Atlas Lithium Corp 10-K/A

Item 9A. Controls and Procedures. (a) Evaluation of Disclosure Controls and Procedures The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of December 31, 2021. On the basis of that evaluation, management concluded that the Company’s disclosure controls and procedures are designed, and are effective, to provide reasonable assurance that the information required to be disclosed in reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Commission, and that such information is accumulated and communicated to management, including its Principal Executive Officer and Principal Financial Officer as appropriate, to allow timely decisions regarding required disclosure. (b) Management’s Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control system is designed to provide reasonable assurance to management and to the Company’s Board of Directors regarding the preparation and fair presentation of published financial statements. Under the supervision and with the participation of management, including the Company’s Principal Executive Officer and Principal Financial Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on management’s evaluation under the framework in Internal Control—Integrated Framework, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2021. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Since the Company is a non-accelerated filer, management’s report is not subject to attestation by the Company’s registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002. As a result, this Annual Report contains only management’s report on internal controls. (c) Changes in Internal Control over Financial Reporting There were no changes in the Company’s internal control over financial reporting that occurred in the fourth quarter of 2021 that materially affected, or would be reasonably likely to materially affect, the Company’s internal control over financial reporting. (d) Limitations of the Effectiveness of Internal Controls The effectiveness of the Company’s system of disclosure controls and procedures and internal control over financial reporting is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating the control system, the assumptions used in identifying the likelihood of future events, and the inability to eliminate fraud and misconduct completely. As a result, there can be no assurance that the Company’s disclosure controls and procedures and internal control over financial reporting will detect all errors or fraud. However, the Company’s control systems have been designed to provide reasonable assurance of achieving their objectives, and the Company’s Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures and internal control over financial reporting are effective at the reasonable assurance level. The Company has utilized the 1992 Committee of Sponsoring Organizations of the Treadway Commission’s internal control framework. Item 9B. Other Information. None. 31 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. The following table sets forth certain information as of the date of this Report, concerning our directors and executive officers: Name Age Position Marc Fogassa 55 Chairman, Chief Executive Officer Ambassador Robert Noriega 62 Independent Director, Member of the Audit Committee Cassiopeia Olson, Esq. 44 Independent Director, Member of the Audit Committee Stephen R. Petersen, CFA 65 Independent Director, Member of the Audit Committee Gustavo Pereira de Aguiar 39 Chief Financial Officer, Treasurer, Principal Accounting Officer Brian W. Bernier 63 Vice-President, Corporate Development and Investor Relations Joel de Paiva Monteiro, Esq. 31 Chief of Environmental, Social and Corporate Governance (ESG), Vice-President, Administration and Operations, and Secretary Volodymyr Myadzel, PhD, Geol. 46 Senior Vice-President, Geology Areli Nogueira da Silva Júnior, Geol. 41 Vice-President, Mineral Exploration Marc Fogassa , age 55, has been a director and our Chairman and Chief Executive Officer since 2012. He has extensive experience in venture capital and public company chief executive management. He has served on boards of directors of multiple private companies in various industries, and has been invited to speak about investment issues, particularly as related to Brazil. Mr. Fogassa double majored at the Massachusetts Institute of Technology (M.I.T.), graduating with two Bachelor of Science degrees in 1990. He later graduated from the Harvard Medical School with a Doctor of Medicine degree in 1995, and also from the Harvard Business School with a Master of Business Administration degree in 1999 with Second-Year Honors. At Harvard Business School, he was Co-President of the Venture Capital and Private Equity Club. Mr. Fogassa was born in Brazil and is fluent in Portuguese and English. Mr. Fogassa is also the Chairman and Chief Executive Officer of Jupiter Gold Corporation, and Chairman and Chief Executive Officer of Apollo Resources Corporation, two companies in which we own equity positions. Ambassador Roger Noriega , age 62, has been an independent director since 2012, and member of the Audit Committee of the Board of Directors since 2021. He has extensive experience in Latin America. Amb. Noriega was appointed by President George W. Bush and confirmed by the U.S. Senate as U.S. Assistant Secretary of State and served from 2003 to 2005. In that capacity, Amb. Noriega managed a 3,000-person team of professionals in Washington and in 50 diplomatic posts to design and implement political and economic strategies in Canada, Latin America, and the Caribbean. Prior to this assignment, Amb. Noriega served as U.S. Ambassador to the Organization of American States from 2001 to 2003. Since 2009, Amb. Noriega has been the Managing Director of Vision Americas, a Latin America-focused consulting group that he founded. Amb. Noriega has a Bachelor of Arts degree from Washburn University of Topeka, Kansas. Cassiopeia Olson, Esq. , age 44, has been an independent director since 2021, and member of the Audit Committee of the Board of Directors since 2021. She is an attorney with extensive experience in international contracts and venture negotiations. She has represented or engaged in transactions with leading companies, including Credit Suisse, UBS, Apollo Group, Universal Music Group, Sony, Chrysler/Jeep, Stella Artois, Miller Brewing Company, General Motors, McDonald’s, Verizon, among others. From 2013 to 2017, Ms. Olson was at Brighton Capital Ltd, and from 2017 to January, 2021, she was an attorney with Kaplowitz Firm, PC. Since February, 2021, Ms. Olson has been an attorney with Ellenoff Grossman & Schole LP. She received a B.A. in Economics and Finance from Loyola University in Chicago, and a J.D. from The John Marshall School of Law. Stephen R. Petersen, CFA , age 65, has been an independent director since 2021, and member of the Audit Committee of the Board of Directors since 202. Mr. Petersen over 40 years of experience in the capital markets and investment management. Since 2013, he has been a Managing Director and member of the Investment Committee at Prio Wealth, an independent investment management firm with over $3 billion in assets under management. Previously, Mr. Petersen served as Senior Vice President, Investments at Fidelity Investments for approximately 32 years. During his tenure at Fidelity, Mr. Petersen served as a Portfolio Manager and Group Leader of The Fidelity Management Trust Company and was responsible for managing several equity income and balanced mutual funds such as Fidelity Equity Income Fund (1993-2011), Fidelity Balanced Fund (1996-1997), Fidelity VIP Equity-Income Fund (1997-2011), Fidelity Puritan Fund (2000-2007), Fidelity Advisor Equity-Income Fund (2009-2011), and Fidelity Equity-Income II (2009-2011). He began his career at Fidelity as an Equity Analyst. Mr. Petersen received a B.B.A. in Finance and an M.S. in Finance from the University of Wisconsin-Madison. Mr. Petersen serves on the Board of the University of Wisconsin Foundation and Chairs its Investment Committee . He also is Co-Chair of the Executive Committee for the Catholic Schools Foundation Inner-City Scholarship Fund. Mr. Petersen is a Chartered Financial Analyst. 32 Table of Contents Gustavo Pereira de Aguiar, age 39, has been our Chief Financial Officer, Principal Accounting Officer, and Treasurer since 2022. From 2016 until 2022, Mr. Aguiar was the Controller of Jaguar Mining, Inc., a Canadian publicly traded company with two producing gold mines in the state of Minas Gerais in Brazil and current market capitalization of approximately $270 million. From 2013 to 2016, Mr. Aguiar was Controller at Grupo Orguel, an enterprise in the construction equipment rental sector in Brazil which received funding from Carlyle, a U.S. private equity group, and from 2010 to 2013, Mr. Aguiar worked at Mirabella Mineração , which at the time was developing its nickel project in the state of Bahia in Brazil. From 2006 to 2010, Mr. Aguiar was an auditor with Deloitte in Brazil. Mr. Aguiar has undergraduate degrees in Business Administration and in Accounting from Universidade FUMEC in Brazil. He has an executive MBA and further post-graduate education in finance from Funda ção Dom Cabral in Brazil. Mr. Aguiar is fluent in Portuguese and English and is a licensed accountant in Brazil. Brian W. Bernier , age 63, has been our Vice-President, Corporate Development and Investor Relations since 2019. From 2010 to 2017, Mr. Bernier was at Four Spring Capital Trust, and from 2017 to 2019, he was at Noble Capital Markets. Mr. Bernier graduated with a degree in Management from Boston University. Joel de Paiva Monteiro, Esq. , age 31, has our Vice-President, Administration and Operations, since 2020, and our Chief of Environmental, Social, and Corporate Governance (“ESG”) matters since 2021. Previously he was a partner of the Brazilian law firm PRA Advogados with three offices and headquarters in Belo Horizonte, state of Minas Gerais. Mr. Monteiro has worked with all aspects of Brazilian business law and has extensive experience in a wide range of areas from strategic business planning to litigation. His prior clients included large corporations in a variety of economic sectors in diverse states in Brazil. Mr. Monteiro has a law degree from the Milton Campos Faculty in Belo Horizonte, Brazil. Subsequently he achieved a post-graduate degree in Business and Civil Law from the Pontifical Catholic University of Minas Gerais. Mr. Monteiro is also a director of Jupiter Gold Corporation and of Apollo Resources Corporation, two companies in which we own equity positions. Volodymyr Myadzel, PhD, Geol. , age 46, has been a consultant to us since 2021 and became our Senior Vice-President, Geology, in 2022. Under Regulation S-K 1300, he is a Qualified Person for lithium, iron, and gold, among other minerals. Mr. Myadzel is a geologist with over 23 years’ experience acquired in mines and projects in Russia, Ukraine, Guinea, Uruguay, and Brazil in a variety of minerals including lithium, iron, and gold. His primary expertise entails geological modeling, resource estimation, and QA/QC analysis. Mr. Myadzel has extensive experience in auditing mineral projects on behalf of investors or acquiring companies. He is a principal at VMG Consultoria e Soluções Ltda, a company that has provided geological expertise to large global companies with mines and projects in Brazil. Mr. Myadzel received Bachelor and Master degrees in Geological Engineering and a PhD degree in Geology, all from Kryvyi Rih National University in Ukraine. Areli Nogueira da Silva Júnior, Geol. , age 41, has been a consultant to us since 2018 and became our Vice-President, Mineral Exploration, in 2021. Under Regulation S-K 1300, he is a Qualified Person for lithium, iron, and gold, He is the Founder and was the Chief Technical Officer of MineXplore, a consultancy focused on mineral rights in Brazil. Mr. da Silva Júnior has been a consultant geologist with GeoEspinha ç o, a firm that undertakes geological studies in a variety of minerals across Brazil. Mr. da Silva Júnior has also been a college faculty member teaching geology. Previously, he worked at the Brazilian mining department and before that as a geologist at Usiminas Minera ç ão. Mr. da Silva Júnior has a Master of Geology degree from the Federal University of Rio de Janeiro, and an undergraduate degree in Geological Engineering from the School of Mines of the Federal University of Ouro Preto, the oldest mining college in Brazil. Mr. da Silva is also a director of Jupiter Gold Corporation, a company in which we own an equity position. Board Composition Our Board of Directors is composed of four members, Ambassador Roger Noriega, Cassiopeia Olson, Esq., Stephen R. Petersen, CFA, and Marc Fogassa. There are no family relationships among our directors and executive officers. There is no arrangement or understanding between or among our executive officers and directors pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan, or understanding as to whether non-management shareholders will exercise their voting rights to continue to elect the current board of directors. Our directors and executive officers have not, during the past ten years: ● had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time, ● been convicted in a criminal proceeding and is not subject to a pending criminal proceeding, ● been subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently, or temporarily enjoining, barring, suspending, or otherwise limiting his involvement in any type of business, securities, futures, commodities, or banking activities; or ● been found by a court of competent jurisdiction (in a civil action), the Securities Exchange Commission, or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. 33 Table of Contents Director Independence Our Board of Directors has determined that Ambassador Roger Noriega, Cassiopeia Olson, Esq., and Stephen R. Petersen, CFA are independent directors within the meaning of Nasdaq Listing Rule 5605(a)(2). Audit Committee Financial Expert Our director Mr. Stephen R. Petersen, CFA, is an independent member of our Audit Committee who qualifies as an “audit committee financial expert” as defined in Item 407(e)(5) of Regulation S-K. Code of Ethics We have a code of ethics that applies to all of our directors, officers, and employees, including our principal executive officer, principal financial officer, and principal accounting officer. Item 11. Executive Compensation. Management Compensation The following table sets forth information concerning cash and non-cash compensation paid by us to our chief executive officer for each of the two years ended December 31, 2020, and 2021. No employee or independent contractor received compensation in excess of $100,000 for either of those two years. Name and Principal Position Year Ended Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) (1) Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Marc Fogassa, Chairman and 12/31/2021 — — — 901,940 — — — 901,940 Chief Executive Officer 12/31/2020 37,500 — — — — — — 37,500 (1) The amounts in this column reflect the aggregate grant date fair value of stock options granted in 2021 to our Chief Executive Officer calculated in accordance with FASB ASC Topic 718. Please see Note 7 to the consolidated financial statements for the year ended December 31, 2020 contained in this Report for the assumptions used in the calculation of grant date fair value pursuant to FASB ASC Topic 718. On January 7, 2021, we filed a Current Report on Form 8-K indicating that on December 31, 2020, our Board approved an amendment and restatement of the employment agreement between the Company and Marc Fogassa, its chief executive officer. The material changes in the agreement are as follows. Under the prior agreement, Mr. Fogassa had the right to receive an annual cash salary of $250,000 per annum. Under the amended and restated agreement, Mr. Fogassa will not receive any cash as salary. Instead, he will be granted each month ten-year non-qualified stock options to purchase up to 25 million shares of our common stock at an exercise price equal to $0.00001 per share, such price and shares being subject to customary adjustments for any dividends, etc. If and when such options are exercised, the stock to be received will be restricted by the provisions of Rule 144, which currently limits any sales of affiliates with respect to the Company to 1% of the total outstanding shares per every 90-day period. In addition, the amended and restated agreement contains a provision which states that, if there is growth of our shareholder equity or book value above a high-water mark, calculated one time per year, then and only then Mr. Fogassa will receive a performance bonus payable half in cash and half in our common stock. The amended and restated employment agreement between Mr. Fogassa and the Company is filed as an exhibit to this Report. On September 17, 2021, we filed a Current Report on Form 8-K indicating that on September 15, 2021, our Board approved resolutions that allow directors the choice to direct the option compensation described in the Board resolutions dated December 31, 2020 (the “2020 Resolutions”, reported in the Form 8-K filed with the Securities and Exchange Commission on January 7, 2021) to either options to purchase Common Stock as originally described in the 2020 Resolutions or to an equivalent number of options to purchase Series D Convertible Preferred Stock. 34 Table of Contents Director Compensation The following table sets forth a summary of compensation for the fiscal year ended December 31, 2021, that we paid to each director other than its Chief Executive Officer, whose compensation is fully reflected in the compensation table above. We do not sponsor a pension benefits plan, a non-qualified deferred compensation plan, or a non-equity incentive plan for directors; therefore, these columns have been omitted from the following table. No other or additional compensation for services were paid to any of the directors. Name Fees Earned or Paid in Cash ($) Option Awards ($) (1) Stock Awards ($) Total ($) Ambassador Roger Noriega — 160,276 160,276 Cassi Olson, Esq. 1,000 16,762 17,772 Stephen Petersen, CFA 500 26,691 27,191 (1) The amounts in this column reflect the aggregate grant date fair value of stock options granted in 2021 to each director calculated in accordance with FASB ASC Topic 718. Please see Note 7 to the consolidated financial statements for the year ended December 31, 2020 contained in this Report for the assumptions used in the calculation of grant date fair value pursuant to FASB ASC Topic 718. On December 31, 2020, our Board of Directors approved an amendment and restatement of the compensation agreement between the Company and Ambassador Roger Noriega, its independent director. The material change in the agreement is as follows. Under the prior agreement, Ambassador had the right to receive an annual compensation of $50,000 payable quarterly through the issuance of such number of five-year options on our common stock as needed to make their Black-Scholes aggregate valuation equal to $12,500; such options had a strike price equal to the average market price of the common stock during such quarter. Under the amended and restated agreement, Ambassador Noriega will receive, on a quarterly basis, ten-year non-qualified stock options to purchase up to 15 million shares of our common stock at an exercise price equal to $0.00001 per share, such price and shares being subject to customary adjustments for any dividends, etc. If and when such options are exercised, the stock to be received will be restricted by the provisions of Rule 144, which currently limits any sales of affiliates with respect to the Company to 1% of the total outstanding shares per every 90-day period. On September 17, 2021, we filed a Current Report on Form 8-K indicating that on September 15, 2021, our Board approved resolutions that allow directors the choice to direct the option compensation described in the Board resolutions dated December 31, 2020 (the “2020 Resolutions”, reported in the Form 8-K filed with the Securities and Exchange Commission on January 7, 2021) to either options to purchase Common Stock as originally described in the 2020 Resolutions or to an equivalent number of options to purchase Series D Convertible Preferred Stock. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following information tables prepared in accordance with Section 13d-3 of the Securities Exchange Act of 1934, as amended, for the determination of beneficial owner set forth certain information regarding our Common Stock owned as of the date of this Report, by: (i) each person who is known by us to own beneficially more than 5% of its outstanding Common Stock; (ii) each director and officer; and (iii) all officers and directors as a group. 35 Table of Contents Name and Address (1) Office Shares Owned Percent of Class (2) Common Stock Marc Fogassa Chief Executive Officer and Chairman 2,704,799,053 (3) 48.36 % Ambassador Roger Noriega Director 172,578,096 (4) 5.37 % Cassiopeia Olson, Esq. Director 2,000,000 (5) 0.06 % Stephen Petersen, CFA Director 2,000,000 (5) 0.06 % Gustavo Pereira de Aguiar Chief Financial Officer, Principal Accounting Officer, and Treasurer 0 0.0 % Brian W. Bernier Vice-President, Corporate Development 29,960,723 0.95 % Joel Monteiro, Esq. Chief of Environmental, Social and Corporate Governance (ESG), Vice-President, Administration and Operations, and Secretary 9,290,151 0.29 % Volodymyr Myadzel, PhD, Geol. Senior Vice-President, Geology 0 0.0 % Areli Nogueira, Geol. Vice-President, Mineral Exploration 2,779,627 0.09 % All executive officers and directors (9 people) 2,922,112,008 51.64 % (1) The mailing address of each of the officers and directors as set forth above is c/o Brazil Minerals, Inc., 433 North Camden Drive, Suite 810, Beverly Hills, CA 90212. (2) As of January 21, 2022, 3,153,007,115 shares of our common stock were issued and outstanding. (3) Includes 79,198,982 shares of our common stock owned by entities controlled by Marc Fogassa and 2,440,060,001 shares of our common stock which may be issued upon the conversion of Series A Preferred Stock and Series D Preferred Stock into common stock. (4) Includes 2,140,060,000 shares of our common stock which may be issued upon the conversion of Series D Preferred Stock into common stock. (5) Includes 4,000,000 shares of our common stock which may be issued upon the exercise of stock options on common stock. 36 Table of Contents Item 13. Certain Relationships and Related Transactions, and Director Independence. Director Independence We believe that Ambassador Roger Noriega, Cassiopeia Olson, Esq, and Stephen Petersen, CFA, are “independent” as such term is defined with respect to directors by the NASDAQ Stock Market Rules. Item 14. Principal Accounting Fees and Services. Audit Fees In December 2021, the Company engaged BF Borgers CPA PC (“Borgers”) as the Company’s independent registered public accounting firm for the audit of the Company’s financial statements as of December 31, 2021. Borgers was also retained as the Company’s independent registered public accounting firm for the audit of the Company’s financial statements as of December 31, 2020. The fee that was billed by Borgers for the audit of our financial statements as of December 31, 2020 and for quarterly reviews during such year was $44,820. The Company expects that the total fees payable to Borgers for the audit of the Company’s financial statements and for quarterly reviews during the year ended December 31, 2021 will be $44,820. Audit-Related Fees During 2020 or 2021, there were no fees paid to Borgers in connection with our compliance with Section 404 of the Sarbanes-Oxley Act of 2002. No other fees were billed by Borgers for the last two years that were reasonably related to the performance of the audit or review of our financial statements and not reported under “Audit Fees” above. Tax Fees There were no fees billed by Borgers during the last two fiscal years for professional services rendered for tax compliance, tax advice, or tax planning. Accordingly, none of such services were approved pursuant to pre-approval procedures or permitted waivers thereof. All Other Fees There were no other non-audit-related fees billed to us by Borgers in 2020 or 2021. Pre-Approval Policies and Procedures Engagement of accounting services by us is not made pursuant to any pre-approval policies and procedures. Rather, we believe that our accounting firm is independent because all of its engagements by us are approved by the Audit Committee of our Board of Directors prior to any such engagement. Our Audit Committee will meet periodically to review and approve the scope of the services to be provided to us by its independent registered public accounting firm, as well as to review and discuss any issues that may arise during an engagement. The Audit Committee is responsible for the prior approval of every engagement of our independent registered public accounting firm to perform audit and permissible non-audit services for us, such as quarterly financial reviews, tax matters, and consultation on new accounting and disclosure standards. Before the auditors are engaged to provide those services, our Chief Financial Officer will make a recommendation to the Audit Committee regarding each of the services to be performed, including the fees to be charged for such services. At the request of the Audit Committee, the independent registered public accounting firm and/or management shall periodically report to the Audit Committee regarding the extent of services being provided by the independent registered public accounting firm, and the fees for the services performed to date. 37 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules (a) Documents filed as part of this report. (i) Financial Statements - see Item 8. Financial Statements and Supplementary Data (ii) Financial Statement Schedules – None (Financial statement schedules have been omitted either because they are not applicable, not required, or the information required to be set forth therein is included in the financial statements or notes thereto.) (iii) Report of Independent Registered Public Accounting Firm. (iv) Notes to Financial Statements. (b) Exhibits The exhibits listed on the accompanying Exhibit Index are filed as part of this Annual Report. 38 Table of Contents BRAZIL MINERALS, INC. TABLE OF CONTENTS DECEMBER 31, 2021 Report of Independent Registered Public Accounting Firm (PCAOB ID: 5041 ) F-1 Consolidated Balance Sheets as of December 31, 2021 and 2020 F-2 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2021 and 2020 F-3 Consolidated Statement of Stockholders’ Deficit F-4 Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020 F-5 Notes to the Consolidated Financial Statements F-6 39 Table of Contents Report of Independent Registered Public Accounting Firm To the shareholders and the board of directors of Brazil Minerals, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Brazil Minerals, Inc. as of December 31, 2021 and 2020, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matter Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /S/ BF Borgers CPA PC We have served as the Company’s auditor since 2015 Lakewood, CO March 25, 2022 F- 1 Table of Contents BRAZIL MINERALS, INC. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2021 AND 2020 December 31, December 31, 2021 2020 ASSETS Current assets: Cash and cash equivalents $ 22,776 $ 253,598 Accounts receivable 1,401 20,106 Taxes recoverable 16,507 17,726 Inventory - 11,676 Deposits and advances 17,246 2,039 Total current assets 57,930 305,145 Property and equipment, net 53,827 89,276 Intangible assets, net 1,302,440 407,467 Equity investments 150,000 150,000 Total assets $ 1,564,197 $ 951,888 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable and accrued expenses $ 988,238 $ 652,119 Convertible notes payable - 872,720 Loans payable - 235,308 Related party notes and other payables 10,167 566,743 Total current liabilities 998,405 2,326,890 Other noncurrent liabilities 108,926 121,250 Total liabilities 1,107,331 2,448,140 Stockholders’ deficit: Series A preferred stock, $ 0.001 par value. 10,000,000 shares authorized; 1 share issued and outstanding as of December 31, 2021 and December 31, 2020, respectively 1 1 Series D preferred stock, $ 0.001 par value. 1,000,000 shares authorized; 214,006 and 0 shares as of December 31, 2021 and December 31, 2020, respectively 214 - Preferred stock value - - Common stock, $ 0.001 par value. 3,250,000,000 shares authorized; 3,109,178,852 and 1,997,930,297 shares as of December 31, 2021 and December 31, 2020, respectively 3,109,179 1,997,930 Additional paid-in capital 51,466,376 47,489,116 Accumulated other comprehensive loss ( 712,810 ) ( 775,113 ) Accumulated deficit ( 54,957,429 ) ( 52,185,071 ) Total Brazil Minerals, Inc. stockholders’ deficit ( 1,094,469 ) ( 3,473,137 ) Non-controlling interest 1,551,335 1,976,885 Total stockholders’ equity (deficit) 456,866 ( 1,496,252 ) Total liabilities and stockholders’ deficit $ 1,564,197 $ 951,888 The accompanying notes are an integral part of the consolidated financial statements. F- 2 Table of Contents BRAZIL MINERALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 Years ended December 31 2021 2020 Revenue $ 10,232 $ 23,446 Cost of revenue 245,810 129,943 Gross loss ( 235,578 ) ( 106,497 ) Operating expenses Professional fees 259,547 170,071 General and administrative 1,114,061 551,584 Compensation and related costs 436,560 329,044 Stock based compensation 1,470,346 124,357 Total operating expenses 3,280,514 1,175,056 Loss from operations ( 3,516,092 ) ( 1,281,553 ) Other expense (income) Interest on promissory notes 240,760 178,043 Amortization of debt discounts and other fees 12,839 249,270 Extinguishment of debt 255,991 - Forgiveness of accrued interest payable on note payable - ( 238,151 ) Loss on share exchange agreement with related party - 76,926 Other expense (income) ( 217 ) ( 1,606 ) Total other expense 509,373 264,482 Loss before provision for income taxes ( 4,025,465 ) ( 1,546,035 ) Provision for income taxes - - Net loss ( 4,025,465 ) ( 1,546,035 ) Loss attributable to non-controlling interest ( 1,253,107 ) ( 404,372 ) Net loss attributable to Brazil Minerals, Inc. stockholders $ ( 2,772,358 ) $ ( 1,141,663 ) Basic and diluted loss per share Net loss per share attributable to Brazil Minerals, Inc. common stockholders $ - $ - Weighted-average number of common shares outstanding: Basic and diluted 2,767,248,003 1,271,251,526 Comprehensive loss: Net loss $ ( 4,025,465 ) $ ( 1,546,035 ) Foreign currency translation adjustment 56,815 ( 134,914 ) Comprehensive loss ( 3,968,650 ) ( 1,680,949 ) Comprehensive loss attributable to noncontrolling interests ( 1,258,595 ) ( 345,130 ) Comprehensive loss attributable to Brazil Minerals, Inc. stockholders $ ( 2,710,055 ) $ ( 1,335,819 ) The accompanying notes are an integral part of the consolidated financial statements. F- 3 Table of Contents BRAZIL MINERALS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 Series A Preferred Stock Series B Preferred Stock Series C Preferred Stock Series D Preferred Stock Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Noncontrolling Total Stockholders’ Equity Shares Value Shares Value Shares Value Shares Value Shares Value Capital Loss Deficit Interests (Deficit) Balance, December 31, 2019 1 $ 1 - $ - - $ - - $ - 1,132,435,380 $ 1,132,435 $ 47,724,570 $ ( 580,957 ) $ ( 51,043,408 ) $ 1,446,715 $ ( 1,320,644 ) Conversion of related party convertible notes and other indebtedness into Series D preferred stock Conversion of related party convertible notes and other indebtedness into Series D preferred stock, shares Issuance of common stock in connection with sales made under private offerings - - - - - - - - 420,000,000 420,000 ( 100,000 ) - - - 320,000 Issuance of common stock in connection with the exercise of common stock options - - - - - - - - 161,636,427 161,636 ( 161,636 ) - - - - Issuance of common stock in exchange for consulting, professional and other services - - - - - - - - 32,565,515 32,566 11,092 - - - 43,658 Issuance of common stock warrants in connection with the issuance of convertible debenture(s) Issuance of common stock in connection with share exchange agreement with related party - - - - - - - - 53,947,368 53,947 22,979 - - - 76,926 Issuance of common stock to related parties in lieu of cash for loans payable and other accrued obligations - - - - - - - - 200,000 200 80 - - - 280 Conversion of convertible debenture (s) and other indebtedness into common stock - - - - - - - - 397,145,607 397,146 ( 232,326 ) - - - 164,820 Exchange of common stock for Jupiter Gold common stock - - - - - - - - ( 200,000,000 ) ( 200,000 ) 100,000 - - 100,000 - Stock based compensation - - - - - - - - - - 124,357 - - - 124,357 Change in foreign currency translation - - - - - - - - - - - ( 194,156 ) - 59,242 ( 134,914 ) Sale of Jupiter Gold common stock in connection with equity offerings - - - - - - - - - - - - - 525,000 525,000 Sale of Apollo Resources common stock in connection with equity offerings - - - - - - - - - - - - - 250,300 250,300 Net loss - - - - - - - - - - - - ( 1,141,663 ) ( 404,372 ) ( 1,546,035 ) Balance, December 31, 2020 1 $ 1 - $ - - $ - - $ - 1,997,930,297 $ 1,997,930 $ 47,489,116 $ ( 775,113 ) $ ( 52,185,071 ) $ 1,976,885 $ ( 1,496,252 ) Conversion of related party convertible notes and other indebtedness into Series D preferred stock - - - - - - 214,006 214 - - 641,804 - - - 642,018 Issuance of common stock in connection with sales made under private offerings - - - - - - - - 174,019,679 174,020 766,989 - - - 941,009 Issuance of common stock in connection with the exercise of common stock options - - - - - - - - 396,917,702 396,917 ( 246,917 ) - - 70,700 220,700 Issuance of common stock in exchange for consulting, professional and other services - - - - - - - - 16,600,539 16,601 148,934 - - 31,845 197,380 Issuance of common stock warrants in connection with the issuance of convertible debenture(s) - - - - - - - - - - 356,827 - - - 356,827 Conversion of convertible debenture(s) and other indebtedness into common stock - - - - - - - - 523,710,635 523,711 839,277 - - - 1,362,988 Stock based compensation - - - - - - - - - - 1,470,346 - - - 1,470,346 Change in foreign currency translation - - - - - - - - - - - 62,303 - ( 5,488 ) 56,815 Sale of Jupiter Gold common stock in connection with equity offerings - - - - - - - - - - - - - 118,000 118,000 Sale of Apollo Resources common stock in connection with equity offerings - - - - - - - - - - - - - 612,500 612,500 Net loss - - - - - - - - - - - - ( 2,772,358 ) ( 1,253,107 ) ( 4,025,465 ) Balance, December 31, 2021 1 $ 1 - $ - - $ - 214,006 $ 214 3,109,178,852 $ 3,109,179 $ 51,466,376 $ ( 712,810 ) $ ( 54,957,429 ) $ 1,551,335 $ 456,866 The accompanying notes are an integral part of the consolidated financial statements. F- 4 Table of Contents BRAZIL MINERALS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 Years ended December 31 2021 2020 Cash flows from operating activities of continuing operations: Net loss $ ( 4,025,465 ) $ ( 1,546,035 ) Adjustments to reconcile net loss to cash used in operating activities: Stock based compensation and services 1,653,738 168,015 Forgiveness of accrued interest payable on note payable - ( 238,151 ) Amortization of debt discounts 44,019 249,270 Common stock issued in satisfaction of other financing costs 91,996 - Convertible debt issued in satisfaction of other financing costs 35,551 22,314 Preferred stock issued in satisfaction of interest and other financing costs 75,276 - Loss on share exchange agreement with related party - 76,926 Loss on extinguishment of debt 255,992 - Depreciation and amortization 37,328 47,765 Provision for excess or obsolete inventory 11,246 - Changes in operating assets and liabilities: Accounts receivable 17,917 ( 30,432 ) Deposits and advances ( 15,873 ) 1,698 Intangible assets ( 672,601 ) - Accounts payable and accrued expenses 720,717 84,776 Accrued salary due to officer - 195,786 Other noncurrent liabilities ( 4,122 ) ( 28,713 ) Net cash used in operating activities ( 1,774,281 ) ( 996,781 ) Cash flows from investing activities: Acquisition of capital assets ( 6,856 ) ( 1,902 ) Increase in intangible assets ( 281,905 ) ( 11,741 ) Net cash used in investing activities ( 288,761 ) ( 13,643 ) Cash flows from financing activities: Loan from (to) officer 24,488 ( 16,931 ) Net proceeds from sale of common stock 1,074,558 320,000 Proceeds from sale of subsidiary common stock to noncontrolling interests 801,200 775,300 Proceeds from convertible notes payable 125,000 - Proceeds from loans payable - 26,180 Repayment of loans payable ( 235,308 ) - Net cash provided by financing activities 1,789,938 1,104,549 Effect of exchange rates on cash and cash equivalents 42,282 8,385 Net increase (decrease) in cash and cash equivalents ( 230,822 ) 102,510 Cash and cash equivalents at beginning of period 253,598 151,088 Cash and cash equivalents at end of period $ 22,776 $ 253,598 Supplemental disclosure of non-cash investing and financing activities: Related party convertible note payable exchanged for stock $ 566,743 $ - Shares issued in connection with conversion of debt and accrued interest $ 1,362,245 $ 164,820 Shares issued in connection with relief of related party payable $ - $ 280 Common stock warrants issued in connection with convertible promissory notes $ 40,019 $ - The accompanying notes are an integral part of the consolidated financial statements. F- 5 Table of Contents BRAZIL MINERALS, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of Business Brazil Minerals, Inc. (“Brazil Minerals” or the “Company”) was incorporated as Flux Technologies, Corp. under the laws of the State of Nevada, U.S. on December 15, 2011. The Company changed its management and business on December 18, 2012, to focus on mineral exploration. Brazil Minerals, through subsidiaries, owns mineral rights in Brazil for gold, diamonds, lithium, rare earths, titanium, iron, nickel, and sand. Basis of Presentation and Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are expressed in United States dollars. For the years ended December 31, 2021 and 2020, the consolidated financial statements include the accounts of the Company; its 99.99 % owned subsidiary, BMIX Participações Ltda. (“BMIXP”), which includes the accounts of BMIXP’s wholly-owned subsidiary, Mineração Duas Barras Ltda. (“MDB”), and BMIXP’s 50 % owned subsidiary, RST Recursos Minerais Ltda. (“RST”); its 99.99 % owned subsidiary, Hercules Resources Corporation (“HRC”), which includes the accounts of HRC’s wholly-owned subsidiary, Hercules Brasil Comercio e Transportes Ltda. (“Hercules Brasil”); its 46.17 % equity interest in Apollo Resources Corporation (“Apollo Resources”) and its subsidiary Mineração Apollo, Ltda.; and its 24.56 % equity interest in Jupiter Gold Corporation (“Jupiter Gold”), which includes the accounts of Jupiter Gold’s wholly-owned subsidiary, Mineração Jupiter Ltda. The Company has concluded that Apollo Resources, Jupiter Gold and their subsidiaries are variable interest entities (“VIE”) in accordance with applicable accounting standards and guidance. As such, the accounts and results of Apollo Resources, Jupiter Gold and their subsidiaries have been included in the Company’s consolidated financial statements. All material intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates 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. Going Concern The condensed 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. 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. Historically, the Company has funded its operations primarily through the issuance of debt and equity securities. Management’s plan to fund its capital requirements and ongoing operations include the generation of revenue from its mining operations and projects. Management’s secondary plan to cover any shortfall is selling its equity securities, including common stock in the Company, or common stock in Apollo Resources and Jupiter Gold that it owns, and obtaining debt financing. There can be no assurance the Company will be successful in these efforts. F- 6 Table of Contents Fair Value of Financial Instruments The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 820 – 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: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. As of December 31, 2021, and 2020, the Company’s derivative liabilities were considered a level 2 liability. See Note 3 for a discussion regarding the determination of the fair market value. The Company does not have any level 3 assets or liabilities. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, taxes receivable, prepaid expenses, deposits and other assets, accounts payable, accrued expenses 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. Cash and Cash Equivalents 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 R$ 250,000 Brazilian Reais (translating into approximately $ 44,799 as of December 31, 2021). Accounts Receivable Accounts receivable are customer obligations due under normal trade terms which are recorded at net realizable value. The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required. Recovery of bad debt amounts previously written off is recorded as a reduction of bad debt expense in the period the payment is collected. If the Company’s actual collection experience changes, revisions to its allowance may be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. F- 7 Table of Contents Inventory Inventory for the Company consisted of ore stockpile, containing auriferous and diamondiferous gravel, which after processing in a recovery plant yields diamonds and gold, and is stated at lower of cost or market. No value was placed on sand. 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. During fiscal 2021, management refocused on our hard-rock lithium project and wrote off the balance of our unprocessed auriferous and diamondiferous gravel for $ 135,656 included in the cost of revenue, and $ 0 as at December 31, 2020. Taxes Receivable The Company records a receivable for value added taxes receivable 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. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. 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. The diamond and gold processing plant and other machinery are depreciated over an estimated useful life of ten years; vehicles are depreciated over an estimated life of four years; and computer and other office equipment over an estimated useful life of three years. Mineral Properties Costs of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. Mineral property acquisition costs, including licenses and lease payments, are 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. 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 December 31, 2021 and 2020, the Company did not recognize any impairment losses related to mineral properties held. Intangible Assets 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 and held by the Company’s subsidiaries. F- 8 Table of Contents Impairment of Intangible Assets with Indefinite Useful Lives The Company accounts for intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other (“ASC 350”). ASC 350 requires that intangible assets with indefinite useful lives no longer be amortized, but instead be evaluated for impairment at least annually. On an annual basis, in the fourth quarter of the fiscal year, management reviews intangible assets with indefinite useful lives for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances makes it more-likely-than-not that the fair value of an intangible asset is less than its carrying amount. If it is determined that it is more-likely-than-not that the fair value of an intangible asset is less than its carrying amount, the intangible asset is further tested for impairment by comparing the carrying amount to its estimated fair value using a discounted cash flow. Impairment, if any, is measured as the amount by which an indefinite-lived intangible asset’s carrying amount exceeds its fair value. Application of impairment tests requires significant management judgment, including the determination of fair value of each indefinite-lived intangible asset. Judgment applied when performing the qualitative analysis includes consideration of macroeconomic, industry and market conditions, overall financial performance of the entity, composition, or strategy changes affecting the recoverability of asset groups. Judgments applied when performing the quantitative analysis includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these judgments, estimates and assumptions could materially affect the determination of fair value for each indefinite-lived intangible asset. Impairment of Long-Lived Assets 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. Convertible Instruments The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 470-20, “Debt with Conversion and Other Options”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) by recording, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. Variable Interest Entities The Company determines at the inception of each arrangement whether an entity in which the Company holds an investment or in which the Company has other variable interests in is considered a variable interest entity. The Company consolidates VIEs when it is the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, the Company assesses whether any changes in the interest or relationship with the entity affect the determination of whether the entity is still a VIE and, if so, whether the Company is the primary beneficiary. If the Company is not the primary beneficiary in a VIE, the Company accounts for the investment under the equity method or cost method in accordance with the applicable GAAP. The Company has concluded that Apollo Resources, Jupiter Gold and their subsidiaries are VIEs in accordance with applicable accounting standards and guidance; and although the operations of Apollo Resources and Jupiter Gold are independent of the Company, through governance rights, the Company has the power to direct the activities that are most significant to Apollo Resources and Jupiter Gold. Therefore, the Company concluded that it is the primary beneficiary of both Apollo Resources and Jupiter Gold. F- 9 Table of Contents Revenue Recognition The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: ● The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer ● The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: ● Variable consideration ● Constraining estimates of variable consideration ● The existence of a significant financing component in the contract ● Non-cash consideration ● Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. F- 10 Table of Contents Costs of Goods Sold Included within costs of goods sold are the costs of cutting and polishing rough diamonds and costs of production such as diesel fuel, labor, and transportation. Stock-Based Compensation 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. The Company utilizes 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. On June 20, 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified nonemployee share-based payment awards are measured at the grant date of the award which is the same as share-based payments for employees. The Company adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance. Foreign Currency The Company’s foreign subsidiaries use a local currency 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. Income Taxes The Company accounts 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 December 31, 2021 and 2020, the Company’s deferred tax assets had a full valuation allowance. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” 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 “more likely than not” test, no tax benefit is recorded. The Company has identified the United States Federal tax returns as its “major” tax jurisdiction. F- 11 Table of Contents On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (“TCJA”), which instituted fundamental changes to the taxation of multinational corporations, including a reduction the U.S. corporate income tax rate to 21 % beginning in 2018. The TCJA also requires a one-time transition tax on the mandatory deemed repatriation of the cumulative earnings of certain of the Company’s foreign subsidiaries as of December 31, 2017. To determine the amount of this transition tax, the Company must determine the amount of earnings generated since inception by the relevant foreign subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings, in addition to potentially other factors. The Company believes that no such tax will be due since its Brazilian subsidiaries have, when required, paid taxes locally and that they have incurred a cumulative operating deficit since inception. Basic Income (Loss) Per Share 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 December 31, 2021, the Company’s potentially dilutive securities relate to common stock issuable in connection with convertible notes payable, options and warrants. As of December 31, 2021, 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. Other Comprehensive Income 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. Reclassifications Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings (loss) or financial position. Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations except as noted below: In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. The Company is evaluating the effect of the adoption of ASU 2020-06 on the consolidated financial statements, but currently does not believe ASU 2020-06 will have a significant impact on the Company’s accounting for its convertible debt instruments. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption. F- 12 Table of Contents In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects adoption will have on its consolidated financial statements. NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS Property and Equipment The following table sets forth the components of the Company’s property and equipment at December 31, 2021 and 2020: SCHEDULE OF PROPERTY AND EQUIPMENT December 31, 2021 December 31, 2020 Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value Capital assets subject to depreciation: Computers and office equipment $ 3,880 $ ( 2,778 ) $ 1,063 $ 3,880 $ ( 573 ) $ 3,307 Machinery and equipment 334,253 ( 281,489 ) 52,764 348,376 ( 271,107 ) 77,269 Vehicles 118,653 ( 118,653 ) - 127,416 ( 118,716 ) 8,700 Total fixed assets $ 456,747 $ ( 402,920 ) $ 53,827 $ 479,672 $ ( 390,396 ) $ 89,276 For the years ended December 31, 2021, and 2020, the Company recorded depreciation expense of $ 37,328 and $ 47,765 , respectively recorded in general and administrative expense. Intangible Assets Intangible assets consist of mining rights are not amortized as the mining rights are perpetual. The carrying value was $ 1,302,440 and $ 407,467 at December 31, 2021 and 2020, respectively. There was no impairment recorded as at December 31, 2021 or 2020. Equity Investments without Readily Determinable Fair Values On October 2, 2017, the Company entered into an exchange agreement whereby it issued 25,000,000 shares of its common stock in exchange for 500,000 shares of Ares Resources Corporation. The Company’s chief executive officer also serves as an officer of Ares Resources Corporation, thus making it a related party under common ownership and control. The shares were recorded at $ 150,000 , or $ 0.006 per share. The shares were valued based upon the lowest market price of the Company’s common stock on the date the agreement. On March 11, 2020, the Company issued 53,947,368 shares of common stock to Lancaster Brazil Fund pursuant to an addendum to the share exchange agreement dated September 28, 2018. The Company recorded a loss on exchange of equity with a related party of $ 76,926 representing the fair value of the additional shares of common stock issued. Under ASC 321-10, the Company elected to use a measurement alternative for its equity investment that does not have a readily determinable fair value. As such, the Company measured its investment at cost, less any impairment, plus or minus any changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The Company owns less than 5 % of the total shares outstanding of Ares Resources Corporation. As of December 31, 2021, no change in the value of the Ares common stock was recorded as the recorded value still approximated fair value. F- 13 Table of Contents Accounts Payable and Accrued Liabilities SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES December 31, December 31, Accounts Payable and Accrued Liabilities 2021 2020 Accounts payable and other accruals $ 310,047 $ 327,704 Mineral rights payable 672,601 - Accrued interest 5,590 324,415 Total $ 988,237 $ 652,119 NOTE 3 – CONVERTIBLE PROMISSORY NOTES PAYABLE The following tables set forth the components of the Company’s convertible debentures as of December 31, 2021 and 2020: SCHEDULE OF CONVERTIBLE DEBENTURES December 31, December 31, 2021 2020 Convertible notes payable – fixed conversion price $ - $ 244,000 Convertible notes payable – variable conversion price - 628,720 Less: loan discounts - - Total convertible notes, net $ - $ 872,720 The following table sets forth a summary of change in our convertible notes payable for the years ended December 31, 2021 and 2020: SUMMARY OF CHANGE IN CONVERTIBLE NOTES PAYABLE December 31, December 31, 2021 2020 Beginning balance $ 872,720 $ 824,614 Issuance of convertible notes payable 399,000 - Lender adjustments for penalties or defaults 37,212 - Debt discounts recorded related to issuance of convertible notes payable ( 44,019 ) - Amortization of debt discounts associated with convertible debt 44,019 153,000 Increase in principal amounts outstanding due to lender adjustments per terms of the note agreements - 22,314 Conversion of convertible note principal into common stock ( 1,038,932 ) ( 127,208 ) Repayments of convertible notes payable ( 270,000 ) - Total convertible notes, net $ - $ 872,720 F- 14 Table of Contents Convertible Notes Payable - Fixed Conversion Price On January 7, 2014, the Company issued to a family trust a senior secured convertible promissory note in the principal amount, and received gross proceeds, of $ 244,000 and warrants to purchase an aggregate of 488,000 shares of the Company’s common stock at an exercise price of $ 62.50 per share through December 26, 2018. 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. 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. As of December 31, 2021, all warrants issued in connection with this note had expired. The outstanding principal on the note was payable on March 31, 2015, which as of the date of these financial statements 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. In December 2020, the lender agreed to reduce the interest rate from the default rate of 30% to the stated rate of 10% retroactively . As a result, the Company recorded gain of $ 238,151 from the relief of interest expense to other income. On February 3, 2021, the Company issued 20,000,000 shares of common stock upon conversion of $ 80,000 in convertible notes payable and accrued interest. On May 6, 2021, the Company issued 86,246,479 shares of common stock upon conversion of $ 334,986 in convertible notes payable and accrued interest. As of December 31, 2021, the balance of the note was $ 0 . On June 18, 2021, Company issued to one noteholder a $ 129,000 convertible promissory note for $ 125,000 in proceeds. The note bears interest at 8.0 % per annum and matures one year from issuance on June 18, 2022. After six months from issuance, the note is convertible at the option of the holder at a price of $ 0.001 . A debt discount of $ 4,000 for issuance costs was recorded and is being amortized over the life of the note. ASC 470-20 requires proceeds from the sale of a debt instrument with stock purchase warrants be allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance. In connection with the warrant issuance, the Company allocated an aggregate fair value of $ 40,019 to the stock warrants and recorded a debt discount which will be amortized to interest expense over the term of the loan using the effective interest method so the debt, at its term, is recorded at its face value. The Company estimated the fair value of this the warrant warrants at date of grant using the Black-Scholes option pricing model using the following inputs: (i) stock price on the date of grant of $ 0.0122 , (ii) the contractual term of the warrant of 4 years, (iii) a risk-free interest rate of 0.89 % and (iv) an expected volatility of the price of the underlying common stock of 443.3 %. During the year ended December 31, 2021, Company issued 19,034,442 shares of common stock upon conversion of $ 129,000 in principal and $ 4,241 .10 in accrued interest. As of December 31, 2021, the balance of the note was $ 0 , and all discounts were fully amortized. Convertible Notes Payable - Variable Conversion Price At various times to fund operations, the Company issues convertible notes payable in which the conversion features are variable. In addition, some of these convertible notes payable have on issuance discounts and other fees withheld. 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 ranging from July to December 2017. 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. On April 9, 2021, the Company agreed to settle all outstanding principal and interest on these notes in exchange for common stock and common stock purchase warrants. See settlement disclosure below for more information. As of December 31, 2021, the outstanding principal balance on these notes total $ 0 , and all discounts were fully amortized. F- 15 Table of Contents During the year ended December 31, 2017, the Company issued to one noteholder in various transactions $ 477,609 in convertible promissory notes with fixed floors and received an aggregate of $ 454,584 in proceeds. The convertible promissory notes each bear interest at 8.0 % per annum and mature one year from issuance ranging from January to August 2018. 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 $ 447,272 were recorded and are being amortized over the life of the notes. During the six months ended June 30, 2021, the Company issued 182,872,798 shares of its common stock upon the conversion of $ 50,000 and $ 14,004 , respectively, in note principal and accrued interest. On April 9, 2021, the Company agreed to settle all outstanding principal and interest on these notes in exchange for common stock and common stock purchase warrants. See settlement disclosure below for more information. As of December 31, 2021, the outstanding principal balance on these notes total $ 0 , and all discounts were fully amortized. During the year ended December 31, 2018, the Company issued to one noteholder in various transactions $ 137,306 in convertible promissory notes with fixed floors and received an aggregate of $ 130,556 in proceeds. The convertible promissory notes each bear interest at 8.0 % per annum and mature one year from issuance ranging from August 2018 to April 2019. 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 $ 122,755 were recorded and are being amortized over the life of the notes. During the six months ended June 30, 2021, the Company issued 23,118,645 shares of its common stock upon the conversion of $ 118,996 and $ 27,496 , respectively, in note principal and accrued interest. On April 9, 2021, the Company agreed to settle all outstanding principal and interest on these notes in exchange for common stock and common stock purchase warrants. See settlement disclosure below for more information. As of December 31, 2021, the outstanding principal balance on these notes total $ 0 , and all discounts were fully amortized. During the year ended December 31, 2019, the Company issued to one noteholder in various transactions $ 282,000 in convertible promissory notes with fixed floors and received an aggregate of $ 276,000 in proceeds. The convertible promissory notes each bear interest at 8.0 % per annum and mature one year from issuance in July 2020. 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 $ 276,000 and $ 6,000 for issuance costs were recorded and are being amortized over the life of the notes. During the six months ended June 30, 2021, the Company issued 156,438,271 shares of its common stock upon the conversion of $ 310,200 and $ 40,186 , respectively, in note principal and accrued interest. As of December 31, 2021, the principal balance on these notes was $ 0 , and all discounts were fully amortized. On April 9, 2021, the Company issued 36,000,000 shares of its common stock upon the conversion of $ 186,736 and $ 62,302 , respectively, in note principal and accrued interest to settle all outstanding balances with the lender. In connection with the settlement, the Company agreed to issue 15,000,000 common stock purchase warrants with a cashless exercise price of $ 0.0125 . The warrants expire on December 31, 2021 . The Company allocated an aggregate fair value of $ 224,812 to the stock warrants and recorded a loss on the extinguishment of debt. The Company estimated the fair value of this the warrant warrants at date of grant using the Black-Scholes option pricing model using the following inputs: (i) stock price on the date of grant of $ 0.0158 , (ii) the contractual term of the warrant of 0.7 years, (iii) a risk-free interest rate of 0.35 % and (iv) an expected volatility of the price of the underlying common stock of 440.5 %. As of December 31, 2021 the 15,000,000 warrants expired. On January 19, 2021, the Company issued to one noteholder a $ 270,000 convertible promissory note. The note bears interest at 8.0 % per annum and matures on January 19, 2025 . After six months from issuance, the 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. The note’s conversion rate has a floor of $ 0.0001 . On May 7, 2021, the Company repaid $ 270,000 in note principal and $ 6,391 in accrued interest to the holder. As of December 31, 2021, the principal balance on the note was $ 0 . F- 16 Table of Contents NOTE 4 – LOANS PAYABLE As of December 31, 2020, the Company had $ 235,308 in principal outstanding from bridge loans. The loans payable bear interest at 8.0 % per annum and are payable upon demand. In February 2021, the Company repaid the full principal balance of $ 235,308 and accrued interest of $ 24,654 . As of December 31, 2021, the balance of these notes was $ 0 . NOTE 5 – OTHER NONCURRENT LIABILITIES Other noncurrent liabilities are comprised solely of social contributions and other employee-related costs at our operating subsidiaries located in Brazil. The Company has been funding these amounts upon the termination of a worker or employee. The balance of these employee related costs as of December 31, 2021 and 2020 amounted to $ 108,926 and $ 121,250 , respectively. NOTE 6 – STOCKHOLDERS’ DEFICIT Authorized and Amendments As of December 31, 2021, the Company had 3,250,000,000 common shares authorized with a par value of $ 0.001 per share. Series A Preferred Stock 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 (“Series A Stock”) 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 . Series D Preferred Stock On September 14, 2021, the Company filed with the Nevada Secretary of State a Certificate of Designations, Preferences and Rights of Series D Convertible Preferred Stock (“Series D Stock”) to designate 1,000,000 shares of a new series of preferred stock. The Certificate of Designations, Preferences and Rights of Series D Convertible Preferred Stock provides that for so long as Series D Stock is issued and outstanding, the holders of Series D Stock shall have no voting power until such time as the Series D Stock is converted into shares of common stock. One share of Series D Stock is convertible into 10,000 shares of common stock and may be converted at any time at the election of the holder. Holders of the Series D Stock are not entitled to any liquidation preference over the holders of common stock, and are entitled to any dividends or distributions declared by the Company on a pro rata basis. On September 15, 2021, the Company issued 214,006 shares of Series D Stock to Marc Fogassa for the conversion of $ 566,743 in convertible note principal and $ 75,275 of interest expense. Year Ended December 31, 2021 Transactions During the year ended December 31, 2021, the Company issued 174,019,679 shares of common stock for gross proceeds of $ 941,009 pursuant to subscription agreements with accredited investors. Additionally, the Company issued 523,710,635 shares of common stock upon conversion of $ 1,362,988 in convertible notes payable and accrued interest. Further, the Company issued shares of common stock for net proceeds of $ 75,000 upon the exercise of 423,816,100 stock options and warrants. Lastly, the Company issued 16,600,539 shares of common stock valued at $ 165,534 to contractors for services provided. F- 17 Table of Contents Year Ended December 31, 2020 Transactions During the year ended December 31, 2020, the Company received $ 320,000 in gross proceeds from the sale of 415,000,000 shares of its common stock to accredited investors. Additionally, the Company issued 5,000,000 shares of common stock to an accredited investor pursuant to a subscription agreement dated April 18, 2018 for which the funds were received in a prior period. During the year ended December 31, 2020, the Company issued 32,565,515 shares of common stock valued at $ 43,658 to non-employees for services rendered. Additionally, the Company issued 397,145,607 shares of common stock upon conversion of $ 164,820 in convertible notes payable and accrued interest. During the year ended December 31, 2020, the Company exchanged 200,000,000 shares of common stock returned by an accredited investor for 150,000 shares of Jupiter Gold’s common stock held as an investment by the Company. The Company used the quoted fair value of each entity’s common stock on the dates of exchange to determine the exchange ratio. See Note 8 – Related Party Transactions for additional disclosures of common stock issuances. Common Stock Options During the year ended December 31, 2021, the Company granted options to purchase common stock to officers and non-management directors. The options were valued using the Black-Scholes option pricing model with the following average assumptions: SCHEDULE OF BLACK-SCHOLES OPTION PRICING MODEL WITH AVERAGE ASSUMPTIONS December 31 2021 December 31 2020 Expected volatility 44.8 % – 124.4 % 199.2 % - 223.2 % Risk-free interest rate 0.9 % – 1.75 % 0.28 % - 0.38 % Stock price on date of grant $ 0.0004 - $ 0.008 $ 0.0009 - $ 0.0014 Dividend yield 0.00 % 0.00 % Expected term 10 years 5 - 10 years SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS Number of Options Outstanding and Vested Weighted Average Exercise Price Remaining Contractual Life (Years) Aggregated Intrinsic Value Outstanding, January 1, 2021 119,917,140 $ 0.0025 3.6 Issued 2,981,079 0.0010 – Exercised ( 117,046,100 ) – – Expired ( 252,000 ) 0.065 Forfeited ( 691,340 ) 0.058 – Outstanding and vested, December 31, 2021 4,908,779 $ 0.011 2.74 $ 19,675 The following table reflects all outstanding and exercisable preferred stock options as at December 31, 2021. All preferred stock options immediately vest and are exercisable for a period of ten years from the date of issuance. Number of Options Outstanding and Vested Weighted Average Exercise Price Remaining Contractual Life (Years) Aggregated Intrinsic Value Outstanding, January 1, 2021 – $ – – Issued 36,000 0.10 9.44 Outstanding and vested, December 31, 2021 36,000 $ 0.10 9.44 $ 2,732,400 The options were valued at $ 1,104,364 in total. F- 18 Table of Contents During the year ended December 31, 2020, the Company granted options to purchase an aggregate of 43,915,500 shares of common stock to non-management directors. The options were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price on the date of the grant which ranged between $ 0.0009 and $ 0.0014 , expected dividend yield of 0.0 %, historical volatility calculated between 135.35 % and 221.07 %, risk-free interest rate between 0.28 % and 0.38 %, and an expected term of 5 years. The options were valued at $ 50,000 in total. See Note 8 – Related Party Transactions for more information related to stock options issued and outstanding for the Company’s subsidiaries Jupiter Gold and Apollo Resources. Stock Purchase Warrants Stock purchase warrants are accounted for as equity in accordance with ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity . The following table reflects all outstanding and exercisable warrants at December 31, 2021. All warrants are exercisable for a period of nine months to four years from the date of issuance: SCHEDULE OF WARRANT ACTIVITY Number of Warrants Outstanding Weighted Average Exercise Price Weighted Average Contractual Life (Yrs.) Outstanding, January 1, 2021 306,770,000 $ 0.0016 Warrants issued 319,701,820 0.0153 Warrants exercised ( 306,770,000 ) 0.0016 Warrants expired ( 15,000,000 ) 0.0125 Outstanding and vested, December 31, 2021 304,701,820 $ 0.0153 1.97 As of December 31, 2021, the warrants outstanding has an aggregated intrinsic value of $ 0 . NOTE 7 – COMMITMENTS AND CONTINGENCIES Rental Commitment The rents office space as its principal executive offices in Pasadena, California for approximately $ 5,750 on a month-to-month basis. The Company also rents office space in the municipality of Olhos D’Agua, Brazil. Such costs are immaterial to the condensed consolidated financial statements. NOTE 8 - RELATED PARTY TRANSACTIONS Chief Executive Officer The following tables set forth the components of the Company’s related party payables as of December 31, 2021 and 2020: SCHEDULE OF RELATED PARTY TRANSACTIONS 31-Dec-21 31-Dec-20 Convertible notes payable to related party $ – $ 566,743 Effective June 30, 2018, the Company issued a convertible promissory note in the principal amount of $ 445,628 to its Chief Executive Officer against a portion of these unpaid compensatory balances. The note bears no interest and is payable on demand. The note is convertible at the option of the holder at the lower of (i) the average of the five lowest bid prices of the Company’s common stock over the previous 20 trading days or (ii) the lowest price per share at which the Company sold its common stock in a transaction with a person who is not a manager, officer, or director of the Company during the period from the date hereof until the giving of notice of the election to convert or the lowest price per share at which a noteholder who is not a manager, officer, or director of the Company converted any debt of the Company into shares of the Company during the period from the date hereof until the giving of notice of the election to convert. The note’s conversion rate has a floor of $ 0.0001 . Total debt discounts related to the beneficial conversion features of $ 445,628 were recorded and are being amortized over a one-year period consistent with the maturity dates of convertible notes issued to third party holders. As of December 31, 2021, all discounts were fully amortized. F- 19 Table of Contents On April 7, 2019, the Company’s board of directors approved the issuance of a convertible note in the principal amount of $ 261,631 to its Chief Executive Officer against a portion of these unpaid compensatory balances. The note bears interest at an annual rate of 6.0 % and is payable on demand. The note is convertible at the option of the holder at the lower of (i) $ 0.00045 or (ii) the lowest price per share at which a noteholder who is not a manager, officer, or director of the Company converted any debt of the Company into common stock of the Company during the period from the date hereof until the giving of notice of the election to convert. Total debt discounts related to the beneficial conversion features of $ 261,631 were recorded and are being amortized over a one-year period consistent with the maturity dates of convertible notes issued to third party holders. As of December 31, 2021, all discounts were fully amortized. On June 30, 2019, the Company’s board of directors approved the issuance of a convertible note in the principal amount of $ 61,724 to its Chief Executive Officer against a portion of these unpaid compensatory balances. The note bears interest at an annual rate of 6.0 % and is payable on demand. The note is convertible at the option of the holder at the lower of (i) $ 0.0003 or (ii) the lowest price per share at which a noteholder who is not a manager, officer, or director of the Company converted any debt of the Company into common stock of the Company during the period from the date hereof until the giving of notice of the election to convert. Total debt discounts related to the beneficial conversion features of $ 61,724 were recorded and are being amortized over a one-year period consistent with the maturity dates of convertible notes issued to third party holders. As of December 31, 2021, all discounts were fully amortized. On September 15, 2021, the Company issued 214,006 shares of Series D Stock to Marc Fogassa for the conversion of $ 566,743 in convertible note principal and $ 75,276 of interest expense. The conversion rate was modified from $ 0.0003 per share of common stock to $ 3.00 per share of Series D Stock due to the change in the underlying security. The Company did not record any dividend or expense as the conversion resulted in an equal exchange of underlying shares of common stock On March 11, 2020, the Company issued 200,000 shares of its common stock with a fair value of $ 280 , or $ 0.0014 per share, to its Chief Executive Officer in lieu of cash for loans payable and other accrued obligations. On December 3, 2020, the Company issued 161,636,427 shares of common stock to its Chief Executive Officer in connection with the exercise stock options acquired on February 19, 2019 as described above. Jupiter Gold Corporation During the year ended December 31, 2021, Jupiter Gold granted options to purchase an aggregate of 315,000 shares of its common stock to Marc Fogassa at prices ranging between $ 0.01 to $ 1.00 per share. The options were valued at $ 148,853 and recorded to stock-based compensation. The options were valued using the Black-Scholes option pricing model with the following average assumptions: the Company’s stock price on the date of the grant ($ 0.19 to $ 1.45 ), expected dividend yield of 0 %, historical volatility calculated between 97.3 % and 200.6 %, risk-free interest rate between a range of 0.81 % to 1.75 %, and an expected term between 5 and 10 years. As of December 31, 2021, an aggregate 2,270,000 Jupiter Gold common stock options were outstanding with a weighted average life of 3.11 years at an average exercise price of $ 0.93 and an aggregated intrinsic value of $ 402,800 . Apollo Resource Corporation During the year ended December 31, 2021, Apollo Resources granted options to purchase an aggregate of 135,000 shares of its common stock to Marc Fogassa at a price of $ 0.01 per share. The options were valued at $ 217,129 and recorded to stock-based compensation. The options were valued using the Black-Scholes option pricing model with the following average assumptions: the Company’s stock price on the date of the grant ($ 4.00 to $ 5.00 ), expected dividend yield of 0 %, historical volatility calculated between 49.2 % and 98.3 %, risk-free interest rate between a range of 0.92 % to 1.75 %, and an expected term of 10 years. As of December 31, 2021, the options were fully exercised. F- 20 Table of Contents NOTE 9 – RISKS AND UNCERTAINTIES In light of the SEC’s Division of Corporate Finance Disclosure Guidance Topic Number 9, dated March 25, 2020, on the impact of COVID-19, the Company notes the following: ● The Company has not had any reports of COVID-19 among its workforce; ● The Company has been able to continue local operations of the Company in Brazil as they are located in a rural area currently unaffected by any lockdown restrictions implemented elsewhere in Brazil; ● Travel between the U.S. and Brazil has essentially ceased; this is mitigated by the use of live streaming video and other methods as needed; ● Some exploratory research of some of the Company’s projects have been delayed as certain municipalities in Brazil have unilaterally restricted the entry of outside persons; these actions are being legally challenged by branches of the state administration and the Company is monitoring all new developments; ● The Company has postponed any expenses which are not critical to it at the moment. Currency Risk The Company operates primarily in Brazil which exposes it to currency risks. The Company’s business activities may generate intercompany receivables or payables that are in a currency other than the functional currency of the entity. Changes in exchange rates from the time the activity occurs to the time payments are made may result in the Company receiving either more or less in local currency than the local currency equivalent at the time of the original activity. The Company’s condensed consolidated financial statements are denominated in U.S. dollars. Accordingly, changes in exchange rates between the applicable foreign currency and the U.S. dollar affect the translation of each foreign subsidiary’s financial results into U.S. dollars for purposes of reporting in the consolidated financial statements. The Company’s foreign subsidiaries translate their financial results from the local currency into U.S. dollars in the following manner: (a) income statement accounts are translated at average exchange rates for the period; (b) balance sheet asset and liability accounts are translated at end of period exchange rates; and (c) equity accounts are translated at historical exchange rates. Translation in this manner affects the shareholders’ equity account referred to as the foreign currency translation adjustment account. This account exists only in the foreign subsidiaries’ U.S. dollar balance sheets and is necessary to keep the foreign subsidiaries’ balance sheets in agreement. NOTE 10 - SUBSEQUENT EVENTS In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to December 31, 2021 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 these: a) On March 16, 2022, the Company terminated the Consulting Services Agreement previously entered into with Jason Baybutt, Chief Operating Officer of Pubco Reporting Solutions, who, prior to the termination of the Consulting Services Agreement, served as the Company’s Chief Financial Officer, Principal Accounting Officer, and Treasurer since December 29, 2021. On March 16, 2022, the Company appointed Gustavo Pereira de Aguiar, age 39, as the Company’s Chief Financial Officer, Principal Accounting Officer, and Treasurer. From 2016 until March 15, 2022, Mr. Aguiar was the Controller of Jaguar Mining, Inc., a Canadian publicly traded company with two producing gold mines in the state of Minas Gerais in Brazil and current market capitalization of approximately $ 270 million. From 2013 to 2016, Mr. Aguiar was Controller at Grupo Orguel, an enterprise in the construction equipment rental sector in Brazil which received funding from Carlyle, a U.S. private equity group, and from 2010 to 2013, Mr. Aguiar worked at Mirabella Mineração , which at the time was developing its nickel project in the state of Bahia in Brazil. From 2006 to 2010, Mr. Aguiar was an auditor with Deloitte in Brazil. Mr. Aguiar has undergraduate degrees in Business Administration and in Accounting from Universidade FUMEC in Brazil. He has an executive MBA and further post-graduate education in finance from Funda ção Dom Cabral in Brazil. Mr. Aguiar is fluent in Portuguese and English and is a licensed accountant in Brazil. b) On March 21, 2021, the Company filed with the Secretary of State of Nevada the Certficate of Amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of common stock issuable by the Company from 3,250,000,000 to 4,000,000,000 . F- 21 Table of Contents EXHIBIT INDEX Exhibit Number Description 3.1 Articles of Incorporation of the Company filed with the Secretary of State of Nevada on December 15, 2011. Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed by the Company on April 6, 2012. 3.2 Certificate of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of the State of Nevada on December 18, 2012. Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 26, 2012. 3.3 Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock filed with the Secretary of State of the State of Nevada on December 18, 2012. Incorporated by reference to Company’s Current Report on Form 8-K filed with the Commission on December 26, 2012. 3.4 Certificate of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of the State of Nevada on December 24, 2012. Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 28, 2013. 3.5 Certificate of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of the State of Nevada on August 27, 2019. Incorporated by reference to Exhibit 3.11 to the Company’s Annual Report on Form 10-K filed with the Commission on April 14, 2020. 3.6 Certificate of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of the State of Nevada on July 16, 2020. Incorporated by reference to Exhibit 3.11 to the Company’s Annual Report on Form 10-K filed with the Commission on March 31, 2021. 3.7 Amended and Restated By-laws of the Company. Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 12, 2021. 3.8 Certificate of Designations, Preferences and Rights of Series D Convertible Preferred Stock filed with the Secretary of State of the State of Nevada on September 16, 2021. Incorporated by reference to Exhibit 3.8 to the Form S-1 filled with the Commission on January 28, 2022. 3.9 Certificate of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of the State of Nevada on March 21, 2022. * 4.1 Common Stock Purchase Agreement between the Company and Triton Funds LLC dated February 26, 2021. Incorporated by reference to Exhibit 1 to the Form 8-K filed with Commission on March 3, 2021. 4.2 Common Stock Purchase Warrant between the Company and Triton Funds LLC dated February 26, 2021. Incorporated by reference to Exhibit 2 to the Form 8-K filed with Commission on March 3, 2021. 4.3 Form of Warrant between the Company and Warberg Funds. Incorporated by reference to Exhibit 4.6 to the Form S-1 filled with the Commission on January 28, 2022. 4.4 Form of Warrant between the Company and investors other than Warberg Funds. Incorporated by reference to Exhibit 4.7 to the Form S-1 filled with the Commission on January 28, 2022. 10.1 Amended and Restated Employment Agreement Between Marc Fogassa and the Company. Incorporated by reference to Exhibit 10.1 to the Form S-1 filled with the Commission on January 28, 2022. 10.2 2017 Stock Incentive Plan incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed with the Commission on December 8, 2017. 10.3 Agreement between the Company and GW Holdings Group LLC dated November 15, 2021. Incorporated by reference to Exhibit 10.3 to the Form S-1 filled with the Commission on January 28, 2022. 10.4 Form of Securities Purchase Agreement between the Company and funds managed by Warberg Asset Management LLC (“Warberg Funds”). Incorporated by reference to Exhibit 10.4 to the Form S-1 filled with the Commission on January 28, 2022. 10.5 Form of Securities Purchase Agreement between the Company and investors other than Warberg Funds. Incorporated by reference to Exhibit 10.5 to the Form S-1 filled with the Commission on January 28, 2022. 21.1 Subsidiaries of the Company. Incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K filed with the Commission on March 31, 2021. 31.1 Certification of the Chief Executive Officer pursuant to Section 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2 Certification of Chief Financial Officer pursuant to Section 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 135, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* 101* Interactive Data files pursuant to Rule 405 of Regulation S-T. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith 40 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Beverly Hills, State of California, on March 29, 2022. Brazil Minerals, Inc. By: /s/ Marc Fogassa Marc Fogassa Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated below: Signature Title Date /s/ Marc Fogassa March 29, 2022 Marc Fogassa Chief Executive Officer (Principal Executive Officer) and Chairman of the Board /s/ Gustavo Pereira de Aguiar March 29, 2022 Gustavo Pereira de Aguiar Chief Financial Officer (Principal Financial and Accounting Officer) /s/ Roger Noriega Director March 29, 2022 Ambassador Roger Noriega /s/ Cassiopeia Olson Director March 29, 2022 Cassiopeia Olson, Esq. /s/ Stephen Peterson Director March 29, 2022 Stephen Peterson, CFA 41