NOTE 10: STOCKHOLDERS' EQUITY

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

NOTE 10: STOCKHOLDERS' EQUITY

Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.10 per share.  As of March 31, 2012, the Company has 100 shares of preferred stock issued and outstanding.

The 100 shares of Series A Preferred Stock, issued to an officer/director as payment for $500,000 in promissory notes, are convertible into the number of shares of common stock sufficient to represent 40 percent (40%) of the fully diluted shares outstanding after their issuance. The Series A Preferred Stock pays an eight percent (8%) dividend. The dividends are cumulative and payable quarterly. The Series A Preferred Stock carries liquidating preference, over all other classes of stock, equal to the amount paid for the stock plus any unpaid dividends. The Series A Preferred Stock provides for voting rights on an "as converted to common stock" basis.

During the years ended March 31, 2012 and 2011, the Company incurred $40,000 in preferred stock dividends, respectively.  As of March 31, 2012 and 2011, dividends in the amount of $35,450 and $48,200, respectively,  had not been paid, and are carried on the Company’s balance sheet as Dividends Payable to Related Party.

The holders of the Series A Preferred Stock have the right to convert the preferred stock into shares of common stock such that if converted simultaneously, they shall represent 40 percent (40%) of the fully diluted shares outstanding after their issuance. Fully diluted shares outstanding is computed as the sum of the number of shares of common stock outstanding plus the number of shares of common stock issuable upon exercise, conversion or exchange of outstanding options, warrants, or convertible securities.

Common Stock

The Company has authorized 3,000,000,000 shares of common stock with a par value of $0.001 per share.  As of March 31, 2012 and 2011, the Company has 767,575,108 and 479,556,004 shares of common stock issued and outstanding.

Common stock issuances during the year ended March 31, 2012:

The Company issued 38,000,000 shares of common stock to consultants for services provided, pursuant to consulting agreements.  The value of these shares in the amount of $45,946 was charged to operations.

The Company issued 250,019,104 shares of common stock for the conversion of a note payable and assumption of debt.  The value of these shares in the amount of $185,923 has been credited to the note payable.

The Company recorded a beneficial conversion feature on a note payable in the amount of $46,350 that was credited to Additional Paid-in Capital.

Common stock issuances during the year ended March 31, 2011:

The Company issued 52,300,000 shares of common stock to consultants for services provided, pursuant to consulting agreements.  The value of these shares in the amount of $190,050 was charged to operations.

The Company issued 84,144,932 shares of common stock for the conversion of a note payable and assumption of debt.  The value of these shares in the amount of $428,194 has been credited to the note payable.

The Company recorded a beneficial conversion feature on a note payable in the amount of $170,000 that was credited to Additional Paid-in Capital.

The Company issued 135,650,000 shares of common stock for cash in the amount of $542,600

The Company issued 22,500,000 shares of common stock to directors of the Company for director’s fees.  The value of these shares in the amount of $89,250 was charged to operations.

The Company issued 43,565,000 shares of common stock for financing fees. The value of these shares in the amount of $114,260 was charged to operations.

The Company cancelled 23,602,121 shares of common stock which had previously been issued in previous fiscal years, and credited the par value of $23,602 to par value, $87,439 went to common stock subscribed, and $6,398 went to additional paid in capital, during the year ended March 31, 2011..

The Company issued 294,000 shares of common stock to interest holders in the Grace Wells pursuant to the buyout agreement.  The value of these shares in the amount of $1,088 was charged to Oil and Gas properties account.

Options

There are no stock options outstanding.

Warrants

The following table summarizes the warrants outstanding and the related prices for the shares of the Company’s common stock issued to non-employees of the Company at March 31, 2012:

Warrants Outstanding						Warrants Exercisable
				Weighted Average						Weighted Average
Exercise		Number		Remaining Contractual		Weighted Average		Number		Remaining Contractual
Prices		Outstanding		Life (years)		Exercise Price		Exercisable		Life (years)
$	0.10		500,000		0.62	$	0.10		500,000	0.62
	0.20		125,000		1.69		0.20		125,000	1.69
	0.60		150,000		1.96		0.60		150,000	1.96
			775,000		1.05				775,000	1.05

Transactions involving warrants are summarized as follows:

	Number of Shares		Weighted Average Price Per Share
Outstanding at March 31, 2011		775,000	$	0.21
Granted		-		-
Exercised		-		-
Cancelled or expired		-		-
Outstanding at March 31, 2012		775,000	$	0.21