10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

S QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended December 31, 2012

or

£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-28585

 

AuraSource, Inc.

(Exact name of registrant as specified in its charter)

Nevada (State or Other Jurisdiction of Incorporation or Organization) 68-0427395 (IRS Employer Identification No.)

1490 South Price Rd. #219

Chandler, AZ 85286

(Address of principal executive offices, zip code)

Registrant's telephone number (including area code): (480) 292-7179

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES S NO £

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

Large Accelerated Filer £ Accelerated Filer £ Non-accelerated Filer £ Smaller reporting company S

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at February 18, 2013
Common Stock, $.001 par value	48,334,690

AURASOURCE, INC.

INDEX

PART I	FINANCIAL INFORMATION	Page
ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS:
	Consolidated Balance Sheets — December 31, 2012 (Unaudited) and March 31, 2012	3
	Consolidated Statements of Operations (Unaudited) — Three and nine months ended December 31, 2012 and 2011	4
	Consolidated Statements of Cash Flows (Unaudited) —Nine months ended December 31, 2012 and 2011	5
	Notes to Consolidated Financial Statements	6
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13
ITEM 4.	CONTROLS AND PROCEDURES	13
PART II	OTHER INFORMATION	14
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	14
ITEM 6.	EXHIBITS	14
	Signatures	15

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PART I - FINANCIAL INFORMATION

ITEM I — CONSOLIDATED FINANCIAL STATEMENTS

 AuraSource, Inc.

(A Development Stage Enterprise)

Consolidated Balance Sheets 

	December 31,			March 31,
	2012			2012
ASSETS	(Unaudited)
Current assets
Cash and equivalents	$	445,049		$	404,331
Due from affiliate		85,463			63,193
Prepaid expenses		460,000			3,075
Total current assets		990,512			470,599
Fixed assets, net of accumulated depreciation		395,708			415,355
Intangible assets, net		790,244			759,651
Total assets	$	2,176,464		$	1,645,605
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	3,117		$	18,634
Accounts payable- related parties		339,543			151,600
Customer deposits		570,000			—
Note payable		500,000			—
Total current liabilities		1,412,660			170,234
Commitments and contingencies
Stockholders' equity
Preferred stock, 10,000 shares authorized, no shares issued and
outstanding, no rights or privileges designated		—			—
Common stock, $.001 par value, 150,000,000 shares authorized 48,334,690 and 47,662,190 shares issued and outstanding at December 31, 2012 and March 31, 2012, respectively		48,335			47,662
Additional paid in capital		7,226,067			6,961,350
Accumulated deficit		(6,510,598	)		(5,533,641	)
Total stockholders' equity		763,804			1,475,371
Total liabilities and stockholders' equity	$	2,176,464		$	1,645,605

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

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AuraSource, Inc.

(A Development Stage Enterprise)

Consolidated Statements of Operations

Three and Nine Months Ended December 31, 2012 and 2011 and the Period March 15, 1990 (Inception) through December 31, 2012

(Unaudited)

	Three Months Ended December 31,						Nine Months Ended December 31,						From March 15, 1990 (Inception) to December 31,
	2012			2011			2012			2011			2012
Revenue, net	$	—		$	—		$	—		$	—		$	—
Cost of revenue		—			—			—			—			—
Gross profit		—			—			—			—			—
Operating expenses:
General & administrative		305,768			293,764			971,090			1,120,039			6,562,318
Total operating expenses		305,768			293,764			971,090			1,120,039			6,562,318
Loss from operations		(305,768	)		(293,764	)		(971,090	)		(1,120,039	)		(6,562,318	)
Interest income / (expense) and other, net		—			12,365			(5,868	)		33,199			51,720
Net loss applicable to common stockholders	$	(305,768	)	$	(281,399	)	$	(976,958	)	$	(1,086,840	)	$	(6,510,598	)
Basic & Diluted Loss per share	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.03	)
Weighted average shares outstanding		48,334,690			31,662,190			48,133,208			31,163,645

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

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AuraSource, Inc.

(A Development Stage Enterprise)

Consolidated Statements of Cash Flows

Nine Months Ended December 31, 2012 and 2011 and the Period March 15, 1990 (Inception) through December 31, 2012

(Unaudited)

							March 15, 1990 (Inception) to December 31,
	2012			2011			2012
Cash flows from operating activities:
Net loss	$	(976,958	)	$	(1,086,840	)	$	(6,510,598	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		22,601			16,850			58,969
Stock issued for services		13,200			247,000			1,586,704
Options issued for services		7,190			52,050			252,272
Fair value of salaries donated as capital		—			—			151,500
Changes in operating assets and liabilities:
Due from affiliate		(22,270	)		(42,309	)		(85,464	)
Prepaid expenses		(456,925	)		(2,474	)		(460,000	)
Accounts payable		(15,517	)		37,180			155,168
Accounts payable – related parties		187,944			—			187,944
Deposits		570,000			—			570,000
Net cash used in operating activities		(670,735	)		(778,543	)		(4,093,505	)
Cash flows from investing activities:
Capital equipment purchases		(2,954	)		(172,373	)		(454,675	)
Cash paid for acquisition of intangible		(30,593	)		(6,121	)		(184,244	)
Sale of assets to MongSource net of cash on hand		—			—			(90,119	)
Net cash used in investing activities		(33,547	)		(178,494	)		(729,038	)
Cash flows from financing activities:
Proceeds from issuance of common stock, net		245,000			1,001,046			4,539,721
Net proceeds from issuance of note payable		500,000			—			727,871
Net cash provided by financing activities		745,000			1,001,046			5,267,592
Net change in cash and equivalents		40,718			44,009			445,049
Cash and equivalents - beginning balance		404,331			642,247			—
Cash and equivalents - ending balance	$	445,049		$	686,256		$	445,049
Supplemental disclosures of cash flows information:
Cash received/(paid) during the period for:
Interest	$	—		$	—		$	—
Income taxes	$	—		$	—		$	—

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

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 AURASOURCE, INC.

(A Development Stage Enterprise)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (UNAUDITED) and March 31, 2012

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Current Operations and Background — AuraSource, Inc. (“AuraSource” or “Company”) was incorporated on March 15, 1990 and is focused on the development and production of environmentally friendly and cost effective industrial energy and feedstock used for industrial application. AuraCoal, AuraSource’s core technology, includes ultrafine grinding and impurities removal. Initial industrial applications of AuraSource technology are ultra-fine coal water mixture for heavy oil substitution, and low grade iron ore fine and slimes beneficiation. AuraSource formed AuraSource Qinzhou Co. Ltd., a wholly owned subsidiary in China (“Qinzhou”), to acquire these types of Hydrocarbon Clean Fuel (“HCF”) technologies, performing research and development related to the reduction of harmful emission and energy costs for HCF technology and products based on this technology, licensing HCF technology to third parties and selling services and products derived from this technology. We have developed two patent pending technologies: 1) ultrafine grinding and 2) ultrafine separation.

On February 15, 2012, we entered into an agreement with Gulf Coast Holdings, LLC (“GCH”) to reserve export ready one million tons of 64% Fe (iron symbol) higher content iron ore and 13 million of 45% grade lower content iron ore, and two million tons of manganese ore. We agreed to issue 16 million shares of our common stock to GCH or its assigns (“Mineral Deposit Shares”). The Mineral Deposit Shares shall vest and be delivered as follows; five million immediately, 11 million upon the successful completion of the first customer order over $5 million. Success is defined as customer acceptance of order and final payment. To the extent a successful order does not occur the unvested Mineral Deposit Shares shall be returned to our treasury and cancelled. Additionally, we entered into an agreement with Gulf Coast Mining Group, LLC (“GCM”) to purchase (i) higher content iron ore, lower content iron ore and manganese ore (collectively, the "Minerals") which will be delivered loose in bulk modified Free on Board (“FOB”). We entered into an agreement with GCH appointing GCH as the exclusive North American licensee for use and exploitation of our technology as it relates to applications involving precious metals in exchange for royalty payments of 5% of gross revenues.

Going Concern — The accompanying consolidated financial statements were prepared assuming we will continue as a going concern. We have suffered recurring losses from operations since inception and have an accumulated deficit of $6,510,598 at December 31, 2012. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue its existence. The recovery of the Company’s assets is dependent upon continued operations of the Company. In addition, the Company's asset recovery is dependent upon future events, the outcome of which is unknowable. The Company intends to continue to attempt to raise additional capital, but there can be no certainty that such efforts will be successful.

Basis of Presentation and Principles of Consolidation — The accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

The unaudited consolidated financial statements were prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with US GAAP was omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended March 31, 2012 included in our Annual Report on Form 10-K. The results of the three and nine months ended December 31, 2012 are not necessarily indicative of the results to be expected for the full year ending March 31, 2013.

Use of Estimates — The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Equivalents — We consider investments with original maturities of 90 days or less to be cash equivalents.

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Income Taxes — The Company accounts for income taxes in accordance with ASC Topic 740. Deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance for a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized.

Stock-Based Compensation — The Company recognizes the cost of employee services received for an award of equity instruments in the consolidated financial statements over the period the employee is required to perform the services.

Foreign Currency Transactions — The Company recognizes foreign currency gains and losses in interest income / (expense) and other, in the accompanying statements of operations. Foreign currency gains and losses arise as the Company conducts business with other entities whose functional currency is not in US dollars. Generally, these gains and losses are recorded at an exchange rate difference between the foreign currency and the functional currency that arises between the transaction date and the payment date.

Net Loss Per Share — The Company computes basic and diluted net loss per share by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Common equivalent shares arising from stock options and warrants were excluded from the computation of basic and diluted earnings per share, for the three and nine months ended December 31, 2012 and 2011 because their effect is anti-dilutive.

Financial Instruments and Fair Value of Financial Instruments — Our financial instruments consist of cash and accounts payable. The carrying values of cash and accounts payable are representative of their fair values (“FVs”) due to their short-term maturities. We measure the FV of financial assets and liabilities on a recurring basis. FV is defined as 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. FV measurements are to be considered from the perspective of a market participant that holds the asset or owes the liability. We also establish a FV hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure FV:

Level 1:	Quoted prices in active markets for identical or similar assets and liabilities.
Level 2:	Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity and that are significant to the FV of the assets or liabilities.

The Company had no assets or liabilities recorded at FV on the basis above at December 31, 2012 or March 31, 2012.

Recent Accounting Pronouncements

On July 27, 2012, the FASB issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350) - Testing Indefinite-Lived Intangible Assets for Impairment.  The ASU provides entities with an option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired.  If an entity concludes that it is more than 50% likely that an indefinite-lived intangible asset is not impaired, no further analysis is required.  However, if an entity concludes otherwise, it would be required to determine the fair value of the indefinite-lived intangible asset to measure the amount of actual impairment, if any, as currently required under US GAAP. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012.  Early adoption is permitted. The adoption of this pronouncement will not have a material impact on these financial statements.

There were no other significant changes in the Company’s critical accounting policies and estimates during the nine months ended December 31, 2012 compared to what was disclosed in the Company’s Form 10-K for the year ended March 31, 2012.

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NOTE 2 - CONCENTRATION OF CREDIT RISK

We maintain our cash balances in US financial institutions that from time to time exceed amounts insured by the Federal Deposit Insurance Corporation (up to $250,000, per financial institution as of December 31, 2012). As of December 31, 2012 and March 31, 2012 (audited), our deposits exceeded insured amounts by $129,274 and zero, respectively. We have not experienced any losses in such accounts and we believe we are not exposed to any credit risk on cash.

Currently, we maintain a bank account in China. This account is not insured and we believe is exposed to credit risk on cash of $116,557. In addition, we have funds being held in China by affiliates in the amount of $85,463 (Note 3).

NOTE 3 – DUE FROM AFFILIATE

As of December 31, 2012 and March 31, 2012, an affiliated party, Timeway International Ltd, holds in trust $85,463 and $63,193, respectively. This money is used to pay day to day expenses on behalf of the Company. Timeway International Ltd is controlled by our CEO.

NOTE 4 – PREPAID EXPENSES

As of December 31, 2012, we have prepaid a total of $460,000 towards the purchase of various minerals to a related party.

NOTE 5 – INTANGIBLE

We entered into an agreement with Beijing Pengchuang Technology Development Co. (“Pengchuang”), Ltd., an independent Chinese company, to purchase 50% of the intellectual property related to ultrafine particle processing. Pengchuang developed an efficient and low energy consumption grinding technology, which utilizes fluid shock waves to make ultrafine particles. This technology can be applied to the coal water slurry, solid lubricant and other material grinding processes. Through the joint development and ownership agreement, AuraSource will enrich its intellectual property portfolio, enabling the further development of AuraCoal, its Hydrocarbon Clean Fuel technology. AuraSource Qinzhou will utilize the particle grinding technology in its AuraCoal Qinzhou production line, as well as license it to others in non-related industries.

We issued 600,000 shares of common stock for the acquisition of certain intangibles. The shares issued in connection with the acquired intangibles were valued at $606,000 or $1.01 per share which was the share price on August 8, 2010, the acquisition date. The Company paid $147,530 cash for the remainder of the amount due.

NOTE 6 – ACCOUNTS PAYABLE – RELATED PARTIES

As of December 31, 2012 and March 31, 2012 (audited), $339,543 and $151,600, respectively, is owed to the officers and directors of the Company. In December 2011, the officers and directors of the Company agreed to accrue compensation for their services until such time the Company had sufficient funds to pay this liability.

NOTE 7 – CUSTOMER DEPOSITS

As of December 31, 2012, we have received a total of $570,000 from customers to be applied towards the purchase of various minerals.

NOTE 8 – NOTE PAYABLE

On December 31, 2012, the Company received $500,000 from an unrelated party. The Company has not finalized the terms and conditions of this payment and has recorded it as a current liability on the balance sheet.

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NOTE 9 – UNVESTED STOCK

On February 15, 2012, we entered into an agreement with GCH to reserve export ready one million tons of 64% Fe higher content iron ore and 13 million tons of 45% grade lower content iron ore, and two million tons of manganese ore. We issued the Mineral Deposit Shares to GCH or its assigns. On February 19, 2012, GCH assigned 100% of its interest in the Mineral Reserve Agreement to Hong Kong Minerals Holdings Ltd (“HKMHL”). The Mineral Deposit Shares shall vest and be delivered as follows: five million immediately and 11 million upon the successful completion of the first customer order of total revenue over $5 million. Success is defined as customer acceptance of order and final payment. To the extent a successful order does not occur, the unvested Mineral Deposit Shares shall be returned to our treasury and cancelled. The Company has no material prior relationship with GCH or HKMHL other than what is set forth above. We valued the shares issued at $4,480,000 based upon the price of the Company’s stock on that day.

NOTE 10 – STOCK ISSUANCE

During the year ended March 31, 2012, the Company completed a private placement to certain accredited investors pursuant to which the Company sold 2,000,000 shares of the Company’s common stock resulting in gross proceeds of $1,000,000 to the Company. The Company issued 300,000 shares of the Company’s common stock to two employees. The Company recorded $195,000 in compensation expense for these shares. The Company issued 16,000,000 shares of the Company’s common stock for the rights to the mineral reserve deposit. The shares issued in connection with the deposit were valued at $4,480,000 (See Note 4).

During the nine months ended December 31, 2012, the Company had a private placement pursuant to which the Company sold 612,500 shares of the Company’s common stock resulting in gross proceeds of $245,000 to the Company.

NOTE 11 - STOCK OPTIONS

In January 2009, we granted 60,000 options to purchase shares of our common stock at $3.50 per share to members of our Board of Directors (“BOD”). In April 2010, we granted an additional 60,000 options to purchase shares of our common stock at $1.00 per share to members of our BOD. The options vest quarterly and have an expiration period of 10 years. In April 2011, we granted an additional 60,000 options to purchase shares of our common stock at $0.75 per share to certain members of our BOD. The options vest quarterly and have an expiration period of 10 years. In February 2012, we granted an additional 2,850,000 options to purchase shares of our common stock at $0.28 per share to certain members of our BOD. The options will vest upon the Company earning $5 million in revenues. The options expire in five years. In April 2012, we granted an additional 60,000 options to purchase shares of our common stock at $0.27 per share to certain members of our BOD. The total grant date fair value of the outstanding options was $796,873.

We will record stock-based compensation expense over the requisite service period, which in our case approximates the vesting period of the options. During the three months ended December 31, 2012 and 2011, the Company recorded $3,595 and $9,018 in compensation expense arising from the vesting of options, respectively. The Company assumed all stock options issued during the quarter will vest. Though these expenses result in a deferred tax benefit, we have a full valuation allowance against the deferred tax benefit.

The Company adopted the detailed method provided in ASC Topic 718 for calculating the beginning balance of the additional paid-in capital pool (“APIC pool”) related to the tax effects of employee stock-based compensation, and to determine the subsequent impact on the APIC pool and Consolidated Statements of Cash Flows of the income tax effects of employee stock-based compensation awards that are outstanding.

The fair value of each stock option granted is estimated on the grant date using the Black-Scholes option pricing model (“BSOPM”). The BSOPM has assumptions for risk free interest rates, dividends, stock volatility and expected life of an option grant. The risk free interest rate is based upon market yields for US Treasury debt securities at a 7-year constant maturity. Dividend rates are based on the Company’s dividend history. The stock volatility factor is based on the last 60 days of market prices prior to the grant date. The expected life of an option grant is based on management’s estimate. The FV of each option grant, as calculated by the BSOPM, is recognized as compensation expense on a straight-line basis over the vesting period of each stock option award.

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These assumptions were used to determine the FV of stock options granted using the BSOPM:

Dividend yield			0.0%
Volatility			25% to 155%
Average expected option life	10.00 years
Risk-free interest rate		1.76% to 2.59%

The following table summarizes activity in the Company's stock option grants for the three months ending December 31, 2012:

	Number of Shares		Weighted Average Price Per Share
Balance at March 31, 2012		3,030,000	$	0.37
Granted		60,000		0.27
Balance at December 31, 2012		3,090,000		0.37

The following summarizes pricing and term information for options issued to employees and directors outstanding as of December 31, 2012:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding at December 31, 2012		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2012		Weighted Average Exercise Price
$3.50		60,000		6.25		$3.50		60,000		$3.50
$1.00		60,000		7.25		$1.00		60,000		$1.00
$0.75		60,000		8.25		$0.75		60,000		$0.75
$0.27 - 0.28		2,910,000		4.25		$0.28		15,000		$0.27
Balance at December 31, 2012		3,090,000		4.57		$0.37		180,000		$1.75

NOTE 12 - LOSS PER SHARE

The 3,090,000 and 180,000 common stock equivalents (potential common stock) for the three and nine months ended December 31, 2012 and 2011, respectively, are not included in the loss per share calculation above because their effect would be anti-dilutive for the periods indicated.

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ITEM 2 . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended March 31, 2012 and presume readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Form 10-Q.

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Annual Report on Form 10-K for the year ended March 31, 2012 in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited consolidated financial statements and notes thereto that appear elsewhere in this report.

Overview

We focus on the development and production of environmentally friendly and cost effective industrial energy and feedstock used for industrial applications. AuraCoal, AuraSource’s core technology, includes ultrafine grinding and impurities removal processes. Initial industrial applications of AuraSource technology are ultra-fine coal water mixture for heavy oil substitution, and low grade iron ore fine and slimes beneficiation. AuraSource formed Qinzhou to acquire these types of Hydrocarbon Clean Fuel (“HCF”) technologies, performing research and development related to the reduction of harmful emission and energy costs for HCF technology and products based on this technology, licensing HCF technology to third parties and selling services and products derived from this technology. We have developed two patent pending technologies: 1) ultrafine grinding and 2) ultrafine separation.

On February 15, 2012, we entered into an agreement with Gulf Coast Holdings, LLC (“GCH”) to reserve export ready one million tons of 64% Fe (iron symbol) higher content iron ore and 13 million tons of 45% grade lower content iron ore, and two million tons of manganese ore. We agreed to issue the Mineral Deposit Shares to GCH or its assigns. The Mineral Deposit Shares shall vest and be delivered as follows; five million immediately, 11 million upon the successful completion of the first customer order over $5 million. Success is defined as customer acceptance of order and final payment. To the extent a successful order does not occur the unvested Mineral Deposit Shares shall be returned to our treasury and cancelled. Additionally, we entered into an agreement with GCM to purchase Minerals which will be delivered loose in bulk modified Free on Board (“FOB”). We entered into an agreement with GCH appointing GCH as the exclusive North American licensee for use and exploitation of our technology as relates to applications involving precious metals in exchange for royalty payments of five percent of gross revenues.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("US GAAP") requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates which are based on historical experience and on other assumptions that we believe to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions. The following accounting policies require significant management judgments and estimates:

We account for our business acquisitions under the purchase method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Codification Topic 805, "Business Combinations." The total cost of acquisitions is allocated to the underlying net assets, based on their respective estimated fair values. The excess of the purchase price over the estimated fair value of the tangible net assets acquired is recorded as intangibles. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives, and market multiples, among other items.

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Results of Operations

For the Three Months Ended December 31, 2012 and 2011

General and Administrative Expenses

General and administrative expenses were $305,768 and $293,764 for the three months ended December 31, 2012 and 2011, respectively. The increase of $12,004 was due primarily to an increase in professional expenses.

Interest Income, Interest Expense and Other

Interest income/(expense) and other was zero and $12,365 for the three months ended December 31, 2012 and 2011, respectively. The decrease is due to a decrease in foreign currency exchange gain of $13,179 in 2011.

For the Nine Months Ended December 31, 2012 and 2011

General and Administrative Expenses

General and administrative expenses were $971,090 and $1,120,039 for the nine months ended December 31, 2012 and 2011, respectively. The decrease of $148,954 was due to a decrease in stock compensation related expenses and of $291,861 offset by an increase in professional fees of $166,827.

Interest Income, Interest Expense and Other

Interest income/(expense) and other was $(5,868) and $33,199 for the nine months ended December 31, 2012 and 2011, respectively. The increase was due primarily to a decrease in foreign currency exchange gains of $32,012 the Company incurred in the nine months ended December 31, 2011.

Liquidity and Capital Resources

Net cash used in operating activities was $670,735 and $778,543 in the nine months ended December 31, 2012 and 2011, respectively. The decrease was primarily due to an increase in accounts payable to our officers and non-cash transaction of stock options and stock issued for services rendered added back to operating activities in the current year.

Net cash used in investing activities was $33,547 and $178,494 in the nine months ended December 31, 2012 and 2011, respectively. The difference is the decrease in capital equipment purchases for the nine months ending December 31, 2012.

Net cash provided by financing activities was $745,000 and $1,001,046 in the nine months ended December 31, 2012 and 2011, respectively. The difference of $256,046 in cash flows from financing activities was due to greater proceeds from the issuance of common stock in 2011.

The Company suffered recurring losses from operations and has an accumulated deficit of $6,510,598 at December 31, 2012. The Company has incurred losses of $976,958 and $1,086,840 for the nine months ended December 31, 2012 and 2011, respectively. To date, we have not generated any revenues.

Inflation and Seasonality

Inflation and seasonality have not been material to us during the past five years.

-12-

Recent Accounting Pronouncements

On July 27, 2012, the FASB issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350) - Testing Indefinite-Lived Intangible Assets for Impairment.  The ASU provides entities with an option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired.  If an entity concludes that it is more than 50% likely that an indefinite-lived intangible asset is not impaired, no further analysis is required.  However, if an entity concludes otherwise, it would be required to determine the fair value of the indefinite-lived intangible asset to measure the amount of actual impairment, if any, as currently required under US GAAP. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012.  Early adoption is permitted. The adoption of this pronouncement will not have a material impact on these financial statements.

Refer to the notes to the consolidated financial statements in our March 31, 2012 Form 10-K for a complete description of recent accounting standards which we have not yet been required to implement and may be applicable to our operation, as well as those significant accounting standards that have been adopted during the current year.

Off-Balance Sheet Arrangements

As of December 31, 2012, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company” as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item 3.

ITEM 4 - CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules, regulations and related forms, and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As of December 31, 2012, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

-13-

PART II - OTHER INFORMATION

ITEM 1. – LEGAL PROCEEDINGS

We are not a party to any current or pending legal proceedings that we believe would have a material adverse effect upon our business, results of operations, or financial condition, and we are not aware of any threatened or contemplated proceeding by any governmental authority against us. To our knowledge, we are not a party to any threatened civil or criminal action or investigation.

ITEM 1A. – RISK FACTORS

In addition to the other risk factors and information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2012, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K is not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, operating results and/or cash flows.

ITEM 2. - UNREGISTERED SALES OF EQUITY SECURITIES

None

ITEM 3. - DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. - OTHER INFORMATION

None

ITEM 6.

Exhibit	Description
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of the Company’s Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

-14-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AURASOURCE, INC.
Date: February 18, 2013	/s/ PHILIP LIU
	Name: Philip
	Title: Chief Executive Officer
Date: February 18, 2013	/s/ ERIC STOPPENHAGEN
	Name: Eric Stoppenhagen
	Title: Chief Financial Officer

-15-

EXHIBIT INDEX

Exhibit	Description
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of the Company’s Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-31.1

EXHIBIT 31.1

AURASOURCE, INC.

Certification of Chief Executive Officer Pursuant to

Securities Exchange Act Rules 13a-14(a) and 15d-14(a)

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Philip Liu, certify that:

1. I have reviewed this Form 10-Q of AuraSource, Inc.;

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

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

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

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

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

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

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

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

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

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

February 18, 2013
	/s/ PHILIP LIU
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

AURASOURCE, INC.

Certification of Chief Financial Officer Pursuant to

Securities Exchange Act Rules 13a-14 and 15d-14

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Eric Stoppenhagen, certify that:

1. I have reviewed this Form 10-Q of AuraSource, Inc.;

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

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

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

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

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

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

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

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

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

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

February 18, 2013
	/s/ ERIC STOPPENHAGEN
	Chief Financial Officer

EX-32

EXHIBIT 32

AURASOURCE, INC.

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18,

UNITED STATES CODE)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of AuraSource, Inc. (the “Company”), does hereby certify, to the best of his knowledge and belief that:

(1) The Quarterly Report on Form 10-Q for the period ended December 31, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

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

February 18, 2013

/s/ PHILIP LIU

Chief Executive Officer

February 18, 2013

/s/ ERIC STOPPENHAGEN

Chief Financial Officer

XML

LOSS PER SHARE (Details Narrative)	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Sep. 30, 2011	Dec. 31, 2012	Dec. 31, 2011
Notes to Financial Statements
Common stock equivalents	3,090,000	180,000	3,090,000	180,000

XML

ACCOUNTS PAYABLE RELATED PARTIES (Details Narrative) (USD $)	Dec. 31, 2012	Mar. 31, 2012
Notes to Financial Statements
Accounts payable related parties	$ 339,543	$ 151,600

XML

PREPAID EXPENSES

9 Months Ended

Dec. 31, 2012

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

PREPAID EXPENSES

NOTE 4 – PREPAID EXPENSES

As of December 31, 2012, we have prepaid a total of $460,000 towards the purchase of various minerals to a related party.

XML

STOCK ISSUANCE (Details Narrative) (USD $)	3 Months Ended	9 Months Ended		274 Months Ended
	Sep. 30, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Mar. 31, 2012	Feb. 15, 2012	Aug. 26, 2011	May 13, 2011	Aug. 08, 2010
Notes to Financial Statements
Common stock issued during the period		612,500
Common stock issued		48,334,690		48,334,690	47,662,190	16,000,000	300,000	2,000,000	600,000
Amount paid common stock		$ 245,000	$ 1,001,046	$ 4,539,721
Share based compensation	195,000
Shares deposit		$ 48,335		$ 48,335	$ 47,662	$ 4,480,000			$ 606,000

XML

UNVESTED STOCK (Details Narrative) (USD $)	Dec. 31, 2012	Mar. 31, 2012	Feb. 15, 2012	Aug. 26, 2011	May 13, 2011	Aug. 08, 2010
Notes to Financial Statements
Common stock issued	48,334,690	47,662,190	16,000,000	300,000	2,000,000	600,000
Common stock value	$ 48,335	$ 47,662	$ 4,480,000			$ 606,000

XML

STOCK OPTIONS - stock option grant (Details) (USD $)	9 Months Ended
	Dec. 31, 2012	Apr. 02, 2012	Mar. 31, 2012	Feb. 15, 2012	Apr. 02, 2011	Apr. 02, 2010	Jan. 01, 2009
Notes to Financial Statements
Number of Options	3,090,000	60,000	3,030,000	2,850,000	60,000	60,000	60,000
Weighted Average Price Per Share	$ 0.37		$ 0.37
Options granted	$ 60,000
Option exercise price	$ 0.27

XML

STOCK OPTIONS - price and term share based compensation (Details) (USD $)	Dec. 31, 2012	Mar. 31, 2012
Exercise Price of Options $3.5	$ 3.5
Outstanding Options $3.5	60,000
Weighted Average Remaining Contractual Life of Options at $3.5	$ 6.75
Weighted Average Exercise Price of Options at $3.5	$ 3.5
Exercisable Options at $3.5	60,000
Weighted Average Exercise Price of Exercisable Options at $3.5	$ 3.5
Exercise Price of Options $1	$ 1
Outstanding Options $1	60,000
Weighted Average Remaining Contractual Life of Options at $1	$ 7.75
Weighted Average Exercise Price of Options at $1	$ 1
Exercisable Options at $1	60,000
Weighted Average Exercise Price of Exercisable Options at $1	$ 1
Exercise Price of Options $.75	$ 0.75
Outstanding Options $.75	60,000
Weighted Average Remaining Contractual Life of Options at $.75	$ 8.75
Weighted Average Exercise Price of Options at $.75	$ 0.75
Exercisable Options at $.75	60,000
Weighted Average Exercise Price of Exercisable Options at $.75	$ 0.75
Exercise Price of Options $.28	$ 0.28
Outstanding Options $.28	2,910,000
Weighted Average Remaining Contractual Life of Options at $.28	$ 4.63
Weighted Average Exercise Price of Options at $.28	$ 0.28
Exercisable Options at $.28	15,000
Weighted Average Exercise Price of Exercisable Options at $.28	$ 0.27
Outstanding Options	3,090,000	3,060,000
Weighted Average Remaining Contractual Life of Options	$ 5.07
Weighted Average Exercise Price of Options	$ 0.37
Exercisable Options	180,000
Weighted Average Exercise Price of Exercisable Options	$ 1.75

XML

DUE FROM AFFILIATE

9 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

DUE FROM AFFILIATE

NOTE 3 – DUE FROM AFFILIATE

As of December 31, 2012 and March 31, 2012, an affiliated party, Timeway International Ltd, holds in trust $85,463 and $63,193, respectively. This money is used to pay day to day expenses on behalf of the Company. Timeway International Ltd is controlled by our CEO.

XML

STOCK OPTIONS (Details Narrative) (USD $)	3 Months Ended
	Sep. 30, 2011	Dec. 31, 2012	Apr. 02, 2012	Mar. 31, 2012	Feb. 15, 2012	Apr. 02, 2011	Apr. 02, 2010	Jan. 01, 2009
Notes to Financial Statements
Options granted		3,090,000	60,000	3,030,000	2,850,000	60,000	60,000	60,000
Exercise price of options		$ 796,873	$ 0.27		$ 0.28	$ 0.75	$ 1.00	$ 3.50
Stock compensation expense	$ 195,000

XML

Balance Sheets (USD $)	Dec. 31, 2012	Mar. 31, 2012
Current assets
Cash and equivalents	$ 445,049	$ 404,331
Due from affiliate	85,463	63,193
Prepaid expenses	460,000	3,075
Total current assets	990,512	470,599
Fixed assets, net of accumulated depreciation	395,708	415,355
Intangible assets, net	790,244	759,651
Total assets	2,176,464	1,645,605
Current liabilities
Accounts payable	3,117	18,634
Accounts payable related parties	339,543	151,600
Customer deposits	570,000	0
Note payable	500,000	0
Total current liabilities	1,412,660	170,234
Preferred stock, 10,000 shares authorized, no shares issued and outstanding, no rights or privileges designated
Common stock, $.001 par value, 150,000,000 shares authorized 48,334,690 and 47,662,190 shares issued and outstanding at December 31, 2012 and March 31, 2012, respectively	48,335	47,662
Additional paid in capital	7,226,067	6,961,350
Accumulated deficit	(6,510,598)	(5,533,641)
Total shareholders equity	763,804	1,475,371
Total liabilities and shareholders equity	$ 2,176,464	$ 1,645,605

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Current Operations and Background — AuraSource, Inc. (“AuraSource” or “Company”) was incorporated on March 15, 1990 and is focused on the development and production of environmentally friendly and cost effective industrial energy and feedstock used for industrial application. AuraCoal, AuraSource’s core technology, includes ultrafine grinding and impurities removal. Initial industrial applications of AuraSource technology are ultra-fine coal water mixture for heavy oil substitution, and low grade iron ore fine and slimes beneficiation. AuraSource formed AuraSource Qinzhou Co. Ltd., a wholly owned subsidiary in China (“Qinzhou”), to acquire these types of Hydrocarbon Clean Fuel (“HCF”) technologies, performing research and development related to the reduction of harmful emission and energy costs for HCF technology and products based on this technology, licensing HCF technology to third parties and selling services and products derived from this technology. We have developed two patent pending technologies: 1) ultrafine grinding and 2) ultrafine separation.

On February 15, 2012, we entered into an agreement with Gulf Coast Holdings, LLC (“GCH”) to reserve export ready one million tons of 64% Fe (iron symbol) higher content iron ore and 13 million of 45% grade lower content iron ore, and two million tons of manganese ore. We agreed to issue 16 million shares of our common stock to GCH or its assigns (“Mineral Deposit Shares”). The Mineral Deposit Shares shall vest and be delivered as follows; five million immediately, 11 million upon the successful completion of the first customer order over $5 million. Success is defined as customer acceptance of order and final payment. To the extent a successful order does not occur the unvested Mineral Deposit Shares shall be returned to our treasury and cancelled. Additionally, we entered into an agreement with Gulf Coast Mining Group, LLC (“GCM”) to purchase (i) higher content iron ore, lower content iron ore and manganese ore (collectively, the "Minerals") which will be delivered loose in bulk modified Free on Board (“FOB”). We entered into an agreement with GCH appointing GCH as the exclusive North American licensee for use and exploitation of our technology as it relates to applications involving precious metals in exchange for royalty payments of 5% of gross revenues.

Going Concern — The accompanying consolidated financial statements were prepared assuming we will continue as a going concern. We have suffered recurring losses from operations since inception and have an accumulated deficit of $6,510,598 at December 31, 2012. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue its existence. The recovery of the Company’s assets is dependent upon continued operations of the Company. In addition, the Company's asset recovery is dependent upon future events, the outcome of which is unknowable. The Company intends to continue to attempt to raise additional capital, but there can be no certainty that such efforts will be successful.

Basis of Presentation and Principles of Consolidation — The accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

The unaudited consolidated financial statements were prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with US GAAP was omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended March 31, 2012 included in our Annual Report on Form 10-K. The results of the three and nine months ended December 31, 2012 are not necessarily indicative of the results to be expected for the full year ending March 31, 2013.

Use of Estimates — The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Equivalents — We consider investments with original maturities of 90 days or less to be cash equivalents.

Income Taxes — The Company accounts for income taxes in accordance with ASC Topic 740. Deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance for a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized.

Stock-Based Compensation — The Company recognizes the cost of employee services received for an award of equity instruments in the consolidated financial statements over the period the employee is required to perform the services.

Foreign Currency Transactions — The Company recognizes foreign currency gains and losses in interest income / (expense) and other, in the accompanying statements of operations. Foreign currency gains and losses arise as the Company conducts business with other entities whose functional currency is not in US dollars. Generally, these gains and losses are recorded at an exchange rate difference between the foreign currency and the functional currency that arises between the transaction date and the payment date.

Net Loss Per Share — The Company computes basic and diluted net loss per share by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Common equivalent shares arising from stock options and warrants were excluded from the computation of basic and diluted earnings per share, for the three and nine months ended December 31, 2012 and 2011 because their effect is anti-dilutive.

Financial Instruments and Fair Value of Financial Instruments — Our financial instruments consist of cash and accounts payable. The carrying values of cash and accounts payable are representative of their fair values (“FVs”) due to their short-term maturities. We measure the FV of financial assets and liabilities on a recurring basis. FV is defined as 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. FV measurements are to be considered from the perspective of a market participant that holds the asset or owes the liability. We also establish a FV hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure FV:

Level 1:	Quoted prices in active markets for identical or similar assets and liabilities.
Level 2:	Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity and that are significant to the FV of the assets or liabilities.

The Company had no assets or liabilities recorded at FV on the basis above at December 31, 2012 or March 31, 2012.

Recent Accounting Pronouncements

On July 27, 2012, the FASB issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350) - Testing Indefinite-Lived Intangible Assets for Impairment.  The ASU provides entities with an option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired.  If an entity concludes that it is more than 50% likely that an indefinite-lived intangible asset is not impaired, no further analysis is required.  However, if an entity concludes otherwise, it would be required to determine the fair value of the indefinite-lived intangible asset to measure the amount of actual impairment, if any, as currently required under US GAAP. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012.  Early adoption is permitted. The adoption of this pronouncement will not have a material impact on these financial statements.

There were no other significant changes in the Company’s critical accounting policies and estimates during the nine months ended December 31, 2012 compared to what was disclosed in the Company’s Form 10-K for the year ended March 31, 2012.

XML

DUE FROM AFFILIATE (Details Narrative) (USD $)	Dec. 31, 2012	Mar. 31, 2012
Notes to Financial Statements
Due from Affiliate Current	$ 85,463	$ 63,193

XML

INTANGIBLE (Details Narrative) (USD $)	Dec. 31, 2012	Mar. 31, 2012	Feb. 15, 2012	Aug. 26, 2011	May 13, 2011	Aug. 08, 2010
Notes to Financial Statements
Common stock issued	48,334,690	47,662,190	16,000,000	300,000	2,000,000	600,000
Common stock value	$ 48,335	$ 47,662	$ 4,480,000			$ 606,000
Paid intangibles	$ 790,244	$ 759,651				$ 147,530

XML

CONCENTRATION OF CREDIT RISK

9 Months Ended

Dec. 31, 2012

Risks and Uncertainties [Abstract]

CONCENTRATION OF CREDIT RISK

NOTE 2 - CONCENTRATION OF CREDIT RISK

We maintain our cash balances in US financial institutions that from time to time exceed amounts insured by the Federal Deposit Insurance Corporation (up to $250,000, per financial institution as of December 31, 2012). As of December 31, 2012 and March 31, 2012 (audited), our deposits exceeded insured amounts by $129,274 and zero, respectively. We have not experienced any losses in such accounts and we believe we are not exposed to any credit risk on cash.

Currently, we maintain a bank account in China. This account is not insured and we believe is exposed to credit risk on cash of $116,557. In addition, we have funds being held in China by affiliates in the amount of $85,463 (Note 3).

XML

Balance Sheets (Parenthetical)	Dec. 31, 2012	Mar. 31, 2012
Statement of Financial Position [Abstract]
Preferred stock, Authorized	10,000	10,000
Preferred Stock, Issued	0	0
Common Stock, Authorized	150,000,000	150,000,000
Common Stock, Issued	48,334,690	47,662,190

XML

LOSS PER SHARE

9 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

Loss Per Share

NOTE 12 - LOSS PER SHARE

The 3,090,000 and 180,000 common stock equivalents (potential common stock) for the three and nine months ended December 31, 2012 and 2011, respectively, are not included in the loss per share calculation above because their effect would be anti-dilutive for the periods indicated.

XML

Document and Entity Information (USD $)	9 Months Ended
	Dec. 31, 2012	Feb. 18, 2013
Document And Entity Information
Entity Registrant Name	AuraSource, Inc.
Entity Central Index Key	0001083922
Document Type	10-Q
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float		$ 3,741,976
Entity Common Stock, Shares Outstanding		48,334,690
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2013

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Going Concern

Going Concern — The accompanying consolidated financial statements were prepared assuming we will continue as a going concern. We have suffered recurring losses from operations since inception and have an accumulated deficit of $6,510,598 at December 31, 2012. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue its existence. The recovery of the Company’s assets is dependent upon continued operations of the Company. In addition, the Company's asset recovery is dependent upon future events, the outcome of which is unknowable. The Company intends to continue to attempt to raise additional capital, but there can be no certainty that such efforts will be successful.

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation — The accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

The unaudited consolidated financial statements were prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with US GAAP was omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended March 31, 2012 included in our Annual Report on Form 10-K. The results of the three and nine months ended December 31, 2012 are not necessarily indicative of the results to be expected for the full year ending March 31, 2013.

Use of estimates

Use of Estimates — The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

Cash and Equivalents — We consider investments with original maturities of 90 days or less to be cash equivalents.

Income Taxes

Income Taxes — The Company accounts for income taxes in accordance with ASC Topic 740. Deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance for a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized.

Stock based compensation

Stock-Based Compensation — The Company recognizes the cost of employee services received for an award of equity instruments in the consolidated financial statements over the period the employee is required to perform the services.

Foreign currency transactions

Foreign Currency Transactions — The Company recognizes foreign currency gains and losses in other income (expense) on the accompanying statement of operations. Foreign currency gains and losses arise as the Company conducts business with other entity’s whose functional currency is not in US dollars. Generally, these gains and losses are recorded at an exchange rate difference between the foreign currency and the functional currency that arises between the transaction date and the payment date.

Net loss per share

Net Loss Per Share — The Company computes basic and diluted net loss per share by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Common equivalent shares arising from stock options and warrants were excluded from the computation of basic and diluted earnings per share, for the three and nine months ended December 31, 2012 and 2011 because their effect is anti-dilutive.

Financial instruments and fair value of financial instruments

Financial Instruments and Fair Value of Financial Instruments — Our financial instruments consist of cash and accounts payable. The carrying values of cash and accounts payable are representative of their fair values (“FVs”) due to their short-term maturities. We measure the FV of financial assets and liabilities on a recurring basis. FV is defined as 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. FV measurements are to be considered from the perspective of a market participant that holds the asset or owes the liability. We also establish a FV hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure FV:

Level 1:	Quoted prices in active markets for identical or similar assets and liabilities.
Level 2:	Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity and that are significant to the FV of the assets or liabilities.

The Company had no assets or liabilities recorded at FV on the basis above at December 31, 2012 or March 31, 2012.

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Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended		274 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Income Statement [Abstract]
Revenue, net	$ 0	$ 0	$ 0	$ 0	$ 0
Cost of revenue	0	0	0	0	0
Gross profit	0	0	0	0	0
Operating expenses:
General & administrative expenses	305,768	293,764	971,090	1,120,039	6,562,318
Total operating expenses	305,768	293,764	971,090	1,120,039	6,562,318
Loss from operations	(305,768)	(293,764)	(971,090)	(1,120,039)	(6,562,318)
Interest income / (expense) and other, net	0	12,365	(5,868)	33,199	51,720
Net loss applicable to common stockholders	$ (305,768)	$ (281,399)	$ (976,958)	$ (1,086,840)	$ (6,510,598)
Basic & Diluted Loss per share	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.03)
Weighted average shares outstanding	48,334,690	31,662,190	48,133,208	31,163,645

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CUSTOMER DEPOSITS

9 Months Ended

Dec. 31, 2012

Banking and Thrift [Abstract]

CUSTOMER DEPOSITS

NOTE 7 – CUSTOMER DEPOSITS

As of December 31, 2012, we have received a total of $570,000 from customers to be applied towards the purchase of various minerals.

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ACCOUNTS PAYABLE RELATED PARTIES

9 Months Ended

Dec. 31, 2012

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE RELATED PARTIES

NOTE 6 – ACCOUNTS PAYABLE – RELATED PARTIES

As of December 31, 2012 and March 31, 2012 (audited), $339,543 and $151,600, respectively, is owed to the officers and directors of the Company. In December 2011, the officers and directors of the Company agreed to accrue compensation for their services until such time the Company had sufficient funds to pay this liability.

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PREPAID EXPENSES (Details Narrative) (USD $)	Dec. 31, 2012	Mar. 31, 2012
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 460,000	$ 3,075

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STOCK OPTIONS (Tables)

9 Months Ended

Dec. 31, 2012

Equity [Abstract]

Stock option grant

	Number of Shares		Weighted Average Price Per Share
Balance at March 31, 2012		3,030,000	$	.37
Granted		60,000		.27
Balance at September 30, 2012		3,090,000		.37

Price and term share based compensation

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding at June 30, 2012		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at June 30, 2012		Weighted Average Exercise Price
$3.50		60,000		6.25		$3.50		60,000		$3.50
$1.00		60,000		7.25		$1.00		60,000		$1.00
$0.75		60,000		8.25		$0.75		60,000		$0.75
$0.27 - 0.28		2,910,000		4.25		$0.28		15,000		$0.27
Balance at September 30, 2012		3,090,000		4.57		$0.37		180,000		$1.75

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STOCK ISSUANCE

9 Months Ended

Dec. 31, 2012

Equity [Abstract]

STOCK ISSUANCE

NOTE 10 – STOCK ISSUANCE

During the year ended March 31, 2012, the Company completed a private placement to certain accredited investors pursuant to which the Company sold 2,000,000 shares of the Company’s common stock resulting in gross proceeds of $1,000,000 to the Company. The Company issued 300,000 shares of the Company’s common stock to two employees. The Company recorded $195,000 in compensation expense for these shares. The Company issued 16,000,000 shares of the Company’s common stock for the rights to the mineral reserve deposit. The shares issued in connection with the deposit were valued at $4,480,000 (See Note 4).

During the nine months ended December 31, 2012, the Company had a private placement pursuant to which the Company sold 612,500 shares of the Company’s common stock resulting in gross proceeds of $245,000 to the Company.

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NOTE PAYABLE

9 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

NOTE PAYABLE

NOTE 8 – NOTE PAYABLE

On December 31, 2012, the Company received $500,000 from an unrelated party. The Company has not finalized the terms and conditions of this payment and has recorded it as a current liability on the balance sheet.

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UNVESTED STOCK

9 Months Ended

Dec. 31, 2012

Extractive Industries [Abstract]

UNVESTED STOCK

NOTE 9 – UNVESTED STOCK

On February 15, 2012, we entered into an agreement with GCH to reserve export ready one million tons of 64% Fe higher content iron ore and 13 million tons of 45% grade lower content iron ore, and two million tons of manganese ore. We issued the Mineral Deposit Shares to GCH or its assigns. On February 19, 2012, GCH assigned 100% of its interest in the Mineral Reserve Agreement to Hong Kong Minerals Holdings Ltd (“HKMHL”). The Mineral Deposit Shares shall vest and be delivered as follows: five million immediately and 11 million upon the successful completion of the first customer order of total revenue over $5 million. Success is defined as customer acceptance of order and final payment. To the extent a successful order does not occur, the unvested Mineral Deposit Shares shall be returned to our treasury and cancelled. The Company has no material prior relationship with GCH or HKMHL other than what is set forth above. We valued the shares issued at $4,480,000 based upon the price of the Company’s stock on that day.

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STOCK OPTIONS

9 Months Ended

Dec. 31, 2012

Equity [Abstract]

STOCK OPTIONS

NOTE 11 - STOCK OPTIONS

In January 2009, we granted 60,000 options to purchase shares of our common stock at $3.50 per share to members of our Board of Directors (“BOD”). In April 2010, we granted an additional 60,000 options to purchase shares of our common stock at $1.00 per share to members of our BOD. The options vest quarterly and have an expiration period of 10 years. In April 2011, we granted an additional 60,000 options to purchase shares of our common stock at $0.75 per share to certain members of our BOD. The options vest quarterly and have an expiration period of 10 years. In February 2012, we granted an additional 2,850,000 options to purchase shares of our common stock at $0.28 per share to certain members of our BOD. The options will vest upon the Company earning $5 million in revenues. The options expire in five years. In April 2012, we granted an additional 60,000 options to purchase shares of our common stock at $0.27 per share to certain members of our BOD. The total grant date fair value of the outstanding options was $796,873.

We will record stock-based compensation expense over the requisite service period, which in our case approximates the vesting period of the options. During the three months ended December 31, 2012 and 2011, the Company recorded $3,595 and $9,018 in compensation expense arising from the vesting of options, respectively. The Company assumed all stock options issued during the quarter will vest. Though these expenses result in a deferred tax benefit, we have a full valuation allowance against the deferred tax benefit.

The Company adopted the detailed method provided in ASC Topic 718 for calculating the beginning balance of the additional paid-in capital pool (“APIC pool”) related to the tax effects of employee stock-based compensation, and to determine the subsequent impact on the APIC pool and Consolidated Statements of Cash Flows of the income tax effects of employee stock-based compensation awards that are outstanding.

The fair value of each stock option granted is estimated on the grant date using the Black-Scholes option pricing model (“BSOPM”). The BSOPM has assumptions for risk free interest rates, dividends, stock volatility and expected life of an option grant. The risk free interest rate is based upon market yields for US Treasury debt securities at a 7-year constant maturity. Dividend rates are based on the Company’s dividend history. The stock volatility factor is based on the last 60 days of market prices prior to the grant date. The expected life of an option grant is based on management’s estimate. The FV of each option grant, as calculated by the BSOPM, is recognized as compensation expense on a straight-line basis over the vesting period of each stock option award.

These assumptions were used to determine the FV of stock options granted using the BSOPM:

Dividend yield			0.0%
Volatility			25% to 155%
Average expected option life	10.00 years
Risk-free interest rate		1.76% to 2.59%

The following table summarizes activity in the Company's stock option grants for the three months ending December 31, 2012:

	Number of Shares		Weighted Average Price Per Share
Balance at March 31, 2012		3,030,000	$	0.37
Granted		60,000		0.27
Balance at December 31, 2012		3,090,000		0.37

The following summarizes pricing and term information for options issued to employees and directors outstanding as of December 31, 2012:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding at December 31, 2012		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2012		Weighted Average Exercise Price
$3.50		60,000		6.25		$3.50		60,000		$3.50
$1.00		60,000		7.25		$1.00		60,000		$1.00
$0.75		60,000		8.25		$0.75		60,000		$0.75
$0.27 - 0.28		2,910,000		4.25		$0.28		15,000		$0.27
Balance at December 31, 2012		3,090,000		4.57		$0.37		180,000		$1.75

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CONCENTRATION OF CREDIT RISK (Details Narrative) (USD $)	Dec. 31, 2012
Notes to Financial Statements
Cash	$ 129,274

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CUSTOMER DEPOSITS (Details Narrative) (USD $)	Dec. 31, 2012	Mar. 31, 2012
Banking and Thrift [Abstract]
Customer deposits	$ 570,000	$ 0

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Statements of Cash Flows (USD $)	9 Months Ended		274 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Statement of Cash Flows [Abstract]
Net loss	$ (976,958)	$ (1,086,840)	$ (6,510,598)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	22,601	16,850	58,969
Stock issued for services	13,200	247,000	1,586,704
Options issued for services	7,190	52,050	252,272
Fair value of salaries donated as capital	0	0	151,500
Changes in operating assets and liabilities:
Due from affiliate	(22,270)	(42,309)	(85,464)
Prepaid expenses	(456,925)	(2,474)	(460,000)
Accounts payable	(15,517)	37,180	155,168
Accounts payable - related parties	187,944	0	187,944
Deposits	570,000	0	570,000
Net cash used in operating activities	(670,735)	(778,543)	(4,093,505)
Cash flows from investing activities :
Capital equipment purchases	(2,954)	(172,373)	(454,675)
Cash paid for acquisition of intangible	(30,593)	(6,121)	(184,244)
Sale of assets to MongSource net of cash on hand	0	0	(90,119)
Net cash used in investing activities	(33,547)	(178,494)	(729,038)
Cash flows from financing activities
Proceeds from issuance of common stock	245,000	1,001,046	4,539,721
Net proceeds from issuance of note payable	500,000	0	727,871
Net cash provided by financing activities	745,000	1,001,046	5,267,592
Net change in cash and equivalents	40,718	44,009	445,049
Cash and equivalents - beginning balance	404,331	642,247	0
Cash and equivalents - ending balance	445,049	686,256	445,049
Interest	0	0	0
Income taxes	$ 0	$ 0	$ 0

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INTANGIBLE

9 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE

NOTE 5 – INTANGIBLE

We entered into an agreement with Beijing Pengchuang Technology Development Co. (“Pengchuang”), Ltd., an independent Chinese company, to purchase 50% of the intellectual property related to ultrafine particle processing. Pengchuang developed an efficient and low energy consumption grinding technology, which utilizes fluid shock waves to make ultrafine particles. This technology can be applied to the coal water slurry, solid lubricant and other material grinding processes. Through the joint development and ownership agreement, AuraSource will enrich its intellectual property portfolio, enabling the further development of AuraCoal, its Hydrocarbon Clean Fuel technology. AuraSource Qinzhou will utilize the particle grinding technology in its AuraCoal Qinzhou production line, as well as license it to others in non-related industries.

We issued 600,000 shares of common stock for the acquisition of certain intangibles. The shares issued in connection with the acquired intangibles were valued at $606,000 or $1.01 per share which was the share price on August 8, 2010, the acquisition date. The Company paid $147,530 cash for the remainder of the amount due.

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NOTE PAYABLE (Details Narrative) (USD $)	Dec. 31, 2012	Mar. 31, 2012
Debt Disclosure [Abstract]
Note Payable	$ 500,000	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)	Dec. 31, 2012	Mar. 31, 2012
Notes to Financial Statements
Retained earnings accumulated deficit	$ (6,510,598)	$ (5,533,641)