Notes to Condensed Consolidated Financial Statements
December 31, 2016
(Unaudited)
1.
ORGANIZATION AND BUSINESS OF COMPANY
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 Companys new planned principle business operations. The Company has a fiscal year end of March 31.
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.
2.
BASIS OF PREPARATION
Pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q, the unaudited condensed 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 condensed 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 condensed consolidated balance sheet at March 31, 2016 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.
The preparation of unaudited condensed consolidated 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. Three and nine month figures are not necessarily indicative of the results to be reported at the year end.
Use of Estimates
The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Management believes that the estimates used are reasonable.
Cash and cash equivalents
The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
Equipment
Equipment consists of mining tools and equipment, watercraft and vehicles which are depreciated on a straight-line basis over their expected useful lives as follows (see Note 5):
Mining tools and equipment
7 years
Watercrafts
7 years
Vehicles
3 years
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Equipment under Construction
Equipment under construction comprises mining equipment that is currently being fabricated and modified by the Company and is not presently in use. Equipment under construction totaled $73,456 and $17,018 as of December 31, 2016 and March 31, 2016, respectively. Equipment under construction at December 31, 2016 comprises Gold Recovery Cyanide Plant, Hydraulic Drum 12YD, Skid Mounted Mill and Survey Winch Marine.
Exploration and Development Costs
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.
Mineral Property Rights
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,
Impairment or Disposal of Long-Lived Assets
.
Long-Lived Assets
In accordance with ASC 360, Property Plant and Equipment the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.
Fair Value of Financial Instruments
ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.
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.
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.
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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.
Foreign Currency Translation
The Companys functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars in accordance with ASC 740, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.
To the extent that the Company incurs transactions that are not denominated in its functional currency, they are undertaken in Mexican Pesos. The Company has not, as of the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
Comprehensive Loss
ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive loss and its components in the consolidated financial statements. As at December 31, 2016 and 2015, the Company had no items that represent a comprehensive loss, and therefore has not included a schedule of comprehensive loss in the consolidated financial statements.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Asset Retirement Obligations
In accordance with accounting standards for asset retirement obligations (ASC 410), the Company records the fair value of a liability for an asset retirement obligation (ARO) when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. The associated asset retirement costs are supposed to be capitalized as part of the carrying amount of the related mineral properties. As of December 31, 2016 and 2015, the Company has not recorded AROs associated with legal obligations to retire any of the Companys mineral properties as the settlement dates are not presently determinable.
Revenue Recognition
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.
Accounting for Derivative Instruments
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.
Stock-based Compensation
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.
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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.
Per Share Data
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.
3.
GOING CONCERN
The accompanying unaudited condensed consolidated 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 condensed consolidated financial statements, the Company has a limited operating history and limited funds and has an accumulated deficit of $22,515,031 at December 31, 2016. These factors, among others, may indicate that the Company may not be able to continue as a going concern.
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 managements plans to raise necessary funds through a private placement of its common stock to satisfy the capital requirements of the Companys 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.
The unaudited condensed consolidated 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.
4.
RECENT ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09,
Revenue from Contracts with Customers
. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted in annual reporting periods beginning after December 31, 2016. The Company is in the process of evaluating the impact of ASU 2014-09 on the Companys consolidated financial statements and disclosures.
In August 2014, the FASB issued Accounting Standards Update No. 2014-15,
Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern
, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. ASU 2014-15 requires management to perform interim and annual assessments of an entitys ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entitys ability to continue as a going concern. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2014-15 on the Companys consolidated financial statements and disclosures.
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In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02,
Leases
.
ASU 2016-02 requires a lessee to record a right of use of asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months.
ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018.
Early adoption is permitted.
A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available.
The Company is currently evaluating the expected impact that the standard could have on its consolidated financial statements and related disclosures.
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements.
5.
EQUIPMENT
|
|
|
|
|
|
Cost
|
Accumulated Depreciation
|
December 31,
2016
Net Book Value
|
March 31, 2016
Net Book Value
|
Mining tools and equipment
|
$ 1,337,588
|
$ 811,998
|
$ 525,590
|
$ 526,311
|
Vehicles
|
129,418
|
118,687
|
10,731
|
1,650
|
|
$ 1,467,006
|
$ 930,685
|
$ 536,321
|
$ 527,961
|
Depreciation expense for the three and nine months ended December 31, 2016 and 2015 was $55,063 and $53,120 and $170,396 and $212,749, respectively.
6.
ACCOUNTS PAYABLE RELATED PARTY
During the nine months ended December 31, 2016 and 2015, 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, 2016 and March 31, 2016, $53,803 and $33,798 for this obligation is outstanding, respectively.
Compensation
On July 2, 2015, the Company entered into a compensation agreement with Paul D. Thompson, the sole director and officer of the Company. Mr. Thompson is compensated $15,000 per month and has the option to take payment in Company stock valued at an average of 5 days closing price, cash payments or deferred payment in stock or cash. In addition, Mr. Thompson is due 2,000,000 shares of common stock at the end of each fiscal quarter. At December 31, 2016 and March 31, 2016, $166,959 and $116,400 of compensation due is included in accounts payable related party, respectively and $65,200 for 4,000,000 shares of common stock due is included in share subscriptions payable, respectively.
7.
NOTES PAYABLE RELATED PARTY
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, 2016 and March 31, 2016, notes payable due to Taurus Gold Inc. totaled $66,662 and $101,428, respectively.
Notes due to North Pacific Gold were accumulated through a series of cash advances to the Company. North Pacific Gold is controlled by Paul Thompson, Jr. an immediate family member of Paul D. Thompson, the sole director and officer of the Company. This loan was due in 90 days and is in default, unsecured and bears interest of 6% per annum and is repayable in cash or Company common stock at market value at the option of the Company. As of December 31, 2016 and March 31, 2016, notes payable due to North Pacific Gold totaled $17,931 and $9,091, respectively.
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8.
NOTES PAYABLE
During the year ended March 31, 2014, the Company received cash advances of $164,502 from three unrelated shareholders of the Company. These advances are non-interest bearing, unsecured and have no specific terms of repayment. On August 19, 2014, the Company issued 1,750,020 shares of common stock valued at $70,000. The shares were issued in settlement of the convertible promissory note ($0.04 per share) to settle $87,501 in advances. As a result, the Company recorded a gain on settlement of debt of $17,501. On February 28, 2015, the Company issued 2,272,727 shares of common stock valued at $48,636 ($0.0214 per share) to settle $25,000 in advances. As a result, the Company recorded a loss on settlement of debt of $23,636. On August 24, 2015, $37,001 of these advances were settled on issuance of the convertible promissory note. At December 31, 2016 and March 31, 2016, the balance of these advances totaled $15,000 and $15,000, respectively.
During the years ended March 31, 2015 and March 31, 2016 and the nine months ended December 31, 2016, the Company received various advances totaling $286,757 from twenty-two investors, received various advances totaling $290,300 from nineteen investors and received $19,198 in various advances from one investor, respectively. These advances are unsecured and are due within 30 to 180 days of issue. Upon receipt of the cash advance, the Company paid majority 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 when due by one of the following: (i) In cash (ii) One-half in cash and onehalf 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 $0.0018 per share to $0.040 per share. For one promissory note with principal of $40,000 payments equal to 20% of cash proceeds received by the Company are due when equipment held for sale is sold.
During the year ended March 31, 2016, note principal and interest of $503,960 was paid through the issuance of shares of common stock and $42,264 in cash. In addition, for the nine months ended December 31, 2016 note principal and interest of $73,000 was paid through the issuance of shares of common stock and $26,500 in cash. At December 31, 2016 and March 31, 2016, the balance of these advances totaled $90,600 and $243,089, respectively. At December 31, 2016 and March 31, 2016, debt discount of $0 and $54,112, respectively has been recorded on the consolidated balance sheet related to these cash advances. At December 31, 2016, $90,600 of these notes were in default. There are no default provisions stated in the notes.
On January 19, 2016, the Company issued a promissory note (Note) with a principal of amount of $77,150 bearing interest of 10% per annum to settle $77,150 in accounts payable due for accounting fees. Payments equal to 15% of cash proceeds received by the Company are due when equipment held for sale is sold. Any unpaid principal and interest is due in full on July 19, 2016. At December 31, 2016 and March 31, 2016, the balance of this note was $74,297 and $77,150, respectively. At December 31, 2016, this note was in default.
9.
PROMISSORY NOTES
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, 2013. 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 were capitalized in the consolidated balance sheet as deferred finance expense and were being amortized on a straight-line basis, which approximates the effective interest rate method, as interest expense over the life of the Promissory Notes. On August 24, 2015, $100,000 of these Promissory Notes were settled on issuance of a convertible promissory note. On December 1, 2015, $60,000 of these Promissory Notes were settled on issuance of a convertible promissory note. On September 19, 2016, the Company issued 570,750 shares of common stock with a fair value $44,234 ($0.0775 per share) to settle a promissory note with principal of $20,000. At December 31, 2016 and March 31, 2016, outstanding Promissory Notes were $75,000 and $95,000, respectively. As of December 31, 2016, 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. At December 31, 2016 and March 31, 2016 accrued interest of $25,399 and $18,013, respectively, is included in accounts payable and accrued liabilities.
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On August 24, 2015, the Company issued a convertible promissory note (Note) for a total amount of $343,973 due on February 24, 2017 to William H. Brinker (Holder). The total amount of the Note is due in three equal payments plus any accrued interest at 180 days, 360 days and 540 days from the issuance date. The Holder upon annual election may elect to be paid in cash or stock (but not both) as follows: (a) in cash, with interest at 4% per annum (b) in shares of common stock of the Company, with interest at 12% per annum (Stock Payment). For a Stock Payment, the number of shares is determined by multiplying the outstanding principal of the Note by 12% divided by 100% of the average of the closing price of the Stock for ten trading days immediately preceding the payment date. This Note has been accounted for in accordance with ASC 480
Distinguishing Liabilities from Equity
. In consideration of the Company issuing the Note, the Holder agreed to cancel all other notes, contracts or other agreements with a carrying value totaling $458,402 prior to the issuance of the Note comprising unsecured promissory note dated January 8, 2013 of $140,000, promissory note of $100,000 dated April 18, 2013, various notes payable of $41,001, interest payable of $9,372 and share subscriptions payable of $168,029. In conjunction with the Note, on September 2, 2015, the Company issued the Holder 8,732,880 shares of common stock with a fair value of $134,486 ($0.0154 per share) which was recorded as debt discount. The issuance of the Note resulted in gain on settlement of $114,429. On September 19, 2016, the Company issued 6,665,786 shares of common stock with a fair value $516,597 ($0.0775 per share) to fully settle the Note with principal of $343,973 and a note payable (see Note 8) with principal of $30,000. At December 31, 2016 and March 31, 2016 the Note is recorded net of discount of $0 and $82,187, respectively. The net note balance as of December 31, 2016 and March 31, 2016 was $0 and $261,786, respectively.
On December 1, 2015, the Company issued a convertible promissory note (Note) dated August 24, 2015 for a total amount of $41,189 due on February 24, 2017 to David Long (Holder). The total amount of the Note is due in three equal payments plus any accrued interest at 180 days, 360 days and 540 days from the date of the Note. The Holder upon annual election may elect to be paid in cash or stock (but not both) as follows: (a) in cash, with interest at 4% per annum (b) in shares of common stock of the Company, with interest at 12% per annum (Stock Payment). For a Stock Payment, the number of shares is determined by multiplying the outstanding principal of the Note by 12% divided by 100% of the average of the closing price of the Stock for ten trading days immediately preceding the payment date. This Note has been accounted for in accordance with ASC 480
Distinguishing Liabilities from Equity
. In consideration of the Company issuing the Note, the Holder agreed to cancel all other notes, contracts or other agreements with a carrying value totaling $60,000 prior to the issuance of the Note comprising a promissory note of $60,000 dated April 18, 2013. In conjunction with the Note, on September 2, 2015, the Company issued the Holder 686,475 shares of common stock with a fair value of $10,297 ($0.015 per share) which as recorded as debt discount. The issuance of the Note resulted in gain on settlement of $18,811. On September 19, 2016, the Company issued 800,000 shares of common stock with a fair value $62,000 ($0.0775 per share) to fully settle the promissory note with principal of $41,189. At December 31, 2016 and March 31, 2016, the Note is recorded net of discount of $0 and $6,293, respectively. The net note balance as of December 31, 2016 and March 31, 2016 was $0 and $34,896, respectively.
Amortization of debt discount was $142,592 and $54,302 for the nine months ended December 31, 2016 and 2015, respectively and $0 and $43,502 for the three months ended December 31, 2016 and 2015, respectively.
10.
CONTINGENT LIABILITIES
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, 2016, 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.
11.
STOCKHOLDERS EQUITY
The stockholders equity of the Company comprises the following classes of capital stock as of December 31, 2016 and March 31, 2016:
Preferred Stock, $0.001 par value per share; 9,000,000 shares authorized, 0 issued and outstanding at December 31, 2016 and March 31, 2016.
Series A Convertible Preferred Stock (Series A Preferred Stock), $0.001 par value share; 1,000,000 shares authorized: 1,000,000 shares issued and outstanding at December 31, 2016 and March 31, 2016.
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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.
Common Stock, par value of $0.001 per share; 850,000,000 shares authorized: 642,759,448 and 480,601,620 shares issued and outstanding at December 31, 2016 and March 31, 2016, respectively. Holders of Common Stock have one vote per share of Common Stock held.
Common Stock
On May 19, 2016, the Company issued 19,027,777 shares of common stock to satisfy obligations under share subscription agreements for $35,300 in cash receipts included in share subscriptions payable.
On April 21, 2016 the Company issued 17,791,176 shares of common stock to satisfy obligations under share subscription agreements for $75,000 for settlement of interest, $47,400 in services and $5,000 in cash receipts included in share subscriptions payable.
On May 13, 2016 the Company issued 17,141,176 shares of common stock to satisfy obligations under share subscription agreements for $306,000 for settlement of accounts payable, $2,000 in equipment and $20,000 in cash receipts included in share subscriptions payable.
On July 6, 2016 the Company cancelled 1,830,600 shares of common stock previously issued to satisfy obligations under share subscription agreements for $27,459 for settlement of notes payable.
On August 12, 2016 the Company issued 8,150,000 shares of common stock to satisfy obligations under share subscription agreements for $305,000 for services and $41,000 in cash receipts included in share subscriptions payable.
On August 24, 2016 the Company issued 14,633,333 shares of common stock to satisfy obligations under share subscription agreements for $205,800 for services, $30,000 for settlement of accounts payable, $51,666 for settlement of notes payable and $114,500 in cash receipts included in share subscriptions payable.
On August 30, 2016 the Company issued 6,025,000 shares of common stock to satisfy obligations under share subscription agreements for $120,500 in cash receipts included in share subscriptions payable.
On September 26, 2016 the Company issued 8,710,000 shares of common stock to satisfy obligations under share subscription agreements for $176,600 for services and $14,200 in cash receipts included in share subscriptions payable.
On October 10, 2016 the Company issued 21,283,782 shares of common stock to satisfy obligations under share subscription agreements for $704,539 for settlement of notes payable, $394,265 in services and $93,000 in cash receipts included in share subscriptions payable.
On November 11, 2016 the Company issued 2,916,667 shares of common stock to satisfy obligations under share subscription agreements for $2,000 for settlement of notes payable, $8,037 for settlement of accounts payable, $29,463 in services and $10,000 in cash receipts included in share subscriptions payable.
On December 2, 2016 the Company issued 14,055,555 shares of common stock to satisfy obligations under share subscription agreements for $5,000 for settlement of notes payable, $20,000 for interest, $44,900 in services and $91,000 in cash receipts included in share subscriptions payable.
On December 12, 2016 the Company issued 33,918,729 shares of common stock to satisfy obligations under share subscription agreements for $44,000 for settlement of notes payable, $190,909 for interest, $1,687 for settlement of accounts payable, $22,499 for replacement of cancellation of shares, $251,650 in services and $36,436 in cash receipts included in share subscriptions payable.
On December 12, 2016 the Company cancelled 2,248,100 shares of common stock previously issued to satisfy obligations under share subscription agreements for $22,481 for settlement of notes payable.
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On December 29, 2016 the Company issued 2,583,333 shares of common stock to satisfy obligations under share subscription agreements for $11,700 for services and $24,625 in cash receipts included in share subscriptions payable.
Common Stock Payable
As at December 31, 2016, the Company had total subscriptions payable for 29,703,664 shares of common stock for $301,515 in cash, shares of common stock for equipment valued at $500, shares of common stock for interest valued at $5,000, shares of common stock for services valued at $428,505, common stock for settlement of accounts payable valued at $4,500 and common stock for settlement of notes payable valued at $17,036.
12.
SUBSEQUENT EVENTS
Common Stock
From the period of January 1, 2017 to February 6, 2017, the Company issued subscriptions payable for 533,333 shares of common stock ($0.0525 per share) for $28,000 in cash.
Common Stock Payable
On February 6, 2017 the Company issued 2,534,136 shares of common stock to satisfy obligations under share subscription agreements for $51,500 in services and $38,000 in cash receipts included in share subscriptions payable.
San Felix Mining Site
Effective January 13, 2017, Mexus Gold Mining, S.A. de C.V., a wholly owned Mexican subsidiary of the Company, entered into a purchase agreement with Jesus Leopoldo Felix Mazon, Leonardo Elias Jaime Perez, and Elia Lizardi Perez, wherein the Company purchased a 50% interest in the San Felix mining site located in the La Alameda area of Caborca, State of Sonora, Mexico. The remaining 50% of the site is owned jointly by Mar Mar Holdings S.A. de C.V. and Marco Antonio Martinez Mora.
The San Felix mining site contains seven (7) concessions over an area of approximately 26,000 acres.
The total purchase price is US$2,000,000 of which the Company is 50% responsible. The required payment schedule is a follows: US$150,000 by January 30, 2017, US$500,000 by August 13, 2017, US$500,000 by March 13, 2018, US$500,000 by October 13, 2018, and US$350,000 by May 13, 2019. On January 30, 2017, the Company paid $75,000 (50% of $150,000).
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ITEM 2.