Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2014

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number 000-53276

GRID PETROLEUM CORP.

[grpr10q_10q002.gif]

(Name of small business issuer in its charter)



Nevada		30-0690324
(State of incorporation)		(I.R.S. Employer Identification No.)

720 South Colorado Blvd Denver, CO 80246

(Address of principal executive offices)

(720) 590-4730

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes[X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ]No[X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ] (Do not check if a smaller reporting company)	Smaller reporting company	[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of January 5, 2015, there were 6,578,408,070shares of the registrant’s $0.001 par value common stock issued and outstanding.

_____________________________________________________________________________________________

GRID PETROLEUM CORP.*

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	8
ITEM 4.	CONTROLS AND PROCEDURES	8

PART II.OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	8
ITEM 1A.	RISK FACTORS	9
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	9
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	10
ITEM 4.	SUBSEQUENT EVENTS	10
ITEM 5.	OTHER INFORMATION	10
ITEM 6.	EXHIBITS	10

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Grid Petroleum Corp. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we,"”GRPR,” "our," "us," the "Company," refers to Grid Petroleum Corp.

PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

GRID PETROLEUM CORP.

(An Exploration Stage Company)

Consolidated Financial Statements

(Unaudited)

(Expressed in US dollars)

December 31, 2014

Financial Statement Index

Consolidated Balance Sheets (unaudited)

F-1

Consolidated Statements of Operations (unaudited)

F-2

Consolidated Statements of Cash Flows (unaudited)

F-3

Notes to the Consolidated Financial Statements (unaudited)

F-4


GRID PETROLEUM CORP.
(KNOWN AS SUNBERTA RESOURCES INC.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS

	December 31,	March 31,
	2014	2014
	(Unaudited)	(Audited)
ASSETS
Current Assets
Cash	$ 51	$ -
Total Current Assets	51	-

Due from related party	16,848	17,048
Oil & gas properties	7,026,666	7,026,666

TOTAL ASSETS	$ 7,043,565	$ 7,043,714

LIABILITIES
Current Liabilities:
Accounts payable	$ 6,121	$ 9,321
Due to related party	40,034	7,195
Notes payable, net of discount	855,479	711,783
Notes payable, interest	97,128	44,296
Derivative liabilities	720,534	1,747,378
Stockholder loans	480,959	368,459
Total Current Liabilities	2,200,256	2,888,432

STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value 20,000,000 shares authorized	1,320	1,320
1,319,500 issued and outstanding at September 30, 2014 and March 31, 2014
Common stock, $0.001 par value 7,500,000,000 authorized	6,578,408	4,896,649
6,578,408,070 shares issued and outstanding at December 31, 2014
4,896,649,008 shares issued and outstanding at March 31, 2014
Additional paid in capital	9,735,065	11,169,172
Accumulated other comprehensive loss	4,144	4,144
Deficit accumulated during the development stage	(123,849)	(123,849)
Deficit accumulated during the exploration stage	(11,351,779)	(11,792,154)
Total Stockholders' Equity	4,843,309	4,155,281

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 7,043,565	$ 7,043,714

The accompanying notes are an integral part of these consolidated financial statements


GRID PETROLEUM CORP.
(KNOWN AS SUNBERTA RESOURCES INC.)
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
					From
					Inception
					(March 31, 2009
	For the three months ended		For the nine months ended		through
	December 31,		December 31,		December 31,
	2014	2013	2014	2013	2014)
Revenue	$ -	$ -	$ -	$ -	$ -

Operating expenses
Consulting	37,500	37,500	112,500	113,000	1,656,050
Depreciation	-	-	-	-	2,759
Impairment of rights to future exploration costs	-	-	-	-	4,825,334
Impairment of oil and gas properties	-	-	-	-	85,334
Interest expense	-	-	-	-	8,989
Investor relations	-	-	-	-	89,753
Management fees	30,000	30,000	90,000	68,155	286,515
Lease	-	-	-	9,931	9,931
Professional fees	1,814	5,006	66,764	35,353	396,185
Salaries & benefits	-	-	-	-	22,294
Other G&A expenses	20,582	20,964	67,024	61,612	779,746
Loss from operations	(89,896)	(93,470)	(336,288)	(288,051)	(8,162,890)

Other income/ (expense)
Change in derivative liability	41,486	384,708	951,222	(149,225)	(744,289)
Interest on convertible notes	(52,141)	(87,832)	(174,559)	(1,309,010)	(2,444,600)
Total other income/expenses	(10,655)	296,876	776,664	(1,458,235)	(3,188,889)

Profit (Loss) before income taxes	(100,551)	203,406	440,375	(1,746,286)	(11,351,779)

Income taxes	-	-	-	-	-

Net Profit (Loss)	$ (100,551)	$ 203,406	$ 440,375	$ (1,746,286)	$ (11,351,779)

Other comprehensive gain (loss)
Loss on elimination of convertible notes	-	-	-	119,505	-
Foreign currency translation adjustments	-	-	-	-	4,144
Comprehensive Profit (Loss)	(100,551)	203,406	440,375	(1,626,781)	(11,347,635)

Per share information
Basic, weighted number of common shares outstanding	6,578,408,070	1,875,417,373	6,378,965,809	1,162,025,895
Net profit (loss) per common share	(0.0000)	0.0001	0.0001	(0.0014)

The accompanying notes are an integral part of these consolidated financial statements


GRID PETROLEUM CORP.
(KNOWN AS SUNBERTA RESOURCES INC.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
			From
			Inception
	For the nine months ended		(March 31, 2009
	December 31,		through
	2014	2013	December 31, 2014)
Operating Activities:
Net profit (loss) in exploration stage	$ 440,375	$ (1,746,286)	$ (11,351,779)
Net loss in development stage	-	-	(123,849)
Adjustment to reconcile net loss to net cash used
in operating activities
Impairment of rights to future exploration costs	-	663,967	4,825,334
Impairment of oil and gas properties	-	-	85,334
Depreciation	-	-	2,759
Change in debt discount	35,454	(75,246)	(24,755)
Change in derivative liabilities	(1,026,844)	(309,918)	720,534
Changes in assets and liabilities:
Increase (decrease) in interest payable	52,832	10,640	97,128
Increase (decrease) in accounts payable	(3,200)	(15,323)	6,121
Decrease (increase) in due from related party	200	(17,048)	(16,848)
Net cash provided by operating activities	(501,182)	(1,489,214)	(5,780,021)
Investing Activities:
Purchase/disposal of equipment	-	-	(2,759)
Purchase of oil & gas properties	-	-	(11,937,334)
Net cash used in investing activities	-	-	(11,940,093)
Financing Activities:
Bank overdraft	-	73	-
Proceeds from note payable	108,242	(80,910)	880,234
Proceeds from stockholders' loans	112,500	113,109	480,959
Due to related party	32,840	1,595	40,034
Issuance of preferred stock	-	(113)	1,320
Issuance of common stock	247,652	1,454,886	16,313,473
Net cash provided by financing activities	501,234	1,488,641	17,716,021
Accumulated other comp income	-	-	4,144
Net increase/(decrease) in cash	51	(573)	51
Cash, beginning of period	-	573	-
Cash, end of period	$ 51	$ (0)	$ 51

Supplementary disclosure for non-cash
investing and financing activities
Forgiveness of accounts payable-related parties	-	-	7,382
Forgiveness of shareholder's loan	-	-	27,500
Stock issued to retire debt	-	-	733,062
Swap of a portion of oil & gas properties for
rights to future exploration costs	-	-	4,825,334

The accompanying notes are an integral part of these consolidated financial statements

F-3

GRID PETROLEUM CORP.

(Known as Sunberta Resources Inc.)

(An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014

(Unaudited)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Description of Business

Grid Petroleum Corp. (the “Company”) was incorporated in the State of Nevada with the name Sunberta Resources Inc. on November 15, 2006. The Company moved through the exploration stage and the Exploration Stage and is currently in the exploration stage once more. Its principal business is the acquisition and exploration of mineral claims and oil & gas properties.

On November 16, 2006, the Company acquired all the issued and outstanding shares of Sunberta Resources Inc. (“Sunberta Alberta”) an inactive corporation incorporated in the province of Alberta, Canada on September 19, 2006. The consideration for the acquisition of Sunberta Alberta was 2,000 shares (on a post-split basis) of the Company.

In January, 2007,Sunberta Alberta acquired seven placer claim tenures on southern Vancouver Island, British Columbia, Canada. During the year ended March 31, 2009, the Company abandoned three of the placer claim tenures and decided to abandon the remaining four properties. Between May 31, 2009 and June 14, 2009, the remaining four placer claim tenures expired. The carrying cost of the properties was written off and the operations associated with the properties were treated in the financial statements as discontinued operations in the year ended March 31, 2009. The Company entered the Exploration Stage on March 31, 2009, to seek other opportunities. See also note 2.

On November 18, 2009, the Company changed its name to Grid Petroleum Corp. (formerly known as Sunberta Resources, Inc.).

The Company’s activities to December 31, 2009, were carried on in Alberta and British Columbia, Canada. In February, 2010, operations were carried on in England. In mid-2010 the Company began to focus on its mineral properties in the United States, and activities of the Company thenceforth were controlled from the United States.

On May 14, 2010, the Company acquired from the CEO for nominal consideration all the issued shares of Grid Petroleum Ltd. (“Grid UK”), a company incorporated in January 27, 2010, under the laws of England. The purpose of Grid UK is to maintain bank accounts in the UK as nominee for the Company. Grid UK does not have any assets, liabilities or operations of its own.

On January 20, 2011, the Company entered into a Share Exchange Agreement (the “Agreement”) with a Nevada corporation, Joaquin Basin Resources Inc., (“Seller”), and its stockholders, (“Selling Shareholders”). Pursuant to the provisions of the Agreement, the Company issued to the Selling Shareholders (i) 62,000,000 shares of Company common stock and (ii) 2,076,324 shares of convertible preferred stock, in exchange for the transfer and delivery to the Company by the Selling Shareholders of the 62,000,000 shares of common stock issued by the Seller, which were all of the issued and outstanding securities of the Seller. As a result of the related transaction on February 1, 2011, the Seller became a wholly owned subsidiary of the Company. The issue of preferred stock was delayed until February 2012. None of the parties to the Agreement is a related person.

On May 23, 2012, we executed an agreement to acquire a 10% percent working interest, 7.5% net revenue interest, from a third party interest holder of the Garcia #3 well in Jim Wells County, Texas. The Company agreed to purchase the working interest for $300,000, payable in convertible promissory note with Direct Capital, convertible into 0.001 shares of the Company’s common stock. The convertible promissory note was executed on May 23, 2012.

F-4

On October 1, 2013 the Company executed a Convertible Promissory Note for $384,000 for oilfield management and industry support for the Company’s expansion efforts into California, Texas, and Oklahoma. Additional support has been is being provided on an ongoing basis for evaluation into North Dakota and Colorado for future expansion efforts. The note represents a monthly fee of $16,000 per month for the last 24 months of work provided to the company.

Principles of Consolidation

The consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries, Sunberta Alberta, Grid Petroleum Ltd. (“Grid UK”) and Joaquin Basin Resources, Inc. All significant inter-company balances and transactions are eliminated.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of cash and highly liquid investments with original maturity dates of less than three months that may not be reported as investments. While the Company may maintain cash and cash equivalents in bank deposit accounts, which at times exceed Federal Deposit Insurance Corporation insured limits, they have not experienced any losses in such accounts.

Management believes it is not exposed to any significant credit risk on cash and cash equivalents.

Mineral Properties and Exploration Expenses

Mineral properties purchased are capitalized and carried at cost. Exploration and development cost are charged to operations as incurred until such time that proven or probable ore reserves are discovered. From that time forward, the Company will capitalize all costs to the extent that future cash flow from reserves equals or exceeds the cost deferred. The deferred cost will be amortized using the unit-of-production method when a property reaches commercial production.

Oil and Gas Properties and Exploration Expenses

Oil and gas property acquisition costs are capitalized and carried at cost. Exploration and development costs are accounted for on the successful-efforts method, whereby the costs related to successful projects are capitalized and all costs incurred as a result of unsuccessful projects are expensed when it is determined that the exploration efforts on that property are unsuccessful. The Company will periodically analyze exploration efforts, once exploration on its oil and gas properties has commenced, to determine which projects have been unsuccessful in establishing proved reserves. The costs of unsuccessful projects will be expensed.

Impairment of Long-Lived Assets

The Company periodically analyzes its long-lived assets for potential impairment, assessing the appropriateness of lives and recoverability of unamortized balances through measurement of undiscounted operating cash flows in accordance with ASC No. 144, Property, Plant and Equipment. If impairment is deemed to exist, it will be written down to its fair value. Fair value is generally determined using a discounted cash flow analysis. As ofDecember 31, 2014, the Company does not believe any adjustment for impairment is required.

Asset Retirement Obligations

The Company has adopted FASB Accounting Standards Codification Topic (“ASC”) No. 410, Asset Retirement and Environmental Obligations which requires that the fair value of liability for an asset retirement obligation be recognized in the period in which it is incurred. ASC No. 410 requires a liability to be recorded for the present value of the estimated site restoration costs with a corresponding increase to the carrying amount of the related long-lived asset. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. The Company has not incurred any asset retirement obligations as ofDecember 31, 2014.

F-5

Advertising Expenses

Advertising costs are expensed as incurred.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with generally accepted accounting principles of United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Actual results could differ from those estimates.

Loss Per Share

Basic loss per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the period after giving retroactive effect to the forward stock split affected on January 14, 2008 (see Note 12.) Diluted earnings (loss) per share is equal to the basic per share for the years ended March 31, 2014, 2013, 2012, and 2011. Common stock equivalents are not included in the loss per share since they are anti-dilutive. All per share amounts have been adjusted for the forward stock split.

Fair Value of Financial Instruments

The carrying value of cash, notes payable, and accounts at December 31, 2014 and 2013 reflected in these financial statements approximates their fair value due to the short-term maturity of these financial instruments.

Income Taxes

The Company records deferred taxes in accordance with FASB ASC No. 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and loss carry-forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

Comprehensive Income

The Company has adopted ASC No. 220, Comprehensive Income. Comprehensive income includes net income and all changes in equity during a period that arises from non-owner sources, such as foreign currency items and unrealized gains and losses on certain investments in equity securities.

Exploration Stage

The Company entered the exploration stage upon its inception. The Company exited the development stage and entered the Exploration Stage on March 31, 2009 when the Company’s mineral claims tenures in British Columbia were abandoned and the Company started seeking new business. The Company exited the Exploration Stage and entered a new exploration stage on March 31, 2010 after the Company acquired oil and gas properties in Wyoming. In January 2011, the Company acquired oil and gas properties in California and started planning to explore the properties.

Recent Accounting Pronouncements

The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any other pronouncements to have a material impact on its results of operations or financial position.

F-6

Reclassification

Certain prior year amounts have been reclassified to conform to the current year presentation.

2. GOING CONCERN

These consolidated financial statements have been prepared on a going-concern basis which assumes the Company will be able to realize assets and discharge liabilities in the normal course of business for the foreseeable future.

The Company has experienced substantial losses since its inception and has limited business operations, which raises substantial doubt about the Company’s ability to continue as going concern. The ability of the Company to

meet its commitments as they become payable, including the completion of acquisitions, exploration and development of oil and gas properties and projects, is dependent on the ability of the Company to obtain necessary financing or achieving a profitable level of operations. There is no assurance the Company will be successful in achieving these goals.

The Company does not have sufficient cash to fund its desired exploration for the next twelve months. The Company has arranged financing as described in Note 4 and intends to draw upon this financing arrangement to fund exploration, production and administration. This financing may be insufficient to fund expenditures or other cash requirements required to find, develop and exploit oil and reserves to the point of profitable operations. There can be no assurance the Company will be successful in finding oil and gas reserves. The Company plans to seek additional financing if necessary in private or public equity offering to secure future funding for operations. There can be no assurance the Company will be successful in raising additional funding. If the Company is not able to secure additional funding, the implementation of the Company’s business plan will be impaired. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.

These financial statements do not give effect to adjustments to the amounts and classification to assets and liabilities that would be necessary should the Company be unable to continue as a going concern.

3. OIL AND GAS PROPERTIES

The Company has oil and gas properties in California.

On January 20, 2011, the Company purchased, through its subsidiary Joaquin Basin Resources Inc., a 50% working interest (37% net revenue interest) in a mineral lease on 4,000 acres in Kings and Fresno counties in California. The lease was initially recorded at the cost of issuing 62,000,000 common shares. On January 20, 2012, 2,076,000 shares of convertible preferred stock were issued in concluding the Joaquin Basin purchase agreement. The cost of the issue, $4,152,000, was based on the value of preferred stock as if converted to common stock. The total cost, $7,026,666, was supported bya volumetric analysis.

On November 21, 2011, a portion of the interest in the lease was swapped for a future “carry” of exploration costs and administration of the lease. Grid’s 50% working interest (37.5% net revenue interest) was reduced to 30% and 14% respectively. The co-lessee, is the obligor under the agreement. Future exploration costs include the operating “carry” costs of the lease and drilling costs of the first well, named “First Farmin Well.” The exploration costs were valued based on the percentage reduction in net revenue interest. A reduction of $4,825,334 in the value of the Joaquin Basin property was recorded.

Impairment of the California properties from their recorded acquisition values was considered at March 31, 2014 and 2013. Management considered that there were no changes in circumstances that would warrant impairment from the estimated values indicated by independently prepared geological reports.

On October 18, 2013, the Company entered into an Asset Swap Agreement (the “Asset Swap Agreement”) by and amongst the Company, Xploration Inc., a Nevada Corporation (“Xploration”) and Solimar Energy, LLC, a California limited liability company (“Solimar”); thereby, swapping certain land leases as described below, forgiveness of delay rentals and terminating the (a) Kreyenhagen Trend Joint Operating Agreement dated March 1, 2011, between Solimar and Xploration (“Kreyenhagen Trend JOA”), (b) Jacalitos Joint Operating Agreement dated March 1, 2011, between Solimar and Xploration (“Jacalitos JOA”) and the (c) Farmin / Settlement Agreement dated November 3, 2011, between Solimar and Xploration, with an effective date as of September 1, 2013.

F-7

Solimar assigned eighty four percent (84%) of its interest in the Bureau of Land Management Lease, serial number: CACA 49877 representing 1,140.62 gross and net landowner acres that is a part of the Kreyenhagen Trend to the Company.

The Company has oil and gas properties in Wyoming which it does not wish to develop and, accordingly has recorded an impairment in the amount of $85,334 at March 31, 2013.

In connection with an Amendment to an Asset Purchase Agreement dated November 21, 2011, the Company recorded rights to future exploration costs in the amount of $4,825,334 on its balance sheet as of March 31, 2012. The Company recorded a full impairment as of March 31, 2013.

Oil and gas properties are summarized as follow As ofDecember 31, 2014:



		Proved
Unconventional Acreage	$	7,026,666

4. NOTE PAYABLE

Notes payable Comprised as the following:


		December 31,	March 31,
		2014	2014
Asher Note #4		13,000	13,000
Asher Note #11		-	400
Asher Note #13		-	10,425
Asher Note #14		-	32,500
Special Situations		21,491	21,491
Direct Capital #1		70,671	70,671
Direct Capital #2		384,000	384,000
Syndication Capital #1		5,000	5,000
Syndication Capital #2		14,072	14,072
Syndication Capital #3		11,000	11,000
Syndication Capital #4		11,000	11,000
Syndication Capital #5		11,000	11,000
Syndication Capital #6		16,000	16,000
Syndication Capital #7		16,000	16,000
Syndication Capital #8		16,000	16,000
Syndication Capital #9		16,000	16,000
Syndication Capital #10		16,000	16,000
Syndication Capital #11		16,000	16,000
Syndication Capital #12		48,000	-
Syndication Capital #13		48,000	-
Syndication Capital #14		48,000	-
Gel Properties #2		-	22,190
Coventry Enterprises #2		20,000	40,243
LG Capital Funding		29,000	29,000
New Venture Attorneys		50,000	-
		$ 880,234	$ 771,993
	Debt discount	(24,755)	(60,209)
	Accrued interest	97,128	44,296
		$ 952,607	$ 756,079

F-8

Asher Note #4

On April 4, 2013, the Company arranged a debt swap under which a Special Situations Fund note for $40,000 was transferred to Asher Enterprises. The promissory note is unsecured, bears interest at 8% per annum. Any principal amount not paid by the maturity date bears interest at 22% per annum. During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $2,155 and $5,819respectively in interest expense.

After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 55% of the market price, where market price is defined as “the average of the lowest three of the last ten closing trading prices on the OTCBB immediately prior to conversion date”.

On June 30, 2013, the Company recorded a derivative liability of $66,774 being the fair value of the conversion feature which was determined using the Black-Scholes valuation method.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded a gain of $23,233 and a loss of $48,019 respectively due to the change in value of the derivative liability.

AtDecember 31, 2014 and 2013, principal balance of $13,000 and $13,000 respectively, accrued interest of $5,148 and $5,819 respectively, a debt discount of $0 and $0 respectively and a derivative liability of $18,162 and $10,728 respectively was recorded.

Asher Note #11

On November 2, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $27,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on August 6, 2013. During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $0 and $1,466respectively in interest expense.

After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 58% of the market price, where market price is defined as “the average of the lowest three of the last ten closing trading prices on the OTCBB immediately prior to conversion date”.

On May 2, 2013 the Company recorded a debt discount and derivative liability of $29,050, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine month period ended December 31, 2014 the Company recorded a credit of $400 to the principal balance with a corresponding increase to additional paid in capital. As per Asher Enterprises, the note has fully converted and has a zero balance due.

AtDecember 31, 2014 and 2013, principal balance of $0 and $400 respectively, accrued interest of $0 and $0 respectively, a debt discount of $0 and $0 respectively and a derivative liability of $0 and $0 respectively was recorded.

Asher Note #13

On June 16, 2013, the Company received funding pursuant to a convertible promissory note in the amount of $27,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 17, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $0 and $1,189respectively in interest expense.

After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 51% of the market price, where market price is defined as “the average of the lowest three of the last ten closing trading prices on the OTCBB immediately prior to conversion date.”

F-9

On December 11, 2013 the Company recorded a debt discount and derivative liability of $38,033, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded gains of $14,847 and $0 respectively due to the change in value of the derivative liability during the period, and a debt discount of $0 and $0 respectively was accreted to the statement of operations.

During the nine month period ended December 31, 2014 the Company issued an aggregate of 230,500,000 common shares upon the conversion of principal amount of $10,425 and interest amount of $1,100. The derivative liability amounting to $21,196 was re-classified to additional paid in capital.

AtDecember 31, 2014 and 2013, principal balance of $0 and $20,670 respectively, accrued interest of $0 and $1,189 respectively, a debt discount of $0 and $7,734 respectively and a derivative liability of $0 and $28,587 respectively was recorded.

Asher Note #14

On August 2, 2013, the Company received funding pursuant to a convertible promissory note in the amount of $32,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 5, 2014. During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $0 and $1,068respectively in interest expense.

On January 30, 2014 the Company recorded a debt discount and derivative liability of $25,319, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded gains of $56,576 and $0 respectively due to the change in value of the derivative liability during the period, and a debt discount of $9,328 and $0 respectively was accreted to the statement of operations.

During the nine month period ended December 31, 2014 the Company issued an aggregate of 676,000,000 common shares upon the conversion of principal amount of $32,500 and interest amount of $1,300. The derivative liability amounting to $55,789 was re-classified to additional paid in capital.

AtDecember 31, 2014 and 2013, principal balance of $0 and $32,500 respectively, accrued interest of $0 and $1,068 respectively, a debt discount of $0 and $0 respectively and a derivative liability of $0 and $0 respectively was recorded.

Special Situations Fund One Note

On March 12, 2012, the Company arranged a debt swap under which an Asher Enterprises note for $40,000 was transferred to Special Situations Fund One for the Asher note plus an additional $21,491, for a total of $61,491. On April 4, 2013, the Company transferred $40,000 of the note to Asher Enterprises. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 12, 2012. During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,295 and $1,380respectively in interest expense.

F-10

On September 9, 2012, the Company recorded a derivative liability of $71,218, being the fair value of the conversion feature which was determined using the Black-Scholes valuation method.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded gains of $41,494 and $54,142 due to the change in value of the derivative liability during the period.

AtDecember 31, 2014 and 2013, principal balance of $21,491 and $21,491 respectively, accrued interest of $10,606 and $3,099respectively, and a derivative liability of $32,808 and $26,453 respectively was recorded.

Direct Capital Note #1

On December 31, 2012, the Company entered into a debt settlement agreement with Direct Capital Group, Inc., whereby the Company exchanged $70,671 in total outstanding debt into Convertible Preferred Shares of the Company. Each of the Convertible Preferred shares will convert into common shares of the Company with the conversion price being the lesser of $0.001 or shall equal the variable conversion price (the “Variable Conversion Price”). The Variable Conversion Price shall mean 50% multiplied by the market price (the “Market Price”). The

Market Price means the average of the lowest six (3) Trading Prices for the Common Stock during the ten (10) Trading day period ending on the latest complete Trading Day prior to the Conversion Date. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

On December 31, 2012, the Company recorded an initial derivative liability of $94,326 being the fair value of the conversion feature which was determined using the Black-Scholes valuation method.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded gains of $139,242 and $271 due to the change in value of the derivative liability during the period.

AtDecember 31, 2014 and 2013, principal balance of $70,671 and $70,671 respectively and aderivative liability of $110,413 and $98,303 respectively wasrecorded.

Direct Capital Note #2

On October 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital, Inc. in the sum of $384,000. The promissory note is unsecured, bears interest at 6% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date shall bear interest at the rate of 12% per annum. During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $34,718 and $0respectively in interest expense.

The note may be converted at the option of the holder into common stock of the Company. The conversion price is 70% of the market price, where market price is defined as “the average of the lowest three of the last ten closing trading prices on the OTCBB immediately prior to conversion date.”

On October 31, 2013 the Company recorded a debt discount and derivative liability of $268,330, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded gains of $535,469 and $0 respectively due to the change in value of the derivative liability during the period, and a debt discount of $1,474 and $0 respectively was accreted to the statement of operations.

AtDecember 31, 2014 and 2013, principal balance of $384,000 and $384,000 respectively, accrued interest of $46,143 and $0 respectively, a debt discount of $0 and $0 respectively and aderivative liability of $402,702 and $0 respectively was recorded.

F-11

Direct Capital Note #3

On October 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group Inc. in the sum of $360,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2015. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. During the nine month period ending December 31, 2014 the Company accrued $0 in interest expense.

Syndication Capital Note #1

On December 31, 2012, the Company entered into a debt settlement agreement with Syndication Capital, whereby the Company exchanges $105,000 in total outstanding debt into Convertible Preferred Shares of the Company. Each of the Convertible Preferred shares will convert into common shares of the Company with the conversion price being the lesser of $0.001 or shall equal the variable conversion price (the “Variable Conversion Price”). The Variable Conversion Price shall mean 50% multiplied by the market price (the “Market Price”). The Market Price means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading day period ending on the latest complete Trading Day prior to the Conversion Date. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

On December 31, 2012, the Company recorded an initial derivative liability of $140,146 being the fair value of the conversion feature which was determined using the Black-Scholes valuation method.

On August 4, 2013, the Company transferred $100,000 of the note to Gel Properties, LLC and recorded a credit to derivative liability of $453,305.

During the nine month periods ended December 31, 2014 and 2013, the Company recordedgains of $9,851 and $140,302 respectively due to the change in value of the derivative liability during the period.

AtDecember 31, 2014 and 2013, principal balance of $5,000 and $5,000 respectively,a debt discount of $0 and $0 respectively and a derivative liability of $7,812 and $6,155 respectively was recorded.

Syndication Capital Note #2

On July 31, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $14,072. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $2,333 and $469respectively in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.

AtDecember 31, 2014 and 2013, accrued interest of $3,392 and $469respectively was recorded.

Syndication Capital Note #3

On July 31, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,435and $366respectively in interest expense.

F-12

AtDecember 31, 2014 and 2013, accrued interest of $2,263 and $366 respectively was recorded.

Syndication Capital Note #4

On August 31, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,435 and $291respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $2,071 and $291 respectively was recorded.

Syndication Capital Note #5

On September 30, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,428 and $219respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $1,864 and $219 respectively was recorded.

Syndication Capital Note #6

On October 31, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $2,462 and $319respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $2,992 and $319 respectively was recorded.

Syndication Capital Note #7

F-13

On November 30, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $2,272 and $109respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $2,696 and $109 respectively was recorded.

Syndication Capital Note #8

On December 31, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $2,084 and $0respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $2,400 and $0 respectively was recorded.

Syndication Capital Note #9

On January 31, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on August 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,897 and $0respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $2,104 and $0 respectively was recorded.

Syndication Capital Note #10

On February 28, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

F-14

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,707 and $0respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $1,816 and $0 respectively was recorded.

Syndication Capital Note #11

On March 31, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,519 and $0respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $1,519 and $0 respectively was recorded.

Syndication Capital Note #12

On April 30, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $3,682 and $0respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $3,682 and $0 respectively was recorded.

Syndication Capital Note #13

On July 31, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,610 and $0respectively in interest expense.

F-15

AtDecember 31, 2014 and 2013, accrued interest of $1,610 and $0 respectively was recorded.

Syndication Capital Note #14

On October 31, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $642 and $0respectively in interest expense.

AtDecember 31, 2014 and 2013, accrued interest of $642 and $0 respectively was recorded.

Gel Properties, LLC Note #2

On August 8, 2013, the Company issued a convertible promissory note to Gel Properties, LLC. Under the terms of the note, the Company has borrowed a total of $50,000 from Gel Properties, LLC, which accrues interest at an annual rate of 6% and has a maturity date of August 8, 2015. The note also contains customary events of default.

During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $71 and $1,505respectively in interest expense.

On February 5, 2014 the Company recorded a debt discount and derivative liability of $125,429, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded gains of $5,863 and $0 respectively due to the change in value of the derivative liability during the period and a debt discount of $11,111 and $0 respectively was accreted to the statement of operations.

During the nine month period ended December 31, 2014 the Company issued an aggregate of 370,392,462 common shares upon the conversion of principal amount of $22,190 and interest amount of $1,886. The derivative liability amounting to $52,969 was re-classified to additional paid in capital.

AtDecember 31, 2014 and 2013, principal balance of $0 and $50,000 respectively, accrued interest of $0 and $1,505 respectively, a debt discount of $0 and $0 respectively and a derivative liability of $0 and $0 respectively was recorded.

Coventry Enterprises Note #2

On March 3, 2014, the Company arranged a debt swap under which an Xploration note for $4,000 in principal and $46,000 in interest was transferred to Coventry Enterprises, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on March 3, 2015. During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,089 and $0respectively in interest expense.

On March 3, 2014 the Company recorded a debt discount and derivative liability of $63,693, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

F-16

During the nine month periods ended December 31, 2014 and 2013, the Company recorded gains of $63,640 and $0 respectively due to the change in value of the derivative liability during the period and debt discount of $21,194 and $0 respectively was accreted to the statement of operations.

During the nine month period ended December 31, 2014 the Company issued an aggregate of 404,866,600 common shares upon the conversion of principal amount of $20,243. The derivative liability amounting to $27,655 was re-classified to additional paid in capital.

AtDecember 31, 2014 and 2013, principal balance of $20,000 and $0 respectively, accrued interest of $1,287 and $0 respectively, a debt discount of $81 and $0 respectively and a derivative liability of $25,211 and $0 respectively was recorded.

LG Capital Funding Note

On March 3, 2014, the Company arranged a debt swap under which an Xploration note for $40,000 was transferred to LG Capital Funding, LLC. The promissory note is unsecured, bears interest at 8% per annum and matures on March 3, 2015. During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $1,748 and $0respectively in interest expense.

On March 3, 2014 the Company recorded a debt discount and derivative liability of $63,048, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded gains of $57,138 and $0 respectively due to the change in value of the derivative liability during the period and a debt discount of $16,941 and $0 respectively was accreted to the statement of operations.

AtDecember 31, 2014 and 2013, principal balance of $29,000 and $0 respectively, accrued interest of $1,891 and $0 respectively, a debt discount of $80 and $0 respectively and a derivative liability of $45,308 and $0 respectively was recorded.

New Venture Attorneys Note

On April 1, 2014, the Company issued a convertible promissory note to New Venture Attorneys PC for legal fees. Under the terms of the note, the Company has borrowed a total of $50,000 from New Venture Attorneys PC, which accrues interest at an annual rate of 8% and has a maturity date of April 1, 2015. The note also contains customary events of default. During the nine month periods endedDecember 31, 2014 and 2013, the Company accrued $3,003 and $0respectively in interest expense.

After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the lowest closing bid on the OTCQB for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company.”

On September 29, 2014 the Company recorded a debt discount and derivative liability of $81,987, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded gains of $3,870 and $0 respectively due to the change in value of the derivative liability during the period and a debt discount of $25,406 and $0 respectively was accreted to the statement of operations.

F-17

AtDecember 31, 2014 and 2013, principal balance of $50,000 and $0 respectively, accrued interest of $3,003 and $0 respectively, a debt discount of $24,594 and $0 respectively and a derivative liability of $78,117 and $0 respectively was recorded.

5. DERIVATIVE LIABILITIES

The Company issued financial instruments in the form of convertible notes with embedded conversion features. Some of the convertible notes payable have conversion rates, which are indexed to the market value of the Company’s stock price.

During the nine month periods ended December 31, 2014 and 2013, the Company recorded derivative liabilities for embedded conversion features related to convertible notes payable of face value $81,987 and $686,698 respectively. During the nine month periods ended December 31, 2014 and 2013, $89,644 and $291,382 respectively of convertible notes payable and accrued interest was converted into common stock of the Company. For the nine month periods ended December 31, 2014 and 2013, the Company performed a final mark-to-market adjustment for the derivative liability related to the convertible notes of and the carrying amount of the derivative liability related to the conversion feature of $157,609 and $435,809 respectively, was re-classed to additional paid in capital on the date of conversion in the statement of shareholders’ deficit. During the nine month periods ended December 31, 2014 and 2013, the Company recognized gains of $951,222 and $560,807 respectively based on the change in fair value (mark-to market adjustment) of the derivative liability associated with the embedded conversion features in the accompanying statement of operations.

These derivative liabilities have been measured in accordance with fair value measurements, as defined by ASC 820. The valuation assumptions are classified within Level 1 and Level 2 inputs. The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above.

The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above:


	December 31,	December 31,
	2014	2013
Balance, beginning of year	$ 1,747,378	$ 713,306
Initial recognition of derivative liability	81,987	686,698
Conversion of derivative instruments to Common Stock	(157,609)	(435,809)
Mark-to-Market adjustment to fair value	(951,222)	(560,807)
Balance, end of year	$ 720,534	$ 403,388

These instruments were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation. The instruments do not qualify for hedge accounting, and as such, all future changes in the fair value will be recognized currently in earnings until such time as the instruments are exercised, converted or expire.

6. SECURITIES PURCHASE AGREEMENT

On April 23, 2010, the Company entered into an agreement with an investor whereby the investor committed to purchase up to $5,000,000 of units, consisting of shares of the Company’s common stock and share purchase warrants, until April 22, 2013. The Company may draw on the facility from time to time, as and when it determines appropriate in accordance with the terms and conditions of the agreement. Each advance shall be in an aggregate amount of not more than $1,000,000 and in integral multiples of $100,000. The Company will use the advances to fund operating expenses, acquisitions, and exploration and general corporate activities. The investor also has an option to subscribe up to a further $2,500,000.

Each unit consists of one share of the Company’s common stock and one share purchase warrant. The unit price will be the price to the higher of either: (a) $0.75; or (b) 90% of the volume weighted average of the closing price of common stock, for the five banking days immediately preceding the date of the notice of advance. Each warrant

F-18

shall entitle the investor to purchase one additional share of common stock at an exercise price equal to 150% of the unit price at which the unit containing the warrant being exercised was issued.

The Company issued 401,067 shares under the agreement during the fiscal year ended March 31, 2011, realizing $400,000. This option expired as of April 22, 2013.

7. RELATED PARTY TRANSACTIONS

Related party transaction is not disclosed elsewhere in the consolidated financial statements are as follows:

On March 8, 2010, the Company entered an employment agreement with the newly-appointed President, James Powell. Pursuant to the terms of the agreement, the President will receive a base salary of $5,000 per month. The employment agreement will continue indefinitely subject to termination by either party without cause on 30 days’ notice.

On October 24, 2011, the Company entered into a new employee agreement with President, James Powell. Pursuant to the terms of the agreement, the President will receive a base salary of $2,500 per month. This agreement supersedes any prior agreements made between the Company and the President.

On March 8, 2010, the Company entered an employment agreement with the newly-appointed Chairman of the Board, Tim DeHerrera. Pursuant to terms of the terms of the agreement, Mr. DeHerrera will receive a base salary of $8,000 per month with an incremental rise of $500 per quarter until an amount of $10,000 per month is achieved.

Mr. DeHerrera agreed to acquire 6,000,000 shares of the former CEO’s shares at $0.02 per share. The new CEO’s shares were be held in escrow in the form of eight certificates each representing 750,000 shares which were released between April 30, 2010 and March 5, 2012 (a minimum of twenty-one months from the first release date).

On December 2, 2011, the Company entered into a new employee agreement with Chairman, Tim DeHerrera. Pursuant to the terms of the agreement, the Chairman will receive an annual salary of $90,000 payable as follows; $7,500 per month for months 1-12 and $10,000 per month for months 13-24. The parties agreed that if the Company does not have the capital available to compensate the cash portion of the agreement, Mr.DeHerrera shall have the option of converting the fees earned into common stock at $.01 per share. As additional compensation for services, the Company shall issue common stock of the Company equal up to an amount of 12,000,000 shares upon signing the agreement and an additional 12,000,000 on December 12, 2013. This agreement supersedes any prior agreements made between the Company and the Chairman.

On December 2, 2011, pursuant to the employment and consulting agreement, Mr. DeHerrera was issued 12,000,000 restricted common shares.

On May 23, 2012, pursuant to the employment consulting agreement, Mr. Powell was issued 2,500,000 common shares.

During the nine month periods endedDecember 31, 2014 and 2013, the Company recorded $22,500 and $22,500 respectively in consulting fees for Mr. Powell increasing the amount due to $142,500.

During the nine month periods endedDecember 31, 2014 and 2013, the Company recorded $90,000 in consulting fees and $609 in expenses for Mr. DeHerrera increasing the amount due to $338,459.

The Company is indebted to its officers as follow:


	December 30,
	2014	2013
James Powell - President	$ 142,500	$ 112,500
Tim DeHererra - Chairman of the Board	338,459	218,459
	$ 480,959	$ 330,959

F-19

The amounts consist of unpaid salary and advances made on behalf of the Company.. The loans carry no interest, are unsecured, are due on demand and have no maturity.

During the nine month periods ended December 31, 2014 and 2013, the Company is indebted to Direct Capital Group for $40,034 and $1,595 respectively.

8. PREFERRED STOCK

On January 25, 2011 the Company filed an amendment to its Nevada Certificate of Designation to create two new series of preferred stock:

Preferred Series A - par value $0.001 - 10,000,000 shares authorized

Preferred Series B - par value $0.001 – 10,000,000 shares authorized

The preferred stock may be converted at will to common stock in the ratio of 0.005 preferred share to one common share.

On January 31, 2012, 2,076,000 shares of Preferred Series A stock were issued in completion of the agreement signed January 20, 2011, wherein the Company acquired100% of the outstanding common stock of Joaquin Basin Resources, Inc., owner of an oil & gas property. There being no market for the shares, they were valued at the prevailing market price of $0.01 for the number of post-conversion shares of common stock. The value, $4,152,000, was assigned to the cost of the Joaquin Basin oil & gas property.

On January 31, 2012, 111,000 shares of Series A Preferred Stock were converted to 22,200,000 shares of common stock at the conversion ratio of .005 preferred to 1 common. The securities exchanged had equal value, resulting in no gain or loss on the transaction.

As of March 31, 2012, 10,000,000 Series A preferred shares and 10,000,000 Series B preferred shares of par value $0.001 were authorized, of which 1,965,000 Series A were issued and outstanding, (0 as of March 31, 2011).

On April 23, 2012, 80,000 shares of Series A Preferred Stock were converted to 16,000,000 shares of common stock at the conversion ratio of .005 preferred to 1 common. The securities exchanged had equal value, resulting in no gain or loss on the transaction.

On August 14, 2012, 328,000 shares of Series A Preferred Stock were converted to 65,600,000 shares of common stock at the conversion ratio of .005 preferred to 1 common, according to the attributes of the preferred stock. The securities exchanged had equal value, resulting in no gain or loss on the transaction.

On October 12, 2012, 125,000 shares of Series A Preferred Stock were converted into 25,000,000 shares of common stock at the conversion ratio of .005 preferred to 1 common. The securities exchanged had equal value, resulting in no gain or loss on the transaction.

As of March 31, 2013, 10,000,000 Series A preferred shares and 10,000,000 Series B preferred shares of par value $0.001 were authorized, of which 1,432,000 Series A shares were issued and outstanding, (1,965,000 shares as of March 31, 2012).

On September 20, 2013, 112,500 Series A preferred shares were converted to 112,500,000 shares of common stock.

As of March 31, 2014, 10,000,000 Series A preferred shares and 10,000,000 Series B preferred shares of par value $0.001 were authorized, of which 1,319,500 Series A shares were issued and outstanding (1,432,000 shares as of March 31, 2013).

As ofDecember 31, 2014, 10,000,000 Series A preferred shares and 10,000,000 Series B preferred shares of par value $0.001 were authorized, of which 1,319,500 Series A shares were issued and outstanding, (1,319,500 shares as ofDecember 31, 2013).

9. COMMON STOCK

F-20

Effective January 14, 2008, the Company split its common stock on a twenty-for-one basis. All shareholders as of the record date of January 14, 2008 receive twenty shares of common stock in exchange for each one common share of their currently issued common stock. The authorized, issued and per share information presented is on a post-split basis. On January 14, 2008, the Company’s total paid-in capital was less than the product of the par value per share multiplied by the number of post-split shares outstanding. As a result, the shareholders may have an obligation to make up the shortfall of $7,735 should the shortfall not be otherwise eliminated.

On March 9, 2010, the Company issued 1,250,000 shares pursuant to a subscription at a price of $0.40 per share for total proceeds of $500,000.

On April 5, 2010, the Company cancelled 18,002,000 shares surrendered for cancellation by the former CEO and majority shareholder of the Company pursuant to an agreement effective March 17, 2010 (Note 8).

On May 14 and September 28, 2010, 134,420 and 266,667 shares, respectively, were issued at $0.48 pursuant to a Securities Purchase Agreement. $400,000 cash was realized.

Pursuant to consulting agreements with two advisors, common stock was issued for services:


Date Issued		Shares				Price Per Share		Expense
December 31, 2010	50,000		$	0.82			Consulting $40,950
October 18, 2010		50,000			$	0.39		Consulting $19,500
November 15, 2010		150,000 s			$	0.39		Consulting $58,500

On January 3, 2011, 6,000,000 shares of restricted common stock were issued for services at $0.02 per share; whereby an expense of $93,000 was recorded.

On February 1, 2011, 1,300,000 shares of common stock were issued at $0.05 per share in retirement of debt of $63,471. The loss on the transaction was de minimus.

On February 1, 2011, 62,000,000 shares of common stock were issued at $0.12 per share in exchange for stock of a subsidiary, acquiring an oil and gas property of $7,368,900. See Note 1.

On August 18, 2011, 500,000 shares of common stock were issued at $0.10 per share for consulting. An expense of $15,000 was recorded.

Between August 29 and September 21, 2011, 9,406,149 common shares were issued at $0.01, $0.02 and $0.03 per share in elimination of $55,000 notes payable. A loss of $32,814 was recorded.

Between November 28 and December 8, 2011, 11,295,545 common shares were issued at $0.10, $0.006 and $0.008 per share in elimination of $55,000 notes payable. A loss of $32,814 was recorded.

On December 2, 2011, 12,000,000 shares were issued for consulting at $0.008 per share. An expense of $96,000 was recorded.

On January 1, 2012, 3,198,528 shares were returned to Treasury and cancelled in a preliminary transaction further to a consulting agreement.

Between January 1 and February 8, 2012, 12,815,862 common shares were issued at $0.008, $0.009 and $0.010 per share in elimination of $115,000 notes payable. A loss of $2,803 was recorded.

On February 2, 2012, 1,684,427 shares of common stock were issued at $0.01 per share for consulting. An expense of $16,845 was recorded.

F-21

On January 31, 2012, 22,200,000 shares of common stock were issued at $0.01 per share in converting 111,000 shares of Series A preferred stock to common stock. The value of the common stock equated to that of the preferred stock, resulting in no gain or loss on the transaction.

As of March 31, 2012, 1,500,000,000 common shares of par value $0.001 were authorized, of which 201,944,542 were issued and outstanding, (135,241,087 as of March 31, 2011).

On April 23, 2012, 16,000,000 shares of common stock were issued in an exchange for 80,000 of Series A Preferred Stock. The stocks exchanged had equal value, resulting in no gain or loss on the transaction.

On May 17, 2012, 1,514,101 shares of common stock were issued for consulting valued at the closing price on the day of $0.01 per share. An expense of $15,141 was recorded.

On May 23, 2012, 2,500,000 shares of common stock were issued for consulting pursuant to an employment agreement, valued at the closing price on the day of $0.01. An expense of $25,000 was recorded.

On June 11, 2012, 1,000,000 shares of common stock were issued at the closing price of $0.01 pursuant to a loan agreement with Vista Capital Investments. An expense of $10,000 was recorded.

Between July 12 and September 18, 2012, 25,715,010 shares of common stock were issued in the elimination of debt at the uniform price of $0.01. An expense of $164,550 was recorded.

On August 14, 2012, 65,600,000 shares of common stock were issued in an exchange for 328,000 of Series A Preferred Stock. The stocks exchanged had equal value, resulting in no gain or loss on the transaction.

On October 12, 2012, 125,000 shares of Series A Preferred Stock were converted into 25,000,000 shares of common stock at the conversion ratio of .005 preferred to 1 common. The stocks exchanged had equal value, resulting in no gain or loss on the transaction.

From October 1, 2012 to December 31, 2012, the holders of a convertible notes converted a total of $92,600 of principal and interest into 49,508,657 shares of our common stock.

From January 1, 2013 to March 31, 2013, the holders of a convertible notes converted a total of $97,920 of principal and interest into 177,789,278 shares of our common stock.

On September 20, 2013, 112,500 Series A preferred shares were converted to 112,500,000 shares of common stock.

From April 1, 2013 to March 31, 2014, the holders of a convertible notes converted a total of $213,540 of principal and $46,266 of interest into 4,218,827,420 shares of our common stock.

From April 1, 2014 to December 31, 2014, the holders of a convertible notes converted a total of $89,644 of principal and interest into 1,681,759,062 shares of our common stock.

As of December 31, 2014, 7,500,000,000 common shares of par value $0.001 were authorized, of which 6,578,408,070 shares were issued and outstanding, (1,368,864,259 shares as of December 31, 2013).

10. INCOME TAXES

A reconciliation of income tax expense to the amount computed at the statutory rates is as follows:


	December 31,
	2014	2013
Operating profit (loss) for the nine month period ended December 31	$ 440,375	$ (1,746,286)
Average statutory tax rate	34%	34%
Expected income tax provisions	$ 149,728	$ (593,737)
Unrecognized tax gains (loses)	149,728	(593,737)
Income tax expense	$ -	$ -

The Company has net operating losses carried forward of approximately $11,351,779 for tax purposes which will expire in 2025 if not utilized beforehand.

11. COMMITMENTS

None.

F-3

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

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

RESULTS OF OPERATIONS

Working Capital



	December 31, 2014 $	March 31, 2014 $
Current Assets	51	---
Current Liabilities	2,200,256	2,888,432
Working Capital (Deficit)	(2,200,205)	(2,888,432)

Cash Flows



	December 31, 2014 $			December 31, 2013 $
Cash Flows from (used in) Operating Activities	(501,182)	(1,489,214)
Cash Flows from (provided by) Financing Activities	501,234			1,488,641
Cash Flows from (used in) Investing Activities	---		---
Net Increase (decrease) in Cash During Period	51		(573)

Results for the Three Months Ended December 31, 2014 Compared to the Three Months Ended December 31, 2013

Operating Revenues

The Company’s revenues for the three months ended December 31, 2014 and December 31, 2013 were $0 and $0, respectively.

Cost of Revenues

The Company’s cost of revenues for the three months ended December 31, 2014 and December 31, 2013 were $0 and $0, respectively.

Gross Profit

The Company’s gross profit for the three months ended December 31, 2014 and December 31, 2013 was $0 and $0 respectively.

General and Administrative Expenses

General and administrative expenses for the three months ended December 31, 2014 and December 31, 2013 were $89,896 and $93,470, respectively. General and administrative expenses consisted primarily of consulting fees, management fees and professional fees. The decrease was primarily attributable to a decrease in professional fees.

Net Loss from Operations

The Company’s net loss from operations for the three month periods ended December 31, 2014 and 2013 was $(89,896) and $(93,470) respectively. The decreased loss is due to normal operating expenses.

Other Income (Expense):

Other income (expense) for the three month periods ended December 31, 2014 and 2013 were $(10,655) and $296,876 respectively. Other income (expense) consists of change of fair value on derivative valuation and interest expense. The gain or loss on derivative valuation is directly attributable to the change in fair value of the derivative liability. Interest expense is primarily attributable the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms.

Net Profit (Loss)

Net profit (loss) for the three month periods ended December 31, 2014 and 2013, was $(100,551) and $203,406 respectively. The increased loss is due the change in fair value of the derivative liabilities.

Results for the Nine months Ended December 31, 2014 Compared to the Quarter Ended December 31, 2013

Operating Revenues

The Company’s revenues for the nine month periods ended December 31, 2014 and 2013 were $0 and $0, respectively.

Cost of Revenues

The Company’s cost of revenues for the nine month periods ended December 31, 2014 and 2013 were $0 and $0, respectively.

Gross Profit

The Company’s gross profit for the nine month periods ended December 31, 2014 and 2013 was $0 and $0 respectively.

General and Administrative Expenses

General and administrative expenses for the nine month periods ended December 31, 2014 and2013 were $336,288 and $288,051, respectively. General and administrative expenses consisted primarily of consulting fees, management fees and professional fees. The increase was primarily attributable to an increase in management fees and professional fees.

Net Loss from Operations

The Company’s net loss from operations for the nine month periods ended December 31, 2014 and 2013 was $(336,288) and $(288,051) respectively. The increased loss is due to normal operating expenses.

Other Income (Expense):

Other income (expense) for the nine month periods ended December 31, 2014 and 2013 were $776,664 and $(1,458,235). Other income (expense) consists of change of fair value on derivative valuation and interest expense. The gain or loss on derivative valuation is directly attributable to the change in fair value of the derivative liability. Interest expense is primarily attributable the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms.

Net Profit (Loss)

Net profit (loss) for the nine month periods ended December 31, 2014 and 2013 was $440,375 and$(1,746,286) respectively. The increased profit is due the change in fair value of the derivative liabilities and a decrease in interest on convertible notes.

Results for the Period from March 31, 2009 (inception of Exploration Stage) Through December 31, 2014

Operating Revenues

The Company’s revenues for the period from March 31, 2009 (inception of Exploration Stage) through December 31, 2014 were $0.

Cost of Revenues

The Company’s cost of revenues for the period from March 31, 2009 (inception of Exploration Stage) through December 31, 2014 were $0.

Gross Profit

The Company’s gross profit for the period from March 31, 2009 (inception of Exploration Stage) through December 31, 2014 was $ 0.

General and Administrative Expenses

General and administrative expenses for the period from March 31, 2009 (inception of Exploration Stage) through December 31, 2014 were $8,162,890. General and administrative expenses consist primarily of consulting fees, management fees, rent, impairment expenses and professional fees appropriate for being a public company.

Net Loss from Operations

The Company’s net loss from operations for the period from March 31, 2009 (inception of Exploration Stage) through December 31, 2014 was $(8,162,890).

Other Income (Expense):

Other income (expenses) for the period from March 31, 2009 (inception of Exploration Stage) through December 31, 2014, was$(3,188,889).

Net Loss

Net loss for the period from March 31, 2009 (inception of Exploration Stage) through December 31, 2014was $(11,351,779).

Liquidity and Capital Resources

As ofDecember 31, 2014, the Company had a cash balance and asset total of $51 and $7,043,565respectively, compared with $0 and $7,043,714 of cash and total assets, respectively, as of March 31, 2014. The increase in cash was due to normal operating activities.

As ofDecember 31, 2014, the Company had total liabilities of $2,200,256 compared with $2,888,432as ofMarch 31, 2014. The decrease in total liabilities was primarily attributed to the decrease in value of derivative liabilities.

The overall working capital increased from $(2,888,432) deficit at March 31, 2014 to $(2,200,205) at December 31, 2014.

Cash Flow from Operating Activities

During the nine months ended December 31, 2014, cash used in operating activities was $(501,182) compared to $(1,489,214) for the nine months ended December 31, 2013.

Cash Flow from Investing Activities

During the nine months ended December 31, 2014 cash used in investing activities was $0 compared to $0 for the nine months ended December 31, 2013.

Cash Flow from Financing Activities

During the nine months ended December 31, 2014, cash provided by financing activity was $501,234 compared to $1,488,641for the nine months ended December 31, 2013.

Quarterly Developments

None.

Subsequent Developments

None.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and

liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a non-accelerated filer and a smaller reporting company, as defined in Rule 12b-2 of the of the Securities Exchange Act of 1934, and as such, are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our sole officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our sole officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2014. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses in our internal control over financial reporting identified in our Annual Report on Form 10-K for the year ended March 31, 2013, that was filed with the SEC on July 15, 2013, the sole officer concluded that our disclosure controls and procedures are ineffective.

Changes in Internal Control over Financial Reporting

We have not yet implemented any of the recommended changes to internal control over financial reporting listed in our Annual Report on Form 10-K for the year ended March 31, 2013. As such, there were no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act, during the quarter ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II- OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director,

officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A.RISK FACTORS

Our Annual Report on Form 10-K for the fiscal year ended March 31, 2013 includes a detailed discussion of our risk factors.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

1.Quarterly Issuances:

On April 1, 2014, Gel Properties, LLC converted $15,000 of principal of a convertible note into 230,769,231 shares of its common stock at a price of $0.000065.

On April 7, 2014, Gel Properties, LLC converted $7,190 of principal and $1,886 of interest of a convertible note into 139,623,231 shares of its common stock at a price of $0.000065.

On April 7, 2014, Asher Enterprises converted $7,075 of principal of a convertible note into 141,500,000 shares of its common stock at a price of $0.00005.

On April 8, 2014, Coventry Enterprises converted $13,450 of principal of a convertible note into 269,000,000 shares of its common stock at a price of $0.00005.

On April 14, 2014, Asher Enterprises converted $2,600 of principal of a convertible note into 52,000,000 shares of its common stock at a price of $0.00005.

On April 14, 2014, Asher Enterprises converted $3,350 of principal and $1,100 of interest of a convertible note into 89,000,000 shares of its common stock at a price of $0.00005.

On April24, 2014, Asher Enterprises converted $7,000 of principal of a convertible note into 140,000,000 shares of its common stock at a price of $0.00005.

On May 1, 2014, Asher Enterprises converted $7,000 of principal of a convertible note into 140,000,000 shares of its common stock at a price of $0.00005.

On May 6, Asher Enterprises converted $7,000 of principal of a convertible note into 140,000,000 shares of its common stock at a price of $0.00005.

On June 9, 2014, Asher Enterprises converted $6,900 of principal of a convertible note into 138,000,000 shares of its common stock at a price of $0.00005.

On June 26, 2014, Asher Enterprises converted $2,000 of principal and $1,300 of interest of a convertible note into 66,000,000 shares of its common stock at a price of $0.00005.

On August 28, 2014, Coventry Enterprises converted $6,793 of principal of a convertible note into 135,866,600 shares of its common stock at a price of $0.00005.

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

2. Subsequent Issuances:

From January 1, 2015 until January 5, 2015, the holders of convertible notes converted a total of $0 of principal and interest.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.SUBSEQUENT EVENTS

On January 1, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group Inc. in the sum of $360,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2015. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum.

ITEM 5. OTHER INFORMATION

Certificate of Amendment to Articles of Incorporation

On or about March 6, 2014, the Board of Directors of Grid Petroleum Corp., a Nevada corporation (the “Company”) authorized an increase in the Company's shares of common stock to Seven Billion Five Hundred Million Twenty Million shares (7,520,000,000) of which Seven Billion Five Hundred Million (7,500,000,000) shall be shares of Common Stock, par value $0.001 per share, and twenty million (20,000,000) shall be shares of Preferred Stock, par value $0.001 per share with ten million (10,000,000) of such shares being designated as Series A Preferred Stock, and ten million (10,000,000) of such shares designated as Series B Preferred Stock.

On March 6, 2014, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase its authorized capital to Seven Billion Five Hundred Million Twenty Million shares (7,520,000,000) of which Seven Billion Five Hundred Million (7,500,000,000) shall be shares of Common Stock, par value $0.001 per share, and twenty million (20,000,000) shall be shares of Preferred Stock, par value $0.001 per share with ten million (10,000,000) of such shares being designated as Series A Preferred Stock, and ten million (10,000,000) of such shares designated as Series B Preferred Stock,(the “Increase in Authorized”). The Increase in Authorized was effective with the Nevada Secretary of State on March 6, 2014 when the Certificate of Amendment was filed. The Increase in Authorized was approved by the Board of Directors and the shareholders holding a majority of the total issued and outstanding shares of common stock on or about March 6, 2014.

Promissory Notes

On October 31, 2014, the Company executed an Unsecured Convertible Promissory Note with Syndication Capital, LLC in the sum of $48,000, which accrues interest at 8% per annum, with a May 1, 2015 maturity date. The note contains customary events of default.

ITEM 6. EXHIBITS


Exhibit Number	Description of Exhibit	Filing
3.1	Articles of Incorporation	Filed with the SEC on June 8, 2007 as part of our Registration of Securities on Form SB-2.
3.1a	Amended Articles of Incorporation	Filed with the SEC on November 11, 2009, on our Current Report on Form 8-K.
3.2	Bylaws	Filed with the SEC on June 8, 2007 as part of our Registration of Securities on Form SB-2.
10.1	Loan Agreement, by and between the Company and Kelly Sundberg, dated December 18, 2006	Filed with the SEC on June 8, 2007 as part of our Registration of Securities on Form SB-2.
10.2	Loan Agreement, by and between the Company and Green Shoe, Inc., dated March 26, 2008	Filed with the SEC on March 28, 2008 as part of our Current Report on Form 8-K.
10.3	Employment Agreement, by and between the Company and Paul Watts, dated January 31, 2010	Filed with the SEC on March 9, 2010 as part of our Current Report on Form 8-K.
10.4	Asset Purchase and Sale Agreement, by and between the Company and Murrayfield Limited, dated March 11, 2010	Filed with the SEC on March 23, 2010 as part of our Current Report on Form 8-K.
10.5	Share Issuance Agreement, by and between the Company and Premier Global Corp, dated April 23, 2010	Filed with the SEC on April 28, 2010 as part of our Current Report on Form 8-K.
10.6	Separation Agreement, by and amongst the Company and Kelly Sundberg, Stephen Ronaldson and Paul Watts, dated December 3, 2010	Filed with the SEC on December 7, 2010 as part of our Current Report on Form 8-K/A.
10.7	Share Exchange Agreement, by and between the Company and Joaquin Basin Resources Inc., dated January 20, 2011	Filed with the SEC on January 25, 2011 as part of our Current Report on Form 8-K.
10.8	Agreement for the Sale and Assignment and Affirmation of Obligation, by and amongst the Company, Green Shoe, LLC, and Syndication Capital, LLC, dated January 28, 2011	Filed with the SEC on February 4, 2011 as part of our Current Report on Form 8-K.
10.9	Form of Securities Purchase Agreement, by and between the Company and Buyer, dated February 24, 2011	Filed with the SEC on March 10, 2011 as part of our Current Report on Form 8-K.
10.10	Form of Convertible Promissory Note, by and between the Company and Holder, dated February 24, 2011	Filed with the SEC on March 10, 2011 as part of our Current Report on Form 8-K.
10.11	Form of Securities Purchase Agreement, by and between the Company and Buyer, dated May 13, 2011	Filed with the SEC on June 13, 2011 as part of our Current Report on Form 8-K.
10.12	Form of Convertible Promissory Note, by and between the Company and Holder, dated May 13, 2011	Filed with the SEC on June 13, 2011 as part of our Current Report on Form 8-K.
10.13	Transfer of Asset by and between, XplorationInc, and Joaquin Basin Resources, dated January 20, 2011	Filed with the SEC on November 23, 2011 as part of our Current Report on Form 8-K.
10.14	Mineral Rights Purchase Amendment, by and between Xploration Inc. and Joaquin Basin Resources, dated November 21, 2011	Filed with the SEC on November 23, 2011 as part of our Current Report on Form 8-K
10.15	Contract Agreement, by and between the Company and James Powell, dated October 24, 2011	Filed with the SEC on February 9, 2012, as part of our Quarterly Report on Form 10-Q.
10.16	Employment/Consulting Agreement, by and between the Company and Tim DeHerrera, dated December 2, 2011	Filed with the SEC on February 9, 2012, as part of our Quarterly Report on Form 10-Q.
10.17	Debt Settlement Agreement, by and between the Company and Syndication Capital, dated December 31, 2012	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.18	Debt Settlement Agreement, by and between the Company and Direct Capital Group, Inc., dated December 31, 2012	Filed with the SEC on February 19, 2013 as part of our Quarterly Report on Form 10-Q.
10.19	Debt Settlement Agreement, by and between the Company and Xploration Incorporated, dated December 31, 2012	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.20	Purchase Agreement by and between the Company and Xploration Incorporated, dated July 31, 2013	Filed with the SEC on August 5, 2013, as part of our Current Report on Form 8-K.
10.21	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated July 31, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.22	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated July 31, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.23	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated August 31, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.24	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated September 30, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.25	Convertible Promissory Note entered by and between the Company and Direct Capital Group, dated October 1, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.26	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated October 31, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.27	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated November 30, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.28	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated December 31, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.30	Convertible Promissory Note entered by and between the Company and Gel Properties, LLC, dated December 18, 2013	Filed herewith.
10.31	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated January 31, 2014	Filed with the SEC on July 15, 2014 as part of our Annual Report on Form 10-K.
10.32	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated March 31, 2014	Filed with the SEC on July 15, 2014 as part of our Annual Report on Form 10-K.
10.33	Convertible Promissory Note entered by and between the Company and LG Capital Funding, LLC, dated March 3, 2014	Filed herewith.
10.34	Convertible Promissory Note entered by and between the Company and Coventry Enterprises, LLC, dated March 3, 2014	Filed herewith.
10.35	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated March 31, 2014	Filed with the SEC on July 15, 2014 as part of our Annual Report on Form 10-K.
10.36	Convertible Promissory Note entered by and between the Company and New Venture Attorneys PC, dated April 1, 2014	Filed herewith
10.37	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated April 30, 2014	Filed with the SEC on August 14, 2014 as part of our Quarterly Report on Form 10-Q.
10.38	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated July 31, 2014	Filed with the SEC on November 14, 2014 as part of our Quarterly Report on Form 10-Q.
10.39	Convertible Promissory Note entered by and between the Company and Syndication Capital, LLC, dated October 31, 2014	Filed herewith.
10.40	Convertible Promissory Note entered by and between the Company and Direct Capital Group, dated October 1, 2014	Filed herewith.
10.41	Convertible Promissory Note entered by and between the Company and Direct Capital Group, dated January 1, 2015	Filed herewith.
16.1	Representative Letter from John Kinross-Kennedy	Filed with the SEC on February 19, 2013 as part of our Quarterly Report on Form 10-Q.
16.2	Representative Letter from Anton & Chia LLP.	Filed with the SEC on October 25, 2013 as part of our Current Report on Form 8-K.
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01	Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith
101.INS*	XBRL Instance Document	Furnished herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document	Furnished herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document	Furnished herewith.
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document	Furnished herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document	Furnished herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document	Furnished herewith.

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




		GRID PETROLEUM CORP.
Dated: February 17, 2015		/s/ James Powell
		JAMES POWELL
		Its: President, Principal Executive Officer & Principal Financial Officer (Principal Accounting Officer)

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.



Dated: February 17, 2015	/s/ Tim DeHerrera
	By: Tim DeHerrera Its: Chairman and Director

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES
ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION

STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE
SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD

PURSUANT TO RULE

144

OR RULE

144A UNDER SAID ACT.

NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $48,000.00

Issue Date: October 31, 2014

Debt Settlement Price: $48,000.00

CONVERTIBLE PROMISSORY NOTE

Grid Petroleum Corporation, a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of Syndication Capital LLC, a Nevada corporation, or registered assigns (the “Holder”) the sum of $48,000.00 together with any interest as set forth herein, on May 1, 2015 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note, which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into Common free trading stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of Las Vegas, Nevada are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Debt Settlement Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Debt Settlement Agreement”).

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1

Conversion Right. The Holder shall have the right from time to time, and

at any time during the period beginning on the date, which is one hundred eighty (180) days,
following the dates listed for each invoice listed in Exhibit B. The Maturity Dates for invoice #42 in the amount of $48,000.00, (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock.

For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise

provided in clause (1) of such proviso, provided, further, however, that the limitations on
conversion may be waived by the Holder upon, at the election of the Holder, not less than 61
days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue
to apply until such 61st day (or such later date, as determined by the Holder, as may be specified
in such notice of waiver). The number of shares of Common Stock to be issued upon each
conversion of this Note shall be determined by dividing the Conversion Amount (as defined
below) by the applicable Conversion Price then in effect on the date specified in the notice of
conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to
the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of
Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Borrower before 6:00 p.m., Las Vegas, Nevada time on
such conversion date (the “Conversion Date”).

The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Borrower’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Borrower’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

1.2

Conversion Price.

(a)

Calculation of Conversion Price. The conversion price

(the

“Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to
equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower
relating to the Borrower’s securities or the securities of any subsidiary of the Borrower,
combinations, recapitalization, reclassifications, extraordinary distributions and similar events).
The "Conversion Price" shall mean par .00001 multiplied by the number of Common Stock converted at the time.

(b)

Conversion Price During Major Announcements. Notwithstanding

anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public
announcement that it intends to consolidate or merge with any other corporation (other than a
merger in which the Borrower is the surviving or continuing corporation and its capital stock is
unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any
person, group or entity (including the Borrower) publicly announces a tender offer to Purchase
50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the
announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement

Date”), then the Conversion Price shall, effective upon the Announcement Date and continuing
through the Adjusted Conversion Price Termination Date (as defined below), be equal to the
lower of (x) the Conversion Price which would have been applicable for a Conversion occurring
on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From
and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be
determined as set forth in this Section 1.2(a). For purposes hereof, “Adjusted Conversion Price

Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

1.3

Authorized Shares. The Borrower covenants that during the period the

conversion right exists, the Borrower will reserve from its authorized and unissued Common
Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of
Common Stock upon the full conversion of this Note issued pursuant to the Debt Settlement Agreement. The Borrower is required at all times to have authorized and reserved two times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the “Reserved Amount”).

The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant to Section 4(g) of the Debt Settlement Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

1.4

Method of Conversion.

(a)

Mechanics of Conversion. Subject to Section 1.1, this Note may

be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., Las Vegas, Nevada time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

(b)

Surrender of Note Upon Conversion. Notwithstanding anything to

the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof,
the Holder shall not be required to physically surrender this Note to the Borrower unless the
entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall
maintain records showing the principal amount so converted and the dates of such conversions or
shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to
require physical surrender of this Note upon each such conversion. In the event of any dispute or
discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in
the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is
converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically
surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver
upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by
the Holder of any applicable transfer taxes) may request, representing in the aggregate the
remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of
this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following

conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

(c)

Payment of Taxes. The Borrower shall not be required to pay any

tax which may be payable in respect of any transfer involved in the issue and delivery of shares
of Common Stock or other securities or property on conversion of this Note in a name other than
that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver
any such shares or other securities or property unless and until the person or persons (other than
the Holder or the custodian in whose street name such shares are to be held for the Holder’s
account) requesting the issuance thereof shall have paid to the Borrower the amount of any such
tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

(d)

Delivery of Common Stock Upon Conversion. Upon receipt by

the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Debt Settlement Agreement.

(e)

Obligation of Borrower to Deliver Common Stock. Upon receipt

by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of
record of the Common Stock issuable upon such conversion, the outstanding principal amount
and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such
conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights
with respect to the portion of this Note being so converted shall forthwith terminate except the
right to receive the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. If the Holder shall have given a Notice of Conversion as provided herein,
the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be
absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the
same, any waiver or consent with respect to any provision thereof, the recovery of any judgment
against any person or any action to enforce the same, any failure or delay in the enforcement of
any other obligation of the Borrower to the holder of record, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of any other circumstance which might otherwise
limit such obligation of the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as
the Notice of Conversion is received by the Borrower before 6:00 p.m., Las Vegas, Nevada
time, on such date.

(f)

Delivery of Common Stock by Electronic Transfer. In lieu of

delivering physical certificates representing the Common Stock issuable upon conversion,
provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast

Automated Securities Transfer

(“FAST”) program, upon request of the Holder and its

compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.

(g)

Failure to Deliver Common Stock Prior to Deadline. Without in

any way limiting the Holder’s right to pursue other remedies, including actual damages and/or
equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion
of this Note is not delivered by the Deadline (other than a failure due to the circumstances
described in Section 1.3 above, which failure shall be governed by such Section) the Borrower
shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the
Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the
fifth day of the month following the month in which it has accrued or, at the option of the Holder
(by written notice to the Borrower by the first day of the month following the month in which it
has accrued), shall be added to the principal amount of this Note, in which event interest shall
accrue thereon in accordance with the terms of this Note and such additional principal amount
shall be convertible into Common Stock in accordance with the terms of this Note. The
Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting
from a failure, attempt to frustrate, interference with such conversion right are difficult if not
impossible to qualify. Accordingly the parties acknowledge that the liquidated damages
provision contained in this Section 1.4(g) are justified.

1.5

Concerning the Shares. The shares of Common Stock issuable upon

Except as otherwise provided in the Debt Settlement Agreement (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear
a legend substantially in the following form, as appropriate:

“NEITHER    THE    ISSUANCE    AND    SALE    OF    THE    SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO
WHICH    THESE    SECURITIES    ARE    EXERCISABLE    HAVE    BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY
THE   HOLDER),   IN   A   GENERALLY   ACCEPTABLE   FORM,   THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING   THE   FOREGOING,   THE   SECURITIES   MAY   BE

PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Borrower shall issue to the
Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer
agent shall have received an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such
Common Stock may be made without registration under the Act, which opinion shall be accepted
by the Company so that the sale or transfer is effected or (ii) in the case of the Common Stock
issuable upon conversion of this Note, such security is registered for sale by the Holder under an
effective registration statement filed under the Act or otherwise may be sold pursuant to Rule
144 without any restriction as to the number of securities as of a particular date that can then be
immediately sold. In the event that the Company does not accept the opinion of counsel
provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from
registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of
Default pursuant to Section 3.2 of the Note.

1.6

Effect of Certain Events.

(a)

Effect of Merger, Consolidation, Etc. At the option of the Holder,

the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the
effectuation by the Borrower of a transaction or series of related transactions in which more than
50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other
business combination of the Borrower with or into any other Person (as defined below) or
Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of

Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

(b)

Adjustment Due to Merger, Consolidation, Etc. If, at any time

when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall
be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock of the Borrower shall be changed
into the same or a different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of
the assets of the Borrower other than in connection with a plan of complete liquidation of the
Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion
of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the
shares of Common Stock immediately theretofore issuable upon conversion, such stock,
securities or assets which the Holder would have been entitled to receive in such transaction had
this Note been converted in full immediately prior to such transaction (without regard to any
limitations on conversion set forth herein), and in any such case appropriate provisions shall be
made with respect to the rights and interests of the Holder of this Note to the end that the
provisions hereof (including, without limitation, provisions for adjustment of the Conversion
Price and of the number of shares issuable upon conversion of the Note) shall thereafter be
applicable, as nearly as may be practicable in relation to any securities or assets thereafter

deliverable upon the conversion hereof. The Borrower shall not affect any transaction described
in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior
written notice (but in any event at least fifteen (15) days prior written notice) of the record date
of the special meeting of shareholders to approve, or if there is no such record date, the
consummation of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the Holder shall be
entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the
Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above
provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share
exchanges.

(c)

Adjustment Due to Distribution. If the Borrower shall declare or

make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

(d)

Adjustment Due to Dilutive Issuance. If, at any time when any

Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section

1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock for no consideration
or for a consideration per share (before deduction of reasonable expenses or commissions or
underwriting discounts or allowances in connection therewith) less than the Conversion Price in
effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a
“Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price will be
reduced to the amount of the consideration per share received by the Borrower in such Dilutive
Issuance.

The Borrower shall be deemed to have issued or sold shares of Common

Stock if the Borrower in any manner issues or grants any warrants, rights or options (not
including employee stock option plans), whether or not immediately exercisable, to subscribe for
or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants, rights and options to Purchase Common Stock
or Convertible Securities are hereinafter referred to as “Options”) and the price per share for
which Common Stock is issuable upon the exercise of such Options is less than the Conversion
Price then in effect, then the Conversion Price shall be equal to such price per share. For
purposes of the preceding sentence, the “price per share for which Common Stock is issuable
upon the exercise of such Options” is determined by dividing (i) the total amount, if any,
received or receivable by the Borrower as consideration for the issuance or granting of all such
Options, plus the minimum aggregate amount of additional consideration, if any, payable to the
Borrower upon the exercise of all such Options, plus, in the case of Convertible Securities
issuable upon the exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full conversion of

Convertible Securities, if applicable). No further adjustment to the Conversion Price will be
made upon the actual issuance of such Common Stock upon the exercise of such Options or upon
the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

Additionally, the Borrower shall be deemed to have issued or sold shares

of Common Stock if the Borrower in any manner issues or sells any Convertible Securities,
whether or not immediately convertible (other than where the same are issuable upon the
exercise of Options), and the price per share for which Common Stock is issuable upon such
conversion or exchange is less than the Conversion Price then in effect, then the Conversion
Price shall be equal to such price per share. For the purposes of the preceding sentence, the
“price per share for which Common Stock is issuable upon such conversion or exchange” is
determined by dividing (i) the total amount, if any, received or receivable by the Borrower as
consideration for the issuance or sale of all such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the Borrower upon the
conversion or exchange thereof at the time such Convertible Securities first become convertible
or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities. No further adjustment to the
Conversion Price will be made upon the actual issuance of such Common Stock upon conversion
or exchange of such Convertible Securities.

(e)

Share Purchase Rights. If, at any time when any Notes are issued and

outstanding, the Borrower issues any convertible securities or rights to Common stock, warrants,
securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of
Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms
applicable to such Share Purchase Rights, the aggregate Share Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained
herein) immediately before the date on which a record is taken for the grant, issuance or sale of
such Debt Settlement Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Debt Settlement Rights.

(f)

Notice of Adjustments. Upon the occurrence of each adjustment

or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

1.7

Trading Market Limitations. Unless permitted by the applicable rules and

regulations of the principal securities market on which the Common Stock is then listed or
traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant to this
Note and the other Notes issued pursuant to the Debt Settlement Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the “Maximum Share Amount”), which shall be 4.99% of the total shares outstanding on the Closing
Date (as defined in the Debt Settlement Agreement), subject to equitable adjustment from time to time

for stock splits, stock dividends, combinations, capital reorganizations and similar events relating
to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has
been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules
or regulations of any stock exchange, interdealer quotation system or other self-regulatory
organization with jurisdiction over the Borrower or any of its securities on the Borrower’s ability
to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu of any
further right to convert this Note, this will be considered an Event of Default under Section 3.3
of the Note.

1.8

Status as Shareholder. Upon submission of a Notice of Conversion by a

Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued
because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or
Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the
Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate,
excepting only the right to receive certificates for such shares of Common Stock and to any
remedies provided herein or otherwise available at law or in equity to such Holder because of a
failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing,
if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th)
business day after the expiration of the Deadline with respect to a conversion of any portion of
this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder
of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of
this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon
as practicable, return such unconverted Note to the Holder or, if the Note has not been
surrendered, adjust its records to reflect that such portion of this Note has not been converted. In
all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i)
the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required
thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to
have the Conversion Price with respect to subsequent conversions determined in accordance with
Section 1.3) for the Borrower’s failure to convert this Note.

1.9

Prepayment. Notwithstanding anything to the contrary contained in this

Note, at any time during the period beginning on the Issue Date and ending on the date which is
ninety (90) days following the issue date, the Borrower shall have the right, exercisable on not
less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the
outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9.
Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the
Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising
its right to prepay the Note, and (2) the date of prepayment which shall be not more than three

(3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for
prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the

Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified
by the Holder in writing to the Borrower at least one (1) business day prior to the Optional
Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall
make payment to the Holder of an amount in cash (the “Optional Prepayment Amount”) equal to
140%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus

(x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional
Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and

(x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the
Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment

Amount due to the Holder of the Note within two (2) business days following the Optional
Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this
Section 1.9.

Notwithstanding anything to the contrary contained in this Note, at any time
during the period beginning on the date of the invoices listed on Exhibit B, which is ninety-one (91) days following the issue date and ending on the date of the invoices listed on Exhibit B, which is one hundred fifty (150) days following the issue date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any Optional Prepayment Notice shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the Optional Prepayment Date, the Borrower shall make payment of the Second Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Second Optional Prepayment Amount”) equal to 145%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Second Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

Notwithstanding anything to the contrary contained in this Note, at any time
during the period beginning on the date of the invoices listed on Exhibit B, which is one hundred fifty-one (151) days following the issue date and ending on the date which is one hundred eighty (180) days following the issue date of the invoices listed on Exhibit B, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any Optional Prepayment Notice shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the Optional Prepayment Date, the Borrower shall make payment of the Third Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Third Optional Prepayment Amount”) equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Third Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

After the expiration of one hundred eighty (180) following the date of the Note, the Borrower shall have no right of prepayment.

ARTICLE II. CERTAIN COVENANTS

2.1

Distributions on Capital Stock. So long as the Borrower shall have any

obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.

2.2

Restriction on Stock Repurchase. So long as the Borrower shall have any

obligation under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

2.3

Borrowings. So long as the Borrower shall have any obligation under this

Note, the Borrower shall not, without the Holder’s written consent, create, incur, assume
guarantee, endorse, contingently agree to purchase or otherwise become liable upon the
obligation of any person, firm, partnership, joint venture or corporation, except by the
endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for
borrowed money, except (a) borrowings in existence or committed on the date hereof and of
which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to
trade creditors or financial institutions incurred in the ordinary course of business or (c)

borrowings, the proceeds of which shall be used to repay this Note.

2.4

Sale of Assets. So long as the Borrower shall have any obligation under

this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise
dispose of any significant portion of its assets outside the ordinary course of business. Any
consent to the disposition of any assets may be conditioned on a specified use of the proceeds of
disposition.

2.5

Advances and Loans. So long as the Borrower shall have any obligation

under this Note, the Borrower shall not, without the Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $500,000.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.1

Failure to Pay Principal or Interest. The Borrower fails to pay the

principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

3.2

Conversion and the Shares. The Borrower fails to issue shares of

Common Stock to the Holder (or announces or threatens in writing that it will not honor its
obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in
accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer
(issue) (electronically or in certificated form) any certificate for shares of Common Stock issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this
Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its
transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate
for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not
to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any
shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this
Note as and when required by this Note (or makes any written announcement, statement or threat
that it does not intend to honor the obligations described in this paragraph) and any such failure
shall continue uncured (or any written announcement, statement or threat not to honor its
obligations shall not be rescinded in writing) for three (3) business days after the Holder shall
have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in
its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of
this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer
agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer
agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the
Holder within forty eight (48) hours of a demand from the Holder.

3.3

Breach of Covenants. The Borrower breaches any material covenant or

other material term or condition contained in this Note and any collateral documents including but not limited to the Debt Settlement Agreement and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.

3.4

Breach of Representations and Warranties. Any representation or

warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Debt Settlement Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Debt Settlement Agreement.

3.5

Receiver or Trustee. The Borrower or any subsidiary of the Borrower

shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

3.6

Judgments. Any money judgment, writ or similar process shall be entered

or filed against the Borrower or any subsidiary of the Borrower or any of its property or other
assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of

twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

3.7

Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation

proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

3.8

Delisting of Stock. The Borrower shall fail to maintain the

listing of the Stock on at least one of the OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

3.9

Failure to Comply with the Exchange Act. The Borrower shall fail to

comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

3.10

Liquidation. Any dissolution, liquidation, or winding up of Borrower or

any substantial portion of its business.

3.11

Cessation of Operations.

Any cessation of operations by Borrower or

Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

3.12

Maintenance of Assets.

The failure by Borrower to maintain any

material intellectual property rights, personal, real property or other assets, which are necessary to conduct its business (whether now or in the future).

3.13

Financial Statement Restatement.

The restatement of any financial

statements filed by the Borrower with the SEC for any date or period from two years prior to the
Issue Date of this Note and until this Note is no longer outstanding, if the result of such
restatement would, by comparison to the unrestated financial statement, have constituted a
material adverse effect on the rights of the Holder with respect to this Note or the Debt Settlement
Agreement.

3.14

Reverse Splits.

The Borrower effectuates a reverse split of its

Common Stock without twenty (20) days prior written notice to the Holder.

3.15

Replacement of Transfer Agent. In the event that the Borrower proposes to

replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Debt Settlement Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

3.16

Cross-Default. Notwithstanding anything to the contrary contained in this

Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

Upon the occurrence and during the continuation of any Event of Default specified in
Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due
at the Maturity Date), the Note shall become immediately due and payable and the Borrower
shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the
Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE
CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE
NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER
SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS
HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED
HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of
any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal
hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event
pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or

3. 15 exercisable through the delivery of written notice to the Borrower by such Holders (the
“Default Notice”), and upon the occurrence of an Event of Default specified the remaining
sections of Articles III (other than failure to pay the principal hereof or interest thereon at the
Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and
payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder,
an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal
amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this
Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any,
on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to
the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be
known as the “Default Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where
parity value means (a) the highest number of shares of Common Stock issuable upon conversion
of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading
Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for
purposes of determining the lowest applicable Conversion Price, unless the Default Event arises
as a result of a breach in respect of a specific Conversion Date in which case such Conversion
Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common
Stock during the period beginning on the date of first occurrence of the Event of Default and
ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other
amounts payable hereunder shall immediately become due and payable, all without demand,
presentment or notice, all of which hereby are expressly waived, together with all costs,

including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

ARTICLE IV. MISCELLANEOUS

4.1

Failure or Indulgence Not Waiver. No failure or delay on the part of the

Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privileges. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

4.2

Notices. All notices, demands, requests, consents, approvals, and other

communications required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with
charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set
forth below or to such other address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to be given hereunder shall be
deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation
generated by the transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to be received), or
the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

If to the Borrower, to:

Grid Petroleum Corporation

1155 Camino Del Mar #176

Del Mar, CA 92014

If to the Holder:

Syndication Capital LLC

1401 Camino Del Mar #202

Del Mar, CA 92014

4.3

Amendments. This Note and any provision hereof may only be amended

by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Debt Settlement Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4

Assignability. This Note shall be binding upon the Borrower and its

successors and assigns, and shall inure to be the benefit of the Holder and its successors and
assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a)
of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be
pledged as collateral in connection with a bona fide margin account or other lending
arrangement.

4.5

Cost of Collection. If default is made in the payment of this Note, the

Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.6

Governing Law. This Note shall be governed by and construed in

accordance with the laws of the State of Nevada without regard to principles of conflicts of
laws. Any action brought by either party against the other concerning the transactions
contemplated by this Note shall be brought only in the state courts of Nevada or in the federal
courts located in the state and county of Clark. The parties to this Note hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not
assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.
The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover
from the other party its reasonable attorney's fees and costs. In the event that any provision of
this Note or any other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative to
the extent that it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.

Any such provision which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision of any agreement. Each
party hereby irrevocably waives personal service of process and consents to process being served
in any suit, action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

4.7

Certain Amounts. Whenever pursuant to this Note the Borrower is

required to pay an amount in excess of the outstanding principal amount (or the portion thereof
required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such
interest, the Borrower and the Holder agree that the actual damages to the Holder from the
receipt of cash payment on this Note may be difficult to determine and the amount to be so paid
by the Borrower represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn a return from the
sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the
price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that
such amount of stipulated damages is not plainly disproportionate to the possible loss to the
Holder from the receipt of a cash payment without the opportunity to convert this Note into
shares of Common Stock.

4.8

Debt Settlement Agreement. By its acceptance of this Note, each party agrees to

be bound by the applicable terms of the Debt Settlement Agreement.

4.9

Notice of Corporate Events. Except as otherwise provided below, the

Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the
extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with
prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials
and other information sent to shareholders). In the event of any taking by the Borrower of a
record of its shareholders for the purpose of determining shareholders who are entitled to receive
payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share
of any class or any other securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any proposed sale, lease or
conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation,
dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at
least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the
consummation of the transaction or event, whichever is earlier), of the date on which any such
record is to be taken for the purpose of such dividend, distribution, right or other event, and a
brief statement regarding the amount and character of such dividend, distribution, right or other
event to the extent known at such time. The Borrower shall make a public announcement of any
event requiring notification to the Holder hereunder substantially simultaneously with the
notification to the Holder in accordance with the terms of this Section 4.9.

4.10

Remedies. The Borrower acknowledges that a breach by it of its

obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that
the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in
the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the
Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing
or curing any breach of this Note and to enforce specifically the terms and provisions thereof,
without the necessity of showing economic loss and without any bond or other security being
required.

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this October 31, 2014

Grid Petroleum Corporation

By: James Powell

James Powell

EXHIBIT A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $_________________ principal amount
of the Note (defined below) into that number of shares of Common Stock to be issued pursuant

to the conversion of the Note (“Common Stock”) as set forth below, of Grid Petroleum Corporation, a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of October 31, 2014 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

[ ]

The Borrower shall electronically transmit the Common Stock issuable pursuant

to this Notice of Conversion to the account of the undersigned or its nominee with

DTC through its Deposit Withdrawal Agent Commission system

(“DWAC

Transfer”).

Name of DTC Prime Broker: Account Number:

[

]

The undersigned hereby requests that the Borrower issue a certificate or

certificates for the number of shares of Common Stock set forth below (which
numbers are based on the Holder’s calculation attached hereto) in the name(s)
specified immediately below or, if additional space is necessary, on an attachment
hereto:

Syndication Capital LLC

1401 Camino Del Mar #202

Del Mar, CA 92014

Attention: Certificate Delivery

Date of Conversion:

_____________

Applicable Conversion Price:

$0.001

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Notes:

______________

Amount of Principal Balance Due remaining

Under the Note after this conversion:

______________

By:_____________________________

Title: President.

Date: ______________

PURSUANT TO RULE

144

OR RULE

144A UNDER SAID ACT.

NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $360,000.00

Issue Date: October 1, 2014

Debt Settlement Price: $360,000.00

CONVERTIBLE PROMISSORY NOTE

Grid Petroleum Corporation, a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of Direct Capital Group Inc, a Nevada corporation, or registered assigns (the “Holder”) the sum of $360,000.00 together with any interest as set forth herein, on April 1, 2015 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note, which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into Common free trading stock, $0.00001par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of Las Vegas, Nevada are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Debt Settlement Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Debt Settlement Agreement”).

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1

Conversion Right. The Holder shall have the right from time to time, and

at any time during the period beginning on the date, which is one hundred eighty (180) days,
following the dates listed for each invoice listed in Exhibit B. The Maturity Date for invoice in the amount of $360,000.00, April 1, 2015 (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock.

1.2

Conversion Price.

(a)

Calculation of Conversion Price. The conversion price (the

(b)

Conversion Price During Major Announcements. Notwithstanding

1.3

Authorized Shares. The Borrower covenants that during the period the

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

1.4

Method of Conversion.

(a)

Mechanics of Conversion. Subject to Section 1.1, this Note may

(b)

Surrender of Note Upon Conversion. Notwithstanding anything to

conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

(c)

Payment of Taxes. The Borrower shall not be required to pay any

(d)

Delivery of Common Stock Upon Conversion. Upon receipt by

(e)

Obligation of Borrower to Deliver Common Stock. Upon receipt

(f)

Delivery of Common Stock by Electronic Transfer. In lieu of

delivering physical certificates representing the Common Stock issuable upon conversion,
provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast

Automated Securities Transfer

(“FAST”) program, upon request of the Holder and its

(g)

Failure to Deliver Common Stock Prior to Deadline. Without in

1.5

Concerning the Shares. The shares of Common Stock issuable upon

conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to
an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall
have been furnished with an opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the effect that the shares
to be sold or transferred may be sold or transferred pursuant to an exemption from such
registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a
successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in
Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance
with this Section 1.5 and who is an Accredited Investor (as defined in the Debt Settlement Agreement).
Except as otherwise provided in the Debt Settlement Agreement (and subject to the removal provisions
set forth below), until such time as the shares of Common Stock issuable upon conversion of this
Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can then be immediately
sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has
not been so included in an effective registration statement or that has not been sold pursuant to
an effective registration statement or an exemption that permits removal of the legend, shall bear
a legend substantially in the following form, as appropriate:

PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

1.6

Effect of Certain Events.

(a)

Effect of Merger, Consolidation, Etc. At the option of the Holder,

(b)

Adjustment Due to Merger, Consolidation, Etc. If, at any time

(c)

Adjustment Due to Distribution. If the Borrower shall declare or

(d)

Adjustment Due to Dilutive Issuance. If, at any time when any

Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section

The Borrower shall be deemed to have issued or sold shares of Common

Additionally, the Borrower shall be deemed to have issued or sold shares

(e)

Share Purchase Rights. If, at any time when any Notes are issued and

(f)

Notice of Adjustments. Upon the occurrence of each adjustment

1.7

Trading Market Limitations. Unless permitted by the applicable rules and

1.8

Status as Shareholder. Upon submission of a Notice of Conversion by a

1.9

Prepayment. Notwithstanding anything to the contrary contained in this

(3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for
prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the

(x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional
Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and

(x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the
Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment

Amount due to the Holder of the Note within two (2) business days following the Optional
Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this
Section 1.9.

After the expiration of one hundred eighty (180) following the date of the Note, the Borrower shall have no right of prepayment.

ARTICLE II. CERTAIN COVENANTS

2.1

Distributions on Capital Stock. So long as the Borrower shall have any

2.2

Restriction on Stock Repurchase. So long as the Borrower shall have any

2.3

Borrowings. So long as the Borrower shall have any obligation under this

borrowings, the proceeds of which shall be used to repay this Note.

2.4

Sale of Assets. So long as the Borrower shall have any obligation under

2.5

Advances and Loans. So long as the Borrower shall have any obligation

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.1

Failure to Pay Principal or Interest. The Borrower fails to pay the

principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

3.2

Conversion and the Shares. The Borrower fails to issue shares of

3.3

Breach of Covenants. The Borrower breaches any material covenant or

3.4

Breach of Representations and Warranties. Any representation or

3.5

Receiver or Trustee. The Borrower or any subsidiary of the Borrower

3.6

Judgments. Any money judgment, writ or similar process shall be entered

or filed against the Borrower or any subsidiary of the Borrower or any of its property or other
assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of

twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

3.7

Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation

3.8

Delisting of Stock. The Borrower shall fail to maintain the

3.9

Failure to Comply with the Exchange Act. The Borrower shall fail to

comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

3.10

Liquidation. Any dissolution, liquidation, or winding up of Borrower or

any substantial portion of its business.

3.11

Cessation of Operations.

Any cessation of operations by Borrower or

3.12

Maintenance of Assets.

The failure by Borrower to maintain any

material intellectual property rights, personal, real property or other assets, which are necessary to conduct its business (whether now or in the future).

3.13

Financial Statement Restatement.

The restatement of any financial

3.14

Reverse Splits.

The Borrower effectuates a reverse split of its

Common Stock without twenty (20) days prior written notice to the Holder.

3.15

Replacement of Transfer Agent. In the event that the Borrower proposes to

3.16

Cross-Default. Notwithstanding anything to the contrary contained in this

including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

ARTICLE IV. MISCELLANEOUS

4.1

Failure or Indulgence Not Waiver. No failure or delay on the part of the

4.2

Notices. All notices, demands, requests, consents, approvals, and other

If to the Borrower, to:

Grid Petroleum Corporation

720 S. Colorado Blvd

Penthouse North

Denver, CO 80246

If to the Holder:

Direct Capital Group Inc

1401 Camino Del Mar #202

Del Mar, CA 92014

4.3

Amendments. This Note and any provision hereof may only be amended

4.4

Assignability. This Note shall be binding upon the Borrower and its

4.5

Cost of Collection. If default is made in the payment of this Note, the

Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.6

Governing Law. This Note shall be governed by and construed in

4.7

Certain Amounts. Whenever pursuant to this Note the Borrower is

4.8

Debt Settlement Agreement. By its acceptance of this Note, each party agrees to

be bound by the applicable terms of the Debt Settlement Agreement.

4.9

Notice of Corporate Events. Except as otherwise provided below, the

4.10

Remedies. The Borrower acknowledges that a breach by it of its

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this October 1, 2014

Grid Petroleum Corporation

By: _James Powell____________

James Powell

EXHIBIT A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $_________________ principal amount
of the Note (defined below) into that number of shares of Common Stock to be issued pursuant

to the conversion of the Note (“Common Stock”) as set forth below, of Grid Petroleum Corporation, a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of October 1, 2014 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

[ ]

The Borrower shall electronically transmit the Common Stock issuable pursuant

to this Notice of Conversion to the account of the undersigned or its nominee with

DTC through its Deposit Withdrawal Agent Commission system

(“DWAC

Transfer”).

Name of DTC Prime Broker: Account Number:

[

]

The undersigned hereby requests that the Borrower issue a certificate or

Direct Capital Group Inc

1401 Camino Del Mar #202

Del Mar, CA 92014

Attention: Certificate Delivery

Date of Conversion:

_____________

Applicable Conversion Price:

$.00001

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Notes:

______________

Amount of Principal Balance Due remaining

Under the Note after this conversion:

______________

By:_____________________________

Title: President.

Date: ______________

PURSUANT TO RULE

144

OR RULE

144A UNDER SAID ACT.

NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $360,000.00

Issue Date: January 1, 2015

Debt Settlement Price: $360,000.00

CONVERTIBLE PROMISSORY NOTE

Grid Petroleum Corporation, a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of Direct Capital Group Inc, a Nevada corporation, or registered assigns (the “Holder”) the sum of $360,000.00 together with any interest as set forth herein, on July 1, 2015 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note, which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into Common free trading stock, $0.00001par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of Las Vegas, Nevada are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Debt Settlement Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Debt Settlement Agreement”).

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1

Conversion Right. The Holder shall have the right from time to time, and

at any time during the period beginning on the date, which is one hundred eighty (180) days,
following the dates listed for each invoice listed in Exhibit B. The Maturity Date for invoice in the amount of $360,000.00, July 1, 2015 (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock.

1.2

Conversion Price.

(a)

Calculation of Conversion Price. The conversion price (the

(b)

Conversion Price During Major Announcements. Notwithstanding

1.3

Authorized Shares. The Borrower covenants that during the period the

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

1.4

Method of Conversion.

(a)

Mechanics of Conversion. Subject to Section 1.1, this Note may

(b)

Surrender of Note Upon Conversion. Notwithstanding anything to

conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

(c)

Payment of Taxes. The Borrower shall not be required to pay any

(d)

Delivery of Common Stock Upon Conversion. Upon receipt by

(e)

Obligation of Borrower to Deliver Common Stock. Upon receipt

(f)

Delivery of Common Stock by Electronic Transfer. In lieu of

delivering physical certificates representing the Common Stock issuable upon conversion,
provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast

Automated Securities Transfer

(“FAST”) program, upon request of the Holder and its

(g)

Failure to Deliver Common Stock Prior to Deadline. Without in

1.5

Concerning the Shares. The shares of Common Stock issuable upon

PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

1.6

Effect of Certain Events.

(a)

Effect of Merger, Consolidation, Etc. At the option of the Holder,

(b)

Adjustment Due to Merger, Consolidation, Etc. If, at any time

(c)

Adjustment Due to Distribution. If the Borrower shall declare or

(d)

Adjustment Due to Dilutive Issuance. If, at any time when any

Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section

The Borrower shall be deemed to have issued or sold shares of Common

Additionally, the Borrower shall be deemed to have issued or sold shares

(e)

Share Purchase Rights. If, at any time when any Notes are issued and

(f)

Notice of Adjustments. Upon the occurrence of each adjustment

1.7

Trading Market Limitations. Unless permitted by the applicable rules and

1.8

Status as Shareholder. Upon submission of a Notice of Conversion by a

1.9

Prepayment. Notwithstanding anything to the contrary contained in this

(3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for
prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the

(x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional
Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and

(x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the
Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment

Amount due to the Holder of the Note within two (2) business days following the Optional
Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this
Section 1.9.

After the expiration of one hundred eighty (180) following the date of the Note, the Borrower shall have no right of prepayment.

ARTICLE II. CERTAIN COVENANTS

2.1

Distributions on Capital Stock. So long as the Borrower shall have any

2.2

Restriction on Stock Repurchase. So long as the Borrower shall have any

2.3

Borrowings. So long as the Borrower shall have any obligation under this

borrowings, the proceeds of which shall be used to repay this Note.

2.4

Sale of Assets. So long as the Borrower shall have any obligation under

2.5

Advances and Loans. So long as the Borrower shall have any obligation

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.1

Failure to Pay Principal or Interest. The Borrower fails to pay the

principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

3.2

Conversion and the Shares. The Borrower fails to issue shares of

3.3

Breach of Covenants. The Borrower breaches any material covenant or

3.4

Breach of Representations and Warranties. Any representation or

3.5

Receiver or Trustee. The Borrower or any subsidiary of the Borrower

3.6

Judgments. Any money judgment, writ or similar process shall be entered

or filed against the Borrower or any subsidiary of the Borrower or any of its property or other
assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of

twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

3.7

Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation

3.8

Delisting of Stock. The Borrower shall fail to maintain the

3.9

Failure to Comply with the Exchange Act. The Borrower shall fail to

comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

3.10

Liquidation. Any dissolution, liquidation, or winding up of Borrower or

any substantial portion of its business.

3.11

Cessation of Operations.

Any cessation of operations by Borrower or

3.12

Maintenance of Assets.

The failure by Borrower to maintain any

material intellectual property rights, personal, real property or other assets, which are necessary to conduct its business (whether now or in the future).

3.13

Financial Statement Restatement.

The restatement of any financial

3.14

Reverse Splits.

The Borrower effectuates a reverse split of its

Common Stock without twenty (20) days prior written notice to the Holder.

3.15

Replacement of Transfer Agent. In the event that the Borrower proposes to

3.16

Cross-Default. Notwithstanding anything to the contrary contained in this

including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

ARTICLE IV. MISCELLANEOUS

4.1

Failure or Indulgence Not Waiver. No failure or delay on the part of the

4.2

Notices. All notices, demands, requests, consents, approvals, and other

If to the Borrower, to:

Grid Petroleum Corporation

720 S. Colorado Blvd

Penthouse North

Denver, CO 80246

If to the Holder:

Direct Capital Group Inc

1401 Camino Del Mar #202

Del Mar, CA 92014

4.3

Amendments. This Note and any provision hereof may only be amended

4.4

Assignability. This Note shall be binding upon the Borrower and its

4.5

Cost of Collection. If default is made in the payment of this Note, the

Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.6

Governing Law. This Note shall be governed by and construed in

4.7

Certain Amounts. Whenever pursuant to this Note the Borrower is

4.8

Debt Settlement Agreement. By its acceptance of this Note, each party agrees to

be bound by the applicable terms of the Debt Settlement Agreement.

4.9

Notice of Corporate Events. Except as otherwise provided below, the

4.10

Remedies. The Borrower acknowledges that a breach by it of its

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this January 1, 2015

Grid Petroleum Corporation

By: _James Powell____________

James Powell

EXHIBIT A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $_________________ principal amount
of the Note (defined below) into that number of shares of Common Stock to be issued pursuant

to the conversion of the Note (“Common Stock”) as set forth below, of Grid Petroleum Corporation, a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of January 1, 2015 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

[ ]

The Borrower shall electronically transmit the Common Stock issuable pursuant

to this Notice of Conversion to the account of the undersigned or its nominee with

DTC through its Deposit Withdrawal Agent Commission system

(“DWAC

Transfer”).

Name of DTC Prime Broker: Account Number:

[

]

The undersigned hereby requests that the Borrower issue a certificate or

Direct Capital Group Inc

1401 Camino Del Mar #202

Del Mar, CA 92014

Attention: Certificate Delivery

Date of Conversion:

_____________

Applicable Conversion Price:

$.00001

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Notes:

______________

Amount of Principal Balance Due remaining

Under the Note after this conversion:

______________

By:_____________________________

Title: President.

Date: ______________

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

I, James Powell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Grid Petroleum Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

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

Date: February 17, 2015

/s/ James Powell

By: James Powell

Its: Principal Executive Officer

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14

I, James Powell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Grid Petroleum Corporation;

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

Date: February 17, 2015

/s/ James Powell

By: James Powell

Its: Principal Financial Officer

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Grid Petroleum Corporation (the “Company”) on Form 10-Q for the period ending December 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James Powell, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ James Powell

By: James Powell

Principal Executive Officer and Principal Financial Officer

Dated: February 17, 2015

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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