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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company’s
financial statements have been prepared using the going concern assumption which contemplates the realization of assets and the
liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations and
has negative cash flows from operating activities, which raise substantial doubt about the Company’s ability to continue
as a going concern. The Company sustained a net loss for the three months ended June 30, 2015 of $473,663 and has an accumulated
deficit of $18,376,204 as of June 30, 2015. In addition, the Company estimates it will require approximately $150,000,000 in capital
to commence principal operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company intends
to continue its research and development efforts, but does not have any revenues in order to finance these activities internally.
As a result, the Company intends to seek financing to fund its operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company has
been able to meet its short-term needs primarily through loans from third parties, private placements of equity and debt securities,
and settling certain obligations owed to vendors and related parties through the issuance of equity securities such as preferred
stock, common stock, and warrants.  The Company plans to continue to obtain financing through the sale of equity or
debt securities in order to finance operations until it can generate positive cash flows from operating activities. The private
and public equity placements are expected to provide the needed funds for continued operations and further research and development
of the Company’s proprietary oil sands refining methods. The Company can provide no assurance that it will be able to obtain
sufficient additional financing needed to develop its technology and alleviate doubt about its ability to continue as a going
concern. To the extent the Company raises additional funds by issuing equity securities, the Company’s stockholders may
experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s
ability to conduct business. The consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">During 2005,
the Company acquired three oil sands mineral leases: (1) an undivided 40% interest in a 1,120-acre parcel, (2) an undivided 20%
interest in the same 1,120-acre parcel, and (3) an undivided 16.666% interest in a 640-acre parcel. These leases are located in
Carbon County, Utah. Effective September 5, 2014, the first lease was extended through December 31, 2020 and, effective September
26, 2014, the lease terms on the second and third leases were extended through December 31, 2019. The minimum annual lease payments
on the leases are $268,915.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In 2009, a fourth
lease was entered into with William G. Gibbs, a relative of the Chief Executive Officer of the Company, for an additional undivided
5% interest in the 640-acre parcel (for a total 21.666% undivided interest in the 640-acre parcel). This lease is located in Carbon
County, Utah, adjacent to the 1,120-acre parcel. This lease has a 6-year life with a minimum yearly lease payment of $7,965 and,
pursuant to an Addendum dated September 28, 2014, is scheduled to terminate by December 31, 2020, if the property has not reached
commercial production.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company’s
interest in these leases is conditioned upon the payments of royalties, minimum yearly investment in development, tax payments,
and other obligations to the owners of the leases. Two of the four leases are conditioned upon reaching the production stage by
December 31, 2020, while one of the other leases requires production by December 31, 2019. If the Company does not attain average
production of at least 500 barrels per day (“bbl/d”) by these dates, the interest in these leases may be terminated. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Upon commencement
of operations, each lease requires a production royalty of 10% of the market value of the minerals sold, net of applicable costs
and expenses. The Company has the right, but not the obligation, to pool or unitize the leases, such that the ore mined is allocated
between, and the royalties paid, on their proportionate interests. If not pooled, the owners will be paid royalties only to the
extent the oil sands ore is mined on their respective properties. Through June 30, 2015, no production royalties were accrued
or paid because production on these properties had not commenced. After three consecutive calendar years of production on the
1,120-acre parcel, the production royalty on the 1,120-acre parcel shall be the greater of the 10% royalty or $1,000,000 annually.
Once production begins, all rents paid count towards the Company’s production royalty commitments.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Future minimum
lease payments are as follows for the years ending:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">June 30,</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: center; width: 34%"><font style="font-size: 8pt">2016</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="text-align: right; width: 13%"><font style="font-size: 8pt">276,880</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center"><font style="font-size: 8pt">2017</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt">276,880</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: center"><font style="font-size: 8pt">2018</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt">276,880</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center"><font style="font-size: 8pt">2019</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt">276,880</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: center"><font style="font-size: 8pt">2020</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">188,599</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td><font style="font-size: 8pt">Total future minimum lease payments</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">1,296,119</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In connection
with the Company issuing its Series A preferred stock units described in Note 6, the Company previously accounted for the conversion
feature related to down-round protection provided to the preferred stockholders in the event that the Company sells its common
stock at a price below $0.35 per share as a derivative liability.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">As more fully
described in Note 2, the Company adopted ASU 2014-16 effective April 1, 2015 and conducted an evaluation of its preferred stock
offering and the related conversion feature. The Company concluded that the conversion feature is clearly and closely related
to the preferred stock and that the preferred stock is more akin to equity. As a result of adopting ASU 2014-16, the Company reclassified
its embedded derivative liability of $691,859 to additional paid-in capital.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Prior to the
adoption of ASU 2014-16, the Company bifurcated its embedded derivative and accounted for it as a liability while the corresponding
preferred stock was accounted for as equity. With the assistance of a third-party valuation specialist, the Company valued the
derivative liability based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value hierarchy prioritizes observable and unobservable
inputs used to measure fair value into three broad levels, which are described below:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 5%"><font style="font-size: 8pt">Level 1</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 94%; text-align: justify"><font style="font-size: 8pt">Quoted prices in active markets that are accessible
at the measurement date for assets or liabilities.</font></td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 8pt">Level 2</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: justify"><font style="font-size: 8pt">Other inputs that are observable directly or indirectly, such
as quoted prices for similar assets and liabilities or market corroborated inputs.</font></td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 8pt">Level 3</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: justify"><font style="font-size: 8pt">Unobservable inputs that are used when little or no market data
is available, which require the Company to develop its own assumptions about how market participants would value the assets
or liabilities.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><font style="font-size: 8pt">Determining
which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy
disclosure each quarter. Assets and liabilities measured at fair value on a recurring basis as of March 31, 2015 is summarized
as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; background-color: white"><font style="font-size: 8pt"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-indent: -11pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Fair Value as
of March 31, 2015</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: -11pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 1</b></font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 2</b></font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 3</b></font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Total</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td><font style="font-size: 8pt"><i>Liabilities</i></font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 36%"><font style="font-size: 8pt">Embedded derivative</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">     –</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">     –</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">691,859</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">691,859</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The following
table presents the fair value reconciliation of Level 3 liabilities measured at fair value on a recurring basis for the three
months ended June 30, 2015:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font-size: 8pt">   </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Fair Value Measurements Using Significant Unobservable
Inputs</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>(Level 3)</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Embedded Derivative
Liability</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 84%; padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt">Beginning balance, March 31, 2015</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; text-align: right"><font style="font-size: 8pt">691,859</font></td>
<td style="width: 1%"><font style="font-size: 8pt">  </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt">Adjustments</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-indent: -10pt; padding-left: 22pt; padding-bottom: 1pt"><font style="font-size: 8pt">Adoptions of ASU 2014-16</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid"><font style="font-size: 8pt"> </font></td>
<td style="text-align: right; border-bottom: Black 1pt solid"><font style="font-size: 8pt">(691,859)</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt">Ending balance, June 30, 2015</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">–</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Given the
nature of the derivative liability, the carrying amounts of $0 and $691,859 reported in the accompanying condensed consolidated
balance sheets as of June 30, 2015 and March 31, 2015, respectively, were derived from Level 3 inputs and represent management’s
best estimates of fair value.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Key assumptions
used in the valuation of the embedded derivatives as of March 31, 2015 using a Monte Carlo analysis methodology are as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"><b> </b></font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 83%; text-align: left"><font style="font-size: 8pt">Threshold barrier</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">0.35</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt">Average price below $0.35 per share</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">0.07</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td><font style="font-size: 8pt">Probability of offer below $0.35 per share</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3%</font></td><td style="text-align: left"></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt">Preferred share conversion price</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">1.40</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt">Conversion ratio</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">20.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In October
2013, the Company initiated a preferred stock unit offering (the “Preferred Stock Offering”) to raise up to $2,000,000
with an option to increase the offering by an additional $500,000 based on market conditions and investor interest. On March 20,
2014, the board authorized an increase in the Preferred Stock Offering from $2,500,000 to $6,650,000. Each unit of the Preferred
Stock Offering sells for $1.40 and entitles the holder to receive one share of Series A Preferred Stock (the “Series A Stock”)
along with one warrant to purchase a share of the Company’s common stock at $0.45 per share and one warrant to purchase
the Company’s common stock at $0.70 per share (hereafter, together referred to as “Series A preferred stock units”). </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In November
2013, the board of directors adopted resolutions approving “the designation of Series A Preferred Stock,” and a
Certificate of Designation was filed with the state of Delaware. On March 4, 2014, the board of directors approved a
resolution increasing the total number of authorized shares of the Series A Stock from 3,250,000 to 4,750,000. On March 5,
2014, the Company filed with the state of Delaware a Certificate of Designation to effectuate the increase in authorized
shares of Series A Stock. There was no change to the original rights, privileges, and preferences of the Series A
Stock.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Series A preferred
stockholders are entitled to receive dividends of 6% and have a liquidation preference equal to $1.40 per share for each outstanding
share of Series A Stock (as adjusted for stock splits, stock dividends and recapitalizations) plus an amount equal to declared
but unpaid dividends thereon. As of June 30, 2015 and March 31, 2015, the liquidation preference for the Series A Stock was $5,765,494.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Holders of Series
A Stock have the right at any time after the date of issuance to convert their Series A Stock to common stock based on a ratio
determined by dividing $1.40 by the Conversion Price in effect at the time for such shares. The Conversion Price is the lower
of $0.35 per share or the lowest price that any additional shares of common stock were issued after the initial purchase date.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Common shares
issued in transactions such as granting of employee incentive options pursuant to the Company’s 2011 Long-Term Incentive
Plan, shares issued in certain financings, and shares issued to acquire technology or assets do not reduce the Conversion Price.
The Series A Stock automatically converts upon the Company completing a financing transaction of $10,000,000 or more. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Preferred
Stock Offering was closed for new commitments on March 31, 2014. As of June 30, 2015, the Company had issued a total of 4,662,120
Series A preferred stock units. The Company received net cash proceeds of $3,701,615 from selling 2,846,054 Series A preferred
stock units and issued an additional 1,532,382 Series A preferred stock units in connection with conversions of convertible debt
and accrued interest totaling $1,925,647 and conversions of related-party debt and accrued interest of $131,101. The Company used
a portion of the proceeds to complete required test drilling at its Sunnyside site location in connection with its project permitting
process and for general corporate purposes. As of June 30, 2015 and March 31, 2015, there were 4,118,210 shares of Series A Stock
outstanding.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">No common
stock was issued during the three months ended June 30, 2015. During the three months ended June 30, 2014, 28,571 shares of Series
A Stock were converted into 114,284 shares of the Company’s common stock. The Company issued an additional 1,874 shares
of common stock to settle cumulative dividends for the Series A preferred shares that were converted.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">During the
three months ended June 30, 2014, warrants to purchase 68,000 shares of common stock were exercised resulting in cash proceeds
of $33,035.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company has
issued various classes of warrants as described below:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 3%"><font style="font-size: 8pt"><b>a)</b></font></td>
<td style="width: 96%; text-align: justify"><font style="font-size: 8pt"><b>Private Placement Warrants</b></font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In connection
with the Company’s private placement of common stock initiated in 2012, the Company granted warrants to the stock purchasers.
These warrants give the holders the right to purchase shares of the Company’s common stock at $1.15 per share for a 2-year
period. In March 2014, the Company issued 121,259 3-year warrants to purchase the Company’s common stock at $1.15 to certain
convertible note holders who converted their notes to Series A preferred stock units. As of June 30, 2015 and March 31, 2015,
there were 121,259 private placement warrants outstanding of which 44,517 were issued to brokers associated with the transaction.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 3%"><font style="font-size: 8pt"><b>b)</b></font></td>
<td style="width: 97%; text-align: justify"><font style="font-size: 8pt"><b>Debt Exchange Warrants</b></font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">On September
30, 2013, the Company exchanged warrants to purchase 3,260,000 shares of common stock of the Company for a related-party convertible
note payable and simultaneously canceled the note. On September 30, 2013, the Company exchanged warrants to purchase 2,260,000
shares of common stock of the Company for the outstanding payroll obligation owed to the Company’s CEO in the amount of
$1,049,350. The warrants give the holders the right to purchase the Company’s common stock at $0.01 for a 10-year period.
All of the warrants remain outstanding as of June 30, 2015.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font-size: 8pt"><b> </b></font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 3%"><font style="font-size: 8pt"><b>c)</b></font></td>
<td style="text-align: justify; width: 97%"><font style="font-size: 8pt"><b>Series A Preferred Stock Warrants</b></font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In connection
with the Company’s Preferred Stock Offering through June 30, 2015, the Company issued 4,378,436 warrants to purchase the
Company’s common stock at $0.45 and 4,378,436 warrants to purchase the Company’s common stock at $0.70 per share.
The warrants have a 5 year term and a cashless exercise provision. As of June 30, 2015, 8,739,017 warrants remain outstanding.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
issued 214,285 Series A preferred stock units for research and development expenses. The issuance included 214,285 warrants to
purchase the Company’s common stock at $0.45 per share and 214,285 warrants to purchase the Company’s common stock
at $0.70 per share. All of the warrants remain outstanding as of June 30, 2015.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
issued 69,399 Series A preferred stock units to placement agents associated with the Preferred Stock Offering. The issuance included
69,399 warrants to purchase the Company’s common stock at $0.45 per share and 69,399 warrants to purchase the Company’s
common stock at $0.70 per share. All of the warrants remain outstanding as of June 30, 2015.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 3%"><font style="font-size: 8pt"><b>d)</b></font></td>
<td style="width: 97%; text-align: justify"><font style="font-size: 8pt"><b>Broker Warrants</b></font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In connection
with the Company’s Preferred Stock Offering through June 30, 2015, the Company issued 1,175,292 warrants to purchase the
Company’s common stock at $0.35 per share for a 5 year period. The warrants were issued to brokers associated with the Preferred
Stock Offering. All of the warrants remain outstanding as of June 30, 2015.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 3%"><font style="font-size: 8pt"><b>e)</b></font></td>
<td style="text-align: justify; width: 97%"><font style="font-size: 8pt"><b>Other Common Stock Warrants</b></font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In connection
with the amended License Agreement described in Note 1, the Company issued 575,000 warrants to purchase common stock of the Company
at $0.01 per share. The estimated fair value of these warrants of $201,250 was recorded as research and development expense during
the year ended March 31, 2014. The warrants remain outstanding as of June 30, 2015.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In April 2011,
the Company adopted the 2011 Long-Term Incentive Plan (the “2011 Plan”) which provides for the issuance of up to 7,000,000
shares of the Company’s common stock. During the three months ended June 30, 2015, the Company did not issue any options
under the 2011 Plan.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> <b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font-size: 8pt">The summary of option activity for
the three months ended June 30, 2015 is presented below:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Number
of Shares</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted
Average Exercise Price</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted
Average Remaining Life (years)</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td colspan="2" style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance as of March 31,
2015</b></font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">5,922,500</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">    0.53</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3.22</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="text-align: left; width: 48%"><font style="font: 8pt Times New Roman, Times, Serif">Granted</font></td><td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="text-align: right; width: 13%"><font style="font-size: 8pt">–</font></td><td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="text-align: right; width: 13%"><font style="font-size: 8pt">–</font></td><td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="text-align: right; width: 13%"><font style="font-size: 8pt">–</font></td><td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">Exercised</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">Canceled</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">(6,250</font></td><td style="text-align: left"><font style="font-size: 8pt">)</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.50</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.21</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">Expired</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td colspan="2" style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance as of June 30, 2015</b></font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,916,250</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">0.53</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">2.95</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
<p style="margin: 0; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><font style="font-size: 8pt">Outstanding and
exercisable options presented by price range as of June 30, 2015 are as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="text-align: right; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="10" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Options
Outstanding</b></font></td><td style="text-align: center; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="text-align: center; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Options
Exercisable</b></font></td><td style="text-align: center; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="6" style="text-align: center"></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Average</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Number of</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Remaining</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Average</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Number of</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Average</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Exercise</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Options</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Life</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Exercise</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Options</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Exercise</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Price</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Outstanding</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Years)</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Price</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Exercisable</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Price</b></font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">0.25</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">50,000</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">1.64</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">0.25</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">50,000</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">0.25</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.35</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">860,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3.08</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.35</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">594,170</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.35</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.40</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3,087,500</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">2.75</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.40</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3,087,500</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.40</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.50</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">68,750</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.21</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.50</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">68,750</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.50</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.65</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">875,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">4.15</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.65</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">291,667</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.65</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.72</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">325,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3.95</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.72</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">216,666</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.72</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.15</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">650,000</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.86</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.15</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">650,000</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.15</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.25-$1.15</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,916,250</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">2.95</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.53</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">4,958,753</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.51</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"><font style="font-size: 8pt"> </font></p>
<p style="margin: 0; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The estimated
fair value of the Company’s stock options, less expected forfeitures, is amortized over the options’ vesting period
on a straight-line basis. The Company recognized $91,190 and $269,880 of equity-based compensation expense during the three months
ended June 30, 2015 and 2014, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">As of June 30,
2015, there was $314,129 of total unrecognized compensation cost with a weighted-average vesting period of approximately 9 months.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The intrinsic
values of outstanding and vested stock options were as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>June 30,</b></font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>March 31,</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>2015</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>2015</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 66%; text-align: left"><font style="font-size: 8pt">Intrinsic value - options outstanding</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">500</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify"><font style="font-size: 8pt">Intrinsic value - options exercisable</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">375</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt">Intrinsic value - options exercised</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"><font style="font-size: 8pt"><b></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On July 1,
2015, David Hardman was engaged to serve as the Company’s new interim Chief Financial Officer until his replacement by the
board of directors or resignation. The Company is still in the process of obtaining government permits, so for the time being
the interim Chief Financial Officer will work the hours required to perform the functions of the position and the Company will
pay him at a rate of $150 per hour. In addition, the Company granted an award of stock options to the interim Chief Financial
Officer to purchase 125,000 shares of Company common stock at an exercise price of $0.34 per share that expire five years from
the date of grant and vest one-third on the date of grant and an additional one-third on the next two anniversaries of the date
of grant.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Effective
August 3, 2015, the Company engaged R. Glenn McGinnis as its Chief Operating Officer. Mr. McGinnis replaces the former Chief Operating
Officer whose employment with the Company terminated on July 31, 2015. The Company has agreed to pay to Mr. McGinnis a monthly
fee of $2,500, plus an additional $200 for each hour worked in excess of 20 hours per month. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>a) Principles
of Consolidation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The condensed
consolidated financial statements include the consolidated operations of American Sands Energy Corp. and its wholly owned subsidiary
Green River Resources Inc. (“GRI”). All significant intercompany balances and transactions have been eliminated in
consolidation.</font></p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">June 30,</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: center; width: 34%"><font style="font-size: 8pt">2016</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="text-align: right; width: 13%"><font style="font-size: 8pt">276,880</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center"><font style="font-size: 8pt">2017</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt">276,880</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: center"><font style="font-size: 8pt">2018</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt">276,880</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center"><font style="font-size: 8pt">2019</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt">276,880</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: center"><font style="font-size: 8pt">2020</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">188,599</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td><font style="font-size: 8pt">Total future minimum lease payments</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">1,296,119</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-indent: -11pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Fair Value as
of March 31, 2015</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: -11pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 1</b></font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 2</b></font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 3</b></font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Total</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td><font style="font-size: 8pt"><i>Liabilities</i></font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 36%"><font style="font-size: 8pt">Embedded derivative</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">     –</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">     –</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">691,859</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">691,859</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td></tr>
</table>
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American Sands Energy Corp.
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">American Sands
Energy Corp. (“AMSE” or the “Company”) is a pre-production oil company with oil sands resources located
near Sunnyside, Utah that has not commenced planned principal operations. The Company’s activities since inception have
consisted principally of acquiring lease rights, raising capital, performing research and development activities with regard to
its oil sands extraction technology, working to obtain the required permits necessary to mine the oil sands, and developing the
plans to construct a bitumen extraction facility. The Company’s activities are subject to significant risks and uncertainties
including failing to secure the additional funding required to operationalize the Company’s technology.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company intends
to mine the oil sands ore using conventional mining techniques and use a proprietary solvent to extract oil from the oil sands
ore. Management believes that the water-free process produces high quality bitumen, recovers nearly 100% of the solvent, requires
no tailings ponds, and its only by-product is reclamation ready sand. Since inception, the Company has been engaged in the business
of acquiring and developing oil sands assets and technologies used to separate the oil contained in oil sands. The Company anticipates
that its primary operations will include the mining of oil sands, the separation of oil products therefrom and the sale of oil
and oil by-products.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company has
acquired rights to approximately 1,760 acres of prime oil sands deposits in the Sunnyside area of Utah through its mineral leases
as more fully described in Note 4 to the condensed consolidated financial statements. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Effective January
24, 2012, the Company entered into a License, Development and Engineering Agreement with Universal Oil Recovery Corp. (“UOR”)
and SRS International (the “License Agreement”) whereby the Company was granted an exclusive non-transferable license
to use certain technology in its proposed business to extract bitumen from oil sands. The territory covered by the agreement includes
the State of Utah and any other geographic location in which a future designated project is commenced by or through the Company.
On November 18, 2013, the Company entered into an Amended and Restated License, Development and Engineering Agreement (“Amendment”)
with UOR. The Amendment amends and restates the License Agreement. Pursuant to the terms of the Amendment, the previous royalties
of 75% on projects outside of Utah and the minimum royalty of $1,000,000 per year on such agreements have been eliminated. Pursuant
to the Amendment, the Company will now pay royalties on projects outside of Utah of 15% of the net fees (net of all costs other
than general and administrative expenses) collected by the Company on any license of the technology. In addition, the $25,000
per month management fee is eliminated until a permanent financing is closed (minimum of $25,000,000), at which time the payment
will be reinstated. In consideration of the amendment, the Company issued to UOR, 575,000 warrants to purchase common stock of
the Company for $0.01 per share, exercisable for ten years. The term of the License Agreement is 20 years and thereafter so long
as production of products using the technology is commercially and economically feasible.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">These financial
statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“US GAAP”)
for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information
and notes required by US GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments
(consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial statements
have been included.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The preparation
of financial statements in conformity with US GAAP requires management to make judgments, estimates, and assumptions that could
affect the reported amounts of assets and liabilities as of the dates of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ significantly from those estimates.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>a) Principles
of Consolidation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The condensed
consolidated financial statements include the consolidated operations of American Sands Energy Corp. and its wholly owned subsidiary
Green River Resources Inc. (“GRI”). All significant intercompany balances and transactions have been eliminated in
consolidation.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>b) Mineral
Leases</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In certain cases,
the Company capitalizes costs related to investments in mineral lease interests. Such costs include mineral lease acquisition
costs. Costs are deferred until such time as the extent of proved developed reserves has been determined and mineral lease interests
are either developed, the property sold or the mineral lease rights are allowed to lapse. To date, all exploration and lease costs
have been expensed.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>c) Other Assets</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">During the three
months ended June 30, 2015 and 2014, the Company capitalized $25,049 and $73,159 of costs, respectively, associated with mine
permitting. As of June 30, 2015, the Company had $432,674 of mine permitting costs capitalized.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font-size: 8pt"><b>d) Research and Development</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company continues
to develop additional technology related to its proprietary bitumen extraction process. To date, the Company has expensed costs
associated with developing its technology as research and development costs. For the three months ended June 30, 2015 and 2014,
the Company incurred costs of $73,417 and $104,328, respectively, for research and development of its technologies.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>e) Stock-based
Compensation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company uses
the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options,
the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period.
For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested
amounts are revalued using the Black-Scholes model at each reporting period. For warrants issued to lenders, the Company records
the grant-date fair value of the warrants, and any resulting beneficial conversion feature for convertible debt, as a debt discount.
The discount is then amortized over the term of the convertible debt as non-cash interest expense.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>f) Net Loss
Per Common Share</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Basic earnings
or loss per common share is computed on the basis of the weighted average number of shares outstanding during the periods. Diluted
earnings or loss per common share is calculated on the basis of the weighted average number of common shares outstanding during
the period plus the effect of dilutive common share equivalents during the period. Common share equivalents include preferred
stock, outstanding stock options and warrants and convertible debt instruments. For periods in which a net loss is reported, common
share equivalents are excluded because they are antidilutive. Therefore, basic loss per common share is the same as diluted loss
per common share for the three months ended June 30, 2015 and 2014. As of June 30, 2015 and 2014, the Company had cumulative,
undeclared dividends that had not been accrued related to its preferred stock of $495,160 and $170,358, respectively. For the
three months ended June 30, 2015 and 2014, the Company had accrued preferred stock dividends of $86,245 and $96,758, respectively,
which were added to net loss in the consolidated statements of operations in order to calculate net loss per common share attributable
to common stockholders.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>g) Recent
Accounting Pronouncements</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">From time to
time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted
by the Company as of the specified effective date.  If not discussed, management believes that the impact of recently
issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon
adoption.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In May 2014,
the FASB<b> </b>issued ASU 2014-09, <i>Revenue from Contracts with Customers</i>. The amendments in ASU 2014-09 affect any entity
that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial
assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09
will supersede the revenue recognition requirements in Topic 605, <i>Revenue Recognition</i>, and most industry-specific guidance,
and creates a Topic 606, <i>Revenue from Contracts with Customers</i>.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The core principle
of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in
an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
To achieve that core principle, an entity should apply the following steps:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 1: Identify
the contracts with a customer.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 2: Identify
the performance obligations in the contracts.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 3: Determine
the transaction price.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 4: Allocate
the transaction price to the performance obligations in the contracts.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 5: Recognize
revenue when (or as) the entity satisfies a performance obligation.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">ASU 2014-09 is
effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.
Early application is not permitted. Until the Company begins to recognize revenue, its financial statements will not be affected
by the adoption of ASU 2014-09.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In August
2014, the FASB issued ASU No. 2014-15, <i>Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.
</i>This standard sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial
doubt about the entity’s ability to continue as a going concern, and if so, to provide related note disclosures. The standard
is for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December
15, 2016. The Company is currently assessing the impact, if any, the implementation of this guidance will have on the Company.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In November
2014, the FASB issued ASU 2014-16, <i>Derivatives and Hedging (Topic 815) – Determining Whether the Host Contract in a Hybrid
Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity</i>. The amendments in ASU 2014-16 clarify
how current US GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid
financial instrument that is issued in the form of a share. Specifically, an entity should consider all relevant terms and features,
including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. No single
term or feature should necessarily determine the economic characteristics and risks of the host contract. In evaluating the nature
of the host contract, an entity should assess the substance of the relevant terms and features (that is, the relative strength
of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weight those terms
and features. The amendments in ASU 2014-16 are effective for entities for fiscal years, and interim periods within those years,
beginning after December 31, 2015. Early adoption, including adoption in an interim period, is permitted.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
adopted ASU 2014-16 effective April 1, 2015. The Company conducted an evaluation of its preferred stock offering and the related
conversion feature. The Company concluded that the conversion feature is clearly and closely related to the preferred stock and
that the preferred stock is more akin to equity. As a result of adopting ASU 2014-16, the Company reclassified the embedded derivative
liability related to the preferred stock conversion feature to additional paid-in capital. See Note 5.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>b) Mineral
Leases</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In certain cases,
the Company capitalizes costs related to investments in mineral lease interests. Such costs include mineral lease acquisition
costs. Costs are deferred until such time as the extent of proved developed reserves has been determined and mineral lease interests
are either developed, the property sold or the mineral lease rights are allowed to lapse. To date, all exploration and lease costs
have been expensed.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>c) Other Assets</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">During the three
months ended June 30, 2015 and 2014, the Company capitalized $25,049 and $73,159 of costs, respectively, associated with mine
permitting. As of June 30, 2015, the Company had $432,674 of mine permitting costs capitalized.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font-size: 8pt"><b>d) Research and Development</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company continues
to develop additional technology related to its proprietary bitumen extraction process. To date, the Company has expensed costs
associated with developing its technology as research and development costs. For the three months ended June 30, 2015 and 2014,
the Company incurred costs of $73,417 and $104,328, respectively, for research and development of its technologies.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>e) Stock-based
Compensation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The Company uses
the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options,
the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period.
For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested
amounts are revalued using the Black-Scholes model at each reporting period. For warrants issued to lenders, the Company records
the grant-date fair value of the warrants, and any resulting beneficial conversion feature for convertible debt, as a debt discount.
The discount is then amortized over the term of the convertible debt as non-cash interest expense.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>f) Net Loss
Per Common Share</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">Basic earnings
or loss per common share is computed on the basis of the weighted average number of shares outstanding during the periods. Diluted
earnings or loss per common share is calculated on the basis of the weighted average number of common shares outstanding during
the period plus the effect of dilutive common share equivalents during the period. Common share equivalents include preferred
stock, outstanding stock options and warrants and convertible debt instruments. For periods in which a net loss is reported, common
share equivalents are excluded because they are antidilutive. Therefore, basic loss per common share is the same as diluted loss
per common share for the three months ended June 30, 2015 and 2014. As of June 30, 2015 and 2014, the Company had cumulative,
undeclared dividends that had not been accrued related to its preferred stock of $495,160 and $170,358, respectively. For the
three months ended June 30, 2015 and 2014, the Company had accrued preferred stock dividends of $86,245 and $96,758, respectively,
which were added to net loss in the consolidated statements of operations in order to calculate net loss per common share attributable
to common stockholders.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"><b>g) Recent
Accounting Pronouncements</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">From time to
time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted
by the Company as of the specified effective date.  If not discussed, management believes that the impact of recently
issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon
adoption.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In May 2014,
the FASB<b> </b>issued ASU 2014-09, <i>Revenue from Contracts with Customers</i>. The amendments in ASU 2014-09 affect any entity
that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial
assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09
will supersede the revenue recognition requirements in Topic 605, <i>Revenue Recognition</i>, and most industry-specific guidance,
and creates a Topic 606, <i>Revenue from Contracts with Customers</i>.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">The core principle
of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in
an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
To achieve that core principle, an entity should apply the following steps:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 1: Identify
the contracts with a customer.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 2: Identify
the performance obligations in the contracts.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 3: Determine
the transaction price.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 4: Allocate
the transaction price to the performance obligations in the contracts.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Step 5: Recognize
revenue when (or as) the entity satisfies a performance obligation.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">ASU 2014-09 is
effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.
Early application is not permitted. Until the Company begins to recognize revenue, its financial statements will not be affected
by the adoption of ASU 2014-09.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In August
2014, the FASB issued ASU No. 2014-15, <i>Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.
</i>This standard sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial
doubt about the entity’s ability to continue as a going concern, and if so, to provide related note disclosures. The standard
is for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December
15, 2016. The Company is currently assessing the impact, if any, the implementation of this guidance will have on the Company.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In November
2014, the FASB issued ASU 2014-16, <i>Derivatives and Hedging (Topic 815) – Determining Whether the Host Contract in a Hybrid
Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity</i>. The amendments in ASU 2014-16 clarify
how current US GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid
financial instrument that is issued in the form of a share. Specifically, an entity should consider all relevant terms and features,
including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. No single
term or feature should necessarily determine the economic characteristics and risks of the host contract. In evaluating the nature
of the host contract, an entity should assess the substance of the relevant terms and features (that is, the relative strength
of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weight those terms
and features. The amendments in ASU 2014-16 are effective for entities for fiscal years, and interim periods within those years,
beginning after December 31, 2015. Early adoption, including adoption in an interim period, is permitted.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
adopted ASU 2014-16 effective April 1, 2015. The Company conducted an evaluation of its preferred stock offering and the related
conversion feature. The Company concluded that the conversion feature is clearly and closely related to the preferred stock and
that the preferred stock is more akin to equity. As a result of adopting ASU 2014-16, the Company reclassified the embedded derivative
liability related to the preferred stock conversion feature to additional paid-in capital. See Note 5.</font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Fair Value Measurements Using Significant Unobservable
Inputs</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>(Level 3)</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Embedded Derivative
Liability</b></font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 84%; padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt">Beginning balance, March 31, 2015</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 13%; text-align: right"><font style="font-size: 8pt">691,859</font></td>
<td style="width: 1%"><font style="font-size: 8pt">  </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt">Adjustments</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-indent: -10pt; padding-left: 22pt; padding-bottom: 1pt"><font style="font-size: 8pt">Adoptions of ASU 2014-16</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid"><font style="font-size: 8pt"> </font></td>
<td style="text-align: right; border-bottom: Black 1pt solid"><font style="font-size: 8pt">(691,859)</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt"><font style="font-size: 8pt">Ending balance, June 30, 2015</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">–</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 83%; text-align: left"><font style="font-size: 8pt">Threshold barrier</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">0.35</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt">Average price below $0.35 per share</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">0.07</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td><font style="font-size: 8pt">Probability of offer below $0.35 per share</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3%</font></td><td style="text-align: left"></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt">Preferred share conversion price</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">1.40</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt">Conversion ratio</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">20.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Number
of Shares</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted
Average Exercise Price</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted
Average Remaining Life (years)</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td colspan="2" style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance as of March 31,
2015</b></font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">5,922,500</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">    0.53</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3.22</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="text-align: left; width: 48%"><font style="font: 8pt Times New Roman, Times, Serif">Granted</font></td><td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="text-align: right; width: 13%"><font style="font-size: 8pt">–</font></td><td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="text-align: right; width: 13%"><font style="font-size: 8pt">–</font></td><td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td><td style="text-align: right; width: 13%"><font style="font-size: 8pt">–</font></td><td style="text-align: left; width: 1%"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">Exercised</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">Canceled</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">(6,250</font></td><td style="text-align: left"><font style="font-size: 8pt">)</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.50</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.21</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">Expired</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td colspan="2" style="text-align: left"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance as of June 30, 2015</b></font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,916,250</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">0.53</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">2.95</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="text-align: right; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="10" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Options
Outstanding</b></font></td><td style="text-align: center; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="text-align: center; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Options
Exercisable</b></font></td><td style="text-align: center; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="6" style="text-align: center"></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Average</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Weighted</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Number of</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Remaining</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Average</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Number of</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Average</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Exercise</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Options</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Life</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Exercise</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Options</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Exercise</b></font></td><td style="text-align: center"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Price</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Outstanding</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Years)</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Price</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Exercisable</b></font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Price</b></font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">0.25</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">50,000</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">1.64</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">0.25</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">50,000</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">0.25</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.35</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">860,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3.08</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.35</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">594,170</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.35</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.40</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3,087,500</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">2.75</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.40</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3,087,500</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.40</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.50</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">68,750</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.21</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.50</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">68,750</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.50</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.65</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">875,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">4.15</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.65</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">291,667</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.65</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.72</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">325,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3.95</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.72</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">216,666</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.72</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.15</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">650,000</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.86</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.15</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">650,000</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1.15</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.25-$1.15</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,916,250</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">2.95</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.53</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">4,958,753</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.51</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>June 30,</b></font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>March 31,</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>2015</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>2015</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 66%; text-align: left"><font style="font-size: 8pt">Intrinsic value - options outstanding</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 13%; text-align: right"><font style="font-size: 8pt">500</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify"><font style="font-size: 8pt">Intrinsic value - options exercisable</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">375</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt">Intrinsic value - options exercised</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
4118210
4118210
33393828
33393828
91190
91190
691859
691859
432674
25049
73159
495160
170358
276880
-691859
.35
.07
.03
1.40
20.00
Series A preferred stockholders are entitled to receive dividends of 6% and have a liquidation preference equal to $1.40 per share for each outstanding share of Series A Stock (as adjusted for stock splits, stock dividends and recapitalizations) plus an amount equal to declared but unpaid dividends thereon.
5765494
5765494
Holders of Series A Stock have the right at any time after the date of issuance to convert their Series A Stock to common stock based on a ratio determined by dividing $1.40 by the Conversion Price in effect at the time for such shares. The Conversion Price is the lower of $0.35 per share or the lowest price that any additional shares of common stock were issued after the initial purchase date.
4118210
4118210
2846054
1532382
1925647
131101
68000
44517
44517
4378436
4378436
6250
.50
P3Y2M19D
P1Y2M16D
P2Y11M12D
0
0
7000000
P9M