<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>1. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>ORGANIZATION AND BUSINESS OF COMPANY</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Mexus Gold US (the “Company”) was originally incorporated under the laws of the State of Colorado on June 22, 1990, as U.S.A. Connection, Inc. On October 28, 2005, the Company changed its’ name to Action Fashions, Ltd. On September 18, 2009, the Company changed its’ domicile to Nevada and changed its’ name to Mexus Gold US to better reflect the Company’s new planned principle business operations. The Company has a fiscal year end of March 31.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company is a mining company engaged in the evaluation, acquisition, exploration and advancement of gold, silver and copper projects in the State of Sonora, Mexico and the Western United States, as well as, the salvage of precious metals from identifiable sources.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>2. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>BASIS OF PREPARATION</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q, the consolidated financial statements, footnote disclosures and other information normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The consolidated financial statements contained in this report are unaudited but, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the consolidated financial statements. All significant inter-company accounts and transactions have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet at March 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.</p> <p style='margin:0in 0in 0pt'>The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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 reviews these estimates and assumptions on an ongoing basis using currently available information. Actual results could differ from those estimates.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Cash and Cash Equivalents</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Per Share Data</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share". Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Fair Value of Financial Instruments</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company's financial instruments consist of cash, accounts payable, accrued liabilities, advances, notes payable, and a loan payable. The carrying amount of these financial instruments approximate fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Our investment in marketable securities is measured at fair value on a recurring basis using Level 1 inputs.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On March 24, 2014, the Company resigned as the operator of the Joint Venture with Minerals La Negra S. de R.L. de C.V. and Trinidad Pacifica S. de R.L. de C.V. and sold 50 shares of the minimum fixed capital stock of Mexus Enterprises S.A. de C.V. to First Pursuit Silver de Mexico S. de R.L. de C.V. for the following consideration: Assumption of $468,000 of accounts payable; Payment of $100,000 and $100,000 on July 2014 and July 2015, respectively, on behalf of the Company to Minerales de Tarchi S. de R.L. de C.V. for lease payments under an exploration agreement; 1,660,000 shares of common stock of Silver Pursuit Resources Limited; and $4,000,000 due on or before March 24, 2015. The Company could recover its 50% interest sold should the purchaser not fulfill the terms of the sale. As of December 31, 2014 the Company has not been successful in obtaining the shares we were to receive, accordingly we have recorded an impairment of $96,150 to fully impaired the value of the investment as it is uncertain if the Company will be able to obtain such shares.</p> <p style='margin:0in 0in 0pt'>Our warrant derivative liability and secured convertible promissory note derivative liability is measured at fair value on a recurring basis using Level 3 inputs.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. The notes payable, loans payable and secured convertible promissory notes have fixed interest rates therefore the Company is exposed to interest rate risk in that they could not benefit from a decrease in market interest rates. In seeking to minimize the risks from interest rate fluctuations, the Company manages exposure through its normal operating and financing activities.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Deferred Financing Costs</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Deferred financing costs are amortized to interest expense based on the terms of the related debt instruments on a straight-line basis, which approximates the effective interest rate method.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Accounting for Derivative Instruments</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Accounting standards require that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. A change in the market value of the financial instrument is recognized as a gain or loss in results of operations in the period of change.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Stock-based Compensation</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Revenue Recognition</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Exploration and Development Costs</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Exploration costs incurred in locating areas of potential mineralization or evaluating properties or working interests with specific areas of potential mineralization are expensed as incurred. Development costs of proven mining properties not yet producing are capitalized at cost and classified as capitalized exploration costs under property, plant and equipment. Property holding costs are charged to operations during the period if no significant exploration or development activities are being conducted on the related properties. Upon commencement of production, capitalized exploration and development costs would be amortized based on the estimated proven and probable reserves benefited. Properties determined to be impaired or that are abandoned are written-down to the estimated fair value. Carrying values do not necessarily reflect present or future values. </p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Mineral Property Rights </b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred either to develop new ore deposits, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates the carrying value of capitalized mining costs and related property and equipment costs, to determine if these costs are in excess of their recoverable amount whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Evaluation of the carrying value of capitalized costs and any related property and equipment costs would be based upon expected future cash flows and/or estimated salvage value in accordance with Accounting Standards Codification (ASC) 360-10-35-15, <i>Impairment or Disposal of Long-Lived Assets</i>.</p>
<!--egx--><div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>3.</b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>GOING CONCERN</b></p></td></tr></table></div> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company has a limited operating history and limited funds and has an accumulated deficit of $16,475,981 at December 31, 2014. These factors, among others, may indicate that the Company may not be able to continue as a going concern.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company is dependent upon outside financing to continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management’s plans to raise necessary funds through a private placement of its common stock to satisfy the capital requirements of the Company’s business plan. There is no assurance that the Company will be able to raise the necessary funds, or that if it is successful in raising the necessary funds, that the Company will successfully execute its business plan.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The financial statements do not include any adjustments relating to the recoverability and classification of assets and/or liabilities that might be necessary should the Company be unable to continue as a going concern. The continuation as a going concern is dependent upon the ability of the Company to meet our obligations on a timely basis, and, ultimately to attain profitability.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>4. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>RECENT ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>In August 2014, the FASB ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, amending FASB Accounting Standards Subtopic 205-40 to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, the amendments (1) provide a definition of the term “substantial doubt,” (2) require an evaluation every reporting period, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that financial statements are issued. ASU 2014-15 is effective for fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently evaluating ASU 2014-15 and does not anticipate a material impact on its consolidated financial statements.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>5. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>ACCOUNTS PAYABLE – RELATED PARTIES</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>During the nine months ended December 31, 2014 and 2013, the Company incurred rent expense to Paul D. Thompson, the sole director and officer of the Company, of $34,200 and $34,200, respectively. At December 31, 2014 and March 31, 2014, $75,198 and $45,966 for this obligation is outstanding, respectively.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18pt;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm;background-color:transparent'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><b><font lang="EN-US">6. </font></b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm;background-color:transparent'> <p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">NOTES PAYABLE</font></b></p></td></tr></table> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">During the nine months ended December 31, 2014, the Company received various cash advances totaling $39,000 from three investors. These advances are unsecured, earn interest at 10% per annum and are due within 90 days of issue. One-half of the cash advances received by the Company may be converted into shares of common stock of the Company, at the option of the holder, at either $0.03 per share or $0.04 per share depending on the date the cash advance was received. These notes are now in default. There is no default provisions stated in the notes.</font></p> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">During the nine months ended December 31, 2014, the Company received various cash advances totaling $189,400 from sixteen investors. These advances are unsecured and are due within 90 days of issue. Upon receipt of the cash advance the Company paid each of the investors the value of their investment in shares of common stock of the Company as a finance fee. The investor has the option to be repaid within 90 days by one of the following: (i) In cash (ii) One-half in cash and one—half in shares converted into common stock of the Company or (iii) The entire amount of the investment converted into shares of common stock of the Company. The conversion prices range from $0.011 per share to $0.040 per share. At December 31, 2014 and March 31, 2014, debt discount of $17,178 and $0, respectively has been recorded on the consolidated balance sheet related to these cash advances. At December 31, 2014, $103,500 of these notes were in default. There is no default provisions stated in the notes.</font></p> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">On February 16, 2010, the Company made an unsecured Promissory Note Agreement with William McCreary in the amount of $2,500 at eight percent interest and due on demand or no later than September 1, 2010. The Company has not made the scheduled payments and is in default on this note as of December 31, 2011. The default rate on the note is eight percent. At December 31, 2014 and March 31, 2014, the balances on this note totalled $2,500 and $2,500, respectively. At December 31, 2014 and March 31, 2014, accrued interest of $3,489 and $3,185 on this note have been included in accounts payable and accrued liabilities, respectively.</font></p> <p style='margin:0cm 0cm 0pt'> </p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>7. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>NOTES PAYABLE – RELATED PARTY</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Notes due to Taurus Gold, Inc. are unsecured, non-interest bearing and due on demand. These notes were accumulated through a series of cash advances to the Company. Taurus Gold, Inc. is controlled by Paul D. Thompson, the sole director and officer of the Company. As of December 31, 2014 and March 31, 2014, notes payable due to Taurus Gold Inc. totalled $198,892 and $179,159, respectively.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>8. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>PROMISSORY NOTES</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On April 18, 2013, the Company issued Promissory Notes for $255,000 in cash. The Notes bear interest of 4% per annum and are due on December 31, 2014. The Notes are secured by all of Mexus Gold US shares of stock in Mexus Resources S.A. de C.V. and a personal guarantee of Paul D. Thompson. In addition, a fee of 2,550,000 shares of common stock of the Company valued at $501,075 ($0.1965 per share) was paid to the Note holders on April 18, 2013. These financing fees are capitalized in the consolidated balance sheet as deferred finance expense and are being amortized on a straight-line basis, which approximates the effective interest rate method, as interest expense over the life of the Promissory Notes. At December 31, 2014 and March 31, 2014, deferred finance expense of $0 and $3,503, respectively related to these promissory notes were recorded on the consolidated balance sheet.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>As of December 31, 2014, the Company has not made the scheduled payments and is in default on these promissory notes. The default rate on the notes is seven percent. Accrued interest of $39,719 is included in accounts payable and accrued liabilities.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="36" style='border-top:#f0f0f0;border-right:#f0f0f0;width:27pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>9. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>SECURED CONVERTIBLE PROMISSORY NOTES</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On June 12, 2013, the Company entered into a Securities Purchase Agreement with Typenex Co-Investment, LLC (“Typenex”), for the sale of an 8% Secured Convertible Promissory Notes (“Notes”) in the principal amount of $557,500 consisting of an initial tranche of $307,500 comprising of $250,000 of cash at closing, Typenex legal expenses in the amount of $7,500 and a $50,000 original issue discount and an additional tranche $250,000 in cash. On June 12, 2013 the Company closed on the initial tranche and received $250,000 in cash. On August 8, 2013, the Company closed on the second tranche and received $125,000 in cash. The Company has not closed on the final tranche for $125,000 in cash. The Company has no obligation to pay Typenex any amounts on the unfunded portion of the Note. The Notes have a maturity date that is thirteen months after the issuance date. Typenex has been granted a security interest in the property of the Company. At the option of the holder, all principal, costs, charges and interest amounts outstanding under all of the Notes shall be exchanged for shares of the Company’s common stock at the Conversion Price of $0.23 per share. The Conversion Price is subject to an anti-dilution adjustment in the event the Company at any time, while the Notes are outstanding, issues equity securities including common stock or any security convertible or exchangeable for shares of common stock for no consideration or for consideration less than $0.23 a share.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>In conjunction with the issuance of the Notes on June 12, 2013, the Company issued a variable number of warrants of the Company’s common stock equal to $278,750 divided by the Market Price. Market Price is defined as the higher of (i) the closing price of the common stock of the Company on June 12, 2013, and (ii) the VWAP of the common stock for the trading day that is two days prior to the exercise date. The Exercise Price of the warrants are $0.24 per share. The Exercise Price is subject to an anti-dilution adjustment in the event the Company at any time, while the Warrants are outstanding, issues equity securities including common stock or any security convertible or exchangeable for shares of common stock for no consideration or for consideration less than $0.24 a share.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The anti-dilution protection for the Note and Warrants excludes (a) the Company’s issuance of securities in connection with strategic license agreements and other partnering arrangements so long as any such issuances are not for the purpose of raising capital and in which holders of such securities or debt are not at any time granted registration rights, and (b) the Company’s issuance of Common Stock or the issuance or grant of options to purchase Common Stock to employees, directors, officers and consultants, authorized by the Company’s board of directors in place on June 12, 2013. After three months after the issuance date, monthly installments are due on the Note payable at the option of the Company (i) in cash (ii) in shares of common stock of the Company discounted depending on the Company’s share price at either 30% or 35%, or (iii) in any combination of cash or shares.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On June 12, 2013, the Company recorded a discount on the Note equal to the fair value of the warrant derivative liability and convertible promissory note derivative liability. This discount is amortized using the effective interest rate method over the term of the Note.</p> <p style='margin:0in 0in 0pt'> </p> <div align="center"> <table cellspacing="0" cellpadding="0" width="50%" border="0" style='width:50%'> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="27%" colspan="2" style='border-top:#f0f0f0;border-right:#f0f0f0;width:27%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>Nine months Ended December 31,</b></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>2014</b></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>2013</b></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Cash advanced on closing of the initial tranche and second tranche</p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$ 375,000</p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> </p> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$ -</p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Discounts on Note</p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> Fair value of warrant derivative liability</p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(219,372)</p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> Fair value of convertible promissory note liability</p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(75,218)</p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> Loss on derivative liabilities</p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>14,734</p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt;text-indent:-0.25in'> Conversion of principal and interest into shares of common stock</p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(276,338)</p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> Amortization of discount on Note</p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> 371,953</p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'> -</p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$ 190,759</p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$ -</p></td></tr></table></div> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Default of Secured Convertible Promissory Notes</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company did not pay the outstanding principal and interest due on July 12, 2014, the maturity date of the Notes, and the Notes went into default. On default, the Holders at their option may redeem the Notes in full or accelerate installments due on the Notes. The Holders may designate whether the installments are due in cash or discounted shares of common stock of the Company or a combination thereof. The default rate on the note is 22%.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>10. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>WARRANT DERIVATIVE LIABILITY</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Warrants are subject to anti-dilution adjustments that allow for the reduction in the Exercise Price in the event the Company subsequently issues equity securities including common stock or any security convertible or exchangeable for shares of common stock for no consideration or for consideration less than $0.24 a share. The Company accounted for the warrants in accordance with ASC Topic 815. Accordingly, the Warrants are not considered to be solely indexed to the Company’s own stock and, as such, recorded as a liability.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company’s warrant derivative liability has been measured at fair value at December 31, 2014 and March 31, 2014 using a binomial model. Since the Exercise Price contains an anti-dilution adjustment, the probability that the Exercise Price of the Notes would decrease as the share price decreased was incorporated into the valuation calculation. After June 12, 2013, the Company issued common stock for cash at a price of $0.015 per share and the conversion price has been adjusted accordingly.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The inputs into the binomial model are as follows:</p> <p style='margin:0in 0in 0pt'> </p> <div align="center"> <table cellspacing="0" cellpadding="0" width="50%" border="0" style='width:50%'> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>December 31, 2014</b></p> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>March 31, 2014</b></p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Closing share price</p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>$0.0265</p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>$0.08</p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Conversion price</p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>$0.0110</p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>$0.0225</p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Risk free rate</p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>1.38%</p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>1.32%</p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Expected volatility</p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>115%</p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>142%</p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Dividend yield</p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>0%</p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>0%</p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Expected life</p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>41 months</p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>50 months</p></td></tr></table></div> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The fair value of the warrant derivative liability is $555,538 at December 31, 2014. The increase (decrease) in the fair value of the conversion option derivative liability of $312,666 and $(365,389) has been recorded as a (gain) loss in the consolidated statements of operations for the three and nine months ended December 31, 2014, respectively.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>11. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>CONVERTIBLE PROMISSORY NOTE DERIVATIVE LIABILITY</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Notes are subject to anti-dilution adjustments that allow for the reduction in the Conversion Price in the event the Company subsequently issues equity securities including common stock or any security convertible or exchangeable for shares of common stock for no consideration or for consideration less than $0.23 a share. The Company accounted for the conversion option in accordance with ASC Topic 815. Accordingly, the Conversion Option is not considered to be solely indexed to the Company’s own stock and, as such, recorded as a liability.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company’s convertible promissory note derivative liability has been measured at fair value at June 12, 2013 and March 31, 2014 using a binomial model. Since the Conversion Price contains an anti-dilution adjustment, the probability that the Conversion Price of the Notes would decrease as the share price decreased was incorporated into the valuation calculation. After June 12, 2013, the Company issued common stock for cash at a price of $0.015 per share and the conversion price has been adjusted accordingly.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The inputs into the binomial model are as follows:</p> <p style='margin:0in 0in 0pt'> </p> <div align="center"> <table cellspacing="0" cellpadding="0" width="50%" border="0" style='width:50%'> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>December 31, 2014</b></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><b>March 31, 2014</b></p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Closing share price</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>$0.025</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>$0.08</p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Conversion price</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>$0.011</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>$0.0225</p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Risk free rate</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>0.12%</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>0.10%</p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Expected volatility</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>163%</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>105%</p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Dividend yield</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>0%</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>0%</p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p style='margin:0in 0in 0pt'>Expected life</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>6 months</p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>4 month</p></td></tr></table></div> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The fair value of the conversion option derivative liability is $285,082 at December 31, 2014. The increase (decrease) in the fair value of the conversion option derivative liability of $(130,687) and $(669,328) is recorded as a (gain) loss in the unaudited consolidated statements of operations for the three and nine months ended December 31, 2014, respectively.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>12. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>CONTINGENT LIABILITIES</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>An asset retirement obligation is a legal obligation associated with the disposal or retirement of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees. While the Company, as of December 31, 2014, does not have a legal obligation associated with the disposal of certain chemicals used in its leaching process, the Company estimates it will incur costs up to $50,000 to neutralize those chemicals at the close of the leaching pond.</p>
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><b>13. </b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>STOCKHOLDERS’ EQUITY</b></p></td></tr></table> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The stockholders’ equity of the Company comprises the following classes of capital stock as of December 31, 2014 and March 31, 2014:</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Preferred Stock, $.001 par value per share; 9,000,000 shares authorized, 0 shares issued and outstanding at December 31, 2014 and March 31, 2014, respectively.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Series A Convertible Preferred Stock (‘Series A Preferred Stock”), $.001 par value share; 1,000,000 shares authorized: 375,000 shares issued and outstanding at December 31, 2014 and March 31, 2014.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Holders of Series A Preferred Stock may convert one share of Series A Preferred Stock into one share of Common Stock. Holders of Series A Preferred Stock have the number of votes determined by multiplying (a) the number of Series A Preferred Stock held by such holder, (b) the number of issued and outstanding Series A Preferred Stock and Common Stock on a fully diluted basis, and (c) 0.000006.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Common Stock, par value of $0.001 per share; 500,000,000 shares authorized: 276,840,567 and 248,103,110 shares issued and outstanding at December 31, 2014 and March 31, 2014, respectively. Holders of Common Stock have one vote per share of Common Stock held.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On April 1, 2014, the Company issued 342,063 shares of common stock valued at $29,075 ($0.085 per share) to Typenex Co-Investment, LLC for conversion of principal and interest of $12,500 and loss on settlement of debt of $16,576.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On April 16, 2014, the Company issued 1,053,553 shares of common stock valued at $63,213 ($0.060 per share) to Typenex Co-Investment, LLC for conversion of principal and interest of $38,500 and loss on settlement of debt of $24,713.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On April 18, 2014, the Company issued 3,056,805 shares of common stock to satisfy obligations under share subscription agreements for $157,492 in cash, $78,238 in services and $5,570 for settlement of accounts payable included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On May 1, 2014, the Company issued 1,427,500 shares of common stock to satisfy obligations under share subscription agreements for $92,245 in services and $15,354 in equipment included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On June 16, 2014, the Company issued 919,033 shares of common stock valued at $36,761 ($0.040 per share) to Typenex Co-Investment, LLC for conversion of principal and interest of $30,000 and loss on settlement of debt of $6,761.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On July 16, 2014, the Company issued 1,103,370 shares of common stock to satisfy obligations under share subscription agreements for $12,100 in services and $39,503 in cash receipt in prior periods included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On July 31, 2014, the Company issued 467,144 shares of common stock valued at $19,153 ($0.041 per share) to Typenex Co-Investment, LLC for conversion of principal and interest of $7,996 and loss on settlement of debt of $11,157.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On August 20, 2014, the Company issued 1,064,237 shares of common stock valued at $42,569 ($0.040 per share) to Typenex Co-Investment, LLC for conversion of principal and interest of $18,009 and loss on settlement of debt of $24,560.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On August 25, 2014, the Company issued 4,800,105 shares of common stock to satisfy obligations under share subscription agreements for $227,505 in settlement of notes payable and $10,001 in cash included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On September 9, 2014, the Company issued 2,444,235 shares of common stock to satisfy obligations under share subscription agreements for $45,000 in finance expense and $27,000 in services included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On September 17, 2014, the Company issued 1,268,520 shares of common stock valued at $38,056 ($0.030 per share) to Typenex Co-Investment, LLC for conversion of principal and interest of $19,690 and loss on settlement of debt of $18,366.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On September 25, 2014, the Company issued 2,640,000 shares of common stock to satisfy obligations under share subscription agreements for $16,000 in finance expense and $98,500 in services included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On October 21, 2014, the Company issued 2.466,666 shares of common stock to satisfy obligations under share subscription agreements for $50,000 in finance expense and $18,750 in services included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On October 30, 2014, the Company issued 783,000 shares of common stock valued at $39,034 ($0.0324 per share) to Typenex Co-Investment, LLC for conversion of principal and interest of $17,510 and loss on settlement of debt of $21,524.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On November 26, 2014, the Company issued 1,204,747 shares of common stock to satisfy obligations under share subscription agreements for $15,000 in finance expense and $11,250 in services included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On December 4, 2014, the Company issued 2,408,146 shares of common stock valued at $96,085 ($0.0399 per share) to Typenex Co-Investment, LLC for conversion of principal and interest of $35,000 and loss on settlement of debt of $61,085.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On December 18, 2014, the Company issued 1,288,000 shares of common stock to satisfy obligations under share subscription agreements for $30,912 in services included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'><b>Common Stock Payable</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>During the nine months ended December 31, 2014, the Company issued subscriptions payable for 7,052,725 shares of common stock for cash at $90,600 ($0.0128 per share).</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>During the nine months ended December 31, 2014, the Company issued subscriptions payable for 7,159,695 shares of common stock for services valued at $275,608 ($0.0380 per share).</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>During the nine months ended December 31, 2014, the Company issued subscriptions payable for 3,302,595 shares of common stock for settlement of notes payable valued at $95,500 ($0.0315 per share).</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>During the nine months ended December 31, 2014, the Company issued subscriptions payable for 5,771,865 shares of common stock for finance expense valued at $148,000 ($0.0256 per share).</p>
<!--egx--><div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'> </p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'><b>14. SUBSEQUENT EVENTS</b></p></td></tr></table></div> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On January 16, 2015 the Company issued 1,881,721 shares of common stock to satisfy obligations under share subscription agreements for $53,946 in services included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On January 21, 2015 the Company issued 3,843,138 shares of common stock to satisfy obligations under share subscription agreements for $43,529 in settlement of accounts payable, $15,000 in finance costs and $26,500 in cash receipts included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On January 27, 2015 the Company issued 3,552,726 shares of common stock to satisfy obligations under share subscription agreements for $8,000 in cash and $42,000 in settlement of notes payable included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On January 28, 2015 the Company issued 244,000 shares of common stock to satisfy obligations under share subscription agreements for $7,800 in services included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On January 28, 2014, the Company issued 2,752,167 shares of common stock valued at $82,290 ($0.0299 per share) to Typenex Co-Investment, LLC for conversion of principal and interest.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On January 30, 2015 the Company issued 2,293,937 shares of common stock to satisfy obligations under share subscription agreements for $1,500 in equipment and $30,500 in settlement of notes payable included in share subscriptions payable.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>During the period from January 1, 2015 to February 9, 2015, the Company issued subscriptions payable for 7,930,858 shares of common stock for cash of $21,500 ($0.011 per share), for services of $37,300 ($.0293 per share), for settlement of notes of $50,000 ($0.0142 per share) and settlement of accounts payable of $43,529 ($0.037 per share). As of the date of this report shares have not yet been issued.</p>
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0
7300
<!--egx--><table cellspacing="0" cellpadding="0" width="100%" border="0" style='width:100%'> <tr> <td valign="top" width="24" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18pt;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm;background-color:transparent'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><b><font lang="EN-US">2. </font></b></p></td> <td valign="top" style='border-top:#f0f0f0;border-right:#f0f0f0;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm;background-color:transparent'> <p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">BASIS OF PREPARATION</font></b></p></td></tr></table> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q, the consolidated financial statements, footnote disclosures and other information normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The consolidated financial statements contained in this report are unaudited but, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the consolidated financial statements. All significant inter-company accounts and transactions have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet at March 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.</font></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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 reviews these estimates and assumptions on an ongoing basis using currently available information. Actual results could differ from those estimates.</font></p> <p style='margin:0cm 0cm 0pt'> </p>
<!--egx--><p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">Cash and Cash Equivalents</font></b></p> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.</font></p> <p style='margin:0cm 0cm 0pt'> </p>
<!--egx--><p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">Per Share Data</font></b></p> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share". Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.</font></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p>
<!--egx--><p style='margin:0in 0in 0pt'><b>Fair Value of Financial Instruments</b></p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>The Company's financial instruments consist of cash, accounts payable, accrued liabilities, advances, notes payable, and a loan payable. The carrying amount of these financial instruments approximate fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Our investment in marketable securities is measured at fair value on a recurring basis using Level 1 inputs.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>On March 24, 2014, the Company resigned as the operator of the Joint Venture with Minerals La Negra S. de R.L. de C.V. and Trinidad Pacifica S. de R.L. de C.V. and sold 50 shares of the minimum fixed capital stock of Mexus Enterprises S.A. de C.V. to First Pursuit Silver de Mexico S. de R.L. de C.V. for the following consideration: Assumption of $468,000 of accounts payable; Payment of $100,000 and $100,000 on July 2014 and July 2015, respectively, on behalf of the Company to Minerales de Tarchi S. de R.L. de C.V. for lease payments under an exploration agreement; 1,660,000 shares of common stock of Silver Pursuit Resources Limited; and $4,000,000 due on or before March 24, 2015. The Company could recover its 50% interest sold should the purchaser not fulfill the terms of the sale. As of December 31, 2014 the Company has not been successful in obtaining the shares we were to receive, accordingly we have recorded an impairment of $96,150 to fully impaired the value of the investment as it is uncertain if the Company will be able to obtain such shares.</p> <p style='margin:0in 0in 0pt'>Our warrant derivative liability and secured convertible promissory note derivative liability is measured at fair value on a recurring basis using Level 3 inputs.</p> <p style='margin:0in 0in 0pt'> </p> <p style='margin:0in 0in 0pt'>Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. The notes payable, loans payable and secured convertible promissory notes have fixed interest rates therefore the Company is exposed to interest rate risk in that they could not benefit from a decrease in market interest rates. In seeking to minimize the risks from interest rate fluctuations, the Company manages exposure through its normal operating and financing activities.</p>
<!--egx--><p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">Deferred Financing Costs</font></b></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Deferred financing costs are amortized to interest expense based on the terms of the related debt instruments on a straight-line basis, which approximates the effective interest rate method.</font></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p>
<!--egx--><p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">Accounting for Derivative Instruments</font></b></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Accounting standards require that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. A change in the market value of the financial instrument is recognized as a gain or loss in results of operations in the period of change.</font></p> <p style='margin:0cm 0cm 0pt'> </p>
<!--egx--><p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">Stock-based Compensation</font></b></p> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.</font></p> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.</font></p> <p style='margin:0cm 0cm 0pt'> </p>
<!--egx--><p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">Revenue Recognition</font></b></p> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured.</font></p> <p style='margin:0cm 0cm 0pt'> </p>
<!--egx--><p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">Exploration and Development Costs</font></b></p> <p style='margin:0cm 0cm 0pt'> </p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Exploration costs incurred in locating areas of potential mineralization or evaluating properties or working interests with specific areas of potential mineralization are expensed as incurred. Development costs of proven mining properties not yet producing are capitalized at cost and classified as capitalized exploration costs under property, plant and equipment. Property holding costs are charged to operations during the period if no significant exploration or development activities are being conducted on the related properties. Upon commencement of production, capitalized exploration and development costs would be amortized based on the estimated proven and probable reserves benefited. Properties determined to be impaired or that are abandoned are written-down to the estimated fair value. Carrying values do not necessarily reflect present or future values. </font></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p>
<!--egx--><p style='margin:0cm 0cm 0pt'><b><font lang="EN-US">Mineral Property Rights </font></b></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred either to develop new ore deposits, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates the carrying value of capitalized mining costs and related property and equipment costs, to determine if these costs are in excess of their recoverable amount whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Evaluation of the carrying value of capitalized costs and any related property and equipment costs would be based upon expected future cash flows and/or estimated salvage value in accordance with Accounting Standards Codification (ASC) 360-10-35-15, <i>Impairment or Disposal of Long-Lived Assets</i>.</font></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p>
<!--egx--><p style='margin:0cm 0cm 0pt'><font lang="EN-US">On June 12, 2013, the Company recorded a discount on the Note equal to the fair value of the warrant derivative liability and convertible promissory note derivative liability. This discount is amortized using the effective interest rate method over the term of the Note.</font></p> <p style='margin:0cm 0cm 0pt'> </p> <div align="center"> <table cellspacing="0" cellpadding="0" width="50%" border="0" style='width:50%'> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td> <td valign="top" width="27%" colspan="2" style='border-top:#f0f0f0;border-right:#f0f0f0;width:27%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><b><font lang="EN-US">Nine months Ended December 31,</font></b></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><b><font lang="EN-US">2014</font></b></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><b><font lang="EN-US">2013</font></b></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Cash advanced on closing of the initial tranche and second tranche</font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">$ 375,000</font></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">$ -</font></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Discounts on Note</font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> Fair value of warrant derivative liability</font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">(219,372)</font></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">-</font></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> Fair value of convertible promissory note liability</font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">(75,218)</font></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">-</font></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> Loss on derivative liabilities</font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">14,734</font></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">-</font></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt;text-indent:-18pt'><font lang="EN-US"> Conversion of principal and interest into shares of common stock</font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">(276,338)</font></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">-</font></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> Amortization of discount on Note</font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US"> 371,953</font></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US"> -</font></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td></tr> <tr> <td valign="top" width="42%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:42%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td> <td valign="top" width="13%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:13%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">$ 190,759</font></p></td> <td valign="top" width="14%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:14%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="right" style='text-align:right;margin:0cm 0cm 0pt'><font lang="EN-US">$ -</font></p></td></tr></table></div>
<!--egx--><p style='margin:0cm 0cm 0pt'><font lang="EN-US">The inputs into the binomial model are as follows:</font></p> <p style='margin:0cm 0cm 0pt'> </p> <div align="center"> <table cellspacing="0" cellpadding="0" width="50%" border="0" style='width:50%'> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><b><font lang="EN-US">December 31, 2014</font></b></p> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><b><font lang="EN-US">March 31, 2014</font></b></p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Closing share price</font></p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">$0.0265</font></p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">$0.08</font></p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Conversion price</font></p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">$0.0110</font></p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">$0.0225</font></p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Risk free rate</font></p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">1.38%</font></p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">1.32%</font></p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Expected volatility</font></p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">115%</font></p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">142%</font></p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Dividend yield</font></p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">0%</font></p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">0%</font></p></td></tr> <tr> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Expected life</font></p></td> <td valign="top" width="18%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:18%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">41 months</font></p></td> <td valign="top" width="16%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:16%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">50 months</font></p></td></tr></table></div> <p style='margin:0cm 0cm 0pt'> </p>
<!--egx--><p style='margin:0cm 0cm 0pt'><font lang="EN-US">The inputs into the binomial model are as follows:</font></p> <p style='margin:0cm 0cm 0pt'> </p> <div align="center"> <table cellspacing="0" cellpadding="0" width="50%" border="0" style='width:50%'> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US"> </font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><b><font lang="EN-US">December 31, 2014</font></b></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:black 1.5pt solid;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><b><font lang="EN-US">March 31, 2014</font></b></p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Closing share price</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">$0.025</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">$0.08</font></p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Conversion price</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">$0.011</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">$0.0225</font></p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Risk free rate</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">0.12%</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">0.10%</font></p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Expected volatility</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">163%</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">105%</font></p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Dividend yield</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">0%</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:white;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">0%</font></p></td></tr> <tr> <td valign="top" width="15%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:15%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p style='margin:0cm 0cm 0pt'><font lang="EN-US">Expected life</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">6 months</font></p></td> <td valign="top" width="12%" style='border-top:#f0f0f0;border-right:#f0f0f0;width:12%;background:#cceeff;border-bottom:#f0f0f0;padding-bottom:0cm;padding-top:0cm;padding-left:0cm;border-left:#f0f0f0;padding-right:0cm'> <p align="center" style='text-align:center;margin:0cm 0cm 0pt'><font lang="EN-US">4 month</font></p></td></tr></table></div> <p style='margin:0cm 0cm 0pt'> </p>
34200
34200
75198
45966
16475981
2500
0.0800
2500
2500
3489
3185
17178
0
198892
179159
255000
0.0400
2550000
501075
0.1965
39719
0
3503
557500
307500
250000
0
7500
0
50000
125000
250000
0.23
0.23
0.24
0.24
278750
39000
0.1000
0.04
189400
90
375000
0
-219372
0
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0
14734
0
-276338
0
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0
190759
0
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41
50
555538
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312666
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6
4
50000
0.001
0.001
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0
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0.001
0.001
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375000
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0.001
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500000000
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276840567
248103110
276840567
248103110
2640000
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467144
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1288000
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227505
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0
0
63213
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96085
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0.00
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0
0.08
0
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0.06
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25000
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10001
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24713
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21524
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61085
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98500
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0
0
0
0
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0
157492
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0
50000
0
15000
0
0
0
0
0
0
0
0
0
0
92245
78238
0
0
18750
0
11250
0
30912
0
0
0
0
0
0
0
0
15354
5570
0
0
0
0
0
0
0
90600
0.0128
275608
0.038
95500
0.0315
148000
0.0256
7930858
21500
37300
50000
43529
1881721
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0
2293937
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0
32000
0
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0
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2752167
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0
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82290
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91633
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150114
129624
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1294520
1567165
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0
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459311
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255000
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190759
282861
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2187619
3068884
0
0
0
0
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375
375
276845
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14104432
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-16011903
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53964
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70462
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141526
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122802
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582830
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-0.003
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-0.012
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0.000
0.003
-0.003
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272591940
226375272
261681634
220430103
10-Q
2014-12-31
false
MXUS
Mexus Gold US
0001355677
--03-31
291408256
Smaller Reporting Company
Yes
No
No
2015
Q3
0001355677
2014-04-01
2014-12-31
0001355677
2015-02-14
0001355677
2014-12-31
0001355677
2014-03-31
0001355677
2013-04-01
2013-12-31
0001355677
2013-03-31
0001355677
2013-12-31
0001355677
2014-10-01
2014-12-31
0001355677
2013-10-01
2013-12-31
0001355677
2010-02-16
0001355677
2013-04-18
0001355677
2013-08-08
0001355677
2013-06-12
0001355677
2014-09-25
0001355677
2014-09-09
0001355677
2014-08-25
0001355677
2014-08-20
0001355677
2014-07-31
0001355677
2014-07-16
0001355677
2014-06-30
0001355677
2014-06-16
0001355677
2014-05-01
0001355677
2014-04-18
0001355677
2014-04-16
0001355677
2014-04-02
0001355677
2014-10-21
0001355677
2014-10-30
0001355677
2014-11-26
0001355677
2014-12-04
0001355677
2014-12-18
0001355677
2015-01-01
2015-02-09
0001355677
2015-01-16
0001355677
2015-01-21
0001355677
2015-01-27
0001355677
2015-01-28
0001355677
2015-01-30
0001355677
2014-01-28
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iso4217:USD
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