10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2015

☐TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________ to ______________

Commission File Number:  333-181683

Gray Fox Petroleum Corp.

(Name of registrant as specified in its charter)

Nevada	99-0373721
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1015 Twin Lakes Rd., Longwood, Florida 32750

(Address of Principal Executive Offices)

(214) 665-9564

(Issuer's telephone number)

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   X        No ___

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes   X        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	[X]

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

As of February 15, 2015, the issuer had 215,567,732 shares of common stock, $0.001 par value per share, issued and outstanding.

 GRAY FOX HOLDING CORP.

(Formerly Gray Fox Petroleum Corp.)

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION	3
Item 1 – Financial Statements	3
Item 2.  Management's Discussion and Analysis or Plan of Operation.	19
Item 3. Quantitative and Qualitative Disclosure about Market Risk	21
Item 4. Controls and Procedures.	21
PART II — OTHER INFORMATION	21
Item 1. Legal Proceedings.	21
Item 1A. Risk Factors	22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	22
Item 3. Defaults Upon Senior Securities	22
Item 4. Mine Safety Disclosures	22
Item 5. Other Information.	22
Item 6. Exhibits.	22
SIGNATURES	23

2

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

GRAY FOX HOLDINGS CORP.

(Formerly Gray Fox Petroleum Corp.)

CONSOLIDATED BALANCE SHEETS

	December 31, 2015			March 31, 2015
ASSETS
Cash and equivalents	$	59,791		$	44
Investments at fair value		75,000			100,000
Total current assets		134,791			100,044
TOTAL ASSETS		134,791			100,044
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	144,344		$	6,083
Accrued expenses, related party		8,461
Convertible notes payable, net of discounts of $371,588 and $0 at December 31, 2015 and March 31, 2015, respectively		159,757			-
Derivative liabilities		436,833			-
TOTAL CURRENT LIABILITIES		749,395			6,083
SHAREHOLDERS' EQUITY (DEFICIT)
Preferred stock, par value $0.001, authorized 20 million, 20 million  and zero shares issued and outstanding at December 31, 2015 and March 31, 2015, respectively		20,000			-
Common stock, par value $0.001, authorized 675 million, 69,109,291 and 37,994,889 issued and outstanding at December 31 and March 31, 2015, respectively.		69,109			37,995
Additional paid-in capital		1,025,612			(36,442	)
Common stock payable		-			249,342
Accumulated deficit		(1,729,325	)		(156,934	)
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)		(614,604	)		93,961
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)	$	134,791		$	100,044

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

3

GRAY FOX HOLDINGS CORP.

(Formerly Gray Fox Petroleum Corp.)

CONSOLIDATED RESULTS OF OPERATIONS

(Unaudited)

	Nine Months Ended December 31,						Three Months Ended December 31,
	2015			2014			2015			2014
Investment income
Dividends	$	12,667		$	3,292		$	4,438		$	3,292
Total investment income		12,667			3,292			4,438			3,292
Operating expenses
General and administrative expenses		1,449,378			26,244			307,619			(12,345	)
Total operating expenses		1,449,378			26,244			307,619			(12,345	)
Operating income (loss)		(1,436,711	)		(22,952	)		(303,181	)		15,637
Other income or (expense)
Interest expense		(266,531	)		-			(140,992	)		-
Realized gains or (losses) on trading securities		(39,464	)		18,593			-			-
Unrealized gains or (losses) on trading securities		30,000			(65,499	)		-			(41,000	)
Change in value of derivative		75,843			-			66,269			-
Gain on exchange of equity for convertible debt		64,472			-			-			-
Total other income or (loss)		(135,680	)		(46,906	)		(74,723	)		(41,000	)
Net loss before income tax provision		(1,572,391	)		(69,858	)		(377,904	)		(25,363	)
Income tax (expense) / benefit		-			-			-			-
NET LOSS	$	(1,572,391	)	$	(69,858	)	$	(377,904	)	$	(25,363	)
Net loss per share, basic and fully diluted	$	(0.03	)	$	(0.00	)	$	(0.01	)	$	0.00
Weighted average number of shares outstanding		51,325,723			37,994,889			60,601,185			37,994,889

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

4

GRAY FOX HOLDINGS CORP.

(Formerly Gray Fox Petroleum Corp.)

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)

(Unaudited)

	Common Stock, Par Value $0.001				Series A Preferred Stock, Par Value $0.001				Additional			Common						Total
	Shares		Amount		Shares		Amount		Paid In Capital			Stock Payable			Accumulated Deficit			Shareholders' Deficit
Balances, March 31, 2014		37,994,889		37,995		-		-		(36,442	)		249,342			(96,452	)		154,443
Net loss		-		-		-		-								(60,482	)		(60,482	)
Balances, March 31, 2015		37,994,889	$	37,995		-	$	-	$	(36,442	)	$	249,342		$	(156,934	)	$	93,961
Effect of reverse merger		-		-		-		-		(152,479	)		-			-			(152,479	)
Conversion of stock payable to convertible notes		-		-		-		-		-			(249,342	)		-			(249,342	)
Issuance of preferred stock		-		-		20,000,000		20,000		70,200			-			-			90,200
Redemption of convertible notes		-		-		-		-		85,967			-			-			85,967
Shares issued for officer compensation		20,600,000		20,600		-		-		1,050,600			-			-			1,071,200
Shares issued for conversion of debt		10,514,402		10,514		-		-		7,766			-			-			18,280
Net loss																(1,572,391	)		(1,572,391	)
Balances, December 31, 2015		69,109,291	$	69,109		20,000,000	$	20,000	$	1,025,612		$	-		$	(1,729,325	)	$	(614,604	)

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

5

GRAY FOX HOLDINGS CORP.

(Formerly Gray Fox Petroleum Corp.)

CONSOLLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended December 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,572,391	)	$	(69,858	)
Adjustments to reconcile net loss with cash used in operations:
Stock-based compensation		1,161,400			-
Gain on conversion of stock payable to convertible notes payable		(64,472	)		-
Unrealized (gain) loss from investments		(30,000	)		65,499
Realized (gain) loss from investments		39,464			(18,593	)
Amortization of discounts on notes payable		239,292			-
Change in value of derivative		(75,843	)		-
Change in operating assets and liabilities:
Investments		15,536			19,027
Accounts payable and accrued expenses		166,240			5,574
Net cash used in operating activities		(120,774	)		1,649
CASH FLOWS FROM INVESTING ACTIVITIES
Effect of reverse merger		(152,479	)		-
Net cash provided by / used in investing activities		(152,479	)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible notes payable		333,000			-
Net cash provided by financing activities		333,000			-
Net increase/(decrease) in cash		59,747			1,649
Cash at beginning of period		44			19
Cash at end of period	$	59,791		$	1,668
SUPPLEMENTAL DISCLOSURES
Cash paid for interest	$	10,214		$	-
Cash paid for income taxes		-			-
ADDITIONAL DISCLOSURES OF NON-CASH FINANCING TRANSACTIONS
Discounts on convertible notes	$	655,185		$	-
Stock payable converted to debt		184,870			-
Redemption of notes with new financing arrangement		187,522			-
Conversion of notes payable to common stock		18,280			-
Derivative settlement on notes payable converted to common stock		85,967			-

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

6

GRAY FOX HOLDINGS CORP.

(Formerly Gray Fox Petroleum Corp.)

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015

Note 1 – Nature of Business and Significant Accounting Policies

Nature of Business

Gray Fox Petroleum Corp. (formerly Viatech Corp.) was incorporated in the State of Nevada on September 22, 2011. The Company was formed to provide interior design and architectural visualization, 3D rendering and architectural animation services. On May 31, 2013, however, the Company abandoned its plans to enter into the interior design and architectural visualization business and the majority stockholder sold his interest in the Company.

A complete history of the Company between May 31, 2013 and March 31, 2014 can be found in Item 1 of our Annual Report on Form 10-K filed on June 27, 2014 and is hereby incorporated by reference.

As is more thoroughly described in Note 3 to the financial statements, Lawrence Pemble, our Chief Executive Officer and Board Chairman, resigned from both positions on April 2, 2015 and sold 100% of his position to DB Capital Corp, a Florida Corporation.  DB Capital appointed Daniel Sobolewski as Chief Executive Officer and Board Chairman.  Additionally, DB Capital merged with Gray Fox Petroleum Corp. on April 3, 2015 by transferring a 70% interest in two non-controlling interests to Gray Fox, distributing the controlling interest in Gray Fox and the remaining 30% interest in the restaurants to Daniel Sobolewski and dissolving DB Capital Corp.

Basis of Presentation

The interim condensed financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in U.S. Dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

The Company has adopted a fiscal year end of March 31.

These statements reflect all adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. These interim condensed financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended March 31, 2015 and notes thereto included in the Company's Annual Report on Form 10-K as of March 31, 2015, filed on June 30, 2015. The Company follows the same accounting policies in the preparation of interim reports.

Fair Value of Financial Instruments

Under ASC 820-10-05, the Financial Accounting Standards Board ("FASB") established a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company's financial statements as reflected herein. The carrying amounts of cash, prepaid expenses and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments.

Revenue Recognition

Interest and Dividend Income

We record interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution.  For equity investments for which we have a 5% or less equity position, we recognize interest and dividend income when received.

In accordance with our valuation policies, we evaluate accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service all of its debt or other obligations, we will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security's status significantly improves regarding the debtor's ability to service the debt or other obligations, or if a loan or debt security is fully impaired, sold or written off, we remove it from non-accrual status.

For the nine months ended December 31, 2015, our only interest and dividend income was from our investment in Graffiti Junktion restaurants which were recorded on a cash basis.

7

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such asset will not be recovered through future operations.

Uncertain Tax Positions

In accordance with ASC 740, "Income Taxes" ("ASC 740"), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Various taxing authorities may periodically audit the Company's income tax returns. These audits may include questions regarding the Company's tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter for which an allowance has been established is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.

The assessment of the Company's tax position relies on the judgment of management to estimate the exposures associated with the Company's various filing positions.

Stock-Based Compensation

The Company adopted FASB guidance on stock based compensation upon inception at September 22, 2011. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, are to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.

Basic and Diluted Loss per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an "as if converted" basis by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Recent Accounting Pronouncements

In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805) ("ASU 2015-16"). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company's consolidated financial statements.

In August, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ("ASU 2015-14"). The amendment in this ASU defers the effective date of ASU No. 2014-09 for all entities for one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods with that reporting period.

In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, Interest–Imputation of Interest (Subtopic 835-30) ("ASU 2015-03"), which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-03 on its balance sheets.

8

Note 2 – Going Concern

As shown in the accompanying financial statements, the Company has incurred net losses from operations resulting in an accumulated deficit of $1,729,325, and a working capital deficit of $614,604. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management is actively pursuing financing for new investment opportunities. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company's ability to continue as a going concern. The financial statements also 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 as a going concern.

Note 3 – Business Combination

On April 2, 2015, Daniel Sobolewski acquired from Lawrence Pemble 19,400,000 shares in exchange for a promissory note.  The change in control constitutes a "reverse acquisition" as defined in ASC 805-40 – Business Combinations.  On that same date, Lawrence Pemble resigned his positions of Chief Executive Officer and Board Chairman.  Upon Mr. Pemble's resignation, Mr. Sobolewski appointed himself as Board Chairman and Chief Executive Officer.

Subsequent to the change in control, Mr. Sobolewski contributed 100% of his shares of DB Capital Corp. to the Company.

In a reverse merger, the incoming operating company (DB Capital Corp.) is the only relevant operating entity going forward.  Therefore, the prior operations of DB Capital, including historical equity transactions reported, are those of DB Capital, and not Gray Fox Petroleum.  The financial statements included in this Form 10-Q and all subsequent operational reporting, as well as historical equity transactions and comparison of operating data with proper periods, will reflect the operations of DB Capital Corp. and not Fray Fox Petroleum, Inc.

Note 4 – Related Party Transactions

Common Stock

On May 30, 2014, the Company issued 1,000,000 shares to Lawrence Pemble, our Chief Executive Officer pursuant to his employment agreement with the Company.

On July 15, 2015, we issued 20,600,000 shares to Daniel Sobolewski, our Board Chairman and Chief Executive Officer for compensation.  We valued the shares at the grant-date fair value ($0.052 per share) and charged General and Administrative Expense with $1,071,200.

Preferred Stock

On December 30, 2015, we issued 20,000,000 shares of Series A Preferred Stock to our Board Chairman and Chief Executive Officer for compensation whose value on the grant date was $90,200.  See Note 7 for a discussion of rights of these shares and their valuation.

CEO Compensation

During the three months ended December 31, 2014, Daniel Sobolewski contributed $33,817 to DB Capital and elected not to receive a promissory note in return.  At the time of these contributions, Mr. Sobolewski did not have a compensation arrangement with DB Capital.  Consequently, DB Capital accounted for compensation payments to Mr. Sobolewski on a cash basis.  Likewise, when Mr. Sobolewski contributed the $33,817 to DB Capital, it was accounted for as a reduction of compensation expense.  For this reason, general and administrative expense is negative for the three months ended December 31, 2014.  If these contributions had not occurred, or if Mr. Sobolewski had taken a promissory note instead of accounting for the contributions as a reduction of compensation expense, general and administrative expenses for the nine and three months ended December 31, 2014 would have been $60,061 and 21,472, respectively.

9

On October 1, 2015, the Company entered into an Executive Employment and Incentive Agreement with Daniel Sobolewski, the Chief Executive Officer.  The term is for two years and automatically renews each year unless terminated by either party.  Mr. Sobolewski's compensation arrangement provides for a salary of $90,000 per year.  The agreement also provides for a one-time bonus not to exceed $70,000.  During the three months ended December 31, 2015, Mr. Sobolewski was paid $69,000 in bonuses.  Moreover, we accrued $22,500 in monthly salary and paid Mr. Sobolewski $14,039, leaving a balance owed of $8,461.

Note 5 – Investments

The fair value of our investments at December 31 and March 31, 2015 were as follows:

	Investments at Fair Value
	12/31/15		3/31/15
Wialan Technologies common stock	$	-	$	25,000
Equity participation in Graffiti Junktion restaurants		75,000		75,000
Total investments	$	75,000	$	100,000

We account for our investments according to ASC 321 Investments – Equity Securities.  We have classified our investments in equity securities as "trading securities" which are investments made with the intent of reselling them in the near future.  They are carried at fair value and changes in value are measured and included in operating income of each period.  A realized gain or loss occurs when a security is liquidated, and the gain or loss is calculated as the difference between the net proceeds, including any broker fees, and the historical cost of those investments.  An unrealized gain or loss occurs when a security is held from one period to another, and the fair value of that security fluctuates.  The Wialan Technologies securities, which are those on which both realized and unrealized gains and losses have been recorded, are classified as "trading securities".

During the nine months ended December 31, 2015, we had the following investment activities:

Wialan Technologies, Inc. (OTCX: WLAN)

At March 31, 2015, we had 10 million shares of Wialan Technologies common stock for which we paid $55,000.  At March 31, 2015, the fair value of that stock was only $25,000.  We therefore reserved the carrying value of that investment and recorded an unrealized loss of $30,000 during the fiscal year ended March 31, 2015.  On April 1, 2015, we reversed that reserve in contemplation of complete liquidation of the position.  We liquidated the position in this investment between April 2, 2015 and May 20, 2015, receiving $15,536 in proceeds, net of broker fees, and recorded a realized loss of $39,464.

The unrealized gain during the nine months ended December 31, 2015 results from the reversal of the unrealized loss recorded at March 31, 2015 referred to in the above paragraph, such that all of the losses for that period become realized (the loss of $39,464).

Graffiti Junktion Restaurants

During the year ended March 31, 2015, we paid $75,000 for 4% equity interest in the Graffiti Junktion restaurant located in Lake Mary, Florida and a 5% interest located in the Graffiti Junktion restaurant in Orlando, Florida.  According to the terms of the agreement we are entitled to receive a pro-rata dividend when the management of Graffiti Junktion declares such a dividend.

During the nine months ended December 31, 2015 and 2014, we received $12,667 and $3,292, respectively.  During the three months ended December 31, 2015 and 2014, we received $4,438 and $3,292, respectively.

10

Note 6 – Fair Value of Financial Instruments

The Company adopted FASB ASC 820-10 upon inception at September 22, 2011. Under FASB ASC 820-10-5, fair value 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has certain financial instruments that must be measured under the new fair value standard. The Company's financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of December 31 and March 31, 2015, respectively:

	Fair Value Measurements  at December 31, 2015
	Level 1			Level 2				Level 3
Assets
Investments at fair value		$	75,000		$	-			$	-
Total assets		$	75,000		$	-			$	-
Liabilities
Convertible notes payable			-			531,345				-
Discounts on convertible notes			-			(371,588	)			-
Derivative liability			-			-				436,833
Total liabilities		$	-		$	159,757			$	436,833
	Fair Value Measurements at March 31, 2015
	Level 1			Level 2				Level 3
Assets
Investments and fair value		$	100,000		$				$
Total assets		$	100,000		$	-			$	-
Liabilities
Total liabilities		$	-		$	-			$	-

The fair values of our accounts payable, convertible notes and discounts are deemed to approximate book value, and are considered Level 2 inputs as defined by ASC Topic 820-10-35.  Our derivative liability is considered a Level 3 input.

There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the nine months ended December 31, 2015 or the year ended March 31, 2015.

11

Note 7 – Stockholders' Equity

Common Stock

The Company has authorized 675,000,000 shares of common stock, $0.001 par value per share and 20,000,000 shares of preferred stock $0.001 par value.

The Company issued shares of common stock during the year ended March 31, 2015, the description of which are in Note 6 – Stockholders' Equity disclosure of the financial statements filed on Form 10-K as of March 31, 2015, filed with the Securities and Exchange Commission on June 30, 2015 and are herein incorporated by reference.

However, as the guidance in ASC 805-40 – Business Combinations indicates, subsequent to a reverse merger (see Note 3), equity transactions are retroactively shown as those of the accounting acquirer (in this case, DB Capital Corp.) but are denominated in the shares of the issuer (Gray Fox Petroleum, Inc.).  Therefore, the Statement of Changes in Shareholder Equity included in these financial statements reflect the equity events of DB Capital Corp. which has not issued any shares since its initial founders' shares.  Therefore, all 37,994,889 shares issued and outstanding at March 31, 2015 are reported as having been outstanding since inception.

On July 15, 2015, we issued 20,600,000 shares to Daniel Sobolewski, our Board Chairman and Chief Executive Officer for compensation.  We valued the shares at the grant-date fair value ($0.052 per share) and charged General and Administrative Expense with $1,071,200.

During the three months ended December 31, 2015, we issued 10,514,402 shares pursuant to certain conversion provisions of the convertible promissory notes discussed in Note 8.  The amounts of interest and principal converted is governed by the terms of the promissory notes themselves.  Upon recording the issuance of these shares, we reduced the principal owed by $17,777, accrued interest by $503, increasing Additional Paid in Capital by the sum of those two reductions, or $18,280.  In addition, we recorded reductions in the associated discounts and derivative liabilities in the amounts of $13,739 and 18,519, respectively.

Preferred Stock

On December 30, 2015, the Board of Directors of the Company approved a Series A Super Voting Preferred Stock Certificate of Designation, which sets forth the rights, preferences and privileges, to be known as Series A Super Voting Preferred Stock and filed with the State of Nevada on October 28, 2015. The Company is authorized to issue up to Twenty Million (20,000,000) shares of Series A Super Voting Preferred Stock. Each share of the Series A Super Voting Preferred Stock shall be entitled to the voting equivalent of 100 shares of common stock.

Pursuant to the Certificate of Designation, 20,000,000 shares constitute the Series A preferred stock. The Series A preferred stock is non-convertible, zero-dividend, zero-interest, have no economic rights other than return of any paid-in capital par value and carry super voting rights.

On December 30, 2015, the Company issued 20,000,000 shares of the Company's Series A Preferred Stock to Daniel Sobolewski, the current CEO.  There is currently no market for the shares of Series A Preferred and they are not convertible into shares of common stock of the Company. The Company received no cash proceeds for the issuance of the shares.

The Preferred Series A issued December 30, 2015 were valued based upon industry specific control premiums and the Company's market cap at the time of the transaction based on the market price of the common stock.

In valuing the preferred shares we used the Market Approach which is utilized to arrive at an indication of equity value by using quoted market prices of the capital structure as of 12/30/15. The market cap of the Company represents 100% of the minority interest for all outstanding common shares. The Preferred Series A fair value is based on the value of the voting rights.

Managements' Preferred Series A shares represent a controlling voting interest in the Company and therefore determining the Control Premium is an indication of the Securities value. The Control Premium for the Company is based on publicly traded companies or comparable entities in the Food Processing industry which have been acquired in arm's–length transactions.

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The valuation of the preferred shares as of 12/30/15 used the following inputs:

1.	The common stock price was $0.010;
2.	Market capitalization based on 58,594,889 common shares outstanding; no in-the-money warrants; and 20,000,000 Series A Preferred shares;
3.	A 15.40% premium for the voting preferences;
4.	2,058,594,889 total voting shares/rights and Managements zero additional voting rights represented 97.154% of the total;
5.	The conversion value is $0;

We determined the fair value of these securities to be $90,200.  In recording the issuance of these shares, we increase Preferred Stock by $20,000, Additional Paid in Capital by $70,200, and charged Stock-Based Compensation (an operating expense) with $90,200.

Common Stock Payable

During 2012, the DB Capital Corp. (the Accounting Acquirer in the reverse merger whose equity transactions are retroactively shown in these financial statements)  entered into multiple subscription agreements (the "2012 Subscription Agreements") to raise operating capital, raising $194,870 in cash, and promising a certain amount of common shares of DB Capital in return.  Interest was explicitly stated in the instruments and, as of March 31, 2015 and 2014, was accrued and became part of the stock payable recorded in the equity section of the balance sheet.  The balance of the stock payable at March 31, 2015 and 2014 was $249,342.

On June 1, 2015, the Company retired this stock payable by issuing convertible notes payable to these initial DB Capital investors (see Note 8).

Note 8 – Convertible Notes Payable

Convertible Notes Payable

The June 1, 2015 Notes

On June 1, 2015, the Company issued convertible notes payable (the "June 1, 2015 Notes") to several original investors of DB Capital Corp. (see Note 7 reference to the "2012 Subscription Agreements").  The aggregate stock payable to these investors at March 31, 2015 was $249,342.

The aggregate principal amount of the convertible promissory notes issued on June 1, 2015 was $184,870.  All of these notes have a maturity date of June 1, 2016 and have interest explicitly stated in the payment amount due at maturity.  The aggregate principal and interest due at maturity is $218,745.  The nominal interest rates implicit in these notes range from 14% to 21%, with an average implicit rate of 18%.

The June 1, 2015 Notes may be converted into common stock of the Company at a 50% discount to the applicable bid price of the closing day the conversion is executed.  This conversion feature based on a future, unknown stock price implies an embedded derivative (see below).

In recording the June 1, 2015 Notes, we charged the notes' aggregate principal amounts ($184,870) against the outstanding stock payable at March 31, 2015 ($249,342), recording a gain of $64,472 on the excess.

On October 27, 2015, we entered into a convertible promissory note with a financing institution to redeem most of these notes (see the discussion below in the section entitled "The October 27, 2015 Redemption Note".  All but one creditor from the June 1, 2015 group redeemed their notes with the financial institution.  The remaining June 1, 2015 note holder has a principal balance owed at December 31, 2015 of $8,300, an unamortized debt discount of $3,458, accrued interest of $944, and an associated derivative liability of $9,061.

The May 20, 2015 Cash Note

On May 20, 2015, we issued a convertible promissory note (the "May 20, 2015 Cash Note") for $21,500 in exchange for $20,000 in cash.  The note principal and interest matures on May 20, 2016, and accrues interest at 8%.  The note is convertible at any time into common shares of the Company at a conversion price equal to 50% of the lowest trading price for the twenty trading days prior to notice of conversion. This conversion feature based on a future, unknown stock price implies an embedded derivative (see below).  We immediately recorded the difference between the stated note principal amount of $21,500 and the actual funds received $20,000 as interest expense.

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During the nine months ended December 31, 2015, we recorded $975 of nominal interest, amortized $11,400 of debt discount to interest expense, and recorded changes in the fair value of the associated derivative liability.

During the three months ended December 31, 2015, we issued 2,145,202 common shares upon election of the creditor to convert a portion of the outstanding interest and principal to our common shares.  In issuing these shares, we recorded a reduction of principal and interest of $11,500 and $504, respectively, increasing Additional Paid in Capital by those amounts.  In addition, we proportionally reduced the unamortized debt discount by $8,150, charging Interest Expense for that amount, and reduced the derivative liability by $13,656, increasing Additional Paid in Capital in so doing.

At December 31, 2015, unpaid interest and principal amounted to $472 and $10,000, respectively.  Unamortized debt discount was $1,950 and the fair value of the embedded derivative liability was $12,881.

The November 1, 2015 Cash Notes

On November 1, 2015, we issued three convertible promissory notes ("The November 1, 2015 Cash Notes") to accredited investors in exchange for cash.  The aggregate nominal value of these notes, which is equal to the cash proceeds, is $125,000.

These notes mature on November 1, 2016,  accrue interest due at maturity at 6.5%, and can be converted to common stock at 50% of the applicable bid price on the day the conversion is executed.  Any unpaid principal and interest is automatically converted, at maturity, to common stock at the conversion price. This conversion feature based on a future, unknown stock price implies an embedded derivative (see below).

During the three months ended December 31, 2015, we accrued interest of $1,035, recorded the initial value of their embedded derivative liabilities (see below) of $133,880 and debt discounts of $125,000.  The difference between the initial derivative and the debt discount (i.e., $8,880) was recorded immediately as interest expense.  Additionally, during the three months ended December 31, 2015, we amortized $18,749 to interest expense, and reduced the embedded derivatives to their fair values at December 31, 2015.  Unamortized discounts and the fair value of embedded derivatives  at December 31, 2015 for the November 1, 2015 Cash Notes were $106,251 and $125,861, respectively.

The October 26, 2015 Cash Note

On October 26, 2015, we exchanged a $206,000 convertible promissory note for $188,000 in cash.   The note matures on April 26, 2015 and bears no interest until maturity, but bears interest of 12% for unpaid principal after maturity.  After the maturity date, the holder may elect to convert any portion of the unpaid principal and accrued interest into common stock at a 35% discount from the average of the lowest intra-day traded price within the fifteen days prior to a notice of conversion.  The inclusion of a variable conversion price implied an embedded derivative (see below for the calculation of the derivative value) which we recorded as $155,951.

The difference between the nominal value of the note ($206,000) and cash proceeds ($188,000) were combined with the initial derivative value (see below) of $155,951 and recorded as a initial debt discount of $173,951.  For the six months ended December 31, 2015, we amortized $57,984 to interest expense and reduced the related derivative liability to its fair value at December 31, 2015 of $139,392, recording a Change in Fair Value of Derivative of $16,559.

The October 27, 2015 Redemption Note

On October 27, 2015, we entered into an arrangement with six of our seven June 1, 2015 Note Holders to redeem their June 1, 2015 Notes, issuing a new note (the "October 27, 2015 Redemption Note") to a new creditor in the amount of $188,322 in the process.  The October 27, 2015 Redemption Note matures on April 26, 2016, inherits the 6.5% interest provision of the acquired June 1, 2015 notes (with unpaid interest and principal accruing interest at 12% after maturity) and can be converted to common stock at price which equals the lesser of (a) 60% of the intra-day price for the twenty days preceding a Notice of Conversion or (b) $0.00075.

We recorded the initial value of the embedded derivative (see below) of $177,864 as a debt discount.

During the three months ended December 31, 2015, we accrued $2,030 in nominal interest and amortized $29,113 of debt discount to interest expense.

We treated the redemption of the six June 1, 2015 Notes as an extinguishment of those debts in accordance with ASC 405-20-40-1, Liabilities – Derecognition.  As such, we reduced the principal and interest balances owed of the June 1, 2015 Notes by $176,570 and 10,952, respectively, and recorded an increase in the principal amount owed of the October 27, 2015 note of $188,321 (with the small $800 difference included as a debt discount).

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Additionally, we reduced the debt discounts ($116,626) and fair values of their embedded derivatives ($184,073) of the June 1, 2015 Notes to zero, recording increase in Additional Paid in Capital of $67,447 on their extinguishment.

During the three months ended December 31, 2015, we issued 8,369,200 common shares upon conversion by the creditor of the October 27, 2015 Redemption Note.  In recording these issuances, we reduced outstanding principal by $6,277.  Additionally, we proportionally reduced the unamortized debt discount and fair values of the associated embedded derivative by $5,589 and $4,863, respectively.  We charged the $5,589 to Interest Expense and increased Additional Paid in Capital for the $4,863.

We amortize debt discounts on all outstanding instruments to interest expense over the life of the notes (none of which exceeds one year) on a straight line basis (which approximates the amortization which would have been recorded using the Effective Interest Method).  For the nine months ended December 31, 2015, we amortized an aggregate of $195,772 of debt discounts to interest expense.

Derivative Liabilities

We evaluated our convertible promissory notes for embedded derivatives according to Statement of Financial Accounting Standard ASC 820-10-35-37 Fair Value in Financial Instruments; Statement of Financial Accounting Standard ASC 815 Accounting for Derivative Instruments and Hedging Activities; and ASC 815-40.

The June 1, 2015 Notes

We evaluated the June 1, 2015 Notes' embedded derivatives at June 30, 2015, September 30, 2015, October 27, 2015 (the date of conversion of six of the seven notes), and December 31, 2015 using the following assumptions:

· The notes convert with an initial conversion price of 50% of the closing bid at conversion;

· An event of default would occur 0% of the time (there are no default provisions)

· The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 159%-162% (194%-209% at December 31, 2015) .

· The company would not redeem the notes prior to maturity and would have no reset events; and

· Risk free rates for the remaining term of the notes was in the range of 0.23% to 0.33% (0.08% to 0.26% for December 31, 2015).

The following table shows the changes in the fair values of the derivatives for the June 1, 2015 Notes from their issuance to December 31, 2015:

	06/30/15			09/30/15			10/27/15			12/31/15
Beginning balance	$	-		$	208,678		$	208,014		$	9,339
Initial value at issuance		213,919			-			-			-
Change in fair value		(5,241	)		(664	)		(14,602	)		(278	)
Decreases from redemptions		-			-			(184,073	)		-
Ending balance	$	208,678		$	208,014		$	9,339		$	9,061

The May 20, 2015 Cash Note

We evaluated the May 20, 2015 Cash Note's embedded derivative at June 30, 2015, September 30, 2015 and December 31, 2015 using the following assumptions:

· The notes convert with an initial conversion price of 50% of the low bid out of the 20 previous days;

· An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 10%;

· The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 159%-162% (194%-209% at December 31, 2015).

· The company would not redeem the notes prior to maturity and would have no reset events; and

· Risk free rates for the remaining term of the notes was in the range of 0.23% to 0.33% (0.08% to 0.26% for December 31, 2015).

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The following table shows the changes in the fair values of the derivatives for the May 20, 2015 Cash Note from issuance to December 31, 2015:

	06/30/15		09/30/15			12/31/15
Beginning balance	$	-	$	34,530		$	16,329
Initial value at issuance		33,654		-			-
Change in fair value		876		(4,545	)		(3,448	)
Reductions from conversions		-		(13,656	)		-
Ending balance	$	34,530	$	16,329		$	12,881

The November 1, 2015 Cash Notes

We evaluated the November 1, 2015 Cash Notes' embedded derivative at December 31, 2015 using the following assumptions:

· The notes convert with an initial conversion price of 50% of the low bid out of the 20 previous days;

· An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 10%;

· The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 194%-209%;

· The company would not redeem the notes prior to maturity and would have no reset events; and

· Risk free rates for the remaining term of the notes was in the range of 0.08% to 0.26%.

Initial derivative aggregate values for the November 1, 2015 Cash Notes were  $133,880.  We recorded a reduction in the fair value of these liabilities at December 31, 2015 of $8,019, resulting in a gain of that amount.  The fair value of the liabilities at December 31, 2015 was $125,861.

The October 26, 2015 Cash Note

We evaluated the October 26, 2015 Cash Note's embedded derivative at December 31, 2015 using the following assumptions:

· The notes convert with an initial conversion price of 50% of the low bid out of the 20 previous days;

· An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 10%;

· The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 194%-209%;

· The company would not redeem the notes prior to maturity and would have no reset events; and

· Risk free rates for the remaining term of the notes was in the range of 0.08% to 0.26%.

The initial value of the embedded derivative was $155,951.  We reduced that amount to the fair value at December 31, 2015 of $139,392, recognizing a gain of $16,559 for the three months ended December 31, 2015.

The October 27, 2015 Redemption Note

We evaluated the October 26, 2015 Cash Note's embedded derivative at December 31, 2015 using the following assumptions:

· The notes convert with an initial conversion price of 50% of the low bid out of the 20 previous days;

· An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 10%;

· The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 194%-209%;

· The company would not redeem the notes prior to maturity and would have no reset events; and

· Risk free rates for the remaining term of the notes was in the range of 0.08% to 0.26%.

· The initial value of the embedded derivative was $155,951.  We reduced that amount to the fair value at December 31, 2015 of $139,392, recognizing a gain of $16,559 for the three months ended December 31, 2015.

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The initial value of the derivative at issuance was $177,864.  During the three months ended December 31, 2015, we reduced that amount by $4,863 due to conversions into common stock by the creditor and an additional $23,363 from a change in the derivative's fair value.

The following table summarizes the changes in the derivative liabilities for the nine months ended December 31, 2015 for all instruments:

Derivative liabilities, March 31, 2015	$	-
New additions from note issuances		715,268
Redemption of June 1, 2015 convertible notes		(184,073	)
Retirement from conversions of debt to equity		(18,519	)
Changes in fair values of derivatives		(75,843	)
Balances, December 31, 2015	$	436,833

Note 9 – Income Taxes

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

For the nine months ended December 31, 2015 and the year ended March 31, 2015, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31 and March 31, 2015, the Company had approximately $567,925 and $156,934 of federal net operating losses, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2030.

The components of the Company's deferred tax asset are as follows:

	December 31, 2015			March 31, 2015
Net operating loss carry-forwards	$	567,925		$	156,934
Deferred tax asset		198,774			54,927
Valuation allowance		(198,774	)		(54,927	)
Net deferred tax asset	$	-		$	-

Note 10 – Legal Proceedings

On March 20, 2015, we were sued in the 157th Judicial District Court of Harris County, Texas for damages relating to our non-payment of certain professional fees to provide an independent technical and economic due diligence report to help the Company determine the oil and gas potential for its West Ranch Prospect.  In Gaffney Cline and Associates, Inc. v .Gray Fox Petroleum Corp. (cause no. 2015-10468), the Plaintiff, Gaffney Cline & Associates, Inc., ("the Plaintiff" or "Gaffney Cline"), sought damages in the amount of $83,188, pre-judgment interest in the amount of $7,352, and legal costs of $8,852, for a total of $99,392.  In addition, the Plaintiff sought additional contingent legal fees in the amount of $5,000 and $10,000 if, upon appeal to an Appellate Court and the Texas Supreme Court, respectively, the plaintiff is the successful party.  At December 31, 2015 and March 31, 2015, we included $86,632 (after adjustments for interest accruals and payments) and $99,392 in Accounts Payable and Accrued Liabilities, respectively, reflecting this judgment.

On April 17, 2015, the Harris Country District Court entered a judgment for the Plaintiff in the requested amount of $99,392.

On May 14, 2015, the Plaintiff filed an Application for Turnover After Judgment and for Appointment of Receiver ("the Receivership Application") for the purpose of liquidating certain non-exempt property to satisfy the outstanding judgment.

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On June 2, 2015, at a court hearing to consider the Receivership Application, the 157th Court denied the Receivership Application, but would allow discovery answer and review and a second Receivership Application should the Plaintiff wish to re-file.  On June 19, 2015, the Plaintiff filed a second Receivership Application.  On July 7, 2015, after hearing the payment schedule proposed by the defendant (the Company), the Court ruled that that the Court will enter an order appointing a post-judgment turnover receiver to take control of Gray Fox's non-exempt assets (essentially, all the assets of the Company) unless the defendant/Company pays $1,000 on the fifteenth of each month beginning on July 15, 2015 (all of which have been paid through the date of this report on Form 10-Q) and $10,000 on the sixth month following July 15, 2015 (the first payment of which was paid December 15, 2015) and each six months thereafter until the obligation is satisfied in full.

Note 11 – Subsequent Events

Subsequent to December 31, 2015, we issued 7,998,692 shares for conversion of a portion of the May 20, 2015 Cash Note; 31,226,633 shares for conversion of a portion of the October 27, 2015 Redemption Note; 7,233,116 for conversion of a portion of the June 1, 2015 Notes and 100,000,000 shares to Daniel Sobolewski, our Chief Executive Officer.

On January 7, 2016, we issued a convertible promissory note with a nominal value of $62,500 for $50,000 in cash.

On January 23, 2016, we signed a Franchise Agreement with Graffiti Junktion Restaurants to license and operate three restaurants under the Graffiti Junktion name, each upon the approval of the Franchisor. We paid $35,000 apiece for the rights ($105,000 total) and we are to pay 5% of monthly gross sales.  The Franchise has an initial term of ten years and can be renewed for three additional five-years periods if the restaurants are in good standing with the franchisor.

The Franchise is owned by us (51%), Tagged Restaurants Corp. (29%), a company created and owned 100% by our Chief Executive Officer, Daniel Sobolewski, and Daniel Sobolewski individually (20%).

On February 4, 2016, we signed a lease for our first franchise location at 415 Main St., Daytona Beach, FL 32118.  The location is 3,880 square feet and is located in the heart of Daytona Beach.  The Lease term overall is renewable for up to 20 yrs with the first right of refusal to purchase.  The monthly rent is $5,000 for the first year, and increases by 3% each year thereafter.  It is a two story facility with a balcony, full kitchen, and has an occupancy of 150.

We have evaluated subsequent events through the date this report was issued.

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Item 2. Management's Discussion and Analysis or Plan of Operation.

This 10−Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.

Overview and Outlook

Until April 2, 2015, the Company was a domestic oil and gas exploration and development company focused on the acquisition and exploration of oil and natural gas properties in the Western United States.

As is more thoroughly described in Note 3 to the financial statements, the Company experienced a change in control on April 2, 2015.

We compare the results of operations for the periods in 2015 with the periods in 2014 with that of DB Capital Corp., the continuing entity, and not Gray Fox Petroleum, Inc.

Results of Operations

Nine Months Ended December 31, 2015 versus 2014

Revenues:

The Company had dividend income from the two Florida restaurants of $12,667 for the nine months ended December 31, 2015 versus $3,292 the same period in 2014.  The investments were made in November, 2014, so only two months of dividends are included in revenues for 2014, whereas a full nine months are recorded for 2015.

General and administrative:

General and administrative expense was $1,449,378 for the nine months ended December 31, 2015.  Of that amount, $1,161,400 was stock-based compensation, leaving $287,978 in general and administrative costs paid or payable in cash.  During the nine months ended December 31, 2014, we had $26,244 of costs in this category.  The increase is mainly due to higher expense levels associated with public company disclosure requirements and Mr. Sobolewski's bonus (see Note 4 to the financial statements) .

Interest expense:

We had no interest-bearing debt during the nine months ended December 31, 2014.  As explained in Note 8 to the financial statements, the Company converted certain stock payable balances to convertible debt and issued certain other convertible promissory notes during the nine months ended December 31, 2015 resulting in $266,531 of interest expense where there was none in 2014.

Trading gains and losses:

We account for our investments according to ASC 321 Investments – Equity Securities.  We have classified our investments in equity securities as "trading securities" which are investments made with the intent of reselling them in the near future.  They are carried at fair value and changes in value are measured and included in operating income of each period.  A realized gain or loss occurs when a security is liquidated, and the gain or loss is calculated as the difference between the net proceeds, including any broker fees, and the historical cost of those investments.  An unrealized gain or loss occurs when a security is held from one period to another, and the fair value of that security fluctuates.  The Wialan Technologies securities, which are those on which both realized and unrealized gains and losses have been recorded, are classified as "trading securities".

Realized investment gains and losses - the Company had net realized loss of $39,464 on equity stock trades during the nine months ended December 31, 2015 versus a gain of $18,593 during the same period in the previous year.

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The current year loss of $39,464 results from the liquidation of 10 million Wialan Technologies (OTCX:WLAN) shares held at March 31, 2015.  The previous-year gain of $18,593 results from the liquidation of 1,917,899 shares of Wialan common stock held at March 31, 2014.

Unrealized investment gains and losses - unrealized gains and losses result from (1) holding shares at the balance sheet whose historical cost basis is different than the current fair market value as determined by the closing price of that equity on a traded exchange or (2) liquidating shares (and realizing a gain or loss) the gain or losses of which had, in previous periods, been included in unrealized gains or losses.  We had a $30,000 gain for the nine months ended December 31, 2015 versus a $65,499 loss for the same period in 2014.   Both the gain in the current year and the loss in the previous year are a result of re-categorization of trading losses from that of unrealized (arising from simply holding shares at period end) to realized losses (resulting from actual liquidation).  If one accounts for both realized and unrealized losses together, then total trading losses amounted to $9,464 and $46,906 for the nine months ended December 31, 2015 and 2014, respectively.

Change in value of derivative:

The change in the value of our derivative liabilities result mostly from the change in our stock price and its volatility.  We had a gain during the nine months ended December 31, 2015 of $75,843 versus no gain or loss during the same period in 2014 as we had no derivative liabilities during 2014.

Gain on exchange of equity for convertible debt:

As explained in Note 7 to the financial statements, certain investors exchanged their stock payable for convertible debt instruments which resulted in a one-time gain of $64,472.  There were no such transactions during the same period in 2014.

Three Months Ended December 31, 2015 versus 2014

Revenues:

During the three months ended December 31, 2015, the Company had $4,438 of dividend income from its investment in two Graffiti Junktion restaurants in Florida versus $3,292 for the same period in 2014.  The change is a result of receiving three months of dividends in the current year, versus only two in the previous.

General and administrative:

General and administrative expense was $307,619 for the three months ended December 31, 2015.  Of that amount, $90,200 was stock-based compensation, leaving $217,419 in general and administrative costs paid or payable in cash.  During the three months ended December 31, 2014, we had negative general and administrative costs of $12,345 (as explained in Note 4 to the financial statements).  The increase is mainly due to higher expense levels associated with public company disclosure requirements and Mr. Sobolewski's bonus (see Note 4 to the financial statements)

Interest expense:

We had no interest-bearing debt during the three months ended December 31, 2014.  For the three months ended December 31, 2015, we had $140,992 of interest expense.

Change in value of derivative:

The change in the value of our derivative liabilities result mostly from the change in our stock price and its volatility.  We had a gain during the three months ended December 3, 2015 of $66,269 versus no gain or loss during the same period in 2014 as we had no derivative liabilities during 2014.

Liquidity and Capital Resources

Our principal source of operating capital has been provided from private sales of our common stock and related-party debt financing. At December 31, 2015, we had negative working capital of $614,604 and negative cash flows from operations of $120,774 for the nine months ended December 31, 2015.

As we continue to develop our business and attempt to expand operational activities, we expect to continue to experience net negative cash flows from operations in amounts not now determinable. We will be required to obtain additional financing to fund operations through common stock offerings and debt borrowings to the extent necessary to provide working capital. We have and expect to continue to have substantial capital expenditure and working capital needs. We do not now have funds sufficient to fund our operations at their current level for the next twelve months.

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We need to raise additional cash to fund our operations and implement our business plan. We expect that the additional financing will (if available) take the form of a private placement of equity, although we may be constrained to obtain additional debt financing in lieu thereof. We are maintaining an ongoing effort to locate sources of additional funding, without which we will not be able to remain a viable entity. There are no assurances that we will be able to obtain adequate financing to fund our operations. If we are able to obtain the financing required to remain in business, eventually achieving operating profits will require substantially increasing revenues or drastically reducing expenses from their current levels or both. If we are able to obtain the required financing to remain in business, future operating results depend upon a number of factors that are outside of our control.

Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. There can be no assurance, however, that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by our future operations will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

Smaller reporting companies are not required to provide the information required by this Item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 ("Exchange Act"), the Company carried out an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(f) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, in consideration of the fact that the Company has no employees besides the Chief Executive Officer, this officer concluded that the Company's disclosure controls and procedures are not effective at December 31, 2015 or March 31, 2015. Through the use of external consultants, the Company believes that the financial statements and the other information presented herewith are not materially misstated.

Inherent Limitations of Internal Controls

Our Principal Executive Officer and Chief Financial Officer do not expect that the Company's disclosure controls and procedures or the Company's internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended December 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

21

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors

Smaller reporting companies are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a)                 Unregistered Sales of Equity Securities.

Not applicable.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

(a)                 Other Information.

None.

(b)                 Changes to Procedures for Recommending Director Nominees.

None.

Item 6. Exhibits.

Exhibit No.	Document Description
31.1	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**

*The XBRL related information in Exhibit 101 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

22

SIGNATURE

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 hereunto duly authorized.

GRAY FOX PETROLEUM CORP.

/s/ Daniel Sobolewski	February 17, 2016
Daniel Sobolewski Principal Executive Officer	Date

23

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Daniel Sobolewsi, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Gray Fox Petroleum Corp.;

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. I am 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 my supervision, to ensure that material information relating to the registrant is made known to me by others, 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 my 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 my 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. I have disclosed, based on my 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 function):

(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.

	Gray Fox Petroleum Corp.
February 17, 2016	By:	/s/ Daniel Sobolewski
		Daniel Sobolewski
		Chief Executive Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned hereby certifies that the Quarterly Report on Form 10-Q for the period ended December 31, 2015 of Gray Fox Petroleum Corp. (the "Company") fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Gray Fox Petroleum Corp.
February 17, 2016	By:	/s/ Daniel Sobolewski
		Daniel Sobolewski
		Chief Executive Officer

 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Gray Fox Petroleum Corp. and will be retained by Gray Fox Petroleum Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2015	Feb. 15, 2015
Document and Entity Information:
Entity Registrant Name	Gray Fox Petroleum Corp.
Document Type	10-Q
Document Period End Date	Dec. 31, 2015
Trading Symbol	gfpc
Amendment Flag	false
Entity Central Index Key	0001546589
Current Fiscal Year End Date	--03-31
Entity Common Stock, Shares Outstanding		215,567,732
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Entity Incorporation, State Country Name	Nevada
Entity Incorporation, Date of Incorporation	Sep. 22, 2011

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2015	Mar. 31, 2015
ASSETS
Cash and equivalents	$ 59,791	$ 44
Investments at fair value	75,000	100,000
Total Current Assets	134,791	100,044
TOTAL ASSETS	134,791	100,044
CURRENT LIABILITIES
Accounts payable and accrued expenses	144,344	6,083
Accrued expenses, related party	8,461
Convertible notes payable, net of discounts of $371,588 and $0 at December 31, 2015 and March 31, 2015, respectively	159,757
Derivative liabilities	436,833
TOTAL CURRENT LIABILITIES	749,395	6,083
SHAREHOLDERS' EQUITY (DEFICIT)
Preferred stock, par value $0.001, authorized 20 million, 20 million and zero shares issued and outstanding at December 31, 2015 and March 31, 2015, respectively	20,000
Common stock, par value $0.001, authorized 675 million, 69,109,291 and 37,994,889 issued and outstanding at December 31 and March 31, 2015, respectively.	69,109	37,995
Additional paid-in capital	1,025,612	(36,442)
Common stock payable		249,342
Accumulated deficit	(1,729,325)	(156,934)
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)	(614,604)	93,961
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)	$ 134,791	$ 100,044

XML

Consolidated Balance Sheets Parenthetical - USD ($)	Dec. 31, 2015	Mar. 31, 2015
Consolidated Balance Sheets Parenthetical
Debt Discount	$ 371,588	$ 0
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	20,000,000	20,000,000
Preferred stock shares issued	20,000,000	0
Preferred stock shares outstanding	20,000,000	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	675,000,000	675,000,000
Common stock shares issued	69,109,291	37,994,889
Common stock shares outstanding	69,109,291	37,994,889

XML

Consolidated Results of Operations - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
Investment income
Dividends	$ 4,438	$ 3,292	$ 12,667	$ 3,292
Total investment income	4,438	3,292	12,667	3,292
Operating expenses
General and administrative expenses	307,619	(12,345)	1,449,378	26,244
Total operating expenses	307,619	(12,345)	1,449,378	26,244
Operating income (loss)	(303,181)	15,637	(1,436,711)	(22,952)
Other income or (expense)
Interest expense	(140,992)		(266,531)
Realized gains or (losses) on trading securities			(39,464)	18,593
Unrealized gains or (losses) on trading securities		(41,000)	30,000	(65,499)
Change in value of derivative	66,269		(75,843)
Gain on exchange of equity for convertible debt			64,472
Total other income or (loss)	(74,723)	(41,000)	(135,680)	(46,906)
Net loss before income tax provision	$ (377,904)	$ (25,363)	$ (1,572,391)	$ (69,858)
Income tax (expense) / benefit
Net loss	$ (377,904)	$ (25,363)	$ (1,572,391)	$ (69,858)
Net loss per share, basic and fully diluted	$ (0.01)		$ (0.03)
Weighted average number of shares outstanding	60,601,185	37,994,889	51,325,723	37,994,889

XML

Consolidated Statement of Shareholders' Equity (Deficit) - USD ($)	Common Stock	Series A Preferred Stock	Additional Paid in Capital	Common Stock Payable	Accumulated Deficit	Total
Balance at Mar. 31, 2014	$ 37,995		$ (36,442)	$ 249,342	$ (96,452)	$ 154,443
Balance - shares at Mar. 31, 2014	37,994,889
Net loss					(60,482)	(60,482)
Balance at Mar. 31, 2015	$ 37,995		(36,442)	249,342	(156,934)	93,961
Balance - shares at Mar. 31, 2015	37,994,889
Effect of reverse merger			(152,479)			(152,479)
Conversion of stock payable to convertible notes				$ (249,342)		(249,342)
Issuance of preferred stock		$ 20,000	70,200			90,200
Issuance of preferred stock - shares		20,000,000
Redemption of convertible notes			85,967			85,967
Shares issued for officer compensation	$ 20,600		1,050,600			1,071,200
Shares issued for officer compensation - shares	20,600,000
Shares issued for conversion of debt	$ 10,514		7,766			18,280
Shares issued for conversion of debt - shares	10,514,402
Net loss					(1,572,391)	(1,572,391)
Balance at Dec. 31, 2015	$ 69,109	$ 20,000	$ 1,025,612		$ (1,729,325)	$ (614,604)
Balance - shares at Dec. 31, 2015	69,109,291	20,000,000

XML

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (1,572,391)	$ (69,858)
Adjustments to reconcile net loss with cash used in operations:
Stock-based compensation	1,161,400
Gain on conversion of stock payable to convertible notes payable	(64,472)
Unrealized (gain) loss from investments	(30,000)	65,499
Realized (gain) loss from investments	39,464	(18,593)
Amortization of discounts on notes payable	239,292
Change in value of derivative	75,843
Change in operating assets and liabilities:
Change in investments	15,536	19,027
Change in accounts payable and accrued expenses	166,240	5,574
Net cash used in operating activities	(120,774)	1,649
CASH FLOWS FROM INVESTING ACTIVITIES
Effect of reverse merger	(152,479)
Net cash provided by / used in investing activities	(152,479)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible notes payable	333,000
Net cash provided by financing activities	333,000
Net increase/(decrease) in cash	59,747	1,649
Cash at beginning of period	44	19
Cash at end of period	59,791	$ 1,668
SUPPLEMENTAL DISCLOSURES
Cash paid for interest	$ 10,214
Cash paid for income taxes
ADDITIONAL DISCLOSURES OF NON-CASH FINANCING TRANSACTIONS
Discounts on convertible notes	$ 655,185
Stock payable converted to debt	184,870
Redemption of notes with new financing arrangement	187,522
Conversion of notes payable to common stock	18,280
Derivative settlement on notes payable converted to common stock	$ 85,967

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Note 1 - Nature of Business and Significant Accounting Policies

9 Months Ended

Dec. 31, 2015

Notes

Note 1 - Nature of Business and Significant Accounting Policies

Note 1 – Nature of Business and Significant Accounting Policies

Nature of Business

Gray Fox Petroleum Corp. (formerly Viatech Corp.) was incorporated in the State of Nevada on September 22, 2011. The Company was formed to provide interior design and architectural visualization, 3D rendering and architectural animation services. On May 31, 2013, however, the Company abandoned its plans to enter into the interior design and architectural visualization business and the majority stockholder sold his interest in the Company.

A complete history of the Company between May 31, 2013 and March 31, 2014 can be found in Item 1 of our Annual Report on Form 10-K filed on June 27, 2014 and is hereby incorporated by reference.

As is more thoroughly described in Note 3 to the financial statements, Lawrence Pemble, our Chief Executive Officer and Board Chairman, resigned from both positions on April 2, 2015 and sold 100% of his position to DB Capital Corp, a Florida Corporation.  DB Capital appointed Daniel Sobolewski as Chief Executive Officer and Board Chairman.  Additionally, DB Capital merged with Gray Fox Petroleum Corp. on April 3, 2015 by transferring a 70% interest in two non-controlling interests to Gray Fox, distributing the controlling interest in Gray Fox and the remaining 30% interest in the restaurants to Daniel Sobolewski and dissolving DB Capital Corp.

Basis of Presentation

The interim condensed financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in U.S. Dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

The Company has adopted a fiscal year end of March 31.

These statements reflect all adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. These interim condensed financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended March 31, 2015 and notes thereto included in the Company’s Annual Report on Form 10-K as of March 31, 2015, filed on June 30, 2015. The Company follows the same accounting policies in the preparation of interim reports.

Fair Value of Financial Instruments

Under ASC 820-10-05, the Financial Accounting Standards Board (“FASB”) established a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, prepaid expenses and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments.

Revenue Recognition

Interest and Dividend Income

We record interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution.  For equity investments for which we have a 5% or less equity position, we recognize interest and dividend income when received.

In accordance with our valuation policies, we evaluate accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service all of its debt or other obligations, we will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security's status significantly improves regarding the debtor's ability to service the debt or other obligations, or if a loan or debt security is fully impaired, sold or written off, we remove it from non-accrual status.

For the nine months ended December 31, 2015, our only interest and dividend income was from our investment in Graffiti Junktion restaurants which were recorded on a cash basis.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such asset will not be recovered through future operations.

Uncertain Tax Positions

In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Various taxing authorities may periodically audit the Company’s income tax returns. These audits may include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter for which an allowance has been established is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.

The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

Stock-Based Compensation

The Company adopted FASB guidance on stock based compensation upon inception at September 22, 2011. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, are to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.

Basic and Diluted Loss per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Recent Accounting Pronouncements

In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805) (“ASU 2015-16”). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

In August, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”). The amendment in this ASU defers the effective date of ASU No. 2014-09 for all entities for one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods with that reporting period.

In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest–Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”), which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-03 on its balance sheets.

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Note 2 - Going Concern

9 Months Ended

Dec. 31, 2015

Notes

Note 2 - Going Concern

Note 2 – Going Concern                 

As shown in the accompanying financial statements, the Company has incurred net losses from operations resulting in an accumulated deficit of $1,729,325, and a working capital deficit of $614,604. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing financing for new investment opportunities. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also 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 as a going concern.

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Note 3 - Business Combination

9 Months Ended

Dec. 31, 2015

Notes

Note 3 - Business Combination

Note 3 – Business Combination

On April 2, 2015, Daniel Sobolewski acquired from Lawrence Pemble 19,400,000 shares in exchange for a promissory note.  The change in control constitutes a “reverse acquisition” as defined in ASC 805-40 – Business Combinations.  On that same date, Lawrence Pemble resigned his positions of Chief Executive Officer and Board Chairman.  Upon Mr. Pemble’s resignation, Mr. Sobolewski appointed himself as Board Chairman and Chief Executive Officer.

Subsequent to the change in control, Mr. Sobolewski contributed 100% of his shares of DB Capital Corp. to the Company.

In a reverse merger, the incoming operating company (DB Capital Corp.) is the only relevant operating entity going forward.  Therefore, the prior operations of DB Capital, including historical equity transactions reported, are those of DB Capital, and not Gray Fox Petroleum.  The financial statements included in this Form 10-Q and all subsequent operational reporting, as well as historical equity transactions and comparison of operating data with proper periods, will reflect the operations of DB Capital Corp. and not Fray Fox Petroleum, Inc.

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Note 4 - Related Party Transactions

9 Months Ended

Dec. 31, 2015

Notes

Note 4 - Related Party Transactions

Note 4 – Related Party Transactions

Common Stock

On May 30, 2014, the Company issued 1,000,000 shares to Lawrence Pemble, our Chief Executive Officer pursuant to his employment agreement with the Company.

On July 15, 2015, we issued 20,600,000 shares to Daniel Sobolewski, our Board Chairman and Chief Executive Officer for compensation.  We valued the shares at the grant-date fair value ($0.052 per share) and charged General and Administrative Expense with $1,071,200.

Preferred Stock

On December 30, 2015, we issued 20,000,000 shares of Series A Preferred Stock to our Board Chairman and Chief Executive Officer for compensation whose value on the grant date was $90,200.  See Note 7 for a discussion of rights of these shares and their valuation.

CEO Compensation

During the three months ended December 31, 2014, Daniel Sobolewski contributed $33,817 to DB Capital and elected not to receive a promissory note in return.  At the time of these contributions, Mr. Sobolewski did not have a compensation arrangement with DB Capital.  Consequently, DB Capital accounted for compensation payments to Mr. Sobolewski on a cash basis.  Likewise, when Mr. Sobolewski contributed the $33,817 to DB Capital, it was accounted for as a reduction of compensation expense.  For this reason, general and administrative expense is negative for the three months ended December 31, 2014.  If these contributions had not occurred, or if Mr. Sobolewski had taken a promissory note instead of accounting for the contributions as a reduction of compensation expense, general and administrative expenses for the nine and three months ended December 31, 2014 would have been $60,061 and 21,472, respectively. 

On October 1, 2015, the Company entered into an Executive Employment and Incentive Agreement with Daniel Sobolewski, the Chief Executive Officer.  The term is for two years and automatically renews each year unless terminated by either party.  Mr. Sobolewski’s compensation arrangement provides for a salary of $90,000 per year.  The agreement also provides for a one-time bonus not to exceed $70,000.  During the three months ended December 31, 2015, Mr. Sobolewski was paid $69,000 in bonuses.  Moreover, we accrued $22,500 in monthly salary and paid Mr. Sobolewski $14,039, leaving a balance owed of $8,461.

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Note 5 - Investments

9 Months Ended

Dec. 31, 2015

Notes

Note 5 - Investments

Note 5 – Investments

The fair value of our investments at December 31 and March 31, 2015 were as follows:

	Investments at Fair Value
		12/31/15		3/31/15
Wialan Technologies common stock	$	-	$	25,000
Equity participation in Graffiti Junktion restaurants		75,000		75,000
Total investments	$	75,000	$	100,000

We account for our investments according to ASC 321 Investments – Equity Securities.  We have classified our investments in equity securities as “trading securities” which are investments made with the intent of reselling them in the near future.  They are carried at fair value and changes in value are measured and included in operating income of each period.  A realized gain or loss occurs when a security is liquidated, and the gain or loss is calculated as the difference between the net proceeds, including any broker fees, and the historical cost of those investments.  An unrealized gain or loss occurs when a security is held from one period to another, and the fair value of that security fluctuates.  The Wialan Technologies securities, which are those on which both realized and unrealized gains and losses have been recorded, are classified as “trading securities”.

During the nine months ended December 31, 2015, we had the following investment activities:

Wialan Technologies, Inc. (OTCX: WLAN)

At March 31, 2015, we had 10 million shares of Wialan Technologies common stock for which we paid $55,000.  At March 31, 2015, the fair value of that stock was only $25,000.  We therefore reserved the carrying value of that investment and recorded an unrealized loss of $30,000 during the fiscal year ended March 31, 2015.  On April 1, 2015, we reversed that reserve in contemplation of complete liquidation of the position.  We liquidated the position in this investment between April 2, 2015 and May 20, 2015, receiving $15,536 in proceeds, net of broker fees, and recorded a realized loss of $39,464.

The unrealized gain during the nine months ended December 31, 2015 results from the reversal of the unrealized loss recorded at March 31, 2015 referred to in the above paragraph, such that all of the losses for that period become realized (the loss of $39,464).

Graffiti Junktion Restaurants

During the year ended March 31, 2015, we paid $75,000 for 4% equity interest in the Graffiti Junktion restaurant located in Lake Mary, Florida and a 5% interest located in the Graffiti Junktion restaurant in Orlando, Florida.  According to the terms of the agreement we are entitled to receive a pro-rata dividend when the management of Graffiti Junktion declares such a dividend.

During the nine months ended December 31, 2015 and 2014, we received $12,667 and $3,292, respectively.  During the three months ended December 31, 2015 and 2014, we received $4,438 and $3,292, respectively.

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Note 6 - Fair Value of Financial Instruments

9 Months Ended

Dec. 31, 2015

Notes

Note 6 - Fair Value of Financial Instruments

Note 6 – Fair Value of Financial Instruments

The Company adopted FASB ASC 820-10 upon inception at September 22, 2011. Under FASB ASC 820-10-5, fair value 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of December 31 and March 31, 2015, respectively:

	Fair Value Measurements at December 31, 2015
	Level 1		Level 2		Level 3
Assets
Investments at fair value	$	75,000	$	-	$	-
Total assets	$	75,000	$	-	$	-
Liabilities
Convertible notes payable		-		531,345		-
Discounts on convertible notes		-		(371,588)		-
Derivative liability		-		-		436,833
Total liabilities	$	-	$	159,757	$	436,833
	Fair Value Measurements at March 31, 2015
	Level 1		Level 2		Level 3
Assets
Investments and fair value	$	100,000	$		$
Total assets	$	100,000	$	-	$	-
Liabilities
Total liabilities	$	-	$	-	$	-

The fair values of our accounts payable, convertible notes and discounts are deemed to approximate book value, and are considered Level 2 inputs as defined by ASC Topic 820-10-35.  Our derivative liability is considered a Level 3 input.

There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the nine months ended December 31, 2015 or the year ended March 31, 2015.

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Note 7 - Stockholders' Equity

9 Months Ended

Dec. 31, 2015

Notes

Note 7 - Stockholders' Equity

Note 7 – Stockholders’ Equity

Common Stock

The Company has authorized 675,000,000 shares of common stock, $0.001 par value per share and 20,000,000 shares of preferred stock $0.001 par value.

The Company issued shares of common stock during the year ended March 31, 2015, the description of which are in Note 6 – Stockholders’ Equity disclosure of the financial statements filed on Form 10-K as of March 31, 2015, filed with the Securities and Exchange Commission on June 30, 2015 and are herein incorporated by reference.

However, as the guidance in ASC 805-40 – Business Combinations indicates, subsequent to a reverse merger (see Note 3), equity transactions are retroactively shown as those of the accounting acquirer (in this case, DB Capital Corp.) but are denominated in the shares of the issuer (Gray Fox Petroleum, Inc.).  Therefore, the Statement of Changes in Shareholder Equity included in these financial statements reflect the equity events of DB Capital Corp. which has not issued any shares since its initial founders’ shares.  Therefore, all 37,994,889 shares issued and outstanding at March 31, 2015 are reported as having been outstanding since inception.

On July 15, 2015, we issued 20,600,000 shares to Daniel Sobolewski, our Board Chairman and Chief Executive Officer for compensation.  We valued the shares at the grant-date fair value ($0.052 per share) and charged General and Administrative Expense with $1,071,200.

During the three months ended December 31, 2015, we issued 10,514,402 shares pursuant to certain conversion provisions of the convertible promissory notes discussed in Note 8.  The amounts of interest and principal converted is governed by the terms of the promissory notes themselves.  Upon recording the issuance of these shares, we reduced the principal owed by $17,777, accrued interest by $503, increasing Additional Paid in Capital by the sum of those two reductions, or $18,280.  In addition, we recorded reductions in the associated discounts and derivative liabilities in the amounts of $13,739 and 18,519, respectively.

Preferred Stock

On December 30, 2015, the Board of Directors of the Company approved a Series A Super Voting Preferred Stock Certificate of Designation, which sets forth the rights, preferences and privileges, to be known as Series A Super Voting Preferred Stock and filed with the State of Nevada on October 28, 2015. The Company is authorized to issue up to Twenty Million (20,000,000) shares of Series A Super Voting Preferred Stock. Each share of the Series A Super Voting Preferred Stock shall be entitled to the voting equivalent of 100 shares of common stock.

Pursuant to the Certificate of Designation, 20,000,000 shares constitute the Series A preferred stock. The Series A preferred stock is non-convertible, zero-dividend, zero-interest, have no economic rights other than return of any paid-in capital par value and carry super voting rights.

On December 30, 2015, the Company issued 20,000,000 shares of the Company’s Series A Preferred Stock to Daniel Sobolewski, the current CEO.  There is currently no market for the shares of Series A Preferred and they are not convertible into shares of common stock of the Company. The Company received no cash proceeds for the issuance of the shares.

The Preferred Series A issued December 30, 2015 were valued based upon industry specific control premiums and the Company’s market cap at the time of the transaction based on the market price of the common stock.

In valuing the preferred shares we used the Market Approach which is utilized to arrive at an indication of equity value by using quoted market prices of the capital structure as of 12/30/15. The market cap of the Company represents 100% of the minority interest for all outstanding common shares. The Preferred Series A fair value is based on the value of the voting rights.

Managements’ Preferred Series A shares represent a controlling voting interest in the Company and therefore determining the Control Premium is an indication of the Securities value. The Control Premium for the Company is based on publicly traded companies or comparable entities in the Food Processing industry which have been acquired in arm’s–length transactions.

The valuation of the preferred shares as of 12/30/15 used the following inputs:

1.       The common stock price was $0.010;

2.       Market capitalization based on 58,594,889 common shares outstanding; no in-the-money warrants; and 20,000,000 Series A Preferred shares;

3.       A 15.40% premium for the voting preferences;

4.       2,058,594,889 total voting shares/rights and Managements zero additional voting rights represented 97.154% of the total;

5.       The conversion value is $0;

We determined the fair value of these securities to be $90,200.  In recording the issuance of these shares, we increase Preferred Stock by $20,000, Additional Paid in Capital by $70,200, and charged Stock-Based Compensation (an operating expense) with $90,200.

Common Stock Payable

During 2012, the DB Capital Corp. (the Accounting Acquirer in the reverse merger whose equity transactions are retroactively shown in these financial statements) entered into multiple subscription agreements (the “2012 Subscription Agreements”) to raise operating capital, raising $194,870 in cash, and promising a certain amount of common shares of DB Capital in return.  Interest was explicitly stated in the instruments and, as of March 31, 2015 and 2014, was accrued and became part of the stock payable recorded in the equity section of the balance sheet.  The balance of the stock payable at March 31, 2015 and 2014 was $249,342.

On June 1, 2015, the Company retired this stock payable by issuing convertible notes payable to these initial DB Capital investors (see Note 8).

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Note 8 - Convertible Notes Payable

9 Months Ended

Dec. 31, 2015

Notes

Note 8 - Convertible Notes Payable

Note 8 – Convertible Notes Payable

Convertible Notes Payable

The June 1, 2015 Notes

On June 1, 2015, the Company issued convertible notes payable (the “June 1, 2015 Notes”) to several original investors of DB Capital Corp. (see Note 7 reference to the “2012 Subscription Agreements”).  The aggregate stock payable to these investors at March 31, 2015 was $249,342.

The aggregate principal amount of the convertible promissory notes issued on June 1, 2015 was $184,870.  All of these notes have a maturity date of June 1, 2016 and have interest explicitly stated in the payment amount due at maturity.  The aggregate principal and interest due at maturity is $218,745.  The nominal interest rates implicit in these notes range from 14% to 21%, with an average implicit rate of 18%.

The June 1, 2015 Notes may be converted into common stock of the Company at a 50% discount to the applicable bid price of the closing day the conversion is executed.  This conversion feature based on a future, unknown stock price implies an embedded derivative (see below).

In recording the June 1, 2015 Notes, we charged the notes’ aggregate principal amounts ($184,870) against the outstanding stock payable at March 31, 2015 ($249,342), recording a gain of $64,472 on the excess.

On October 27, 2015, we entered into a convertible promissory note with a financing institution to redeem most of these notes (see the discussion below in the section entitled “The October 27, 2015 Redemption Note”.  All but one creditor from the June 1, 2015 group redeemed their notes with the financial institution.  The remaining June 1, 2015 note holder has a principal balance owed at December 31, 2015 of $8,300, an unamortized debt discount of $3,458, accrued interest of $944, and an associated derivative liability of $9,061.

The May 20, 2015 Cash Note

On May 20, 2015, we issued a convertible promissory note (the “May 20, 2015 Cash Note”) for $21,500 in exchange for $20,000 in cash.  The note principal and interest matures on May 20, 2016, and accrues interest at 8%.  The note is convertible at any time into common shares of the Company at a conversion price equal to 50% of the lowest trading price for the twenty trading days prior to notice of conversion. This conversion feature based on a future, unknown stock price implies an embedded derivative (see below).  We immediately recorded the difference between the stated note principal amount of $21,500 and the actual funds received $20,000 as interest expense.

During the nine months ended December 31, 2015, we recorded $975 of nominal interest, amortized $11,400 of debt discount to interest expense, and recorded changes in the fair value of the associated derivative liability.

During the three months ended December 31, 2015, we issued 2,145,202- common shares upon election of the creditor to convert a portion of the outstanding interest and principal to our common shares.  In issuing these shares, we recorded a reduction of principal and interest of $11,500 and $504, respectively, increasing Additional Paid in Capital by those amounts.  In addition, we proportionally reduced the unamortized debt discount by $8,150, charging Interest Expense for that amount, and reduced the derivative liability by $13,656, increasing Additional Paid in Capital in so doing.

At December 31, 2015, unpaid interest and principal amounted to $472 and $10,000, respectively.  Unamortized debt discount was $1,950 and the fair value of the embedded derivative liability was $12,881.

The November 1, 2015 Cash Notes

On November 1, 2015, we issued three convertible promissory notes (“The November 1, 2015 Cash Notes”) to accredited investors in exchange for cash.  The aggregate nominal value of these notes, which is equal to the cash proceeds, is $125,000.

These notes mature on November 1, 2016,  accrue interest due at maturity at 6.5%, and can be converted to common stock at 50% of the applicable bid price on the day the conversion is executed.  Any unpaid principal and interest is automatically converted, at maturity, to common stock at the conversion price. This conversion feature based on a future, unknown stock price implies an embedded derivative (see below).

During the three months ended December 31, 2015, we accrued interest of $1,035, recorded the initial value of their embedded derivative liabilities (see below) of $133,880 and debt discounts of $125,000.  The difference between the initial derivative and the debt discount (i.e., $8,880) was recorded immediately as interest expense.  Additionally, during the three months ended December 31, 2015, we amortized $18,749 to interest expense, and reduced the embedded derivatives to their fair values at December 31, 2015.  Unamortized discounts and the fair value of embedded derivatives at December 31, 2015 for the November 1, 2015 Cash Notes were $106,251 and $125,861, respectively.

The October 26, 2015 Cash Note

On October 26, 2015, we exchanged a $206,000 convertible promissory note for $188,000 in cash.   The note matures on April 26, 2015 and bears no interest until maturity, but bears interest of 12% for unpaid principal after maturity.  After the maturity date, the holder may elect to convert any portion of the unpaid principal and accrued interest into common stock at a 35% discount from the average of the lowest intra-day traded price within the fifteen days prior to a notice of conversion.  The inclusion of a variable conversion price implied an embedded derivative (see below for the calculation of the derivative value) which we recorded as $155,951.

The difference between the nominal value of the note ($206,000) and cash proceeds ($188,000) were combined with the initial derivative value (see below) of $155,951 and recorded as a initial debt discount of $173,951.  For the six months ended December 31, 2015, we amortized $57,984 to interest expense and reduced the related derivative liability to its fair value at December 31, 2015 of $139,392, recording a Change in Fair Value of Derivative of $16,559.

The October 27, 2015 Redemption Note

On October 27, 2015, we entered into an arrangement with six of our seven June 1, 2015 Note Holders to redeem their June 1, 2015 Notes, issuing a new note (the “October 27, 2015 Redemption Note”) to a new creditor in the amount of $188,322 in the process.  The October 27, 2015 Redemption Note matures on April 26, 2016, inherits the 6.5% interest provision of the acquired June 1, 2015 notes (with unpaid interest and principal accruing interest at 12% after maturity) and can be converted to common stock at price which equals the lesser of (a) 60% of the intra-day price for the twenty days preceding a Notice of Conversion or (b) $0.00075.

We recorded the initial value of the embedded derivative (see below) of $177,864 as a debt discount.

During the three months ended December 31, 2015, we accrued $2,030 in nominal interest and amortized $29,113 of debt discount to interest expense.

We treated the redemption of the six June 1, 2015 Notes as an extinguishment of those debts in accordance with ASC 405-20-40-1, Liabilities – Derecognition.  As such, we reduced the principal and interest balances owed of the June 1, 2015 Notes by $176,570 and 10,952, respectively, and recorded an increase in the principal amount owed of the October 27, 2015 note of $188,321 (with the small $800 difference included as a debt discount).

Additionally, we reduced the debt discounts ($116,626) and fair values of their embedded derivatives ($184,073) of the June 1, 2015 Notes to zero, recording increase in Additional Paid in Capital of $67,447 on their extinguishment. 

During the three months ended December 31, 2015, we issued 8,369,200 common shares upon conversion by the creditor of the October 27, 2015 Redemption Note.  In recording these issuances, we reduced outstanding principal by $6,277.  Additionally, we proportionally reduced the unamortized debt discount and fair values of the associated embedded derivative by $5,589 and $4,863, respectively.  We charged the $5,589 to Interest Expense and increased Additional Paid in Capital for the $4,863.

We amortize debt discounts on all outstanding instruments to interest expense over the life of the notes (none of which exceeds one year) on a straight line basis (which approximates the amortization which would have been recorded using the Effective Interest Method).  For the nine months ended December 31, 2015, we amortized an aggregate of $195,772 of debt discounts to interest expense.

Derivative Liabilities

We evaluated our convertible promissory notes for embedded derivatives according to Statement of Financial Accounting Standard ASC 820-10-35-37 Fair Value in Financial Instruments; Statement of Financial Accounting Standard ASC 815 Accounting for Derivative Instruments and Hedging Activities; and ASC 815-40.

The June 1, 2015 Notes

We evaluated the June 1, 2015 Notes’ embedded derivatives at June 30, 2015, September 30, 2015, October 27, 2015 (the date of conversion of six of the seven notes), and December 31, 2015 using the following assumptions:

·         The notes convert with an initial conversion price of 50% of the closing bid at conversion;

·         An event of default would occur 0% of the time (there are no default provisions)

·         The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 159%-162% (194%-209% at December 31, 2015) .

·         The company would not redeem the notes prior to maturity and would have no reset events; and

·         Risk free rates for the remaining term of the notes was in the range of 0.23% to 0.33% (0.08% to 0.26% for December 31, 2015).

The following table shows the changes in the fair values of the derivatives for the June 1, 2015 Notes from their issuance to December 31, 2015:

		06/30/15		09/30/15		10/27/15		12/31/15
Beginning balance	$	-	$	208,678	$	208,014	$	9,339
Initial value at issuance		213,919		-		-		-
Change in fair value		(5,241)		(664)		(14,602)		(278)
Decreases from redemptions		-		-		(184,073)		-
Ending balance	$	208,678	$	208,014	$	9,339	$	9,061

The May 20, 2015 Cash Note

We evaluated the May 20, 2015 Cash Note’s embedded derivative at June 30, 2015, September 30, 2015 and December 31, 2015 using the following assumptions:

·         The notes convert with an initial conversion price of 50% of the low bid out of the 20 previous days;

·         An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 10%;

·         The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 159%-162% (194%-209% at December 31, 2015).

·         The company would not redeem the notes prior to maturity and would have no reset events; and

·         Risk free rates for the remaining term of the notes was in the range of 0.23% to 0.33% (0.08% to 0.26% for December 31, 2015).

The following table shows the changes in the fair values of the derivatives for the May 20, 2015 Cash Note from issuance to December 31, 2015:

		06/30/15		09/30/15		12/31/15
Beginning balance	$	-	$	34,530	$	16,329
Initial value at issuance		33,654		-		-
Change in fair value		876		(4,545)		(3,448)
Reductions from conversions		-		(13,656)		-
Ending balance	$	34,530	$	16,329	$	12,881

The November 1, 2015 Cash Notes

We evaluated the November 1, 2015 Cash Notes’ embedded derivative at December 31, 2015 using the following assumptions:

·         The notes convert with an initial conversion price of 50% of the low bid out of the 20 previous days;

·         An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 10%;

·         The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 194%-209%;

·         The company would not redeem the notes prior to maturity and would have no reset events; and

·         Risk free rates for the remaining term of the notes was in the range of 0.08% to 0.26%.

Initial derivative aggregate values for the November 1, 2015 Cash Notes were $133,880.  We recorded a reduction in the fair value of these liabilities at December 31, 2015 of $8,019, resulting in a gain of that amount.  The fair value of the liabilities at December 31, 2015 was $125,861.

The October 26, 2015 Cash Note

We evaluated the October 26, 2015 Cash Note’s embedded derivative at December 31, 2015 using the following assumptions:

·         The notes convert with an initial conversion price of 50% of the low bid out of the 20 previous days;

·         An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 10%;

·         The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 194%-209%;

·         The company would not redeem the notes prior to maturity and would have no reset events; and

·         Risk free rates for the remaining term of the notes was in the range of 0.08% to 0.26%.

The initial value of the embedded derivative was $155,951.  We reduced that amount to the fair value at December 31, 2015 of $139,392, recognizing a gain of $16,559 for the three months ended December 31, 2015.

The October 27, 2015 Redemption Note

We evaluated the October 26, 2015 Cash Note’s embedded derivative at December 31, 2015 using the following assumptions:

·         The notes convert with an initial conversion price of 50% of the low bid out of the 20 previous days;

·         An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 10%;

·         The projected annual volatility curve for each valuation period was based on the historical annual volatility of the company in the range 194%-209%;

·         The company would not redeem the notes prior to maturity and would have no reset events; and

·         Risk free rates for the remaining term of the notes was in the range of 0.08% to 0.26%.

·         The initial value of the embedded derivative was $155,951.  We reduced that amount to the fair value at December 31, 2015 of $139,392, recognizing a gain of $16,559 for the three months ended December 31, 2015.

The initial value of the derivative at issuance was $177,864.  During the three months ended December 31, 2015, we reduced that amount by $4,863 due to conversions into common stock by the creditor and an additional $23,363 from a change in the derivative’s fair value.

The following table summarizes the changes in the derivative liabilities for the nine months ended December 31, 2015 for all instruments:

Derivative liabilities, March 31, 2015	$	-
New additions from note issuances		715,268
Redemption of June 1, 2015 convertible notes		(184,073)
Retirement from conversions of debt to equity		(18,519)
Changes in fair values of derivatives		(75,843)
Balances, December 31, 2015	$	436,833

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Note 9 - Income Taxes

9 Months Ended

Dec. 31, 2015

Notes

Note 9 - Income Taxes

Note 9 – Income Taxes

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

For the nine months ended December 31, 2015 and the year ended March 31, 2015, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31 and March 31, 2015, the Company had approximately $567,925 and $156,934 of federal net operating losses, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2030.

The components of the Company’s deferred tax asset are as follows:

		December 31, 2015		March 31, 2015
Net operating loss carry-forwards	$	567,925	$	156,934
Deferred tax asset		198,774		54,927
Valuation allowance		(198,774)		(54,927)
Net deferred tax asset	$	-	$	-

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Note 10 - Legal Proceedings

9 Months Ended

Dec. 31, 2015

Notes

Note 10 - Legal Proceedings

Note 10 – Legal Proceedings

On March 20, 2015, we were sued in the 157th Judicial District Court of Harris County, Texas for damages relating to our non-payment of certain professional fees to provide an independent technical and economic due diligence report to help the Company determine the oil and gas potential for its West Ranch Prospect.  In Gaffney Cline and Associates, Inc. v .Gray Fox Petroleum Corp. (cause no. 2015-10468), the Plaintiff, Gaffney Cline & Associates, Inc., (“the Plaintiff” or “Gaffney Cline”), sought damages in the amount of $83,188, pre-judgment interest in the amount of $7,352, and legal costs of $8,852, for a total of $99,392.  In addition, the Plaintiff sought additional contingent legal fees in the amount of $5,000 and $10,000 if, upon appeal to an Appellate Court and the Texas Supreme Court, respectively, the plaintiff is the successful party.  At December 31, 2015 and March 31, 2015, we included $86,632 (after adjustments for interest accruals and payments) and $99,392 in Accounts Payable and Accrued Liabilities, respectively, reflecting this judgment.

On April 17, 2015, the Harris Country District Court entered a judgment for the Plaintiff in the requested amount of $99,392.

On May 14, 2015, the Plaintiff filed an Application for Turnover After Judgment and for Appointment of Receiver (“the Receivership Application”) for the purpose of liquidating certain non-exempt property to satisfy the outstanding judgment.

On June 2, 2015, at a court hearing to consider the Receivership Application, the 157th Court denied the Receivership Application, but would allow discovery answer and review and a second Receivership Application should the Plaintiff wish to re-file.  On June 19, 2015, the Plaintiff filed a second Receivership Application.  On July 7, 2015, after hearing the payment schedule proposed by the defendant (the Company), the Court ruled that that the Court will enter an order appointing a post-judgment turnover receiver to take control of Gray Fox’s non-exempt assets (essentially, all the assets of the Company) unless the defendant/Company pays $1,000 on the fifteenth of each month beginning on July 15, 2015 (all of which have been paid through the date of this report on Form 10-Q) and $10,000 on the sixth month following July 15, 2015 (the first payment of which was paid December 15, 2015) and each six months thereafter until the obligation is satisfied in full.

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Note 11 - Subsequent Events

9 Months Ended

Dec. 31, 2015

Notes

Note 11 - Subsequent Events

Note 11 – Subsequent Events

Subsequent to December 31, 2015, we issued 7,998,692 shares for conversion of a portion of the May 20, 2015 Cash Note; 31,226,633 shares for conversion of a portion of the October 27, 2015 Redemption Note; 7,233,116 for conversion of a portion of the June 1, 2015 Notes and 100,000,000 shares to Daniel Sobolewski, our Chief Executive Officer.

On January 7, 2016, we issued a convertible promissory note with a nominal value of $62,500 for $50,000 in cash.

On January 23, 2016, we signed a Franchise Agreement with Graffiti Junktion Restaurants to license and operate three restaurants under the Graffiti Junktion name, each upon the approval of the Franchisor. We paid $35,000 apiece for the rights ($105,000 total) and we are to pay 5% of monthly gross sales.  The Franchise has an initial term of ten years and can be renewed for three additional five-years periods if the restaurants are in good standing with the franchisor.  

The Franchise is owned by us (51%), Tagged Restaurants Corp. (29%), a company created and owned 100% by our Chief Executive Officer, Daniel Sobolewski, and Daniel Sobolewski individually (20%).

On February 4, 2016, we signed a lease for our first franchise location at 415 Main St., Daytona Beach, FL 32118.  The location is 3,880 square feet and is located in the heart of Daytona Beach.  The Lease term overall is renewable for up to 20 yrs with the first right of refusal to purchase.  The monthly rent is $5,000 for the first year, and increases by 3% each year thereafter.  It is a two story facility with a balcony, full kitchen, and has an occupancy of 150.

We have evaluated subsequent events through the date this report was issued.

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Note 1 - Nature of Business and Significant Accounting Policies: Nature of Business (Policies)

9 Months Ended

Dec. 31, 2015

Policies

Nature of Business

Nature of Business

Gray Fox Petroleum Corp. (formerly Viatech Corp.) was incorporated in the State of Nevada on September 22, 2011. The Company was formed to provide interior design and architectural visualization, 3D rendering and architectural animation services. On May 31, 2013, however, the Company abandoned its plans to enter into the interior design and architectural visualization business and the majority stockholder sold his interest in the Company.

A complete history of the Company between May 31, 2013 and March 31, 2014 can be found in Item 1 of our Annual Report on Form 10-K filed on June 27, 2014 and is hereby incorporated by reference.

As is more thoroughly described in Note 3 to the financial statements, Lawrence Pemble, our Chief Executive Officer and Board Chairman, resigned from both positions on April 2, 2015 and sold 100% of his position to DB Capital Corp, a Florida Corporation.  DB Capital appointed Daniel Sobolewski as Chief Executive Officer and Board Chairman.  Additionally, DB Capital merged with Gray Fox Petroleum Corp. on April 3, 2015 by transferring a 70% interest in two non-controlling interests to Gray Fox, distributing the controlling interest in Gray Fox and the remaining 30% interest in the restaurants to Daniel Sobolewski and dissolving DB Capital Corp.

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Note 1 - Nature of Business and Significant Accounting Policies: Basis of Presentation (Policies)

9 Months Ended

Dec. 31, 2015

Policies

Basis of Presentation

Basis of Presentation

The interim condensed financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in U.S. Dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

The Company has adopted a fiscal year end of March 31.

These statements reflect all adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. These interim condensed financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended March 31, 2015 and notes thereto included in the Company’s Annual Report on Form 10-K as of March 31, 2015, filed on June 30, 2015. The Company follows the same accounting policies in the preparation of interim reports.

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Note 1 - Nature of Business and Significant Accounting Policies: Fair Value of Financial Instruments (Policies)

9 Months Ended

Dec. 31, 2015

Policies

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Under ASC 820-10-05, the Financial Accounting Standards Board (“FASB”) established a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, prepaid expenses and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments.

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Note 1 - Nature of Business and Significant Accounting Policies: Revenue Recognition (Policies)

9 Months Ended

Dec. 31, 2015

Policies

Revenue Recognition

Revenue Recognition

Interest and Dividend Income

We record interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution.  For equity investments for which we have a 5% or less equity position, we recognize interest and dividend income when received.

In accordance with our valuation policies, we evaluate accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service all of its debt or other obligations, we will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security's status significantly improves regarding the debtor's ability to service the debt or other obligations, or if a loan or debt security is fully impaired, sold or written off, we remove it from non-accrual status.

For the nine months ended December 31, 2015, our only interest and dividend income was from our investment in Graffiti Junktion restaurants which were recorded on a cash basis.

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Note 1 - Nature of Business and Significant Accounting Policies: Income Taxes (Policies)

9 Months Ended

Dec. 31, 2015

Policies

Income Taxes

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such asset will not be recovered through future operations.

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Note 1 - Nature of Business and Significant Accounting Policies: Uncertain Tax Positions (Policies)

9 Months Ended

Dec. 31, 2015

Policies

Uncertain Tax Positions

Uncertain Tax Positions

In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Various taxing authorities may periodically audit the Company’s income tax returns. These audits may include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter for which an allowance has been established is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.

The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

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Note 1 - Nature of Business and Significant Accounting Policies: Stock-based Compensation (Policies)

9 Months Ended

Dec. 31, 2015

Policies

Stock-based Compensation

Stock-Based Compensation

The Company adopted FASB guidance on stock based compensation upon inception at September 22, 2011. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, are to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.

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Note 1 - Nature of Business and Significant Accounting Policies: Basic and Diluted Loss Per Share (Policies)

9 Months Ended

Dec. 31, 2015

Policies

Basic and Diluted Loss Per Share

Basic and Diluted Loss per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

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Note 1 - Nature of Business and Significant Accounting Policies: Recently Issued Accounting Pronouncements (Policies)

9 Months Ended

Dec. 31, 2015

Policies

Recently Issued Accounting Pronouncements

Recent Accounting Pronouncements

In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805) (“ASU 2015-16”). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

In August, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”). The amendment in this ASU defers the effective date of ASU No. 2014-09 for all entities for one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods with that reporting period.

In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest–Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”), which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-03 on its balance sheets.

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Note 5 - Investments: Investments (Tables)

9 Months Ended

Dec. 31, 2015

Tables/Schedules

Investments

	Investments at Fair Value
		12/31/15		3/31/15
Wialan Technologies common stock	$	-	$	25,000
Equity participation in Graffiti Junktion restaurants		75,000		75,000
Total investments	$	75,000	$	100,000

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Note 6 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables)

9 Months Ended

Dec. 31, 2015

Tables/Schedules

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

	Fair Value Measurements at December 31, 2015
	Level 1		Level 2		Level 3
Assets
Investments at fair value	$	75,000	$	-	$	-
Total assets	$	75,000	$	-	$	-
Liabilities
Convertible notes payable		-		531,345		-
Discounts on convertible notes		-		(371,588)		-
Derivative liability		-		-		436,833
Total liabilities	$	-	$	159,757	$	436,833
	Fair Value Measurements at March 31, 2015
	Level 1		Level 2		Level 3
Assets
Investments and fair value	$	100,000	$		$
Total assets	$	100,000	$	-	$	-
Liabilities
Total liabilities	$	-	$	-	$	-

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Note 8 - Convertible Notes Payable: Schedule of Changes in Fair Value of Plan Assets (Tables)

9 Months Ended

Dec. 31, 2015

June 1, 2015 Note

Schedule of Changes in Fair Value of Plan Assets

		06/30/15		09/30/15		10/27/15		12/31/15
Beginning balance	$	-	$	208,678	$	208,014	$	9,339
Initial value at issuance		213,919		-		-		-
Change in fair value		(5,241)		(664)		(14,602)		(278)
Decreases from redemptions		-		-		(184,073)		-
Ending balance	$	208,678	$	208,014	$	9,339	$	9,061

May 20, 2015 Cash Note

Schedule of Changes in Fair Value of Plan Assets

		06/30/15		09/30/15		12/31/15
Beginning balance	$	-	$	34,530	$	16,329
Initial value at issuance		33,654		-		-
Change in fair value		876		(4,545)		(3,448)
Reductions from conversions		-		(13,656)		-
Ending balance	$	34,530	$	16,329	$	12,881

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Note 8 - Convertible Notes Payable: Schedule of Derivative Liabilities at Fair Value (Tables)

9 Months Ended

Dec. 31, 2015

Tables/Schedules

Schedule of Derivative Liabilities at Fair Value

Derivative liabilities, March 31, 2015	$	-
New additions from note issuances		715,268
Redemption of June 1, 2015 convertible notes		(184,073)
Retirement from conversions of debt to equity		(18,519)
Changes in fair values of derivatives		(75,843)
Balances, December 31, 2015	$	436,833

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Note 9 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables)

9 Months Ended

Dec. 31, 2015

Tables/Schedules

Schedule of Deferred Tax Assets and Liabilities

		December 31, 2015		March 31, 2015
Net operating loss carry-forwards	$	567,925	$	156,934
Deferred tax asset		198,774		54,927
Valuation allowance		(198,774)		(54,927)
Net deferred tax asset	$	-	$	-

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Note 1 - Nature of Business and Significant Accounting Policies: Nature of Business (Details)	9 Months Ended
	Dec. 31, 2015
Details
Entity Incorporation, State Country Name	Nevada
Entity Incorporation, Date of Incorporation	Sep. 22, 2011

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Note 2 - Going Concern (Details) - USD ($)	Dec. 31, 2015	Mar. 31, 2015
Details
Accumulated deficit	$ 1,729,325	$ 156,934
Working Capital Deficit	$ 614,604

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Note 3 - Business Combination (Details)	9 Months Ended
	Dec. 31, 2015 shares
Details
Shares Acquired in Exchange for a Promissory Note	19,400,000

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Note 4 - Related Party Transactions (Details) - Chief Executive Officer - USD ($)	3 Months Ended		9 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Mar. 31, 2015
Shares issued for officer compensation			$ 1,071,200
Preferred stock shares issued	20,000,000		20,000,000
Issuance of preferred stock			$ 90,200
Proceeds from Contributed Capital		$ 33,817
Officers' Compensation	$ 69,000
Increase (Decrease) in Accrued Salaries	22,500
Compensation	14,039
Employee-related Liabilities, Current	$ 8,461		$ 8,461
Common Stock
Represents the SharesIssuedForOfficerStockPayableShares (number of shares), during the indicated time period.				1,000,000
Shares issued for officer compensation - shares			20,600,000

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Note 5 - Investments: Investments (Details) - USD ($)	Dec. 31, 2015	Mar. 31, 2015
Investments at fair value	$ 75,000	$ 100,000
Wialan Technologies
Investments at fair value		25,000
Graffiti Junktion restaurants
Investments at fair value	$ 75,000	$ 75,000

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Note 5 - Investments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Mar. 31, 2015
Investments at fair value	$ 75,000		$ 75,000		$ 100,000
Unrealized gains or (losses) on trading securities		$ (41,000)	30,000	$ (65,499)
Change in investments			15,536	19,027
Realized gains or (losses) on trading securities			(39,464)	18,593
Dividends	4,438	$ 3,292	12,667	$ 3,292
Wialan Technologies
Investments at fair value					25,000
Unrealized gains or (losses) on trading securities			30,000
Change in investments			15,536
Realized gains or (losses) on trading securities			39,464
Graffiti Junktion restaurants
Investments at fair value	$ 75,000		$ 75,000		$ 75,000

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Note 6 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($)	Dec. 31, 2015	Mar. 31, 2015
Investments at fair value	$ 75,000	$ 100,000
TOTAL ASSETS	134,791	100,044
Debt Discount	371,588	0
Derivative liabilities	436,833
TOTAL CURRENT LIABILITIES	749,395	6,083
Fair Value, Inputs, Level 1
Investments at fair value	75,000	100,000
TOTAL ASSETS	75,000	$ 100,000
Fair Value, Inputs, Level 2
Convertible notes payable, net of discounts of $189,171 and $0 at June 30, 2015 and March 31, 2015, respectively	531,345
Debt Discount	(371,588)
TOTAL CURRENT LIABILITIES	159,757
Fair Value, Inputs, Level 3
Derivative liabilities	436,833
TOTAL CURRENT LIABILITIES	$ 436,833

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Note 7 - Stockholders' Equity (Details) - USD ($)	9 Months Ended	12 Months Ended
	Dec. 31, 2015	Mar. 31, 2012	Mar. 31, 2015	Mar. 31, 2014
Common stock shares authorized	675,000,000		675,000,000
Common stock par value	$ 0.001		$ 0.001
Preferred stock shares authorized	20,000,000		20,000,000
Preferred stock par value	$ 0.001		$ 0.001
Common stock shares issued	69,109,291		37,994,889
Common stock shares outstanding	69,109,291		37,994,889
Shares issued for officer compensation	$ 1,071,200
Shares issued for conversion of debt	$ 18,280
Preferred stock shares issued	20,000,000		0
Issuance of preferred stock	$ 90,200
Proceeds from Common Stock Payable		$ 194,870
Common stock payable			$ 249,342	$ 249,342
Common Stock
Shares issued for officer compensation - shares	20,600,000
Shares issued for officer compensation	$ 20,600
Shares issued for conversion of debt - shares	10,514,402
Shares issued for conversion of debt	$ 10,514
Series A Preferred Stock
Issuance of preferred stock	20,000
Additional Paid in Capital
Shares issued for officer compensation	1,050,600
Shares issued for conversion of debt	7,766
Issuance of preferred stock	$ 70,200

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Note 8 - Convertible Notes Payable (Details) - USD ($)	9 Months Ended
	Dec. 31, 2015	Mar. 31, 2015	Mar. 31, 2014
Common stock payable		$ 249,342	$ 249,342
Stock payable converted to debt	$ 184,870
Gain on conversion of stock payable to convertible notes payable	64,472
Convertible notes payable, net of discounts of $371,588 and $0 at December 31, 2015 and March 31, 2015, respectively	159,757
Proceeds from convertible notes payable	$ 333,000
Common Stock
Shares issued for conversion of debt - shares	10,514,402
June 1, 2015 Note
Stock payable converted to debt	$ 184,870
Aggregate Principle and interest	218,745
Gain on conversion of stock payable to convertible notes payable	$ 64,472
June 1, 2015 Note | Minimum
Fair Value Assumptions, Expected Volatility Rate	194.00%
Fair Value Assumptions, Risk Free Interest Rate	0.08%
June 1, 2015 Note | Maximum
Fair Value Assumptions, Expected Volatility Rate	209.00%
Fair Value Assumptions, Risk Free Interest Rate	0.26%
May 20, 2015 Cash Note
Convertible notes payable, net of discounts of $371,588 and $0 at December 31, 2015 and March 31, 2015, respectively	$ 21,500
Proceeds from convertible notes payable	20,000
Debt Instrument, Increase, Accrued Interest	$ 472
May 20, 2015 Cash Note | Minimum
Fair Value Assumptions, Expected Volatility Rate	194.00%
Fair Value Assumptions, Risk Free Interest Rate	0.08%
May 20, 2015 Cash Note | Maximum
Fair Value Assumptions, Expected Volatility Rate	209.00%
Fair Value Assumptions, Risk Free Interest Rate	0.26%
May 20, 2015 Cash Note | Common Stock
Shares issued for conversion of debt - shares	2,145,202
November 1, 2015 Cash Notes
Proceeds from convertible notes payable	$ 125,000
November 1, 2015 Cash Notes | Minimum
Fair Value Assumptions, Expected Volatility Rate	194.00%
Fair Value Assumptions, Risk Free Interest Rate	0.08%
November 1, 2015 Cash Notes | Maximum
Fair Value Assumptions, Expected Volatility Rate	209.00%
Fair Value Assumptions, Risk Free Interest Rate	0.26%
October 26, 2015 Cash Note
Convertible notes payable, net of discounts of $371,588 and $0 at December 31, 2015 and March 31, 2015, respectively	$ 206,000
Proceeds from convertible notes payable	$ 188,000
October 26, 2015 Cash Note | Minimum
Fair Value Assumptions, Expected Volatility Rate	194.00%
Fair Value Assumptions, Risk Free Interest Rate	0.08%
October 26, 2015 Cash Note | Maximum
Fair Value Assumptions, Expected Volatility Rate	209.00%
Fair Value Assumptions, Risk Free Interest Rate	0.26%
October 27, 2015 Redemption Note
Convertible notes payable, net of discounts of $371,588 and $0 at December 31, 2015 and March 31, 2015, respectively	$ 188,322
October 27, 2015 Redemption Note | Minimum
Fair Value Assumptions, Expected Volatility Rate	194.00%
Fair Value Assumptions, Risk Free Interest Rate	0.08%
October 27, 2015 Redemption Note | Maximum
Fair Value Assumptions, Expected Volatility Rate	209.00%
Fair Value Assumptions, Risk Free Interest Rate	0.26%
October 27, 2015 Redemption Note | Common Stock
Shares issued for conversion of debt - shares	8,369,200

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Note 8 - Convertible Notes Payable: Schedule of Derivative Liabilities at Fair Value (Details)	3 Months Ended	9 Months Ended
	Dec. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)
Details
Derivative liabilities	$ 436,833	$ 436,833
Change in value of derivative	$ 66,269	$ (75,843)

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Note 9 - Income Taxes (Details) - USD ($)	Dec. 31, 2015	Mar. 31, 2015
Details
Operating Loss Carryforwards	$ 567,925	$ 156,934

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Note 9 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Dec. 31, 2015	Mar. 31, 2015
Details
Deferred Tax Assets, Operating Loss Carryforwards	$ 567,925	$ 156,934
Deferred Tax Assets, Gross	198,774	54,927
Deferred Tax Assets, Valuation Allowance	$ (198,774)	$ (54,927)

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Note 10 - Legal Proceedings (Details) - USD ($)	9 Months Ended
	Dec. 31, 2015	Mar. 31, 2015
Accounts payable and accrued expenses	$ 144,344	$ 6,083
Gaffney Cline and Associates, Inc. v. Gray Fox Petroleum Corp.
Accounts payable and accrued expenses	86,632	$ 99,392
Loss Contingency, Damages Awarded, Value	$ 99,392