the Company's Chief Executive Officer. On the date of consolidation, the Company determined the fair market value of RST to be $570,548. The fair market value was based upon the average price paid by the Company for the 50% ownership, including the relief of monies advanced to RST and increasing for the non-controlling interest which represents 50%. The Company allocated 100% of the fair market value to the mineral rights held by RST.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The purpose of the Company's acquisition of RST was due to the quality of its mineral assets, close proximity to the Company's MDB original diamond and gold processing plant, and attractive acquisition price. Pro-forma financial statements have not been provided as the assets, liabilities and operations of RST are not significant.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Jupiter Gold Corporation and Minera&#231;&#227;o Jupiter Ltda</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 27, 2016, upon approval by its Board of Directors, the Company entered into a stock purchase and sale agreement pursuant to which HRC transferred its 99.99% equity interest in MJL to the Company which immediately thereafter sold such equity interest to JGC in exchange for the acquisition of 4,000,000 shares of JGC common stock at par value, which totaled $4,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Subsequent to the agreement, the Company transferred approximately 41% of its ownership in JGC to noncontrolling interests through both sales of JGC common stock at $1.00 per share to outside investors and conversions of certain of the Company's notes payable and preferred stock into JGC common stock. As a result of these transactions, a noncontrolling interest of $1,328,594 was recognized in the consolidated financial statements.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 3 &#8211; COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Intangible Assets</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Intangible assets consist of mining rights at MDB and RST and are not amortized as the mining rights are perpetual. The carrying value was $648,149 and $630,089 at September 30, 2017 and December 31, 2016, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Accounts Payable and Accrued Liabilities</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td colspan="3" style="text-align: center"><font style="font-size: 10pt">As of</font></td> <td nowrap="nowrap">&#160;</td> <td colspan="3" style="text-align: center"><font style="font-size: 10pt">As of</font></td> <td nowrap="nowrap">&#160;</td></tr> <tr style="vertical-align: bottom"> <td>&#160;</td> <td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2017</font></td> <td nowrap="nowrap">&#160;</td> <td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2016</font></td> <td nowrap="nowrap">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 78%"><font style="font-size: 10pt">Accounts payable and other accruals</font></td> <td style="width: 1%">&#160;</td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 8%; text-align: right"><font style="font-size: 10pt">158,294</font></td> <td nowrap="nowrap" style="width: 1%">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 8%; text-align: right"><font style="font-size: 10pt">162,976</font></td> <td nowrap="nowrap" style="width: 1%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Accrued interest</font></td> <td>&#160;</td> <td>&#160;</td> <td style="text-align: right"><font style="font-size: 10pt">245,666</font></td> <td nowrap="nowrap">&#160;</td> <td>&#160;</td> <td>&#160;</td> <td style="text-align: right"><font style="font-size: 10pt">170,439</font></td> <td nowrap="nowrap">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Total</font></td> <td>&#160;</td> <td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">403,960</font></td> <td nowrap="nowrap">&#160;</td> <td>&#160;</td> <td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">333,415</font></td> <td nowrap="nowrap">&#160;</td></tr> </table> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 4 &#8211; CONVERTIBLE PROMISSORY NOTES PAYABLE</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Convertible Notes Payable - Fixed Conversion Price</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 7, 2014, the Company issued to a family trust a Senior Secured Convertible promissory note in the principal amount of $244,000 (the &#34;Note&#34;) and warrants to purchase an aggregate of 488,000 shares of the Company's common stock, par value $0.001 per share at an exercise price of $62.50 per share through December 26, 2018 (the &#34;Warrants&#34;). The Company received gross proceeds of $244,000 for the sale of such securities. The outstanding principal of the Note bears interest at the rate of 12% per annum. All principal on the Note was payable on March 31, 2015 (the &#34;Maturity Date&#34;), which as of the date of this filing is past due and in technical default. The Company is in negotiations with the note holder to satisfy, amend the terms or otherwise resolve the obligation in default. No demand for payment has been made. As a result of the default, the interest rate on the Note increased to 30% per annum. Interest was payable on September 30, 2014 and on the Maturity Date. As of September 30, 2017, the Company has accrued interest payable totaling $219,309. The Note is convertible at the option of the holder into common stock of the Company at a conversion rate of one share for each $50.00 of principal and interest converted. A debt discount related to the value of the warrants in the amount of $10,252 was recorded and was being amortized over the life of the note. As of December 31, 2015, the discount was fully amortized.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2015, the Company issued four convertible promissory notes totaling $200,000 in proceeds and options to purchase an aggregate of 80,000 shares of the Company's common stock at an exercise price of $2.50 per share for a period of three years. The convertible promissory notes incur interest at 10.0% and are due January 30, 2018. The convertible promissory notes are convertible at the option of the holder at a rate of $1.25 per share. Debt discount related to the relative fair market value of the options in the amount of $22,423 and implied beneficial conversion features of $22,423, totaling $44,846, were recorded and are being amortized over the life of the notes. During the years ended December 31, 2016 and 2015, $27,406 and $17,440 of the discount was amortized to interest expense, respectively. As of December 31, 2016, the discount was fully amortized to interest expense, and the notes were converted into 160,000 shares of the Company's common stock, 192,000 shares of JGC common stock, and 384,000 stock purchase warrants for JCG common stock. The 192,000 shares of JGC common stock were valued at $192,000, or $1.00 per share, which represents fair market value as of such date. The 384,000 warrants are exercisable at $1.50 for a two-year period from issuance. The JGC warrants were valued at $37,426 using the Black-Scholes option pricing model and the following assumptions: an exercise price of $1.50, a stock price of $1.00 on the date of grant, an expected dividend yield of 0%, an expected volatility of 40.0%, a risk-free interest rate of 0.71% and an expected term of 2.0 years. As a result, a noncontrolling interest of $229,425 was recorded in the consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2015, the Company purchased machinery and equipment from a third party making an initial deposit of $10,910 ($35,000 Brazilian Reais), issuing notes payable totaling $38,963 ($125,000 Brazilian Reais) payable in five equal monthly installments starting March 15, 2015 and $43,638 in customer deposits ($140,000 Brazilian Reais) in which are to be satisfied through gravel produced by MDB. The note payable was convertible into common stock of the Company at the market rate on the date of issuance and thus a beneficial conversion feature was not recorded. In June 2015, the Company cancelled this agreement returning the machinery and equipment and forfeiting amounts already paid to the seller.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2015, the Company issued three convertible promissory notes and received an aggregate $100,000 in proceeds. The convertible promissory notes incur interest at 10.0% per annum and are due December 31, 2016. The convertible promissory notes are convertible at the option of the holder at a 40% discount to the average of the five lowest closing prices of the Company's common stock over the previous 20 days. In addition, the notes conversion rate has a ceiling of $15.00 and a floor of $0.0165. A debt discount related to the beneficial conversion feature of $87,720 was recorded and is being amortized over the life of the notes. During the year ended December 31, 2015, the discount was fully amortized to interest expense, and the notes were converted into 100 shares of Series B Preferred Stock; see Note 5.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Convertible Notes Payable - Variable Conversion Price</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At various times to fund operations, the Company issues convertible notes payable in which the conversion features that are variable. In addition, some of these convertible notes payable have on issuance discounts and other fees withheld. Due to the variable conversion price, the Company may be required to record a derivative liability in connection with the convertible notes payable. The combination of the original issue discount (&#34;OID&#34;), fees paid and allocation to the derivative liabilities resulted in various discounts to the convertible notes payable. The discounts are being amortized over the term of the convertible notes payable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2016, the Company issued to one noteholder in various transactions $242,144 in convertible promissory notes with fixed floors and received an aggregate of $232,344 in proceeds. The convertible promissory notes each bear interest at 8.0% per annum and mature one year from issuance. After six months from issuance, each convertible promissory note is convertible at the option of the holder at a 50% discount to the lowest traded price of the Company's common stock over the previous 20 days. In addition, each note's conversion rate has a floor of $0.0001. Total debt discounts related to the beneficial conversion features of $241,852 were recorded and are being amortized over the life of the notes.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30, 2017, the Company issued to one noteholder in various transactions $435,535 in convertible promissory notes with fixed floors and received an aggregate of $415,420 in proceeds. The convertible promissory notes each bear interest at 8.0% per annum and mature one year from issuance. After six months from issuance, each convertible promissory note is convertible at the option of the holder at a 50% discount to the lowest traded price of the Company's common stock over the previous 20 days. In addition, each note's conversion rate has a floor of $0.0001. Total debt discounts related to the beneficial conversion features of $405,208 were recorded and are being amortized over the life of the notes.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Including the convertible notes payable discussed in the preceding paragraphs, as of September 30, 2017, the Company has $891,389 in principal of notes payable. These convertible notes have maturity dates ranging from currently due to September 2018. The combination of the OID, fees paid and allocation to the derivative liabilities resulted in various discounts to these convertible notes payable with a remaining total of $298,101. During the nine months ended September 30, 2017 and 2016, $277,094 and $97,912 of the discounts were amortized to interest expense, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30, 2017 and 2016, the Company issued 19,629,192 and 5,183,869 shares of common stock upon conversion of $66,115 and $154,391, respectively, in convertible notes payable and accrued interest.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Convertible Customer Deposits</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2015, as discussed below in Note 6, the Company has previously provided customers with the option to convert their deposits of diamonds into common stock if the diamonds are not delivered on the scheduled timeline.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Derivative Liabilities</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with convertible notes payable the Company records derivative liabilities for the conversion feature. The derivative liabilities are valued on the date of issuance of the convertible note payable and revalued at each reporting period. During the year ended December 31, 2015 the Company recorded derivative liabilities of $281,345 based upon the following Black-Scholes option pricing model average assumptions: an exercise price of $0.75 to $0.025, our stock price on the date of grant ($1.65 to $0.05), expected dividend yield of 0%, expected volatility of 218% to 313%, risk free interest rate of 0.12% and an expected term of 0.50 years. Upon initial valuation, the derivative liability exceeded the face value of the convertible note payable of $302,111, a day one loss on derivative liability of $372,878 was recorded.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 30, 2016, the derivative liabilities were revalued at $122,935 resulting in a gain of $158,410 related to the change in fair market value of the derivative liabilities. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following average assumptions: an exercise price of $0.00005 to $0.00007, our stock price on the date of valuation ($0.0001), expected dividend yield of 0%, expected volatility of 360%, risk-free interest rate of 0.39%, and an expected term of 0.5 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2017, no derivative liability was recorded.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Future Potential Dilution</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Most of the Company's convertible notes payable contain adjustable conversion terms with significant discounts to market. As of September 30, 2017, the Company's convertible notes are convertible into an aggregate of approximately 293,542,262 shares of common stock. Due to the variable conversion prices on some of the Company's convertible notes, the number of common shares issuable is dependent upon the traded price of the Company's common stock.</p> <p style="margin: 0pt"></p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 6 &#8211; COMMITMENTS AND CONTINGENCIES</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Operating Leases</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company leases offices in Pasadena, California, U.S., and in the municipality of Olhos D'Agua, Brazil. Such costs are immaterial to the consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Diamond Delivery Agreements</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 4, 2014, the Company received proceeds of $500,000 from a sale of polished and GIA graded diamonds pursuant to an agreement with two buyers that agreed to receive these diamonds over a period of one year. One of the buyers has expertise and a long and successful history of investments in natural resources. As part of this transaction, the Company pledged with a third-party collateral agent an aggregate of 22,000 shares of its common stock, valued at approximately $990,000 at the time the transaction was consummated, in order to secure the delivery of the diamonds. The number of shares pledged is subject to periodic adjustment as diamonds are delivered and as the market price of our common stock may change. The Company also issued to these buyers two-year options to purchase an aggregate of 6,000 shares of its common stock at an exercise price (subject to adjustment upon the occurrence of certain events) of $60.00 per share, a premium of 33% above the stock price when the transaction was consummated. These options initially expired on March 4, 2016 and have an exercise price of $60.00, which was reduced to $40.00 per share in October 2014 and the expiration date extended to March 4, 2018. The fair value of the options was $93,280 was calculated using the Black- Scholes option pricing model with the following assumptions: our stock price on date of grant ($45.00), expected dividend yield of 0%, expected volatility of 78%, risk-free interest rate of 0.78%, and an expected term of 2 years. In July 2015, the Company extended these agreements until December 31, 2016. Under the new agreements, quarterly the Company is required to deliver diamonds with $15,000 in aggregate Rappaport value. If the diamonds are not delivered, then the customer has the option of converting the required value at 50% of market. Due to the variable conversion price, the Company is recording a derivative liability upon each tranche becoming convertible. As of December 31, 2015, total amounts convertible into common stock were $35,158. In addition, the collateral shares for this contract were increased to 930,588.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 30, 2014, the Company entered into Subscription Agreements with four investors (the &#34;Buyers&#34;), pursuant to which the Buyers agreed to pay to the Company an aggregate of $500,000 and the Company agreed to deliver to the Buyers from time to time on or before December 31, 2015, polished and GIA-graded diamonds of at least 0.4 carats having a certain aggregate Rappaport value. The Company agreed to pledge with third party collateral agents for the Buyers an aggregate of 16,000 shares of its common stock, valued at approximately $800,000 at the time the transaction was consummated, in order to secure the delivery of the diamonds. The number of shares pledged is subject to periodic adjustment as diamonds are delivered and as the market price of the Company's stock may change. As of December 31, 2014, the required reserve was 246,154 shares of common stock. On the date of the agreement, the Company reserved for the Buyers or their designees, an aggregate of 7,500 shares of the Company's common stock (the &#34;Shares&#34;) and two-year options to purchase an aggregate of 3,750 shares of Common Stock at an exercise price of $60.00 per share, payable in cash to the Company (the &#34;Options&#34;). The fair value of the options was $57,662 was calculated using the Black-Scholes option pricing model with the following assumptions: our stock price on date of grant ($45.00), expected dividend yield of 0%, expected volatility of 78%, risk-free interest rate of 0.11%, and an expected term of 2 years. The common stock issued was valued at $348,750 based upon the closing market price of the Company's common stock. Since the agreement contained various elements, the Company allocated the $47,544 to the options, $287,552 to the shares issued and $164,904 to deferred revenue based upon the relative fair market value. In July 2015, the Company extended these agreements until December 31, 2016. Under the new agreements, quarterly the Company is required to deliver diamonds with aggregate Rappaport values ranging from $10,000 to $20,000. If the diamonds are not delivered, then the customer has the option of converting the required value at 50% of market. Due to the variable conversion price, the Company is recording a derivative liability upon each tranche becoming convertible. As of December 31, 2015, total amounts convertible into common stock were $40,000. A total of 400,000 in collateral shares were issued for this contract.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 30, 2015, the diamond agreements described were exchanged for 668 shares of Series B Stock. Under the terms of the agreement, all obligations under the agreement to deliver diamonds and other guarantees were removed, including the derivative liability. On the date of the exchange the Company determined that the value of the Series B Stock was $1,113,333 based upon the number of common shares the Series B Stock is convertible into. The agreement relieved $543,630 in customer deposits, $182,300 in derivative liabilities less a remaining discount of $68,057, a total relief of $657,873. The Company recorded the excess value of the Series B Stock issued of $455,460 as a loss on extinguishment.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 8 - SUBSEQUENT EVENTS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to September 30, 2017 to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, except for the items below:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 23, 2017, an amendment of the charter of the Company filed with the Secretary of State of Nevada increased the number of authorized common shares to 250,000,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 24, 2017, Article III, Section 7 of the Bylaws of the Company were amended to clarify that all vacancies in the Board of Directors, other than a vacancy created by a removal of a director without cause, may be filled by the vote of the remaining directors, even if less than a quorum.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 24, 2017, Ambassador Paul Durand, the Company's Secretary and a director, resigned from both positions for health reasons.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Organization and Description of Business</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Brazil Minerals, Inc. (&#34;BMIX&#34; or the &#34;Company&#34;) was incorporated as Flux Technologies, Corp. under the laws of the State of Nevada, U.S. on December 15, 2011. The Company, through subsidiaries, mines and sells diamonds, gold, sand and mortar. The Company, through subsidiaries, outright or jointly owns 10 mining concessions and 28 other mineral rights in Brazil, for diamonds, gold, sand and manganese. The Company, through subsidiaries, owns one large fixed plant and one modular mobile plant for diamond and gold processing and recovery, a sand processing and mortar plant, trucks and earth-moving capital equipment used for mining.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Principles of Consolidation</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements include the accounts of the Company and its 99.99% owned subsidiary, BMIX Participa&#231;&#245;es Ltda. (&#34;BMIXP&#34;), which includes the accounts of BMIXP's wholly-owned subsidiary, Minera&#231;&#227;o Duas Barras Ltda. (&#34;MDB&#34;).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2014, BMIXP acquired an initial 25% interest in RST Recursos Minerais Ltda. (&#34;RST&#34;), and during the first quarter of 2015, it acquired an additional 25% interest in RST, thus bringing its total ownership of RST to 50%. As of March 18, 2015, RST has been consolidated within the Company's financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 17, 2015, BMIXP incorporated Hercules Resources Corporation (&#34;HRC&#34;). On May 27, 2015, HRC formalized title to 99.99% of Hercules Brasil Comercio e Transportes Ltda. (&#34;Hercules Brasil&#34;). Thus, Hercules Brasil is a wholly owned subsidiary and has been consolidated within the Company's consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 27, 2016, upon approval by its Board of Directors, the Company entered into a stock purchase and sale agreement pursuant to which HRC transferred its 99.99% equity interest in Minera&#231;&#227;o Jupiter Ltda (&#34;MJL&#34;) to the Company which immediately thereafter sold such equity interest to Jupiter Gold Corporation (&#34;JGC&#34;), a newly created company, in exchange for all of the common stock of JGC. On December 16, 2016, the Securities and Exchange Commission (&#34;SEC&#34;) declared effective a Registration Statement filed by JGC for the sale of shares in a public offering in the U.S. As of September 30, 2017, the Company has ownership of approximately 58% of the equity of JGC. As such, the accounts and results of JGC and MJL have been included in the Company's consolidated financial statements. See Note 2 for more information.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All material intercompany accounts and transactions have been eliminated in consolidation.</p> <p style="margin: 0pt"></p> <p style="font: 11pt/12.55pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify"><u>Going Concern</u></p> <p style="font: 11pt/12.55pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify">The consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has limited working capital, has incurred losses in each of the past two years, and has not yet received material revenues from sales of products or services. These factors create substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.</p> <p style="font: 11pt/12.55pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify">&#160;</p> <p style="font: 11pt/12.55pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify">The ability of the Company to continue as a going concern is dependent on the Company generating cash from its operations, the sale of its stock, and/or obtaining debt financing. During the nine months ended September 30, 2016, the Company funded operations through the receipt of proceeds from revenues, and the sale of equity and debt securities. Management's plan to fund its capital requirements and ongoing operations include an increase in cash received from sales primarily of gold derived from processing in a small, low operational cost gold plant its inventory of alluvial material and gravel already mined, as well as an increase in cash received from mortar and sand sales, all of which are expected to occur within the next two quarters. Management's secondary plan to cover any shortfall is selling its equity securities and obtaining debt financing. There can be no assurance the Company will be successful in these efforts.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Interim Consolidated Financial Statements</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these consolidated financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2016. The results of operations for the three and nine months ended September 30, 2017 are not indicative of the results that may be expected for the full year.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Basis of Presentation</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements of the Company have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles (&#34;GAAP&#34;) of the United States of America and are presented in U.S. dollars.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Use of Estimates</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 contingencies at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from those estimates.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Fair Value of Financial Instruments</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows the guidance of Accounting Standards Codification (&#34;ASC&#34;) Topic 820 &#8211; Fair Value Measurement and Disclosure. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of our Company. Unobservable inputs are inputs that reflect our Company's assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1. Observable inputs such as quoted prices in active markets;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2017 and December 31, 2016, the Company does not have any level 2 or 3 assets or liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company's financial instruments consist of cash and cash equivalents, accounts receivable, taxes recoverable, prepaid expenses, inventory, deposits and other assets, accounts payable, accrued expenses, deferred revenue and convertible notes payable. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Cash and Cash Equivalents</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent that the funds are not being held for investment purposes. The Company's bank accounts are deposited in FDIC insured institutions. Funds held in U.S. banks are insured up to $250,000 and funds held in Brazilian banks are insured up to $250,000 Brazilian reais (translating into approximately $78,900 as of September 30, 2017).</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Inventory</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory for the Company consists of diamonds, gold, ore stockpile, parts, supplies and related production costs and is stated at lower of cost or market. The amount of any write-down of inventories to net realizable value and all losses, are recognized in the period the write-down of loss occurs. At September 30, 2017 and December 31, 2016, inventory consisted primarily of rough ore stockpiled for further gold and diamonds recovery. No value was placed on sand.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Property and Equipment</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment are stated at cost. Major improvements and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statements of operations as other gain or loss, net.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The diamond and gold processing plants, vehicles, and other machinery are depreciated over an estimated useful life of 10 years; and computer and other office equipment over an estimated useful life of 3 years. Accumulated depreciation as of September 30, 2017 and December 31, 2016, was $333,985 and $271,208 respectively.</p> <p style="margin: 0pt"></p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Intangible Assets</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values, unless the values of neither the assets received nor the assets transferred are determinable within reasonable limits, in which case the assets received are measured based on the carrying values of the assets transferred. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Intangible assets consist of mineral rights awarded by the Brazilian national mining department (&#34;DNPM&#34;) and held by MDB, RST, BMIXP, and MJL.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Impairment of Long-Lived Assets</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For long-lived assets, such as property and equipment and intangible assets subject to amortization, the Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Revenue Recognition</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured. Typically, the Company records revenues upon delivery of the products to the customer. As of September 30, 2017 and December 31, 2016, the Company had deposits of $0 and $0, respectively, related to proceeds received for future diamond and gravel sales which have been recorded as customer deposits. See Note 4 and 6 for additional information related to these agreements.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Costs of Goods Sold</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Included within costs of goods sold are the costs of cutting and polishing rough diamonds and costs of production such as diesel fuel, labor, machine rentals, and transportation.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Stock-Based Compensation</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records stock-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation. ASC 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee's requisite service period. Under ASC 718, volatility is based on the historical volatility of our stock or the expected volatility of the stock of similar companies. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We use the Black-Scholes option-pricing model, which was developed for use in estimating the fair value of options. Option-pricing models require the input of highly complex and subjective variables including the expected life of options granted and the expected volatility of our stock price over a period equal to or greater than the expected life of the options. Because changes in the subjective assumptions can materially affect the estimated value of our employee stock options, it is management's opinion that the Black-Scholes option-pricing model may not provide an accurate measure of the fair value of our employee stock options. Although the fair value of employee stock options is determined in accordance with ASC Topic 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted a stock plan to attract, retain and motivate its directors, officers, employees, consultants and advisors. The Company's stock plan approved in 2013 provides for the issuance of up to 30,000 common shares for employees, consultants, directors, and advisors.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Foreign Currency</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company's Brazilian subsidiaries use the Brazilian Real, the currency of Brazil, as the functional currency. Resulting translation gains or losses are recognized as a component of accumulated other comprehensive income. Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations. Net foreign currency transaction losses included in the Company's consolidated statements of operations were negligible for all periods presented.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Income Taxes</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We account for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of September 30, 2017 and December 31, 2016, the Company's deferred tax assets had a full valuation allowance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Under ASC 740, a tax position is recognized as a benefit only if it is &#34;more likely than not&#34; that the tax position would be sustained in a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the &#34;more likely than not&#34; test, no tax benefit is recorded. The Company has identified the United States Federal tax returns as its &#34;major&#34; tax jurisdiction.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Basic Income (Loss) Per Share</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company computes loss per share in accordance with ASC Topic 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. As of September 30, 2017, the Company's potentially dilutive securities relate to common stock issuable in connection with convertible notes payable, options and warrants. As of September 30, 2017, if all holders of preferred stock, convertible notes payable, options and warrants exercised their right to convert their securities to common stock, the common stock issuable would be in excess of the Company's authorized, but unissued shares of common stock.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Other Comprehensive Income</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Other comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, other than net income and including foreign currency translation adjustments.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Recent Accounting Pronouncements</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2015, the FASB issued Accounting Standard Update (&#34;ASU&#34;) 2015-03, Simplifying the Presentation of Debt Issuance Costs. This update requires capitalized debt issuance costs to be classified as a reduction to the carrying value of debt rather than a deferred charge, as is currently required. This update is effective for the Company for all annual and interim periods beginning after December 15, 2015 and is required to be adopted retroactively for all periods presented. The Company adopted this ASU with no impact on the accompanying consolidated financial statements as the issuance costs were already accounted for as a reduction of the carrying value of the debt.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2014, the FASB issued Accounting Standards Update (&#34;ASU&#34;) No. 2014-15, &#34;Presentation of Financial Statements Going Concern&#34;, which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. The guidance is not expected to have a material impact on the Company's financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update simplify the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The guidance is not expected to have a material impact on the Company's financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU 2016-02, Leases (Topic 840), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a public entity. Early adoption of the amendments in this standard is permitted for all entities and the Company must recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently in the process of evaluating the effect this guidance will have on its financial statements and related disclosures.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have reviewed other recent accounting pronouncements issued to the date of the issuance of these consolidated financial statements, and we do not believe any of these pronouncements will have a material impact on the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="margin: 0pt"></p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Accounts Payable and Accrued Liabilities</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td colspan="3" style="text-align: center"><font style="font-size: 10pt">As of</font></td> <td nowrap="nowrap">&#160;</td> <td colspan="3" style="text-align: center"><font style="font-size: 10pt">As of</font></td> <td nowrap="nowrap">&#160;</td></tr> <tr style="vertical-align: bottom"> <td>&#160;</td> <td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2017</font></td> <td nowrap="nowrap">&#160;</td> <td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2016</font></td> <td nowrap="nowrap">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 78%"><font style="font-size: 10pt">Accounts payable and other accruals</font></td> <td style="width: 1%">&#160;</td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 8%; text-align: right"><font style="font-size: 10pt">158,294</font></td> <td nowrap="nowrap" style="width: 1%">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 8%; text-align: right"><font style="font-size: 10pt">162,976</font></td> <td nowrap="nowrap" style="width: 1%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Accrued interest</font></td> <td>&#160;</td> <td>&#160;</td> <td style="text-align: right"><font style="font-size: 10pt">245,666</font></td> <td nowrap="nowrap">&#160;</td> <td>&#160;</td> <td>&#160;</td> <td style="text-align: right"><font style="font-size: 10pt">170,439</font></td> <td nowrap="nowrap">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Total</font></td> <td>&#160;</td> <td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">403,960</font></td> <td nowrap="nowrap">&#160;</td> <td>&#160;</td> <td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">333,415</font></td> <td nowrap="nowrap">&#160;</td></tr> </table> <p style="margin: 0pt">&#160;</p> <p style="font: 11pt/12.55pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify">The following is a roll forward of amounts due to the Chief Executive Officer for the nine months ended September 30, 2016:</p> <p style="font: 11pt/12.55pt Times New Roman, Times, Serif; margin: 3pt 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 89%"><font style="font-size: 10pt">Balance at December 31, 2015</font></td> <td style="width: 1%">&#160;</td> <td style="width: 1%"><font style="font-size: 10pt">$</font></td> <td style="width: 8%; text-align: right"><font style="font-size: 10pt">160,214</font></td> <td nowrap="nowrap" style="width: 1%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Salary Accrual</font></td> <td>&#160;</td> <td>&#160;</td> <td style="text-align: right"><font style="font-size: 10pt">112,500</font></td> <td nowrap="nowrap">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">401(k) Contribution Accrual</font></td> <td>&#160;</td> <td>&#160;</td> <td style="text-align: right"><font style="font-size: 10pt">40,500</font></td> <td nowrap="nowrap">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td><font style="font-size: 10pt">Advances to the Company</font></td> <td>&#160;</td> <td>&#160;</td> <td style="text-align: right"><font style="font-size: 10pt">7,740</font></td> <td nowrap="nowrap">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Repayments</font></td> <td>&#160;</td> <td>&#160;</td> <td style="text-align: right"><font style="font-size: 10pt">(85,570</font></td> <td nowrap="nowrap"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Issuance of Common Stock</font></td> <td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: black 1.5pt solid">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(4,040</font></td> <td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><font style="font-size: 10pt">Balance at September 30, 2016&#160;</font></td> <td>&#160;</td> <td><font style="font-size: 10pt">$</font></td> <td style="text-align: right"><font style="font-size: 10pt">231,344</font></td> <td nowrap="nowrap">&#160;</td></tr> </table> 231344 160214 40500 7740 -85570 -4040 <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Value-Added Taxes Receivable</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records a receivable for value added taxes recoverable from Brazilian authorities on goods and services purchased by its Brazilian subsidiaries. The Company intends to recover the taxes through the acquisition of capital equipment from sellers who accept tax credits as payments. On April 20, 2016, the Company's taxes receivable decreased by $50,496 with the recovery of such amount being used in the acquisition of a Mercedes Benz truck, through a state government program.</p> <p style="margin: 0pt"></p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Mineral Properties</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Costs of exploration, carrying and retaining unproven mineral lease properties are normally expensed as incurred. Mineral property acquisition costs, including licenses and lease payments, are normally capitalized. Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company's rights. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. As of September 30, 2017 and December 31, 2016, the Company did not recognize any impairment losses related to mineral properties held.</p> <p style="margin: 0pt">&#160;</p> 250000000. 543630 182300 68057 657873 455460 40000 200000000 Black-Scholes option pricing model Black-Scholes option pricing model 57662 93280 1.00 0.09 0.09 0.0000 0.0000 0.7756 0.7756 0.0011 0.0011 P2Y P2Y 35158 40000 <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 5 &#8211; STOCKHOLDERS' DEFICIT</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Authorized and Amendments</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 21, 2016, the Company amended its Articles of Incorporation to increase the authorized number of shares of its common stock to 20 million shares. On August 23, 2016, the Company further amended its Articles of Incorporation to increase the authorized number of shares of its common stock to 25 million shares. On November 2, 2016, the Company further amended its Articles of Incorporation to increase the authorized number of shares of its common stock to 30 million shares. The Company filed a 1-for-500 reverse split with the state of Nevada on December 15, 2016, which became effective on January 27, 2017. On February 15, 2017, the Company further amended its Articles of Incorporation to increase the authorized number of shares of its common stock to 100 million shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2016, the Company had 30 million common shares authorized with a par value of $0.001 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2017, the Company had 100 million common shares authorized with a par value of $0.001 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Series A Preferred Stock</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 18, 2012, the Company filed with the Nevada Secretary of State a Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (&#34;Series A Stock&#34;) to designate one share of a new series of preferred stock. The Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock provides that for so long as Series A Stock is issued and outstanding, the holders of Series A Stock shall vote together as a single class with the holders of the Company's Common Stock, with the holders of Series A Stock being entitled to 51% of the total votes on all such matters regardless of the actual number of shares of Series A Stock then outstanding, and the holders of Common Stock are entitled to their proportional share of the remaining 49% of the total votes based on their respective voting power.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Series B Preferred Stock</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 26, 2015, the Company filed with the Nevada Secretary of State a Certificate of Designations, Preferences and Rights (the &#34;Certificate of Designations&#34;) of par value $0.001 Series B Convertible Preferred Stock (&#34;Series B Stock&#34;) to designate 1,000,000 shares of a new series of preferred stock. The Series B Stock has an original issue price of $1,000 per share. Cumulative dividends on such shares are payable annually (or upon conversion of such stock into Common Stock) in Common Stock at the rate of 10% per stated share value per annum. The holders of Series B Stock shall be entitled to vote on all matters as one class with the holders of Common Stock, with the holders of Series B Stock being entitled to such number of votes as shall equal the number of whole and fractional shares of Common Stock into which such share is then convertible. At any time until December 31, 2016 each holder of Series B Stock could have elected to convert all or a portion of the preference amount into shares of Common Stock at a conversion price which is a 40% discount to the average of the lowest 5 closing prices of the Common Stock in the 20-day period before a notice of conversion is given, but the conversion price would not have been higher than $15.00 nor lower than $0.0165. During the three months ended March 31, 2016, the Company accrued dividends of $27,450, recorded as interest expense. On December 31, 2016, all outstanding shares of Series B Stock automatically converted into Common Stock at the applicable conversion price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2015, the Company issued 273 shares of Series B Stock for $270,000 in cash proceeds. In addition, six shares of Series B Stock were issued to a placement agent.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As discussed in Note 4, during the year ended December 31, 2015, the Company issued 100 shares of Series B Stock in satisfaction of $100,000 in convertible notes payable. In connection with the exchange, the Company recorded other expense of $66,667 due to the Series B Stock having an estimated fair market value of $166,667 on the date of the exchange. The Company estimated the fair market value of the Series B Stock based upon the number of common shares it could be converted into.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">See Note 6 for discussion related to the exchange of customer deposits received in connection with the delivery of diamonds for 668 shares of Series B Stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2016, the Company issued 34.5 shares of Series B Stock for $55,500 in cash proceeds.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2016, the Company entered into an agreement with the holders of its Series B Preferred Stock whereby the holders exchanged 471.3 shares preferred stock for 785,248 shares of Jupiter Gold Corporation common stock and options to purchase common stock of Jupiter Gold. The options were issued in two tranches. The first tranche of 581,548 options are exercisable at $1.50 for a one-year period from issuance. The second tranche of 785,248 options are exercisable at $1.50 for a two-year period from issuance. The options were valued at $97,349 using the Black-Scholes option pricing model and the following assumptions: an exercise price of $1.50, a stock price of $1.00 on the date of grant, an expected dividend yield of 0%, an expected volatility of 40.0%, a risk-free interest rate of 0.56%-0.72% and an expected term of 1.0-2.0 years. As a result, a noncontrolling interest of $890,346 was recorded in the consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with the Certificate of Designations, the remainder Series B Preferred Stock were converted to common stock of the Company on December 31, 2016. As of December 31, 2016, there was no Series B Preferred Stock outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Series C Preferred Stock</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 29, 2015, the Company filed with the Nevada Secretary of State a Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock (&#34;Series C Stock&#34;) to designate 1,000,000 shares of a new series of preferred stock. The Series C Stock has an original issue price of $1,000 per share. Cumulative dividends on such shares are payable annually (or upon conversion of such stock into Common Stock) in Common Stock at the rate of $0.04 per share per annum. The holders of Series C Stock shall be entitled to vote on all matters as one class with the holders of Common Stock, with the holders of Series C Stock being entitled to such number of votes as shall equal the number of whole and fractional shares of Common Stock into which such share is then convertible. At any time until December 31, 2016 each holder of Series C Stock could have elected to convert all or a portion of the preference amount into shares of Common Stock at a conversion price which is the lower of $0.04 or the volume weighted average price of the Company's Common Stock for the 90 trading days before a notice of conversion with a floor of $0.02. On December 31, 2016, all outstanding shares of Series C Stock would automatically be converted into Common Stock at the applicable conversion price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 29, 2015, the Company issued 200,000 shares of Series C Stock in exchange for 2,000,000 shares of common stock in which had been previously sold for $80,000 in proceeds. In connection with the exchange, the Company recorded other expense of $170,000 due to the Series C Stock having an estimated fair market value of $250,000 on the date of the exchange. The Company estimated the fair market value of the Series C Stock based upon the number of common shares it could be converted into.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 30, 2016, the Company entered into an agreement with the holders of its Series C Preferred Stock whereby the holders exchanged all of the Preferred C Stock outstanding, namely 200,000 such shares, for 125,000 shares of Jupiter Gold Corporation common stock. As a result, a noncontrolling interest of $125,000 was recorded in the consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2016, there was no Series C Preferred Stock outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Nine Months Ended September 30, 2017 Transactions</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30, 2017, the Company issued 1,800,000 shares of common stock for cash proceeds of $21,834.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Nine Months Ended September 30, 2016 Transactions</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30, 2016, the Company issued 700,000 shares of common stock for cash proceeds of $21,000. In addition, the Company received cash deposits in 150,000 for the sale of common stock. At September 30, 2016, the Company recorded the amount as a current liability.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30, 2016, the Company issued 836,486 shares of common stock to its CEO in satisfaction of amounts payable. The shares were valued based upon the closing market price of the Company's common stock on the date the service was complete. In addition, the Company has agreed to issue additional shares of common stock if the effective price of a future common stock transaction decreases.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">See Note 4 for discussion of additional common stock issuances.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Common Stock Options</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2015, options to purchase 800,000 shares of common stock were issued in connection with $200,000 in convertible notes payable. See Note 4 for additional information. The options expire on January 30, 2018 and have an exercise price of $2.50 per share. The fair value of the options was $79,111, of which $22,423 was allocated to the options based upon the relative fair market value. The options were valued using the Black-Scholes option pricing model with the following assumptions: our stock price on date of grant ($1.20), expected dividend yield of 0%, expected volatility of 176%, risk-free interest rate of 1.70%, and an expected term of 3.00 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2015, the Company granted options to purchase an aggregate of 25,846 shares of common stock to non-management directors. The options were valued at $39,200 in total. The options were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price on date of grant ($0.90), expected dividend yield of 0%, expected volatility of 176%, risk-free interest rate of 1.70%, and an expected term of 5.00 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2016, the Company granted options to purchase an aggregate of 626,680 shares of common stock to non-management directors. The options were valued at $25,000 in total. The options were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price on date of grant ($0.05), expected dividend yield of 0%, historical volatility of 113%, risk-free interest rate of 1.13%, and an expected term of 5.00 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">No stock options were granted during the nine months ended September 30, 2017.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">See Note 6 discussion regarding options issued in connection with future diamond sales.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Common Stock Warrants</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2015, in connection with a common stock raise, the Company issued warrants to purchase an aggregate of 62,308 shares of the Company's common stock that expired on August 31, 2017 and had an exercise price of $0.50 per share. The value of the warrants was approximately $30,000 based upon Black-Scholes option pricing model. No entry was required as the warrants were issued in connection with raising capital and thus would have offset any proceeds received.</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 7 - RELATED PARTY TRANSACTIONS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Brazil Mining, Inc.</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Previously the Company had amounts due from Brazil Mining, Inc. (&#34;BMI&#34;), a related party through common management. The loans did not incur interest and were due on demand. During the year ended December 31, 2015, BMI transferred equipment with a carrying value of $44,854 to the Company as a partial offset to the amounts due. During December 2015, in satisfaction of the remaining receivable, BMI transferred the rights to two mineral right properties. At the time of the transfer, the Company's subsidiary RST retained a 50% ownership in these rights, thus, the value of the two mineral rights transferred is included within consolidation of RST. Thus, the Company recorded other expense of $93,580 during the year ended December 31, 2015 as the assets had already been reflected at their fair market value on the Company's financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Chief Executive Officer</u></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2017 and December 31, 2016, amounts payable to the Chief Executive Officer for accrued salaries, retirement contributions, and advances made net of any repayments included within related party payable were $462,678 and $310,259, respectively.</p> <p style="margin: 0pt">&#160;</p> 100000000 30000000 0.001 0.001 86181478 64752286 5183869 418242912 750897439 7409184 86181 64752 152500 24808 82350 92783 270000 1.50 1.50 97349 Black-Scholes option pricing model Black-Scholes option pricing model Black-Scholes option pricing model Black-Scholes option pricing model Black-Scholes option pricing model 1.00 0.00005 0.0018 0.0001 0.0033 0.0001 150000 125000 150000 79111 372878 2014-01-07 1428572 107858 29077 28264 203784 191391 1638250 1184095 7258 81185 78911 4479 260288 121572 415664 421927 648149 630089 1324101 1173588 403960 333415 567828 349030 462678 310259 1434466 992704 45327006 44690704 -454169 -489516 218656 218656 -46945727 -45823698 -1768052 -1339101 1453903 1328594 -314149 -10507 1324101 1173588 -1122029 -1039455 -494395 -444727 -90624 -24777 -74646 -38762 -1212653 -1064232 -569041 -483489 359582 324923 156161 249124 1538 226294 1493 226295 -277094 -199886 -124748 -82144 80950 91913 29920 -24555 -193170 -34760 -853071 -739309 -412880 -234365 769930 638837 394162 194656 164574 57568 164574 206627 146066 62278 50261 261108 287569 106948 92883 137621 147634 60362 51512 -83141 -100472 -18718 -39709 113528 112293 36651 47461 30387 11821 17933 7752 -0.02 -0.06 -0.01 -0.03 64816691 17259861 79414392 15489547 35347 40960 -1177306 -1064232 -528081 -483489 -90624 -24777 -74646 -38762 -1086682 -1039455 -453435 -444727 229426 -2964 37784 167741 57568 -1212653 -1064232 -569041 -483489 1586 20529 -1116 -16594 -4469 72977 182710 87500 104130 6874 -26732 37991 18492 -37991 -44544 64889 -28960 21834 188300 34500 212766 31000 415420 147500 79000 -79000 714909 372340 11776 37825 139279 -52355 49883 156250 733831 5800 405208 165343 82350 -549415 -417976 55521 60576 229426 158294 162976 245666 170439 403960 333415 930588 <p style="margin: 0pt"></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">Brazil Minerals, Inc. (the &#34;Company&#34;) is filing this Amendment&#160;No.&#160;1 on Form&#160;10-Q/A (this &#34;Amendment&#34;) to amend its Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, as originally filed with the Securities and Exchange Commission (the &#34;SEC&#34;) on November 24, 2017&#160;(the &#34;Original Form 10-Q&#34;).&#160; The purpose of this Amendment is to amend the Original Form 10-Q's XBRL exhibits to correct a technical problem.</p> <p style="margin: 0pt"></p> 66115 322584 EX-101.SCH 6 bmix-20170930.xsd XBRL TAXONOMY EXTENSION SCHEMA 00000001 - Document - Document And Entity Information link:presentationLink link:calculationLink link:definitionLink 00000002 - Statement - CONSOLIDATED BALANCE SHEETS link:presentationLink link:calculationLink link:definitionLink 00000003 - Statement - CONSOLIDATED BALANCE SHEETS (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 00000004 - Statement - CONSOLIDATED STATEMENTS OF OPERATIONS link:presentationLink link:calculationLink link:definitionLink 00000005 - Statement - CONSOLIDATED STATEMENTS OF CASH FLOWS link:presentationLink link:calculationLink link:definitionLink 00000006 - Disclosure - ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES link:presentationLink link:calculationLink link:definitionLink 00000007 - Disclosure - ACQUISITIONS link:presentationLink link:calculationLink link:definitionLink 00000008 - Disclosure - COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS link:presentationLink link:calculationLink link:definitionLink 00000009 - Disclosure - CONVERTIBLE PROMISSORY NOTES PAYABLE link:presentationLink link:calculationLink link:definitionLink 00000010 - Disclosure - STOCKHOLDERS' DEFICIT link:presentationLink link:calculationLink link:definitionLink 00000011 - Disclosure - COMMITMENTS AND CONTINGENCIES link:presentationLink link:calculationLink link:definitionLink 00000012 - Disclosure - RELATED PARTY TRANSACTIONS link:presentationLink link:calculationLink link:definitionLink 00000013 - Disclosure - SUBSEQUENT EVENTS link:presentationLink link:calculationLink link:definitionLink 00000014 - Disclosure - ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) link:presentationLink link:calculationLink link:definitionLink 00000015 - Disclosure - COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS (Tables) link:presentationLink link:calculationLink link:definitionLink 00000016 - Disclosure - RELATED PARTY TRANSACTIONS (Tables) link:presentationLink link:calculationLink link:definitionLink 00000017 - Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000018 - Disclosure - ACQUISITIONS (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000019 - Disclosure - COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS (Details) link:presentationLink link:calculationLink link:definitionLink 00000020 - Disclosure - COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000021 - Disclosure - CONVERTIBLE PROMISSORY NOTES PAYABLE (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000022 - Disclosure - STOCKHOLDERS' DEFICIT (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000023 - Disclosure - COMMITMENTS AND CONTINGENCIES (Details narrative) link:presentationLink link:calculationLink link:definitionLink 00000024 - Disclosure - RELATED PARTY TRANSACTIONS (Details) link:presentationLink link:calculationLink link:definitionLink 00000025 - Disclosure - RELATED PARTY TRANSACTIONS (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000026 - Disclosure - SUBSEQUENT EVENTS (Details narrative) link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 7 bmix-20170930_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE EX-101.DEF 8 bmix-20170930_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE EX-101.LAB 9 bmix-20170930_lab.xml XBRL TAXONOMY EXTENSION LABEL LINKBASE Related Party [Axis] BMIX Participacoes Ltd [Member] Brazilian Reais [Member] Property, Plant and Equipment, Type [Axis] Machinery and Equipment [Member] Other Capitalized Property Plant and Equipment [Member] Short-term Debt, Type [Axis] US Banks [Member] Brazilian Banks [Member] Two Hundred Forty-Four Thousand [Member] Convertable Promissory Note Payable [Member] Equity Components [Axis] Common Stock [Member] Derivative Instrument [Axis] Equity Option [Member] Range [Axis] Minimum [Member] Maximum [Member] Business Acquisition [Axis] RST Recursos Minerais Ltda [Member] Brazil Mining Inc [Member] Class of Stock [Axis] Series A Preferred Stock [Member] Series B Preferred Stock [Member] Series C Preferred Stock [Member] Title of Individual [Axis] Chief Executive Officer [Member] Consultants [Member] Document And Entity Information [Abstract] Entity Registrant Name Document Type Document Period End Date Amendment Flag Amendment Description Trading Symbol Entity Central Index Key Current Fiscal Year End Date Entity Common Stock, Shares Outstanding Entity Filer Category Entity Current Reporting Status Entity Voluntary Filers Entity Well-known Seasoned Issuer Document Fiscal Year Focus Document Fiscal Period Focus Statement [Table] Statement [Line Items] ASSETS Current Assets Cash and cash equivalents Taxes recoverable Prepaid expenses Inventory Deposits and advances Total Current Assets Capital Assets Property, plant & equipment, net of accumulated depreciation Other Assets Intangible assets, net Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accrued expenses and accounts payable Convertible notes payable, net of debt discounts totaling $292,611 and $137,113, respectively Related party payable Total current liabilities Long term liabilities Convertible notes payable -- noncurrent, net of debt discounts Other noncurrent liabilities Total Liabilities Stockholders' deficit: Series A preferred stock, $0.001 par value. 10,000,000 shares authorized; 1 share issued and outstanding Common stock, $0.001 par value. 100,000,000 and 30,000,000 shares authorized, respectively; 86,181,478 and 64,752,286 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively Additional paid-in-capital Accumulated other comprehensive loss Stock purchase warrants Accumulated deficit Total Brazil Minerals, Inc. stockholders' deficit Non-controlling interest Total stockholders' deficit Total liabilities and stockholders' deficit Debt Instrument, Unamortized Discount Debt discounts Preferred Stock, Par or Stated Value Per Share Preferred Stock, Shares Authorized Preferred Stock, Shares Issued Preferred Stock, Shares Outstanding Common Stock, Par or Stated Value Per Share Common Stock, Shares Authorized Common Stock, Shares, Issued Common Stock, Shares, Outstanding Consolidated Statements Of Operations Revenue Cost of revenue Gross margin Operating expenses: Professional fees General and administrative expenses Compensation and related costs Stock based compensation Total operating expenses Loss from operations Other expense (income): (Gain) loss on derivative liabilities Interest on promissory notes Amortization of debt discount and other fees Other expense (income) Total other expense (income) Loss before provision for income taxes Provision for income taxes Net loss Loss attributable to non-controlling interest Net loss attributable to Brazil Minerals, Inc. stockholders Net loss per share attributable to Brazil Minerals, Inc. common stockholders: Basic and diluted Weighted average number of shares outstanding: Basic and diluted Comprehensive loss: Foreign curreny translation adjustment Comprehensive loss Comprehensive loss attributable to noncontrolling interests Comprehensive loss attributable to Brazil Minerals, Inc. stockholders Consolidated Statements Of Cash Flows Cash flows from operating activities of continuing operations: Adjustments to reconcile net loss to cash used in operating activities: Stock based compensation and services Unrealized (gain) loss from change in derivative liabilities Amortization of debt discount Amortization of deferred financing costs Excess fair market value of common stock issued in satisfaction of liabilities Gain on exchange of preferred shares for common stock to noncontrolling interests of subsidiary company Loss on extinguishment of debt Depreciation and amortization Changes in operating assets and liabilities: Accounts receivable Taxes recoverable Prepaid expenses Inventory Deposits and advances Accounts payable and accrued expenses Accrued salary due to officer Other noncurrent liabilities Net cash provided by (used in) operating activities Cash flows from investing activities: Acquisition of capital assets Net cash provided by (used in) investing activities Cash flows from financing activities: Loan from officer Net proceeds from sale of common stock Proceeds from sale of preferred stock Proceeds from sale of subsidiary common stock to noncontrolling interests Proceeds from convertible notes payable Proceeds from loans payable Repayment of notes payable Net cash provided by (used in) financing activities Effect of exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and equivalents, beginning of period Cash and equivalents, end of period Supplemental disclosure of cash flow information: Cash paid for interest Cash paid for income taxes Supplemental disclosure of non-cash investing and financing activities: Acquisition of capital assets with taxes receivable Shares issued in connection with conversion of debt and accrued interest Conversion of notes payable and accrued interest into subsidiary common stock Conversion of Series B preferred stock into common stock of subsidiary company Deferred financing costs accrued in relation to the issuance of debt Discount for beneficial conversion features on convertible notes Dividends payable to Series B preferred shareholders Accounting Policies [Abstract] Significant Accounting Policies Notes to Financial Statements ACQUISITIONS COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS Convertible Promissory Note Payable [Abstract] Convertible Promissory Note Payable Common Stock Disclosure [Abstract] STOCKHOLDERS' EQUITY Commitments and Contingencies Disclosure [Abstract] Commitments and Contingencies Disclosure Related Party Transactions [Abstract] Related Party Transactions Disclosure Subsequent Events [Abstract] Subsequent Events Organization, Consolidation and Presentation of Financial Statements [Abstract] Organization and Description of Business Principles of Consolidation Going Concern Interim Consolidated Financial Statements Basis of Presentation Use of Estimates Fair Value of Financial Instruments Cash and Cash Equivalents Inventory Value-Added Taxes Receivable Property and Equipment Mineral Properties Intangible Assets Impairment of Long-Lived Assets Revenue Recognition Costs of Goods Sold Stock-Based Compensation Foreign Currency Income Taxes Basic Income (Loss) Per Share Other Comprehensive Income Recent Accounting Pronouncements Schedule of Accounts Payable and Accrued Liabilities Schedule of Related Party Transactions Related Party Transaction [Axis] Noncontrolling Interest, Ownership Percentage by Parent Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized Property, Plant and Equipment, Useful Life Cash, FDIC Insured Amount Cost of Goods Sold, Depreciation Interest-bearing Deposits in Banks and Other Financial Institutions Depreciation, Nonproduction Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period Accumulated depreciation property and equipment Deposits Sale of Stock, Number of Shares Issued in Transaction Fair value of Shares Issued in Transaction Business Acquisition, Additional Paid In Capital Monthly payments for acquisition Business Acquisition, cash paid Purpose of acquisition Accounts payable and other accruals Accrued interest Total Intangible assets Financial Instrument [Axis] Debt Instrument, Issuance Date Debt Instrument Aggregate Face Amount Debt Instrument, Face Amount Maturity date Class of Warrant or Right, Number of Securities Called by Warrants or Rights Debt Instrument, Interest Rate, Stated Percentage Debt Instrument Convertible Conversion Price Of Warrants Fair Value Measurements, Valuation Techniques Fair Value Assumptions, Expected Dividend Rate Fair Value Assumptions, Expected Volatility Rate Fair Value Assumptions, Risk Free Interest Rate Fair Value Assumptions, Expected Term Exercise price Stock price Amortization of Debt Discount (Premium) Debt Instrument, Convertible, Stock Price Trigger Debt Instrument, Convertible, Carrying Amount of Equity Component Convertible Debt, Fair Value Disclosures Debt Instrument, Call Feature Conversion Of Convertible Debt Shares Issued Conversion Of Convertible Debt Amount Issued Derivative liabilities Change in fair market value of the derivative liabilities Accrued dividends Loss on derivative liability Common Stock Shares Issued Common Stock Value Noncontrolling interest Receipt of cash from sale of common stock Common Stock Shares Authorised Common Stock, Par value Interest expense Dividends payable Sale proceed of Preffered Stock Stock Price Fair value of warrants Expected Life (years) Expected Volatility Expected dividend yield Risk-free interest rate Stock price on date of grant Warrants and Rights Outstanding Fair value of Options Amounts convertible into common Collateral shares issued Customer deposits Derivative liabilities Discount Total relief Loss on extinguishment Fair Value Fair Value Assumptions, Method Used Stock price Fair Value Assumptions, Expected Term Fair Value Assumptions, Expected Volatility Rate Fair Value Assumptions, Expected Dividend Rate Fair Value Assumptions, Risk Free Interest Rate Value convertible into common stock Increasement of collateral shares Balance at beginning Salary Accrual 401(k) Contribution Accrual Advances to the Company Repayments Issuance of Common Stock Balance at ending Common Stock, Value, Issued Due to Other Related Parties Value of equipment transferred Increase in number of authorized shares Acquisition of capital assets with taxes receivable. The entire policy disclosure for the basis of presentation. Bmix Participacoes Ltd. [Member] Brazilin Banks [Member] Brazil Mining Inc. [Member] :Business Acquisition TextBlock Collateral shares issued. Common stock disclosure abstract. COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS TEXT BLOCK The amount of cash issued in conversion of convertible debt. The value of the stock issued in the conversion of convertible debt. Conversion of notes payable and accrued interest into subsidiary common stock. Conversion of notes payable into preferred stock. Conversion of series b preferred stock into common stock of subsidiary company. Convertible Promissory Note Payable [Member] The entire disclosure about convertible promissory note payable. Debt discounts. The aggregate Face (par) amount of debt instrument at time of issuance. The price per warrant of the conversion feature embedded in the debt instrument. Deferred financing costs accrued in relation to issuance of debt Discount for beneficial conversion features on convertible notes. Dividends payable to series b preferred shareholders. Gain on exchange of preferred shares for common stock to noncontrolling interests of subsidiary company. Increasement of authorized shares. Increasement of collateral shares. Interest on promissory notes. Interim Consolidated Financial Statements Policy TextBlock Issuance of common stock during the period. Loss on derivative liability. Mineral properties policy text block. Proceeds from sale of preferred stock. Provision for income taxes. PurchaseOfEquipmentOffsetByRelatedPartyReceivable Purchase of equipment with note and customer deposits. Receipt of cash from sale of common stock. RST Recursos Minerais Ltda Member Sale proceed of preffered stock. Share Based Compensation And Services Stock price on date of grant. Two Hundred Forty Four Thousand Member US Banks [Member] Value added taxes receivable policy text block. Value of equipment transferred. Assets, Current Assets Liabilities, Current Liabilities Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest Liabilities and Equity Gross Profit Operating Expenses Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest Amortization of Debt Issuance Costs and Discounts Nonoperating Income (Expense) Increase (Decrease) in Income Taxes Receivable Increase (Decrease) in Prepaid Expense Increase (Decrease) in Inventories Increase (Decrease) in Deposits Increase (Decrease) in Other Noncurrent Liabilities Net Cash Provided by (Used in) Operating Activities Payments for Capital Improvements Net Cash Provided by (Used in) Investing Activities Cash and Cash Equivalents, Period Increase (Decrease) Inventory, Policy [Policy Text Block] Accounts Payable and Accrued Liabilities Derivative Liability Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate Due from Related Parties EX-101.PRE 10 bmix-20170930_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE XML 11 R1.htm IDEA: XBRL DOCUMENT v3.8.0.1
Document And Entity Information - shares
9 Months Ended
Sep. 30, 2017
Dec. 22, 2017
Document And Entity Information [Abstract]    
Entity Registrant Name Brazil Minerals, Inc.  
Document Type 10-Q/A  
Document Period End Date Sep. 30, 2017  
Amendment Flag true  
Amendment Description

Brazil Minerals, Inc. (the "Company") is filing this Amendment No. 1 on Form 10-Q/A (this "Amendment") to amend its Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, as originally filed with the Securities and Exchange Commission (the "SEC") on November 24, 2017 (the "Original Form 10-Q").  The purpose of this Amendment is to amend the Original Form 10-Q's XBRL exhibits to correct a technical problem.

 
Trading Symbol bmxi  
Entity Central Index Key 0001540684  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   98,347,944
Entity Filer Category Smaller Reporting Company  
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Entity Well-known Seasoned Issuer No  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q3  
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONSOLIDATED BALANCE SHEETS - USD ($)
Sep. 30, 2017
Dec. 31, 2016
Current Assets    
Cash and cash equivalents $ 145,547 $ 7,139
Taxes recoverable 29,077 28,264
Prepaid expenses 7,258
Inventory 81,185 78,911
Deposits and advances 4,479
Total Current Assets 260,288 121,572
Capital Assets    
Property, plant & equipment, net of accumulated depreciation 415,664 421,927
Other Assets    
Intangible assets, net 648,149 630,089
Total Assets 1,324,101 1,173,588
Current Liabilities    
Accrued expenses and accounts payable 403,960 333,415
Convertible notes payable, net of debt discounts totaling $292,611 and $137,113, respectively 567,828 349,030
Related party payable 462,678 310,259
Total current liabilities 1,434,466 992,704
Long term liabilities    
Convertible notes payable -- noncurrent, net of debt discounts
Other noncurrent liabilities 203,784 191,391
Total Liabilities 1,638,250 1,184,095
Stockholders' deficit:    
Series A preferred stock, $0.001 par value. 10,000,000 shares authorized; 1 share issued and outstanding 1 1
Common stock, $0.001 par value. 100,000,000 and 30,000,000 shares authorized, respectively; 86,181,478 and 64,752,286 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 86,181 64,752
Additional paid-in-capital 45,327,006 44,690,704
Accumulated other comprehensive loss (454,169) (489,516)
Stock purchase warrants 218,656 218,656
Accumulated deficit (46,945,727) (45,823,698)
Total Brazil Minerals, Inc. stockholders' deficit (1,768,052) (1,339,101)
Non-controlling interest 1,453,903 1,328,594
Total stockholders' deficit (314,149) (10,507)
Total liabilities and stockholders' deficit 1,324,101 1,173,588
Series A Preferred Stock [Member]    
Stockholders' deficit:    
Series A preferred stock, $0.001 par value. 10,000,000 shares authorized; 1 share issued and outstanding $ 1 $ 1
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
Sep. 30, 2017
Dec. 31, 2016
Debt discounts $ 292,611 $ 137,113
Preferred Stock, Par or Stated Value Per Share $ 0.001 $ 0.001
Preferred Stock, Shares Authorized 10,000,000 10,000,000
Preferred Stock, Shares Issued 1 1
Preferred Stock, Shares Outstanding 1 1
Common Stock, Par or Stated Value Per Share $ 0.001 $ 0.001
Common Stock, Shares Authorized 100,000,000 30,000,000
Common Stock, Shares, Issued 86,181,478 64,752,286
Common Stock, Shares, Outstanding 86,181,478 64,752,286
Series A Preferred Stock [Member]    
Preferred Stock, Par or Stated Value Per Share $ 0.001 $ 0.001
Preferred Stock, Shares Authorized 10,000,000 10,000,000
Preferred Stock, Shares Issued 1 1
Preferred Stock, Shares Outstanding 1 1
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.8.0.1
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Consolidated Statements Of Operations        
Revenue $ 17,933 $ 7,752 $ 30,387 $ 11,821
Cost of revenue 36,651 47,461 113,528 112,293
Gross margin (18,718) (39,709) (83,141) (100,472)
Operating expenses:        
Professional fees 60,362 51,512 137,621 147,634
General and administrative expenses 106,948 92,883 261,108 287,569
Compensation and related costs 62,278 50,261 206,627 146,066
Stock based compensation 164,574 164,574 57,568
Total operating expenses 394,162 194,656 769,930 638,837
Loss from operations (412,880) (234,365) (853,071) (739,309)
Other expense (income):        
(Gain) loss on derivative liabilities (34,760) (193,170)
Interest on promissory notes 29,920 (24,555) 80,950 91,913
Amortization of debt discount and other fees 124,748 82,144 277,094 199,886
Other expense (income) 1,493 226,295 1,538 226,294
Total other expense (income) 156,161 249,124 359,582 324,923
Loss before provision for income taxes (569,041) (483,489) (1,212,653) (1,064,232)
Provision for income taxes
Net loss (569,041) (483,489) (1,212,653) (1,064,232)
Loss attributable to non-controlling interest (74,646) (38,762) (90,624) (24,777)
Net loss attributable to Brazil Minerals, Inc. stockholders $ (494,395) $ (444,727) $ (1,122,029) $ (1,039,455)
Net loss per share attributable to Brazil Minerals, Inc. common stockholders: Basic and diluted $ (0.01) $ (0.03) $ (0.02) $ (0.06)
Weighted average number of shares outstanding: Basic and diluted 79,414,392 15,489,547 64,816,691 17,259,861
Comprehensive loss:        
Net loss $ (569,041) $ (483,489) $ (1,212,653) $ (1,064,232)
Foreign curreny translation adjustment 40,960 35,347
Comprehensive loss (528,081) (483,489) (1,177,306) (1,064,232)
Comprehensive loss attributable to noncontrolling interests (74,646) (38,762) (90,624) (24,777)
Comprehensive loss attributable to Brazil Minerals, Inc. stockholders $ (453,435) $ (444,727) $ (1,086,682) $ (1,039,455)