The accompanying notes are an integral part
of these consolidated financial statements
The accompanying notes are an integral part
of these consolidated financial statements
The accompanying notes are an integral part
of these consolidated financial statements
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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.
On March 9, 2016, the Company entered into
an Asset Purchase Agreement (the “Asset Purchase Agreement”) with RJM and Associates, LLC, a California limited liability
company (“RJM”); thereby, acquiring Intellectual Property referred to as “Media IP” and inventory consisting
of finished products and raw materials and supplies. RJM will assign the Media IP asset and inventories and provide “Know-How”
that will enable the Company to launch a Broadcast Equipment and Digital Media Product Line, together valued at Six Million Two
Hundred Fifty Thousand Dollars ($6,250,000). As consideration for the Media IP and the “Know -How”, the Buyer shall
issue, or cause to be issued, $5,000,000 of Restricted Common Stock (PAR $.00001) Ninety (90) days from the date of this agreement
and $1,250,000 of Preferred Series-A Shares of a GRPR Preferred Stock; (PAR $.001). The value of restricted common shares will
be the closing price of the stock as of 90 days from this agreement. The maturity date for the restricted common shares will be
60 months from the date of this agreement.
On March 25, 2016, the Company approved a name
change to Simlatus Corp, stock symbol SIML, which was executed on April 4, 2016. The new name change better described the Company’s
new business and new revenues in selling commercial broadcast equipment on a global basis.
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 of March 31, 2016, 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 of March
31, 2016.
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 reverse stock split affected on July 27, 2015 (see Note 10). Diluted earnings (loss) per share is equal to the basic
per share for the years ended March 31, 2016 and 2015. 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 reverse stock split.
Inventories
Inventories are stated at the lower
of cost, computed using the first-in, first-out method and net realizable value. Any adjustments to reduce the cost of inventories
to their net realizable value are recognized in earnings in the current period. As of March 31, 2016, the Company’s inventories
consist primarily of raw materials and supplies rather than finished goods.
Long Lived Assets Including Goodwill and
Other Acquired Intangible Assets
The Company amortizes its intangible assets
with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes
its acquired intangible assets with definite useful lives over periods from three to seven years.
Fair Value of Financial Instruments
The carrying value of cash, notes payable,
and accounts at March 31, 2016 and 2015 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
On June 10, 2014, The Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915):
Elimination
of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, consolidation
removes
all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from
the FASB Accounting Standards Codification. For the first annual period beginning after December 15, 2014, the presentation and
disclosure requirements in Topic 915 will no longer be required for the public business entities. The revised consolidation standards
are effective one year later, in annual periods beginning after December 15, 2015. Early adoption is permitted. The Company has
adopted this amendment effective the current reporting period.
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 an impact on its results of operations or financial position.
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 5 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 by a 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, 2015 and 2014. 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.
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 at March 31, 2016:
|
|
Proved
|
|
Unconventional Acreage
|
|
$
|
7,026,666
|
|
4. INTANGIBLE ASSETS
On March 9, 2016, the Company
entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with RJM and Associates, LLC, a California
limited liability company (“RJM”); thereby, acquiring Intellectual Property referred to as “Media IP” and
inventory consisting of finished products and raw materials and supplies. RJM will assign the Media IP asset and inventories and
provide “Know-How” that will enable the Company to launch a Broadcast Equipment and Digital Media Product Line. The
total purchase price consideration for these acquisitions was Six Million Two Hundred Fifty Thousand Dollars ($6,250,000), which
consisted of inventory at $204,856, and $6,045,144 to acquired intangible asset. The final transaction of the Agreement with be
completed after the date of this report.
The Company’s acquired intangible assets
with definite useful lives primarily consist of Media IP and “Know-How” and are amortized over a period typically five
years. The following table summarizes the components of gross and net intangible asset balances as of March 31, 2016:
|
|
March 31, 2016
|
|
|
|
Gross
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Net Carrying
|
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
Definite-lived and amortizable acquired intangible assets
|
|
$
|
6,045,144
|
|
|
$
|
(72,833
|
)
|
|
$
|
5,972,311
|
|
Total acquired intangible assets
|
|
$
|
6,045,144
|
|
|
$
|
(72,833
|
)
|
|
$
|
5,972,311
|
|
5. NOTE PAYABLE
Notes payable comprised as the following:
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2016
|
|
|
2015
|
|
Asher Note #4
|
|
|
–
|
|
|
|
13,000
|
|
Special Situations
|
|
|
21,491
|
|
|
|
21,491
|
|
Direct Capital #1
|
|
|
70,671
|
|
|
|
70,671
|
|
Direct Capital #2
|
|
|
330,035
|
|
|
|
380,800
|
|
Direct Capital #3
|
|
|
360,000
|
|
|
|
360,000
|
|
Direct Capital #4
|
|
|
360,000
|
|
|
|
360,000
|
|
Direct Capital #5
|
|
|
240,000
|
|
|
|
240,000
|
|
Direct Capital #6
|
|
|
240,000
|
|
|
|
–
|
|
Direct Capital #7
|
|
|
240,000
|
|
|
|
–
|
|
Direct Capital #8
|
|
|
72
|
|
|
|
14,072
|
|
Direct Capital #9
|
|
|
–
|
|
|
|
11,000
|
|
Direct Capital #10
|
|
|
–
|
|
|
|
11,000
|
|
Direct Capital #11
|
|
|
11,000
|
|
|
|
11,000
|
|
Direct Capital #12
|
|
|
–
|
|
|
|
16,000
|
|
Direct Capital #13
|
|
|
–
|
|
|
|
16,000
|
|
Direct Capital #14
|
|
|
–
|
|
|
|
16,000
|
|
Direct Capital #15
|
|
|
–
|
|
|
|
16,000
|
|
Direct Capital #16
|
|
|
–
|
|
|
|
16,000
|
|
Direct Capital #17
|
|
|
16,000
|
|
|
|
16,000
|
|
Direct Capital #18
|
|
|
23,000
|
|
|
|
48,000
|
|
Direct Capital #19
|
|
|
–
|
|
|
|
48,000
|
|
Direct Capital #20
|
|
|
45,157
|
|
|
|
48,000
|
|
Direct Capital #21
|
|
|
80,000
|
|
|
|
–
|
|
Direct Capital #22
|
|
|
80,000
|
|
|
|
–
|
|
Direct Capital #23
|
|
|
80,000
|
|
|
|
–
|
|
Direct Capital #24
|
|
|
80,000
|
|
|
|
–
|
|
Direct Capital #25
|
|
|
80,000
|
|
|
|
–
|
|
Syndication Capital #1
|
|
|
5,000
|
|
|
|
5,000
|
|
Coventry Enterprises #2
|
|
|
2,114
|
|
|
|
20,000
|
|
LG Capital Funding
|
|
|
29,000
|
|
|
|
29,000
|
|
New Venture Attorneys
|
|
|
–
|
|
|
|
50,000
|
|
Santa Rosa Resources
|
|
|
–
|
|
|
|
–
|
|
Rockwell Capital Partners #1
|
|
|
–
|
|
|
|
–
|
|
Rockwell Capital Partners #2
|
|
|
–
|
|
|
|
–
|
|
Blackbridge Capital
|
|
|
2,000
|
|
|
|
–
|
|
GW Holdings
|
|
|
46,500
|
|
|
|
–
|
|
ARC Capital Ltd
|
|
|
21,625
|
|
|
|
–
|
|
Microcap Equity
|
|
|
4,180
|
|
|
|
–
|
|
Tangiers Investment
|
|
|
–
|
|
|
|
–
|
|
GHS Investment
|
|
|
12,748
|
|
|
|
–
|
|
Southridge Partners
|
|
|
15,655
|
|
|
|
–
|
|
Tide Pool
|
|
|
14,500
|
|
|
|
–
|
|
Anthony Super
|
|
|
23,020
|
|
|
|
–
|
|
|
|
$
|
2,533,768
|
|
|
$
|
1,837,034
|
|
Debt discount
|
|
|
(195,909
|
)
|
|
|
(429,542
|
)
|
Notes payable, net of discount
|
|
$
|
2,337,859
|
|
|
$
|
1,407,492
|
|
Accrued interest
|
|
|
373,728
|
|
|
|
147,836
|
|
|
|
$
|
2,711,586
|
|
|
$
|
1,555,328
|
|
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
years ended March 31, 2016 and 2015, the Company accrued $2,155 and $2,860 respectively 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 years March 31, 2016 and 2015, the
Company recorded a loss of $2,548 and a gain of $20,307 respectively due to the change in value of the derivative liability.
On March 21, 2016, the Company retired this
note, at no penalty, in full. Both parties agreed to cancel the note and its obligations entirely.
At March 31, 2016 and 2015, principal balance
of $0 and $13,000 respectively, accrued interest of $0 and $5,853 respectively, and a derivative liability of $0 and $21,088 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 years ended March
31, 2016 and 2015, the Company accrued $1,724 and $1,719 respectively 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 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $3,920 and a gain of $36,521 respectively due to the change in value of the derivative liability
during the period.
At March 31, 2016 and 2015, principal balance
of $21,491 and $21,491 respectively, accrued interest of $12,754 and $11,030 respectively, and a derivative liability of $41,701
and $37,781 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 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 $94,326 being the fair value of the conversion feature which was determined using the Black-Scholes
valuation method.
During the years ended March 31, 2016 and 2015,
the Company recorded a loss of $13,005 and a gain of $122,773 due to the change in value of the derivative liability during the
period.
At March 31, 2016 and 2015, principal balance
of $70,671 and $70,671 respectively and a derivative liability of $139,887 and $126,882 respectively was recorded.
Direct Capital Note #2
On October 1, 2013 the Company entered into
a Convertible Promissory Note with Direct Capital Group, 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 years ended March 31, 2016 and 2015, the Company accrued $43,705 and $46,016 respectively 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $45,011 and a gain of $457,279 respectively due to the change in value of the derivative liability
during the period.
During the year ended March 31, 2016 the Company
issued an aggregate of 391,800,000 common shares upon the conversion of principal amount of $50,765. The derivative liability amounting
to $56,553 was re-classified to additional paid in capital.
On March 24, 2016, accrued interest of $30,000
was reassigned to Anthony Super.
At March 31, 2016 and 2015, principal balance
of $330,035 and $380,800 respectively, accrued interest of $71,146 and $57,441 respectively, and a derivative liability of $465,704
and $477,246 respectively was recorded.
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. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $79,417 and $14,282 respectively 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.
On October 1, 2014, interest expense relating
to the beneficial conversion feature of this convertible note of $360,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $989 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $360,000 and $360,000 respectively and accrued interest of $93,699 and $14,282 respectively was recorded.
Direct Capital Note #4
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. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $66,852 and $7,022 respectively 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.
On January 1, 2015, interest expense relating
to the beneficial conversion feature of this convertible note of $360,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $182,983 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $360,000 and $360,000 respectively and accrued interest of $53,874 and $7,022 respectively, was recorded.
Direct Capital Note #5
On March 31, 2015 the Company entered into
a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest
at 8% per annum, and matures on September 30, 2015. Any principal amount not paid by the maturity date shall bear interest at a
rate of 22% annum. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $36,099 and $0 respectively 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.
On March 31, 2015, interest expense relating
to the beneficial conversion feature of this convertible note of $240,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $240,000 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $240,000 and $240,000 respectively and accrued interest of $36,099 and $0 respectively, was recorded.
Direct Capital Note #6
On June 30, 2015 the Company entered into a
Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest
at 8% per annum, and matures on December 30, 2015. Any principal amount not paid by the maturity date shall bear interest at a
rate of 22% annum. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $22,843 and $0 respectively 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.
On June 30, 2015, interest expense relating
to the beneficial conversion feature of this convertible note of $240,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $240,000 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $240,000 and $0 respectively, and accrued interest of $22,843 and $0 respectively, was recorded.
Direct Capital Note #7
On September 30, 2015 the Company entered into
a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest
at 8% per annum, and matures on March 31, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate
of 22% annum. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $9,626 and $0 respectively 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.
On September 30, 2015, interest expense relating
to the beneficial conversion feature of this convertible note of $240,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $120,656 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $240,000 and $0 respectively, accrued interest of $9,626 and $0 respectively, and debt discount of $119,344 and $0 respectively
was recorded.
Direct Capital Note #8 (formerly 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 $.00001 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. On August
8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $784 and $3,096 respectively 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.
On July 1, 2015, the principal amount of $14,000
was reassigned to Santa Rosa Resources, Inc.
At March 31, 2016 and 2015, principal balance
of $72 and $14,072 respectively and accrued interest of $4,939 and $4,155 respectively was recorded.
Direct Capital Note #9 (formerly 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 $.00001 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. On August
8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $1,213 and $2,420 respectively 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.
On October 27, 2015, the principal amount of
$11,000 and interest of $4,461 was reassigned to Southridge Partners.
At March 31, 2016 and 2015, principal balance
of $0 and $11,000 respectively and accrued interest of $0 and $3,248 respectively was recorded.
Direct Capital Note #10 (formerly 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 $.00001 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. On August 8, 2015, the
note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $1,213 and $2,420 respectively 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.
On October 27, 2015, the principal amount of
$11,000 and interest of $4,269 was reassigned to Southridge Partners.
At March 31, 2016 and 2015, principal balance
of $0 and $11,000 respectively and accrued interest of $0 and $3,056 respectively was recorded.
Direct Capital Note #11 (formerly 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 $.00001 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. On August 8, 2015, the
note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $2,427 and $2,413 respectively 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.
At March 31, 2016 and 2015, principal balance
of $11,000 and $11,000 respectively and accrued interest of $5,276 and $2,849 respectively was recorded.
Direct Capital Note #12 (formerly 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 $.00001 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. On August 8, 2015, the
note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $1,765 and $3,330 respectively 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.
On September 18, 2015, the principal balance
of $16,000 and accrued interest of $5,625 was reassigned to Rockwell Capital Partners Inc.
At March 31, 2016 and 2015, principal balance
of $0 and $16,000 respectively and accrued interest of $0 and $3,860 respectively was recorded.
Direct Capital Note #13 (formerly Syndication
Capital Note #7)
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 $.00001 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. On August 8, 2015, the
note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $1,765 and $3,140 respectively 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.
On September 18, 2015, the principal balance
of $16,000 and accrued interest of $4,441 was reassigned to Rockwell Capital Partners Inc.
At March 31, 2016 and 2015, principal balance
of $0 and $16,000 respectively and accrued interest of $0 and $3,564 respectively was recorded.
Direct Capital Note #14 (formerly 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 $.00001 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. On August 8, 2015, the
note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $1,765 and $2,952 respectively 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.
On October 15, 2015, the principal balance
of $16,000 and accrued interest of $5,033 was reassigned to Microcap Equity Group LLC.
At March 31, 2016 and 2015, principal balance
of $0 and $16,000 respectively and accrued interest of $0 and $3,268 respectively was recorded.
Direct Capital Note #15 (formerly 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 $.00001 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. On August
8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $2,653 and $2,765 respectively 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.
On October 2, 2015, the principal balance of
$16,000 and accrued interest of $5,625 was reassigned to ARC Capital Ltd.
At March 31, 2016 and 2015, principal balance
of $0 and $16,000 respectively and accrued interest of $0 and $2,972 respectively was recorded.
Direct Capital Note #16 (formerly 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 $.00001 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. On August
8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $878 and $2,575 respectively 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.
On July 1, 2015, the principal balance of $16,000
was reassigned to Santa Rosa Resources, Inc.
At March 31, 2016 and 2015, principal balance
of $0 and $16,000 respectively and accrued interest of $3,561 and $2,684 respectively was recorded.
Direct Capital Note #17 (formerly 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 $.00001 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. On August
8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $3,530 and $2,387 respectively 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.
At March 31, 2016 and 2015, principal balance
of $16,000 and $16,000 respectively and accrued interest of $5,917 and $2,387 respectively was recorded.
Direct Capital Note #18 (formerly 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 $.00001 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. On August
8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $8,178 and $6,286 respectively 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.
On October 23, 2015, the principal amount of
$25,000 was reassigned to GHS Investments, LLC.
At March 31, 2016 and 2015, principal balance
of $23,000 and $48,000 respectively and accrued interest of $14,464 and $6,286 respectively was recorded.
Direct Capital Note #19 (formerly 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 $.00001 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. On August
8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $5,294 and $3,624 respectively 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.
On September 30, 2015, the principal balance
of $48,000 was reassigned to Blackbridge Capital, LLC.
At March 31, 2016 and 2015, principal balance
of $0 and $48,000 respectively and accrued interest of $8,919 and $3,624 respectively was recorded.
Direct Capital Note #20 (formerly 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 $.00001 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. On August 8, 2015, the
note was reassigned to Direct Capital Group, Inc.
During the years ended March 31, 2016 and 2015,
the Company accrued $7,280 and $1,589 respectively 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.
On October 31, 2014, interest expense relating
to the beneficial conversion feature of this convertible note of $48,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $5,436 and $0 respectively
was accreted to the statement of operations.
On October 15, 2015, the principal balance
of $48,000 and accrued interest of $6,419 was reassigned to Tangiers Investment Group, LLC.
On January 1, 2016, the principal balance of
$45,157 and accrued interest of $795 was reassigned back to Direct Capital Group, LLC from Tangiers Investment Group, LLC.
At March 31, 2016 and 2015, principal balance
of $45,157 and $48,000 respectively, and accrued interest of $3,245 and $1,589 respectively was recorded.
Direct Capital Note #21
On October 31, 2015 the Company entered into
a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest
at 8% per annum, and matures on April 30, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate
of 22% annum. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $2,665 and $0 respectively 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.
On October 31, 2015, interest expense relating
to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $26,813 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $80,000 and $0 respectively, accrued interest of $2,665 and $0 respectively, and debt discount of $53,187 and $0 respectively
was recorded.
Direct Capital Note #22
On November 30, 2015 the Company entered into
a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest
at 8% per annum, and matures on May 31, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate
of 22% annum. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $2,139 and $0 respectively 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.
On November 30, 2015, interest expense relating
to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $13,552 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $80,000 and $0 respectively, accrued interest of $2,139 and $0 respectively, and debt discount of $66,448 and $0 respectively
was recorded.
Direct Capital Note #23
On December 31, 2015 the Company entered into
a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest
at 8% per annum, and matures on June 30, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate
of 22% annum. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $1,596 and $0 respectively 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.
On December 31, 2015, interest expense relating
to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $0 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $80,000 and $0 respectively, accrued interest of $1,596 and $0 respectively, and debt discount of $80,000 and $0 respectively
was recorded.
Direct Capital Note #24
On January 31, 2016 the Company entered into
a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest
at 8% per annum, and matures on July 31, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate
of 22% annum. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $1,052 and $0 respectively 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.
On January 31, 2016, interest expense relating
to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $0 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $80,000 and $0 respectively, accrued interest of $1,052 and $0 respectively, and debt discount of $80,000 and $0 respectively
was recorded.
Direct Capital Note #25
On February 29, 2016 the Company entered into
a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest
at 8% per annum, and matures on August 31, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate
of 22% annum. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $544 and $0 respectively 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.
On February 29, 2016, interest expense relating
to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $0 and $0 respectively
was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $80,000 and $0 respectively, accrued interest of $544 and $0 respectively, and debt discount of $80,000 and $0 respectively
was recorded.
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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $920 and a gain of $8,686 respectively due to the change in value of the derivative liability during
the period.
At March 31, 2016 and 2015, principal balance
of $5,000 and $5,000 respectively and a derivative liability of $9,897 and $8,977 respectively was recorded.
Coventry Enterprises Note #2
On March 3, 2014, the Company arranged a debt
swap under which an Xploration, Inc. 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. Any principal amount not paid
by the maturity date bears interest at 24% per annum. During the years ended March 31, 2016 and 2015, the Company accrued $3,062
and $1,661 respectively 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.
During the years ended March 31, 2016 and 2015,
the Company recorded a loss of $6,570 and a gain of $59,285 respectively due to the change in value of the derivative liability
during the period.
During the years ended March 31, 2016 the Company
issued an aggregate of 115,990,000 common shares upon the conversion of principal amount of $17,886. The derivative liability amounting
to $32,653 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $2,114 and $20,000 respectively, accrued interest of $4,921 and $1,859 respectively, and a derivative liability of $3,483 and
$29,566 respectively, was recorded.
LG Capital Funding Note
On March 3, 2014, the Company arranged a debt
swap under which an Xploration, Inc. 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. Any principal amount not paid by the maturity date bears interest
at 24% per annum. During the years ended March 31, 2016 and 2015, the Company accrued $6,979 and $2,676 respectively 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $5,336 and a gain of $50,380 respectively due to the change in value of the derivative liability
during the period.
At March 31, 2016 and 2015, principal balance
of $29,000 and $29,000 respectively, accrued interest of $9,798 and $2,819 respectively, and a derivative liability of $57,403
and $52,066 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. Any principal
amount not paid by the maturity date bears interest at 24% per annum. The note also contains customary events of default. During
the years ended March 31, 2016 and 2015, the Company accrued $6,422 and $3,898 respectively 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $10,230 and a gain of $7,782 respectively due to the change in value of the derivative liability
during the period and a debt discount of $134 and $49,866 respectively was accreted to the statement of operations.
On October 13, 2015, the principal balance
of $50,000 and accrued interest of $10,411 was reassigned to GW Holdings, LLC and the derivative liability amounting to $100,000
was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $0 and $50,000 respectively, accrued interest of $0 and $3,989 respectively, a debt discount of $0 and $134 respectively and
a derivative liability of $0 and $89,769 respectively was recorded.
Santa Rosa Resources Note
On July 1, 2015, the Company entered into a
Convertible Promissory Note with Santa Rosa Resources under which two notes issued to Syndication Capital were reassigned to Santa
Rosa Resources in the sum of $30,000. The promissory note is unsecured, bears interest at 8% per annum, and matured on September
1, 2014. The Conversion Price shall mean par $.00001 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 years ended March 31, 2016 and 2015,
the Company accrued $1,203 and $0 respectively 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.
On July 1, 2015 interest expense relating to
the beneficial conversion feature of this convertible note of $30,000 was recorded in the financial statements with a corresponding
increase to additional paid in capital. During the years ended March 31, 2016 and 2015 debt discount of $30,000 and $0 respectively
was accreted to the statement of operations.
On March 21, 2016, the Company retired this
note, at no penalty, in full. Both parties agreed to cancel the note and its obligations entirely.
At March 31, 2016 and 2015, principal balance
of $0 and $0 respectively, and accrued interest of $0 and $0 respectively was recorded.
Rockwell Capital Partners Note #1
On September 18, 2015, the Company reassigned
the principal and accrued interest of a Direct Capital Note to Rockwell Capital Partners Inc. The original note was issued on November
30, 2013 in the sum of $16,000. The promissory note is unsecured, and matured on June 1, 2014.
On September 18, 2015 the Company recorded
a debt discount and derivative liability of $32,000, 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $3,698 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $16,000 and $0 respectively was accreted to the statement of operations.
During the years ended March 31, 2016 the Company
issued an aggregate of 77,800,000 common shares upon the conversion of principal amount of $16,000 and interest of $1,695. The
derivative liability amounting to $35,698 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $0 and $0 respectively and accrued interest of $0 and $0 respectively was recorded.
Rockwell Capital Partners Note #2
On September 18, 2015, the Company reassigned
the principal and accrued interest of a Direct Capital Note to Rockwell Capital Partners Inc. The original note was issued on October
31, 2013 in the sum of $16,000. The promissory note is unsecured, and matured on May 1, 2014.
On September 18, 2015 the Company recorded
a debt discount and derivative liability of $32,000, 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $9,496 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $16,000 and $0 respectively was accreted to the statement of operations.
During the years ended March 31, 2016 the Company
issued an aggregate of 7,300,000 common shares upon the conversion of principal amount of $16,000 and interest of $1,435. The derivative
liability amounting to $41,496 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $0 and $0 respectively and accrued interest of $0 and $0 respectively was recorded.
Blackbridge Capital Note
On September 30, 2015, the Company reassigned
$48,000 of the principal balance of a Direct Capital Note to Blackbridge Capital, LLC. The original note was issued on July 31,
2014 in the sum of $48,000. The promissory note is unsecured, bears interest at 5% per annum, and matures on February 28,
2016. During the years ended March 31, 2016 and 2015, the Company accrued $135 and $0 respectively in interest expense.
On September 30, 2015 the Company recorded
a debt discount and derivative liability of $96,000, 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $26,596 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $48,000 and $0 respectively was accreted to the statement of operations.
During the years ended March 31, 2016 the Company
issued an aggregate of 40,600,000 common shares upon the conversion of principal amount of $46,000. The derivative liability amounting
to $118,637 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $2,000 and $0 respectively, accrued interest of $135 and $0 respectively, debt discount of $0 and $0 respectively, and a derivative
liability of $4,959 and $0 respectively was recorded.
ARC Capital Ltd Note
On October 2, 2015, the Company reassigned
$21,625 of the principal balance and accrued interest of a Direct Capital Note to ARC Capital Ltd. The original note was issued
on January 31, 2014 and had a principal balance of $16,000 and accrued interest of $5,625. The promissory note is unsecured,
bears interest at 8% per annum, and matures on April 2, 2016. During the years ended March 31, 2016 and 2015, the Company accrued
$858 and $0 respectively in interest expense.
On October 2, 2015 the Company recorded a debt
discount and derivative liability of $51,900, 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 years ended March 31, 2016 and 2015,
the Company recorded a gain of $9,095 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $21,505 and $0 respectively was accreted to the statement of operations.
At March 31, 2016 and 2015, principal balance
of $21,625 and $0 respectively, accrued interest of $858 and $0 respectively, debt discount of $120 and $0 respectively, and a
derivative liability of $42,805 and $0 respectively was recorded.
GW Holdings Group LLC Note
On October 13, 2015, the Company reassigned
$60,411 of the principal balance and accrued interest of a New Venture Attorneys Note to GW Holdings Group LLC. The original note
was issued on April 1, 2014 and had a principal balance of $50,000 and accrued interest of $10,411. The promissory note is
unsecured and matured on April 1, 2015.
On October 13, 2015 the Company recorded a
debt discount and derivative liability of $159,082, 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 years ended March 31, 2016 and 2015,
the Company recorded a gain of $31,651 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $60,411 and $0 respectively was accreted to the statement of operations.
During the year ended March 31, 2016 the Company
issued an aggregate of 19,381,370 common shares upon the conversion of principal amount of $13,911. The derivative liability amounting
to $35,387 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $46,500 and $0 respectively, and a derivative liability of $92,044 and $0 respectively was recorded.
Microcap Equity Group LLC Note
On October 15, 2015, the Company reassigned
the principal balance and accrued interest of a Direct Capital Group Note to Microcap Equity Group LLC. The original note was issued
on December 31, 2013 and had a principal balance of $16,000 and accrued interest of $5,033. The promissory note is unsecured
and matured on July 30, 2015.
On October 15, 2015 the Company recorded a
debt discount and derivative liability of $32,000, 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $978 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $16,000 and $0 respectively was accreted to the statement of operations.
During the year ended March 31, 2016 the Company
issued an aggregate of 179,520,000 common shares upon the conversion of principal amount of $11,820 and accrued interest of $1,961.
The derivative liability amounting to $24,704 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $4,180 and $0 respectively, accrued interest of $3,072 and $0 respectively, and a derivative liability of $8,274 and $0 respectively,
was recorded.
Tangiers Investment Group LLC Note
On October 15, 2015, the Company reassigned
$56,919 of the principal balance and accrued interest of a Direct Capital Note to Tangiers Investment Group LLC. The original note
was issued on October 31, 2014, and had a principal balance of $48,000 and accrued interest of $6,419. The promissory note
is unsecured, bears interest at 8% per annum, and matures on October 15, 2016. During the years ended March 31, 2016 and 2015,
the Company accrued $795 and $0 respectively in interest expense.
On October 15, 2015 the Company recorded a
debt discount and derivative liability of $113,838, 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $8,939 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $56,919 and $0 respectively was accreted to the statement of operations.
During the year ended March 31, 2016 the Company
issued an aggregate of 34,154,386 common shares upon the conversion of principal amount of $11,762. The derivative liability amounting
to $32,463 was re-classified to additional paid in capital.
On January 1, 2016, the principal balance of
$45,157 and accrued interest of $795 was reassigned back to Direct Capital Group, LLC. The derivative liability balance of $90,314
was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $0 and $0 respectively, accrued interest of $0 and $0 respectively, debt discount of $0 and $0 respectively, and a derivative
liability of $0 and $0 respectively, was recorded.
GHS Investments LLC Note
On October 23, 2015, the Company reassigned
$25,000 of the principal amount of a Direct Capital Note to GHS Investments LLC. The original note was issued on April 30, 2014
with a principal balance of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July
25, 2016. During the years ended March 31, 2016 and 2015, the Company accrued $588 and $0 respectively in interest expense.
On October 23, 2015 the Company recorded a
debt discount and derivative liability of $76,316, 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 years ended March 31, 2016 and 2015,
the Company recorded a gain of $24,785 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $20,725 and $0 respectively was accreted to the statement of operations.
During the year ended March 31, 2016 the Company
issued an aggregate of 137,207,850 common shares upon the conversion of principal amount of $12,253. The derivative liability amounting
to $26,298 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $12,748 and $0 respectively, accrued interest of $588 and $0 respectively, debt discount of $4,725 and $0 respectively, and
a derivative liability of $25,233 and $0 respectively was recorded.
Southridge Partners LP Note
On October 27, 2015, the Company reassigned
$30,730 of the principal balance and accrued interest of two Direct Capital Note to Southridge Partners LP. The original notes
were issued on July 31, 2013 and August 31, 2013, and had a principal balance of $11,000 and $11,000 respectively and accrued interest
of $4,461 and $4,269 respectively. The promissory note is unsecured, bears interest at 8% per annum, and matured on March
1, 2014. During the years ended March 31, 2016 and 2015, the Company accrued $2,023 and $0 respectively in interest expense.
On October 27, 2015 the Company recorded a
debt discount and derivative liability of $38,817, 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 years ended March 31, 2016 and 2015,
the Company recorded a loss of $23,135 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $30,730 and $0 respectively was accreted to the statement of operations.
During the year ended March 31, 2016 the Company
issued an aggregate of 417,243,600 common shares upon the conversion of principal amount of $15,075 and $2,023 in interest. The
derivative liability amounting to $30,964 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $15,655 and $0 respectively, accrued interest of $0 and $0 respectively, and a derivative liability of $30,988 and $0 respectively
was recorded.
Tide Pool Note
On March 11, 2016, the Company reassigned $20,000
of the accrued interest amount of a Direct Capital Note to Tide Pool Ventures Corporation. The original note was issued on January
1, 2015 with a principal balance of $360,000. The promissory note is unsecured and matured on July 1, 2015.
On March 11, 2016 the Company recorded a debt
discount and derivative liability of $39,725, 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 years ended March 31, 2016 and 2015,
the Company recorded a gain of $102 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $20,000 and $0 respectively was accreted to the statement of operations.
During the year ended March 31, 2016 the Company
issued an aggregate of 110,000,000 common shares upon the conversion of principal amount of $5,500. The derivative liability amounting
to $10,921 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $14,500 and $0 respectively, debt discount of $0 and $0 respectively, and a derivative liability of $28,702 and $0 respectively
was recorded.
Anthony Super Note
On March 24, 2016, the Company reassigned $30,000
of the accrued interest amount of a Direct Capital Note to Anthony Super. The original note was issued on October 1, 2013 with
a principal balance of $384,000. The promissory note is unsecured, and matured on April 1, 2014.
On March 11, 2016 the Company recorded a debt
discount and derivative liability of $59,572, 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 years ended March 31, 2016 and 2015,
the Company recorded a gain of $145 and $0 respectively due to the change in value of the derivative liability during the period
and debt discount of $30,000 and $0 respectively was accreted to the statement of operations.
During the year ended March 31, 2016 the Company
issued an aggregate of 69,800,000 common shares upon the conversion of principal amount of $6,980. The derivative liability amounting
to $13,861 was re-classified to additional paid in capital.
At March 31, 2016 and 2015, principal balance
of $23,020 and $0 respectively, debt discount of $0 and $0 respectively, and a derivative liability of $45,566 and $0 respectively
was recorded.
6. 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 years ended March 31, 2016 and 2015,
the Company recorded derivative liabilities for embedded conversion features related to convertible notes payable of face value
$731,250 and $81,987 respectively. During the years ended March 31, 2016 and 2015, $231,066 and $92,844 respectively of convertible
notes payable principal and accrued interest was converted into common stock of the Company. For the years ended March 31, 2016
and 2015, 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 $673,585 and $161,255 respectively,
was re-classed to additional paid in capital on the date of conversion in the statement of shareholders’ deficit. During
the years ended March 31, 2016 and 2015, the Company recognized a loss of $94,605 and a gain of $824,734 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
:
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2016
|
|
|
2015
|
|
Balance, beginning of year
|
|
$
|
843,376
|
|
|
$
|
1,747,378
|
|
Initial recognition of derivative liability
|
|
|
731,250
|
|
|
|
81,987
|
|
Conversion of derivative instruments to Common Stock
|
|
|
(673,585
|
)
|
|
|
(161,255
|
)
|
Mark-to-Market adjustment to fair value
|
|
|
94,605
|
|
|
|
(824,734
|
)
|
Balance, end of year
|
|
$
|
995,646
|
|
|
$
|
843,376
|
|
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.
7. 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 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.
8. RELATED PARTY TRANSACTIONS
Related party transaction 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.
On March 3, 2015, Tim DeHerrera, resigned from
his position with the Company as Treasurer, Secretary and a member of the Board. His resignation was not the result of any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices.
On March 21, 2016 Mr. DeHererra, agreed to
convert all of his outstanding salary and unpaid expenses to Preferred Series A Stock. The Company issued 200,000 shares of Preferred
Series A stock to satisfy $358,459 of debt owed to Mr. DeHererra. The stock is locked-up for 24 months.
During the years ended March 31, 2016 and 2015,
the Company recorded $0 and $110,000 respectively in consulting fees and other expenses.
On March 3, 2015, James Powell was appointed
as the Company’s Treasurer, Secretary and as a member of the Board.
On September 9, 2015 James Powell announced his resignation as
President, Secretary, Treasure, and Director of the Company. There are no known disagreements with Mr. Powell regarding such
resignation or any claims the Company may have against him.
During the years ended March 31, 2016 and 2015,
the Company recorded $12,500 and $30,000 respectively in consulting fees for Mr. Powell increasing the amount due to $162,500.
On September 9, 2015 Edward Aruda was appointed President, Director,
Secretary, and Treasurer of the Company.
On March 9, 2016, Mr. Aruda, tendered his resignation
as President, Secretary and Treasurer. Mr. Aruda will remain a Director of the Company. Mr. Aruda’s resignation
was not due to any disagreement on any matter relating to the operations, policies, or practices of the Company.
On March 21, 2016, Mr. Aruda, signed an agreement
to waive all of his unpaid salary and expenses to date in the amount of $8,000. This debt has been canceled and removed from the
financial statements.
During the years ended March 31, 2016 and 2015,
the Company recorded $0 and $0 respectively in consulting fees.
The Company is indebted to its officers as
follow:
|
|
March 31,
|
|
|
|
2016
|
|
|
2015
|
|
Edward Aruda
|
|
$
|
–
|
|
|
$
|
–
|
|
James Powell
|
|
|
162,500
|
|
|
|
150,000
|
|
Tim DeHererra
|
|
|
–
|
|
|
|
358,459
|
|
|
|
$
|
162,500
|
|
|
$
|
508,459
|
|
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 years ended March 31, 2016 and 2015,
the Company accrued debt to Direct Capital Group of $880,000 and $960,000 which was converted into convertible debt.
During the years ended March 31, 2016 and 2015,
the Company is indebted to Direct Capital Group for $30,919 and $34,693 respectively for a total amount due of $72,807.
During the years ended March 31, 2016 and 2015,
the Company accrued debt to Syndication Capital Group of $0 and $144,000 which was converted into convertible debt.
9. 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:
|
A.
|
Preferred Series A - par value $0.001 - 10,000,000 shares authorized
|
|
B.
|
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 acquired
100% 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.
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.
On September 20, 2013, 112,500 shares of Series
A Preferred Stock were converted to 112,500,000 shares of common stock.
On July 1, 2015, the Company’s Board
of Directors authorized the creation of 1,000 shares of Series B Voting Preferred Stock. The holder of the shares of
the Series B Voting Preferred Stock has the right to vote those shares of the Series B Voting Preferred Stock regarding any matter
or action that is required to be submitted to the shareholders of the Company for approval. The vote of each share of
the Series B Voting Preferred Stock is equal to and counted as 4 times the votes of all of the shares of the Company’s (i)
common stock, and (ii) other voting preferred stock issued and outstanding on the date of each and every vote or consent of the
shareholders of the Company regarding each and every matter submitted to the shareholders of the Company for approval.
On July 1, 2015, the Company filed a Certificate of Designation
with the Nevada Secretary of State creating the 1,000 shares of Series B Voting Preferred Stock
On July 27, 2015, the Company issued 1,000 shares of Series B Voting
Preferred Stock to Santa Rosa, representing 100% of the total issued and outstanding shares of the Company’s Series B Voting
Preferred Stock.
On March 21, 2016 Mr. DeHererra, agreed to
convert all of his outstanding salary and unpaid expenses to Preferred Series A Stock. The Company issued 200,000 shares of Preferred
Series A stock to satisfy $358,459 of debt owed to Mr. DeHererra. The stock is locked-up for 24 months.
As of March 31, 2016, 10,000,000 Series A preferred
shares and 10,000,000 Series B preferred shares of par value $0.001 were authorized, of which 1,519,500 Series A shares were issued
and outstanding, (1,319,500 shares as of March 31, 2015) and 1,000 Series B shares were issued and outstanding (0 shares as of
March 31, 2015).
10. COMMON STOCK
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.
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
|
|
|
$
|
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.
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 at 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 at 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 March 31, 2015, the holders
of convertible notes converted a total of $92,844 of principal and interest into 2,001,759,062 shares of our common stock.
On July 27, 2015, the Company, approved the
authorization of a 1 for 1,000 reverse stock split of the Company’s outstanding shares of common stock.
On September 17, 2015, 60,000,000 shares of
common shares were issued to Right Energy Incorporated pursuant to an agreement.
On October 26, 2015, the Company filed a Certificate
of Amendment to change the par value of common stock from $0.001 to $0.00001.
On March 31, 2016, Right Energy, Inc. returned
and retired 60,000,000 shares of common stock that was issued on September 17, 2015, pursuant to the ‘Farmout Agreement’
executed on September 14, 2015. The Company agreed to cancel all of the shares and return all of the 60,000,000 shares to
the treasury.
From April 1, 2015 to March 31, 2016, the holders
of convertible notes converted a total of $231,066 of principal and interest into 1,668,797,249 shares of our common stock.
As of March 31, 2016, 7,500,000,000 common
shares of par value $0.00001 were authorized, of which 1,615,695,657 shares were issued and outstanding (6,898,408 shares as of
March 31, 2015).
11. INCOME TAXES
The Company had no income tax expense during
the reported period due to net operating losses.
A reconciliation of income tax expense to the
amount computed at the statutory rates is as follows:
|
|
March 31,
|
|
|
|
2016
|
|
|
2015
|
|
Operating profit (loss) for the years ended March 31
|
|
$
|
(2,905,434
|
)
|
|
$
|
(1,424,579
|
)
|
Average statutory tax rate
|
|
|
34%
|
|
|
|
34%
|
|
Expected income tax provisions
|
|
$
|
(987,848
|
)
|
|
$
|
(484,357
|
)
|
Unrecognized tax gains (losses)
|
|
|
(987,848
|
)
|
|
|
(484,357
|
)
|
Income tax expense
|
|
$
|
–
|
|
|
$
|
–
|
|
The Company has net operating losses carried
forward of approximately $16,122,167 for tax purposes which will expire in 2026 if not utilized beforehand.
12. COMMITMENTS
Effective March 31, 2010, the Company was committed
to payment of 100,000 shares per year to each of two consultants, payable in quarterly installments of 25,000 shares, the first
installment due December 31, 2010. The advisors will also be paid $1,000 per day for attending meetings of the Company’s
committee of advisors and $1,000 per day for services to be provided as needed. The agreements may be terminated by either party
without notice. This is a one year agreement and is no longer applicable.
On March 10, 2016, the Company entered into
a Consulting Agreement with its newly appointed President, Chief Executive Officer and Secretary, Gary Tilden. The Consulting Agreement
is for a term of two (2) years, and shall automatically renew for successive periods of one (1) year each, unless either party
shall have given to the other at least sixty (60) days’ prior written notice of their intention not to renew. Mr. Tilden
will receive an annual salary of $125,000 to be paid on a monthly basis at $10,417 per month commencing on April 1, 2016.
On March 10, 2016, the Company entered into
a Consulting Agreement with its newly appointed Treasurer, Chief Operations Officer and Director, Mike Schatz. The Consulting Agreement
is for a term of two (2) years, and shall automatically renew for successive periods of one (1) year each, unless either party
shall have given to the other at least sixty (60) days’ prior written notice of their intention not to renew. Mr. Schatz
will receive an annual salary of $125,000 to be paid on a monthly basis at $10,417 per month commencing on April 1, 2016.
On March 10, 2016, the Company entered into
a Consulting Agreement with its newly appointed Chairman of the Board, Robert Stillwaugh. The Consulting Agreement is for a term
of two (2) years, and shall automatically renew for successive periods of one (1) year each, unless either party shall have given
to the other at least sixty (60) days’ prior written notice of their intention not to renew. Mr. Stillwaugh will receive
an annual salary of $125,000 to be paid on a monthly basis at $10,417 per month commencing on April 1, 2016.
On March 10, 2016, the Company entered into
a Consulting Agreement with its newly appointed Advisory Board Member, D.M. Murtaugh. The Consulting Agreement is for a term of
two (2) years, and shall automatically renew for successive periods of one (1) year each, unless either party shall have given
to the other at least sixty (60) days’ prior written notice of their intention not to renew. Ms. Murtaugh will receive an
annual salary of $125,000 to be paid on a monthly basis at $10,417 per month commencing on April 1, 2016.
On March 16, 2016, the Company entered into
an Engagement Agreement with SD Mitchell & Associates, PLC to advise the Company on certain legal, corporate and business operations.
The Agreement is for a term of six (6) months commencing on April 1, 2016, and is renewable for successive six (6) month terms
by mutual agreement of the parties, and may be terminated by either party in writing in thirty (30) days. Compensation will be
in the amount of $2,000 per month for the review of Form 10-K Annual Reports, Form 10-Q Quarterly Reports, preparation of Form
8-K, preparation of Board Resolutions and preparation and/or review of contractual agreements, and $215 per hour for all other
services performed.
13. SUBSEQUENT EVENTS
On April 3, 2016 Edward Aruda announced his
resignation as a Director of the Company. There are no known disagreements with Mr. Aruda regarding such resignation
or any claims the Company may have against him.
On April 3, 2016, the Company determined that
it was in the best interests of the Company and its stockholders that the Company modify the Asset Purchase Agreement dated March
9, 2016. In reference to the Asset Purchase Agreement filed in the 8K on March 10, 2016, the Company made changes and an addendum
to Section 1.07 regarding the Series B Preferred Voting Shares. The 1,000 Preferred Stock Series B shares issued to Santa Rosa
Resources, Inc. were transferred in equal amounts of 250 shares each to Robert Stillwaugh, Mike Schatz, Gary Tilden and Donna Marie
Murtaugh.
On April 4, 2016, the Company changed the name
to Simlatus Corp.
On April 12, 2016, the Company entered into
a Debt Assignment Agreement whereby $10,000 of accrued interest of a Direct Capital Group, Inc. note was reassigned to V2IP, LLC.
On April 20, 2016, the Company accepted the
request from Direct Capital Group Inc., to extinguish the note between Syndication Capital and the Company dated December 31, 2012
for $105,000. The note has a remaining balance of $5,000. (See Note 5)
On April 20, 2016, the Company accepted the
request from Special Situations Fund One Inc. to extinguish the note dated March 12, 2012 for $21,491 plus accrued interest of
$12,754 between Special Situations and the Company. (See Note 5)
On April 20, 2016, the Company accepted the
request from Direct Capital Group Inc., to extinguish the note between Southridge Partners LP and the Company dated October 26,
2015 for $11,000 plus interest. The note has a remaining balance of $15,655. (See Note 5)
On April 25, 2016, the Company entered into
a Settlement and Release Agreement with Blackbridge Capital, LLC, pursuant to a Convertible Note dated September 30, 2015. Both
parties agreed that the outstanding 729,955,556 Shares of Common Stock owed to Blackbridge by the Company would be reduced to a
total amount of 200,000,000 Shares of Common Stock as full and final settlement of both current and contemplated future conversion
notices of the September 30, 2015 Convertible Note.
On April 27, 2016, the Company entered into
a Debt Assignment Agreement whereby $5,000 of accrued interest of a Direct Capital Group, Inc. note was reassigned to Silo Equity.
On April 27, 2016, the Company entered into
a Debt Assignment Agreement whereby $23,550 of principal of a Direct Capital Group, Inc. note was reassigned to Rockwell Capital
Partners.
On April 28, 2016 the Company reassigned the
interest of a Direct Capital note to GHS Investments, LLC in the sum of $15,886. The promissory note is unsecured, bears interest
at 8% per annum, and matures on January 28, 2017.
On May 3, 2016 the Company reassigned the principal
amount of a Direct Capital note to Blackbridge Capital, LLC in the sum of $100,000. The promissory note is unsecured, bears interest
at 5% per annum, and matures on May 3, 2017.
On May 4, 2016, the Company entered into a
Debt Assignment Agreement whereby $16,000 of principal and $6,177 of accrued interest of a Direct Capital Group, Inc. note was
reassigned to Microcap Equity Group, LLC.
On May 13, 2016, the Company entered into a
Debt Assignment Agreement whereby $20,000 of accrued interest of a Direct Capital Group, Inc. note was reassigned to V2IP, LLC.
On May 19, 2016, the Company finalized an agreement
with Direct Capital Group Inc., to extinguish the following notes in total value of $1,685,842:
|
|
Original
|
|
|
|
Current
|
|
Principal
|
|
P & I
|
|
|
Principal
|
|
Original
|
|
Interest
|
|
Balance
|
|
Balance
|
Payee
|
|
Amount
|
|
Date
|
|
Rate
|
|
May 19, 2016
|
|
May 19, 2016
|
Direct Capital Group
|
|
80,000
|
|
2/29/2016
|
|
8%
|
|
80,000
|
|
81,298
|
Direct Capital Group
|
|
80,000
|
|
1/31/2016
|
|
8%
|
|
80,000
|
|
81,806
|
Direct Capital Group
|
|
80,000
|
|
12/31/2015
|
|
8%
|
|
80,000
|
|
82,350
|
Direct Capital Group
|
|
80,000
|
|
11/30/2015
|
|
8%
|
|
80,000
|
|
82,893
|
Direct Capital Group
|
|
80,000
|
|
10/31/2015
|
|
8%
|
|
80,000
|
|
83,818
|
Direct Capital Group
|
|
240,000
|
|
3/31/2015
|
|
8%
|
|
240,000
|
|
282,319
|
Direct Capital Group
|
|
360,000
|
|
1/1/2015
|
|
8%
|
|
360,000
|
|
423,204
|
Direct Capital Group
|
|
48,000
|
|
10/31/2014
|
|
8%
|
|
45,157
|
|
49,572
|
Direct Capital Group
|
|
360,000
|
|
10/1/2014
|
|
22%
|
|
360,000
|
|
463,029
|
Direct Capital Group
|
|
48,000
|
|
7/31/2014
|
|
22%
|
|
-
|
|
8,919
|
Direct Capital Group
|
|
48,000
|
|
4/30/2014
|
|
22%
|
|
23,000
|
|
38,060
|
Direct Capital Group
|
|
16,000
|
|
2/28/2014
|
|
22%
|
|
-
|
|
3,561
|
Direct Capital Group
|
|
16,000
|
|
1/31/2014
|
|
22%
|
|
-
|
|
-
|
Direct Capital Group
|
|
16,000
|
|
12/31/2013
|
|
22%
|
|
-
|
|
-
|
Direct Capital Group
|
|
16,000
|
|
11/30/2013
|
|
22%
|
|
-
|
|
-
|
Direct Capital Group
|
|
16,000
|
|
10/31/2013
|
|
22%
|
|
-
|
|
-
|
Direct Capital Group
|
|
11,000
|
|
8/31/2013
|
|
22%
|
|
-
|
|
-
|
Direct Capital Group
|
|
14,072
|
|
7/31/2013
|
|
22%
|
|
72
|
|
5,013
|
Direct Capital Group
|
|
11,000
|
|
7/31/2013
|
|
22%
|
|
-
|
|
-
|
TOTALS
|
|
1,620,072
|
|
|
|
|
|
1,428,229
|
|
1,685,842
|
On June 15, 2016, the Company approved the authorization of a 1
for 1,000 reverse stock split of the Company’s outstanding shares of common stock. Furthermore, the Company agreed to establish
members for an Audit and Executive Compensation Committee.