Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited condensed consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.

As used in this quarterly report, the terms “we”, “us”, “our company”, mean Lithium Exploration Group, Inc. a Nevada corporation, and our wholly owned subsidiary, Alta Disposal Ltd., an Alberta, Canada corporation, our partially owned subsidiary, Alta Disposal Morinville Ltd., an Alberta, Canada corporation, unless otherwise indicated.

Corporate History

We were incorporated on May 31, 2006 in the State of Nevada under the name “Mariposa Resources, Ltd.”. Effective November 30, 2010, we changed our name to “Lithium Exploration Group, Inc.,” by way of a merger with our wholly-owned subsidiary Lithium Exploration Group, Inc., which was formed solely for the change of name.

Our executive offices are located at 3800 N Central Avenue, Suite 820, Phoenix, AZ 85012, and our telephone number is (480) 641-4790. We also have an office at 840 6th Ave SW Suite 300, Calgary, Alberta T2P 3E5. The phone number for our Calgary office is 403-930-1925.

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On October 18, 2013, our company, through our then wholly owned subsidiary, Alta Disposal Ltd. (formerly 1617437 Alberta Ltd.), an Alberta, Canada corporation, completed the acquisition of 51% of the shares of Blue Tap Resources Inc. for total payment of CAD$466,547. As of September 30, 2013, CDN $300,000 (US$294,908) was paid regarding the acquisition. As a result of the share acquisition, Blue Tap Resources Inc. is now a partially owned subsidiary of our company through our wholly owned subsidiary, Alta Disposal Ltd. On January 22, 2014, Blue Tap Resources Inc. changed its name to Alta Disposal Morinville Ltd.

On August 20, 2013, we entered into a letter of intent with Tero Oilfield Services Ltd., a private company, pursuant to which Tero agreed to sell up to 75% of the issued and outstanding common shares of Tero to our company in exchange for payment in the amount of $1,500,000.

On March 1, 2014, Alta Disposal Ltd., our wholly-owned subsidiary, entered into a share purchase agreement with Tero and Garry Hofmann, the sole shareholder of Tero. Pursuant to the agreement, Mr. Hofmann agreed to sell and we agreed to purchase 50% of the issued and outstanding common shares of Tero in exchange for an aggregate of CAD$1,000,000. As part of the share purchase by Alta Disposal, on February 22, 2014, Tero declared a dividend in the amount of $307,104, payable to Mr. Hofmann by way of a promissory note. As a result of the share purchase agreement, Tero is now a partially owned (50%) subsidiary of our company.

Additionally, Alta Disposal, Tero and Mr. Hofmann entered into an option agreement entitling Alta Disposal to purchase up to an additional 25% of the issued and outstanding common shares of Tero from Mr. Hofmann exercisable at a price of $500,000 for a period of one year. We have subsequently sold our interest in Tero on May 1, 2015 as further described below.

On October 17, 2014, we amended our Articles of Incorporation, which amendment was filed with the Nevada Secretary of State on October 17, 2014, to increase the authorized capital of our common shares from 500,000,000 common shares, par value $0.001 to 2,000,000,000 common shares, par value $0.001. Our authorized capital consists of 2,000,000,000 common shares and 100,000,000 preferred shares, all with a par value of $0.001.

On January 19, 2015, we received written consent from our company’s board of directors to effect a reverse stock split of our issued and outstanding shares of common stock on a basis of 20 old shares of common stock for 1 new share of common stock. Stockholders of our company originally approved the reverse stock split on October 14, 2014 at a special meeting. Our authorized capital will not be affected by the reverse stock split.

On May 1, 2015, our company entered into a share purchase agreement with an individual and disposed of our 50% interest in Tero in consideration of $300,000.

On June 22, 2015, in accordance with our articles of incorporation, our board of Directors has designated 250,000 of our 100,000,000 authorized shares of Preferred Stock as Series “A” Preferred Stock. The Series “A’ Preferred Stock, par value $0.001, will rank senior to our common stock, carrying general voting rights with the common stock at the rate of 62 votes per share. The Series “A” Preferred Stock will be deemed cancelled within 1 year of issuance and are not entitled to share in dividends or other distributions. So long as any shares of Series “A” Preferred Stock are outstanding, the affirmative vote of not less than 75% of those outstanding shares of Series “A” Preferred Stock will be required for any change to our Articles of Incorporation.

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On July 9, 2015 our board of directors approved a settlement agreement dated June 25, 2015 among our company, JDF Capital Inc., and our wholly owned subsidiary, Alta Disposal Ltd. Previously, pursuant to a General Security Agreement dated July 22, 2014, JDF Capital Inc. was granted a first ranking security interest over all current and future assets of Alta Disposal Ltd. in full guarantee of $708,000 loan to our Company. Pursuant to the Settlement Agreement, JDF Capital Inc. and its assign, Blue Citi LLC, have agreed to release and discharge their general security interest in consideration of the issuance of 130,000 shares of Series “A” Preferred Stock. The 130,000 shares of Series “A” Preferred Stock were relinquished and cancelled by agreement with Blue Citi effective December 5, 2015 .

Effective September 4, 2015, our company entered into an Asset Purchase Agreement with Cancen Oil Canada whereby we sold all right, title and interest of Alta Disposal Morinville Ltd. assets for total purchase price of CAD$10,000 (approximately USD$7,531.25) .

On July 13, 2015 our company's directors approved an increase to our authorized capital from 2,000,000,000 shares of common stock, par value $0.001 to 10,000,000,000 shares of common stock, par value of $0.001 per share and a reverse stock split on a basis of up to 200 old shares of common stock for one (1) share of common stock. The increase of authorized capital and stock split was approved by shareholders on July 13, 2015. A Definitive Schedule 14C was filed with United States Securities and Exchange Commission ("SEC") on August 6, 2015. On September 9, 2015, we filed with the Nevada Secretary of State a Certificate of Amendment increasing our authorized capital from 2,000,000,000 shares of common stock, par value $0.001 to 10,000,000,000 shares of common stock, par value of $0.001 per share. The reverse split became effective with the Over-the-Counter Bulletin Board at the opening of trading on September 30, 2015. Effective September 30, 2015, our new CUSIP number is 53680P308.

Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.

Disclosure Adjustments for Reverse Stock Split

On January 19, 2015, our board of directors consented to effect a reverse stock split of our issued and outstanding shares of common stock on a basis of 20 old shares of common stock for one 1 new share of common stock. The reverse stock split was reviewed and approved for filing by the FINRA effective February 25, 2015. Our authorized capital was not affected by the reverse stock split.

On July 13, 2015, our board of directors consented to effect a reverse stock split of our issued and outstanding shares of common stock on a basis of 200 old shares of common stock for 1 new share of common stock. The reverse stock split was reviewed and approved for filing by the FINRA effective September 30, 2015. Our authorized capital was not affected by the reverse stock split.

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In this Quarterly Report and in the accompanying financial statements and notes, the above described reverse splits are reflected retrospectively in the descriptions of shares and warrants, and their corresponding issuance and exercise prices, except where otherwise indicated.

Our Current Business

We are corporation engaged principally in the acquisition, exploration, and development of resource properties. Through our subsidiary Alta Disposal Morinville Ltd., we also operate in the waste water disposal industry.

Assignment Agreement with Lithium Exploration VIII Ltd.

On December 16, 2010, we entered into an assignment agreement with Lithium Exploration VIII Ltd. (not related to our company) to acquire an undivided 100% right, title and interest in and to certain mineral permits located in the Province of Alberta, Canada. Lithium Exploration VIII and Golden Virtue Resources Inc. (formerly First Lithium Resources Inc.) (not related to our company) had entered into an underlying option agreement dated October 6, 2010, which option agreement and interest were assigned to our company.

On December 31, 2012, our company entered into an amending agreement to amend an original payment requirement of the assignment agreement of CAD$100,000 due on January 1, 2013 to the following payments:

The note was interest free until March 31, 2013. After March 31, 2013, interest accrued on the principal balance then in arrears at the rate of 15% per annum. Payments were due and payable by December 31, 2013. Further, at any time, Lithium Exploration VIII and Golden Virtue could elect to convert the remaining balance of the note and accrued interest into common shares of our company at 75% of the closing market price of our company’s common shares on the election day.

On July 3, 2013, Lithium Exploration VIII and Golden Virtue elected to convert the note and accrued interest in the combined aggregate amount of CAD$83,057.53 (USD$78,743) into common shares of our company. Pursuant to this election, we issued an aggregate of 239 shares (on a pre-reverse split basis) of our common stock at the price of USD$330 per share.

Glottech

On November 8, 2011, we entered into a letter agreement with Glottech-USA. Pursuant to the terms of the agreement, we were granted an exclusive license to use and distribute the technology within the Swan Hills region of Alberta as well as a non-exclusive right to distribute the technology within Canada.

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We previously made the following payments in association with the production of a working unit of Glottech-USA’s technology:

As part of the November 8, 2011 agreement, our officer and director, Alexander Walsh, agreed to provide Glottech-USA with the option, for a period of 12 months from delivery of the first unit, to acquire 500 shares (of our common stock currently held by him , for a total price of $4,000 ($1 pre-reverse splits). Additionally, if, for any reason, Mr. Walsh failed to deliver the 500shares of our common stock to Glottech-USA, we agreed to issue the shares from treasury.

On June 12, 2012, we filed a complaint against Glottech-USA in the Court of Common Pleas of Chester County, Pennsylvania, alleging that Glottech-USA misused our funds and was in breach of our agreements that called for Glottech-USA to deliver one initial unit of the mechanical ultrasound technology. We further alleged that Glottech-USA was financially insolvent and unable to fulfill its promises to us.On June 12, 2012, we filed a complaint with the Court of Common Pleas of Chester County, Pennsylvania against Glottech-USA, LLC, Eldredge, Inc., and the Eldredge Companies, Inc. Pursuant to an unopposed motion, the Eldredge parties were dismissed in October of 2012. The complaint initially sought an order of the Court granting possession of the initial unit.

Effective August 14, 2012, we entered into an option agreement with GD Glottech International to protect our license and distribution rights in the event that Glottech-USA became unable to perform and honor its obligations to us.

Pursuant to the terms of the option agreement, we were required to provide an initial amount of $150,000 to be held in escrow for the option to obtain a license on the patent rights, as set forth in the option agreement. On September 1, 2012, Glottech-USA’s license to the technology expired and also on September 1, 2012, we exercised this option agreement and released the funds to GD Glottech International.

On October 1, 2012, we entered into a license agreement and a sales agency agreement with GD Glottech, regarding GD Glottech International’s proprietary and patented mechanical ultrasound technology for use in water purification in the process of separation of salt and other minerals from lithium bearing brine produced from oil and gas operations. The license agreement and sales agency agreement expands and replaces all prior agreements among our company, GD Glottech International and Glottech-USA, LLC regarding our rights to use and sell the mechanical ultrasound technology, included in our letter of intent dated November 18, 2011, and our option agreement dated August 14, 2012.

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Pursuant to the sales agency agreement we were appointed as sales agent for the patented mechanical ultrasound technology within Canada. Our appointment is exclusive within the field of non petrochemical mining and non-exclusive in all other fields of use. In consideration of the sales agency rights, we agreed to issue to GD Glottech International 500 common shares of our capital stock which obligation has been satisfied through the transfer to GD Glottech International of 500 shares held by our officer and director, Alexander Walsh. It was the explicit intention of the parties that this share transfer fulfills the prior obligations of Alexander Walsh and our company with respect to the option contemplated in the March and November 2011 agreements with Glottech-USA.

We will receive a royalty in respect of sales of the technology secured by us. The term of the initial agreement will be for 5 years with the possibility of extension if sales targets are achieved.

Pursuant to the license agreement, we obtained the exclusive right to use the mechanical ultrasound technology within the field of non-petrochemical mining within the territory of Canada. We may also sublicense our rights under the license in respect of one or more units of the technology to any entity operating within the field of use in which we own or beneficially own at least a 20% equity interest. GD Glottech International agreed to supply us with up to 5 technology units per 12-month period from the effective date of the license term, which will start from the month of delivery of the unit of the technology. The first unit of the technology provided under the license to be provided at no additional cost to us and subsequent units shall be subject to a fee based on the then current retail price of the units. If we sublicense any of our rights, the term of the applicable license will be for 5 years from the date the applicable unit is delivered. Pursuant to the license agreement, GD Glottech International shall provide ongoing technical assistance and training in respect of our use of the technology at our cost.

In consideration of the license, we will pay to GD Glottech International a royalty based on the tonnage of water produced by our use of the technology in accordance with the agreement. A minimum annual royalty will be applicable. The term of the license agreement shall be for an initial period of 5 years and shall be renewable for additional terms of 5 years provided that we satisfy the minimum royalty requirements during each period.

GD Glottech International’s technology is designed to separate suspended solids from water (brine), which is one step in the process that we are taking to produce commercially viable minerals. The technology produces extremely high temperatures, which destroy organic substances such as bacteria and other toxic agents. We believe that GD Glottech International’s technology can provide lower costs of operation as well as reduced time for site clean-up than traditional methods of water treatment. We anticipate using this application to extract dissolved solids like lithium, potassium, and magnesium from oil field brine. The disposal of produced water (brine) from oil and gas production in Alberta is a significant environmental issue for the province and presents a considerable economic issue for producers. We intend to use the technology on our Valleyview Property in Alberta, in cooperation with oil and gas producers, to treat and dispose of their produced water while monetizing the minerals that are contained within that produced water stream that is being brought to the surface during the oil and gas production process. As we own the MAIM (Metals and Industrial Minerals) claims to the minerals on the Valleyview Property, the minerals contained in their produced water stream fall under our rights.

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While we have had discussions with oil and gas consultants and oil operators regarding their difficulties in treating the brine at some of their fields, we have no formal agreements in place.

The technical process is based on the use of mechanical ultrasound generated through the production of a series of cavitations. Mechanical ultrasound is a machine-produced sound of a frequency above the upper limit of the normal range of human hearing. Cavitations are the rapid formation and collapse of bubbles in liquids, caused by the movement of something such as a propeller or by waves of high-frequency sound. The production of mechanical ultrasound allows GD Glottech International’s technology to distill the fluid stock. Using mechanical ultrasound for distillation has been attempted before, but the external energy requirement needed to produce the mechanical ultrasound was far too expensive to make it commercially viable. GD Glottech International’s technology uses the energy released during the cavitations in order to make it commercially viable from an economic perspective. During these cavitations, a millisecond of energy is released. During this release, temperatures can reach 5,000 degrees centigrade.

On August 27, 2012, we filed a motion to amend our complaint to include claims of breach of trust and fiduciary duty, breach of good faith and fair dealing, breach of contract, conversion of funds, fraud, and the imposition of a constructive trust. We believe that this action was necessary to protect our interests against possible misuse of funds by Glottech-USA, LLC and its principals. On October 19, 2012, GD Glottech International moved to intervene as an interested party in the litigation pending against Glottech-USA. GD Glottech International cited its role as owner of the patents as a basis for intervening in the litigation against Glottech-USA. We believe GD Glottech International’s entry into the litigation against Glottech-USA is favorable to our cause in the litigation.

On October 22, 2012, the Court of Common Pleas in Chester County, Pennsylvania, granted our motion to amend our complaint against Glottech-USA to add claims for fraud and damages reflective of the malfeasance which we allege against Glottech-USA and its officers.

On December 12, 2012, GD Glottech International removed the management of Glottech-USA and appointed itself as the manager of Glottech-USA. On the same day, Larry Nesbit, Mark Siegel and Ron Fender filed a motion to dissolve Glottech-USA in Mississippi on the basis that Glottech-USA was unable to meet its financial obligations and could not finish or deliver the unit to us.

On December 19, 2012, an attorney purportedly acting on behalf of Glottech-USA filed a motion in the lawsuit pending in Chester County, Pennsylvania, seeking possession of the unit. In addition, Glottech-USA filed a counterclaim seeking possession of the unit.

GD Glottech International immediately filed a motion to quash Glottech-USA’s motion and for sanctions against the law firm that filed the motion. We also filed a motion, seeking disqualification of the law firm that purported to represent Glottech-USA on the basis that the new management for Glottech-USA had fired the law firm and, as such, the law firm no longer had authority to represent Glottech-USA.

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On April 25, 2013, we attended a hearing on the motions pending in the lawsuit filed in Chester County, Pennsylvania. The Court did not rule on any of the motions and, instead, stayed the case as to Glottech-USA until December of 2013 pending the outcome of the lawsuit seeking dissolution of Glottech-USA. The matter in Pennsylvania is no longer stayed. An attorney purporting to represent Glottech-USA and the receiver appointed in Mississippi has filed motions and other documents that may move the matter forward. We have pending preliminary objections to the counterclaim, including a request for a determination of which group is in control of Glottech-USA.

Certain members of Glottech-USA continued to pursue dissolution of the company in Mississippi. The members of Glottech-USA who seek dissolution have stated in court filings that it is not practicable for Glottech-USA to continue as an ongoing business. In addition, Sulzer filed suit against Glottech-USA Texas for unfulfilled obligations.

We do not believe that Glottech-USA has sufficient capital to continue as an ongoing business. We have provided full consideration to Glottech-USA and complied with all other agreed upon terms. We believe any assertions against us to lack merit.

Given pending litigation against Glottech-USA, and the uncertainties naturally inherent of any litigation (particularly as to outcome and timing thereof), we have moved to assure continuity of our licensing rights through entering into, and exercising, the option to contract directly with the technology inventor and patents owner, GD Glottech International. Thus, regardless of the outcome of the litigation, or indeed any action or inaction of Glottech-USA, our interest in the technology is assured.

On December 18, 2015 we withdrew our complaint against Glottech-USA, LLC filed in the Court of Common Pleas in Chester County, Pennsylvania. Concurrently, we released Glottech –USA, LLC and its former principals, Mark Seigel, Larry Nesbit and Ron Fender, from any and all claims related to the complaint.

Alta Disposal Morinville Ltd. Acquisition

On June 11, 2013, we entered into a letter of intent with Alta Disposal Morinville Ltd. (formerly Blue Tap Resources Inc.) pursuant to which we agreed to acquire not less than 51% of the outstanding securities of Alta Disposal Morinville in consideration of an aggregate investment of $450,000 in Alta Disposal Morinville’s waste water disposal facility located in Morinville, Alberta. The closing of the transaction was subject to a number of conditions precedent, including but not limited to completion of due diligence and the negotiation of a definitive long form agreement.

On July 29, 2013, in anticipation of the completion of a formal agreement with Alta Disposal Morinville embodying the terms of the letter of intent, we entered into a convertible debenture agreement with Alta Disposal Morinville pursuant to which we agreed to deliver to Alta Disposal Morinville up to CAD$300,000 (approximately USD$291,000) payable in two installments of CAD$150,000 deliverable respectively upon execution of the convertible debenture, and within 5 business days following receipt of regulatory approval for the re-activation of Alta Disposal Morinville’s waste water disposal facility. Delivery of the first and second installments totaling CAD$300,000 have been satisfied and the acquisition was finalized as of October 18, 2013. The funds advanced are secured against all present and future assets and undertakings of Alta Disposal Morinville and are convertible at our option into a number of common shares of Alta Disposal Morinville equal to 51% of its issued and outstanding voting stock.

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Effective August 1, 2013, we entered into a joint venture agreement with Alta Disposal Morinville pursuant to which our company and Alta Disposal Morinville will operate certain lands and facilities including a disposal well in the Morinville area of Alberta.

On October 18, 2013, we completed the acquisition of 51% of the outstanding securities of Alta Disposal Morinville, pursuant to a letter of intent with Alta Disposal Morinville dated June 11, 2013. As a result of the share acquisition, Alta Disposal Morinville is now a partially owned subsidiary of our company through our wholly owned subsidiary, Alta Disposal Ltd.

In accordance with the letter of intent, we acquired, through our wholly owned subsidiary, Alta Disposal Ltd., 51% of the outstanding securities of Alta Disposal Morinville (being 510,000 common shares) in consideration of an aggregate investment of CDN$466,547 (approximately USD$453,204) in Alta Disposal Morinville’s waste water disposal facility located in Morinville, Alberta, where Alta Disposal Morinville holds a 100% working interest in 17 freehold mineral leases. There are currently two standing natural gas wells and one disposal well located on the leases, including water disposal facilities, tanks and equipment. Payment of an initial CDN$300,000 (USD$291,000) of the CDN$466,547 aggregate investment was made pursuant to a secured convertible debenture which has been fully converted into common shares of Alta Disposal Morinville. The Alta Disposal Morinville leases are subject to a 3% gross overriding royalty held by Mr. Vincent Murphy pursuant to a gross overriding royalty agreement dated June 30, 2013. The royalty is payable on all fluids separated, treated, or otherwise enhanced for sale on the lease property.

The acquisition of Alta Disposal Morinville was completed through our wholly owned subsidiary, Alta Disposal Ltd., which was formed in the Province of Alberta for the primary purpose of the transaction with Alta Disposal Morinville. Concurrent with the closing of the acquisition, Alta Disposal entered into a unanimous shareholders and management agreement (the “Shareholders Agreement”) dated October 18, 2013 with Excel Petroleum Ltd. (which holds 49% of Alta Disposal Morinville) and Alta Disposal Morinville itself.

Pursuant to the Shareholders Agreement, Alta Disposal may continue to fund the current capital requirements of Alta Disposal Morinville up to an aggregate of $420,000 in consideration of additional shares of Alta Disposal Morinville at the rate of 163,250 shares (equivalent to approximately 5% of Alta Disposal Morinville’s common shares on a diluted basis) for each $105,000 funded until Alta Disposal holds an aggregate of 70% of Alta Disposal Morinville’s outstanding common shares. If Alta Disposal elects to fund the on-going capital requirements of Alta Disposal Morinville beyond the aggregate of $870,000, any such funds advanced by Alta Disposal will be deemed to be funds loaned by Alta Disposal to Alta Disposal Morinville on a non-interest bearing, unsecured bridge loan basis.

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Any such funds provided to Alta Disposal Morinville will be repayable from cash flow generated by Alta Disposal Morinville. Funds loaned prior to June 30, 2014 will not be due and payable until June 30, 2014 and thereafter will not be due and payable until at least 6 months following the date of any such loan.

Other terms of the Shareholders Agreement include:

The Shareholders Agreement additionally provides for the engagement of Valeura Energy Inc. as the operator of Alta Disposal Morinville’s lands, wells, the facilities, pipelines and disposal wells pursuant to an operating agreement between Alta Disposal Morinville and Valeura dated July 9, 2013. Valeura was to retain a 10% working interest in Alta Disposal Morinville’s lands until completion of the initial work on the disposal well project and will re-convey that interest to Alta Disposal Morinville provided that Alta Disposal Morinville has paid Valeura a cash payment of $2,500 per month for acting as operator of the disposal well and the lands and upon payment of an amount of $10,000 to Valeura upon completion of the project. The disposal well work program must be mutually approved by Alta Disposal Morinville and Valeura. Alta Disposal Morinville will be responsible for all costs and expenses relating to the work program. Effective September 4, 2015, our company entered into an Asset Purchase Agreement with Cancen Oil Canada whereby we sold all right, title and interest of Alta Disposal Morinville Ltd. assets for total purchase price of CAD$10,000 (approximately USD$7,531.25) .

Tero Oilfield Services Ltd. Acquisition (and Disposition)

On August 20, 2013, we entered into a letter of intent with Tero Oilfield Services Ltd., a private company, pursuant to which Tero agreed to sell up to 75% of the issued and outstanding common shares of Tero to our company in exchange for payment in the amount of $1,500,000.

On March 1, 2014, Alta Disposal Ltd., our wholly-owned subsidiary, entered into a share purchase agreement with Tero and Garry Hofmann, the sole shareholder of Tero. Pursuant to the agreement, Mr. Hofmann agreed to sell and we agreed to purchase 50% of the issued and outstanding common shares of Tero (the “ Tero Shares ”) in exchange for an aggregate of CAD$1,000,000. As part of the share purchase by Alta Disposal, on February 22, 2014, Tero declared a dividend in the amount of $307,104, payable to Mr. Hofmann by way of a promissory note.

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Additionally, Alta Disposal, Tero and Mr. Hofmann entered into an option agreement entitling Alta Disposal to purchase up to an additional 25% of the issued and outstanding common shares of Tero from Mr. Hofmann exercisable at a price of $500,000 for a period of one year.

Lastly, Alta Disposal, Tero and Mr. Hofmann entered into a shareholders’ agreement concerning any potential financing by the shareholders of Tero for the benefit of Tero’s operations. This agreement provides that the shareholders of Tero, Alta Disposal and Mr. Hofmann, may by unanimous resolution advance to Tero, upon demand by Tero, such funds as may be determined specified by unanimous resolution, subject to the agreement.

Tero was a family owned waste disposal company. The waste disposal facility had been under the same ownership since it began operations in 1997. In 2002, Tero successfully reclassified the original Class II well to a Class IB disposal well and expanded the capabilities of the facility to handle solid waste disposal. The facility is located near Wardlow, Alberta and is right in the heart of the area’s oil and gas producers. The nearest competing commercial disposal companies are 75 kilometers away which presents Tero’s facility with a large geographical advantage.

On May 1, 2015, our former subsidiary Alta Disposal entered into a share purchase agreement with Natel Hofmann and Tero Oilfield Services Ltd. for the sale of the Tero Shares by Alta Disposal to Ms. Hofmann in consideration of an aggregate of $300,000. As at April 29, 2015, the purchase price was paid in full.

Loans of Our Company

Since March 2014, our company has received various loans from unrelated third party that are listed below. These loans are convertible into shares of our company pursuant to the terms of the loan agreements. In the descriptions below of the loans, the issuance of common shares pursuant to the conversion of debt pursuant to convertible promissory notes, and the issuance of common shares pursuant to the exercise of warrants, transactions are a on a post reverse stock split basis. These adjustments include our first reverse share split approved on January 19, 2015 (20 old shares of common stock for one (1) new share of common stock), and our second reverse stock split approved by our board of directors on July 13, 2015 (200 old shares of common stock for one (1) new share of common stock). All the loans, convertible promissory notes, and warrants include terms that make them subject to the share splits.

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Loan Agreements with JDF Capital Inc.

$500,000 Loan

On March 15, 2014, we entered into a securities purchase agreement with JDF, pursuant to which JDF provided us with an aggregate investment of $500,000 in consideration of our issuance of convertible promissory notes and common share purchase warrants. We issued JDF a 10% original issue discount convertible promissory note of $550,000 due September 15, 2015 and convertible into common shares on a cashless basis at a price per share of 35% of the lower of lowest closing bid price of our common shares during the prior 20 trading days prior to 1) the date of the purchase agreement or 2) the day of the notice for conversion. The note bears interest, in arrears, at a rate per annum equal to fifteen percent (15%) accruing on a semi-annual basis commencing March 15, 2014 in cash or restricted shares of our company’s common stock, par value $0.001 per share at the option of the holder. During the six months ended December 31, 2015, an interest expense of $8,362 (June 30, 2015 - $6,279) was accrued.

In addition on March 15, 2014, we issued an aggregate of 4,583 warrants to JDF in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of $240.00 and expire after a term of three years. In the case that after six months there is no registration statement available for the resale of our common shares from exercising of these warrants, the warrants may be exercised on a cashless basis at a price as set out in the warrant.

Pursuant to a partial sale and assignment agreement dated February 27, 2015 among our company, JDF Capital Inc. and River North Equity, LLC, JDF Capital assigned $100,000 portion of the March 15, 2014 note to River North Equity.

On March 30, 2015, our directors approved an amendment to the note. We amended and restated a $50,000 portion of the $550,000 note, into a new promissory note to LG Capital Funding LLC, in the amount of $50,000 to provide conversion features equal to 50% of the lowest closing price of the last 20 trading days prior to conversion, as well as 10% per annum interest and become due and payable one year after the issuance date.

To date, we have issued the following securities in conversion of the $400,000 portion of the March 15, 2014 convertible promissory note held by JDF Capital:

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To date, we have issued the following securities in conversion of the $100,000 portion of the March 15, 2014 convertible promissory note held by River North Equity:

As at December 31, 2015, a balance of $6,639 remains payable or convertible into common shares pursuant to the March 15, 2014 note (which amount excludes the restated $50,000 portion), whereas all of the accompanying warrants remain unconverted and outstanding.

On March 3, 2015, JDF Capital, LG Capital Funding, LLC and our company agreed to assign an aggregate of $50,000 from the note of JDF Capital to LG Capital and to amend the conversion price to equal to 65% of the lowest closing price of the our common stock for the last 20 trading days prior to conversion, as well as 10% per annum interest. As at the date of this report, we have made the following issuances of common stock in conversion of this convertible note:

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As at the date of this report, there remains no balance payable pursuant to the note.

$600,000 Loan

On August 6, 2014, we entered into a securities purchase agreement with JDF dated July 22, 2014 pursuant to which we issued to JDF a convertible promissory note in the aggregate principal amount of $708,000, which amount includes the purchase price of $600,000 plus 18 months prepaid interest at the rate of 12% per annum. The convertible note has a maturity date of January 22, 2016 and is convertible in whole or in part into shares of our common stock at price per share equal to 65% of the lowest reported sale price of our common shares during the 20 trading days prior to July 22, 2014 ($160.00) or prior to the applicable conversion date. Our company will have the option to prepay the note within 60 days subject to a 10% penalty, within the subsequent 60 days subject to a 20% penalty, or anytime thereafter prior to maturity subject to a 30% penalty. The purchase price of the promissory note is payable in six installments beginning upon the effective date of the agreement (which amount has been paid) and monthly thereafter beginning on August 22, 2014. The promissory note is secured in first position against all assets of our subsidiary, Alta Disposal Ltd., pursuant to a general security agreement between Alta Disposal and JDF.

As additional consideration for the proceeds of the convertible note, we issued to JDF Capital warrants exercisable for 5 years to purchase up to 4,200 shares of our common stock at an exercise price of $160.00 per share, subject to cashless exercise provisions.

To date, we have issued the following securities in conversion of the August 6, 2014 convertible promissory note:

As at December 31, 2015, $600,000 has been funded pursuant to the note of which approximately $431,370 remains unconverted and outstanding.

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On March 9, 2015, JDF Capital and Blue Citi PR, LLC agreed to assign an aggregate of $100,000 from the convertible promissory note of JDF Capital (that was issued by our company) to Blue Citi PR LLC. As at the date of this report, we have issued the following securities in conversion of the promissory note:

As at the date of this report, there remains a balance of $62,720 unconverted and payable pursuant to the note.

Loan Agreement with JMJ Financial

On February 13, 2013, we entered into a securities purchase agreement with JMJ Financial. Pursuant to the terms of the agreement, our company will also enter into a convertible promissory note in the principal amount of $1,100,000 (for consideration of up to $1,000,000), of which $100,000 shall be paid to our company upon closing of the convertible promissory note and a common stock purchase warrant for the purchase of up to 135 shares of our common stock at an exercise price of $740 for a period of five years. The convertible promissory note shall have a maturity date of February 13, 2016. The remainder of the convertible debenture can be drawn down on by mutual agreement from JMJ Financial and our company. As at the date of this report, we have made the following issuances of common stock in conversion of the February 13, 2013 note:

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As at December 31, 2015, there remains a balance of approximately $49,233 unconverted and payable pursuant to the note.

Together with the promissory note issued on February 13, 2013, we issued the following warrants:

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Loan Agreement with JSJ Investments Inc.

On February 23, 2014, we entered into a securities purchase agreement with JSJ Investments Inc., pursuant to which JSJ Investments provided our company with an aggregate investment of $100,000 in consideration of our issuance of convertible promissory notes and common share purchase warrants. We issued JSJ Investments a convertible promissory note with 12% interest due August 27, 2014 and convertible into common shares on a cashless basis at a price of the lower of 50% of the average of the three lowest bids on the 20 trading days before February 27, 2014 or of a notice to convert during the twenty trading days preceding the delivery of any related conversion notice. On August 28, 2014, we issued 2,598 common shares at a deemed price of $40.80 per share in full conversion of the promissory note and interest at face value of $105,983.

In addition, we issued warrants to purchase an aggregate of 278 common shares of our company to JSJ Investments in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of approximately $360.00 and expire after a term of five years. In the case that after six months there is no registration statement available for the resale of our common shares from exercising of these warrants, the warrants may be exercised on a cashless basis at a price as set out in the warrant.

Loan Agreement with Centaurian Fund

On February 28, 2014, we entered into a securities purchase agreement with Centaurian Fund, pursuant to which Centaurian provided our company with an aggregate investment of $50,000 in consideration of our issuance of convertible promissory notes and common share purchase warrants. We issued Centaurian a convertible promissory note with 15% interest due August 28, 2014 and convertible into common shares on a cashless basis at a price of the lower of 50% of the average of the three lowest bids on the 20 trading days before February 28, 2014 or of a notice to convert during the 20 trading days preceding the delivery of any related conversion notice. In addition, we issued warrants to purchase an aggregate of 1,289 common shares of our company to Centaurian in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of $240.00 and expire after a term of six months. In the case that our common share closing price is greater than $240.00 per share for two days, the warrants may be exercised on a cashless basis at a price pursuant to the warrant. The warrants expired unexercised.

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On September 4, 2014, JSJ, Centaurian Fund and our company agreed to assign the note from Centaurian Fund to JSJ Investments and increase the principal interest of the note to $74,750 with 12% interest.

On April 8, 2015, we issued 21,838 common shares at a market price of $0.85 per share for promissory note and interest conversion of $18,475. As at the date of this report, there remains no balance payable pursuant to the note.

Loan Agreements with LG Capital Funding, LLC

On February 27, 2014, we entered into another securities purchase agreement with LG Capital Funding, LLC. Pursuant to which LG Capital provided our company with an aggregate investment of $75,000 in consideration of a promissory note carrying interest at the rate of 10% per annum and due March 3, 2016. The promissory note is convertible into common shares of our company at the investor’s option at any time after 180 days at a price equal to 50% of the lowest bids price for the 20 days prior to conversion date subject to various prescribed conditions. During the year ended June 30, 2015, the full face value of the note including interest (being $80,145 (June 30, 2014 - $Nil) in the aggregate) was fully converted to 28,087 common shares pursuant to the following issuances of common stock:

On March 3, 2015, we entered into a securities purchase agreement with LG Capital Funding, LLC, pursuant to which LG Capital provided our company with an aggregate investment of $29,000 in consideration of our issuance of convertible promissory notes. We issued LG Capital a convertible promissory note with 10% interest due March 3, 2016 and convertible into common shares on a cashless basis at a price of 65% of the lowest closing bid price of our common shares during the prior 20 trading days including the delivery of any related conversion notice.

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On September 11, 2015, the Company issued 80,801 common shares at a deemed price of $0.04 per share for partial conversion of the March 3, 2015 promissory note. During the year ended June 30, 2015, an interest expense of $967 was accrued in respect of the note. As at the date of this report, there remains a balance of approximately $26,000 unconverted and payable pursuant to the note.

On September 30, 2015, we entered into a securities purchase agreement with LG Capital Funding, LLC. Pursuant to the terms of the agreement, JDF Capital acquired a convertible redeemable promissory note with an aggregate principal amount $27,000 due on September 30, 2016 which amount includes an issuance discount of 10% and carries interest at the rate of 10% per annum after 12 months. The note is convertible at the lower of 65% discount of the lowest trading price for the 20 days prior to conversion date subject to various prescribed conditions.

Loan Agreement with St. George Investments LLC

On February 28, 2014, we entered into a securities purchase agreement with St. George Investments LLC, pursuant to which St. George Investments provided our company with an aggregate investment of $100,000 in consideration of our issuance of convertible promissory notes and common share purchase warrants. We issued St. George Investments a convertible promissory note of $125,500 including 15% prepaid interest due August 28, 2015 and convertible into common shares on a cashless basis at a price of 50% of the lower of lowest closing bid price of our common shares during the prior 20 trading days prior to 1) the date of the purchase agreement or 2) the day of the notice for conversion. As at the date of this report we have made the following issuances of common stock in conversion of the February 28, 2014 note:

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As at the date of this report, there remains no balance unconverted and payable pursuant to the note.

In addition, we issued an aggregate of 370 warrants to St. George Investments in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of $270.00 and expire after a term of five years. As at the date of this report we have made the following issuances of common stock in full exercise of the February 28, 2014 warrant:

Loan Agreement with Vista Capital Investments, LLC

On February 28, 2014, we entered into a securities purchase agreement with Vista Capital Investments, LLC, pursuant to which Vista Capital provided our company with an aggregate investment of $100,000 in consideration of our issuance of convertible promissory notes and common share purchase warrants. We issued Vista Capital a convertible promissory note of $110,000 with 12% interest due September 1, 2014 and convertible into common shares on a cashless basis at a price of the lesser of $300 or 50% of the lowest bid price of our common shares during the prior 25 consecutive trading days prior the delivery of any related conversion notice. As at the date of this report, we have made the following issuances of common stock in full conversion of the February 28, 2014 note:

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In addition, we issued warrants to purchase an aggregate of 2,578 common shares of our company to Vista Capital in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of $240.00 during the period beginning August 28, 2014 and ending August 28, 2019. In the case that our common share closing price is greater than $240.00 per share for two days, the warrants may be exercised on a cashless basis at a price pursuant to the warrant.

On August 20, 2014, we issued an aggregate of 4,528 common shares at a deemed price of $203.13 per share for the cashless conversion of warrants issued on February 28, 2014.

Loan Agreement with Union Capital, LLC

On March 3, 2014, we entered into a securities purchase agreement with Union Capital, LLC, pursuant to which Union provided our company with an aggregate investment of $50,000 in consideration of our issuance of convertible promissory notes and common share purchase warrants. We issued Union a convertible promissory note of $50,000 with 10% interest due March 5, 2015 and convertible into common shares on a cashless basis at a price per share of 50% of the lowest closing bid price of our common shares during the prior 20 trading days including the delivery of any related conversion notice. As at the date of this report, we have made the following issuances of common stock in conversion of the March 3, 2014 note:

As at the date of this report, there remains no balance unconverted and payable pursuant to the note.

In addition, we issued warrants to purchase an aggregate of 235 common shares of our company to Union in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of $212.00 and expire after a term of five years. In the case that after six months there is no registration statement available for the resale of our common shares from exercising of these warrants, the warrants may be exercised on a cashless basis at a price as set out in the warrant.

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Loan Agreement with Iconic Holdings, LLC

On March 3, 2014, we entered into a securities purchase agreement with Iconic Holdings, LLC, pursuant to which Iconic provides our company with an aggregate investment of $100,000 in consideration of our issuance of convertible promissory notes and common share purchase warrants. We issued Iconic a convertible promissory note of $100,000 with 12% interest due September 3, 2014 and convertible into common shares on a cashless basis at a price of 50% of the lower of lowest closing bid price of our common shares during the prior 20 trading days prior to 1) the date of the purchase agreement or 2) the day of the notice for conversion. As at the date of this report, we have made the following issuances of common stock in conversion of the March 3, 2014 note:

As at the date of this report, all interest and principal of the note has been fully converted.

In addition, we issued an aggregate of 500 warrants to Iconic in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of $200 and expire after a term of three years. As at the date of this report, we have made the following issuances of common stock in cashless exercise of the March 3, 2014 warrants:

Loan Agreement with Adar Bays, LLC

On March 3, 2014, we entered into a securities purchase agreement with Adar Bays, LLC, pursuant to which Adar provided our company with an aggregate investment of $50,000 in consideration of our issuance of convertible promissory notes and common share purchase warrants. We issued Adar a convertible promissory note of $50,000 with 10% interest due March 4, 2015 and convertible into common shares on a cashless basis at a price per share of 50% of the lowest closing bid price of our common shares during the prior 20 trading days including the delivery of any related conversion notice. As at the date of this report, we have made the following issuances of common stock in conversion of the March 3, 2014 note:

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As at the date of this report, there remains no balance unconverted and payable pursuant to the note.

In addition on March 4, 2014, we issued an aggregate of 235 warrants to Adar in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of $212.00 and expire after a term of five years.

Loan Agreement with Black Mountain Equities, Inc.

On March 3, 2014, we entered into a securities purchase agreement with Black Mountain Equities, Inc., pursuant to which Black Mountain provided our company with an aggregate investment of $100,000 in consideration of our issuance of original issue discount convertible promissory notes and common share purchase warrants. We issued Black Mountain a convertible promissory note of $115,000 with 15% prepaid interest due April 1, 2015 and convertible into common shares on a cashless basis at the lesser price per share of $240.00 or 50% of the lowest trade price of our common shares during the prior 20 trading days immediately preceding the delivery of any related conversion notice.

As at the date of this report, we have made the following issuances of common stock in conversion of the March 3, 2014 note:

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As at the date of this report, there remains no balance unconverted and payable pursuant to the note.

In addition on March 3, 2014, we issued an aggregate of 417 warrants to Black Mountain in consideration for purchasing the note. Subject to adjustments, each warrant is convertible into common shares at a price of $240.00 per share and expire after a term of five years. In the case that our common share closing price is greater than $240.00 per share for two days, the warrants may be exercised on a cashless basis at a price pursuant to the warrant. As at the date of this report, we have made the following issuances of common stock in full exercise of the March 3, 2014 warrants:

As at the date of this report, there remain no warrants remaining pursuant to the securities purchase agreement.

Loan Agreement with Blue Citi, LLC

Effective March 3, 2014, we entered into another securities purchase agreement with Blue Citi LLC. Pursuant to the terms of the agreement, Blue Citi acquired a convertible promissory note with an aggregate face value of $220,000, at an issuance discount of $20,000; resulting in $200,000 net proceeds to our company. The note was due on September 3, 2014 and carries an interest rate of 12% per annum over the term of the note, with an effective interest rate of 1220.64% . The note is convertible at a 50% discount of the lowest closing price for the 20 trading days immediately prior to (i) date of the purchase agreement, or (ii) the voluntary conversion of the note.

During the year ended June 30, 2015, $453,200 (June 30, 2014 - $Nil) in face value of the note including interest was fully converted to 49,640 (June 30, 2014 - Nil) common shares pursuant to the following issuances of common shares:

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There is no outstanding balance payable in respect of the note as of the date of this report. Along with the promissory note entered on March 3, 2014, we issued warrants to acquire a total of 1,000 shares of the company for a period of three years at an exercise price of $200.00. On September 4, 2014, 25 warrants were exercised for 146 of our common shares at a deemed price of $456 in accordance with the terms of the agreement.

Loan Agreement with 514742 B.C. Ltd.

On March 3, 2014, we entered into a securities purchase agreement with Alta Disposal Ltd., our wholly-owned subsidiary, and 514742 B.C. Ltd., pursuant to which 514742 B.C. provided Alta Disposal with an aggregate investment of CAD$330,000 (US$298,518) in consideration of our issuance of secured promissory notes and common share purchase warrants.

On March 3, 2014, 514742 B.C. funded an aggregate investment of CAD$333,000 to Alta Disposal. Therefore, Alta Disposal issued 514742 B.C. a secured promissory note of Alta Disposal CAD$333,000 with 20% interest due June 1, 2014. The note is secured by all present and after acquired property of Alta Disposal. Effective April 14, 2014, the company paid a total of CAD$346,274 (US$316,355) in principle and interest to settle this debt.

In addition on March 3, 2014, we issued an aggregate 550 warrants to 514742 B.C. in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of $200.00 and expire after a term of three years. In the case that after six months there is no registration statement available for the resale of our common shares from exercising of these warrants, the warrants may be exercised on a cashless basis at a price as set out in the warrant.

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Loan Agreement with Cardinal Capital Group, Inc.

On October 31, 2014, we entered into a securities purchase agreement with Cardinal Capital Group, Inc., pursuant to which Cardinal Capital provided our company with an aggregate investment of $50,000 in consideration of our issuance of a convertible promissory note. We issued Cardinal Capital a convertible promissory note of $59,500 comprised of $6,000 in interest and $3,500 in legal fees and due in two years. The note is convertible into shares of our common stock at the lesser of $20.00 or 65% of the lowest trade price of our common stock during the 20 trading days immediately preceding a conversion date. As at the date of this report, we have made the following issuances of common stock in conversion of the October 31, 2014 note:

As at the date of this report, there remains no balance unconverted and payable pursuant to the note.

Loan Agreement with InLight Capital Partners, LLC.

On August 22, 2014, we entered into a securities purchase agreement with InLight Capital Partners, LLC, pursuant to which InLight Capital provided our company with an aggregate investment of $100,000 in consideration of our issuance of a convertible promissory note and warrants to purchase common shares of our company with an aggregate exercise price of $120,500. The note was funded by InLight Capital in the amount of $100,000 and shall include $20,500 in respect of pre-paid interest calculated in advance at the rate of 12% per annum for 18 months plus expenses of the Purchaser. InLight Capital delivered to us funds in the amount of $50,000 on the effective date and $50,000 on September 19, 2014.

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As at the date of this report, we have made the following issuances of common stock in conversion of the March 3, 2014 note:

There remains a principal balance of $32,043 unconverted and payable pursuant to the note as at December 31, 2015. In addition on August 22, 2014 and September 19, 2014, we issued an aggregate of 538 warrants to InLight Capital Partners, LLC in consideration for purchasing the note. Subject to adjustments, these warrants are convertible into common shares at a price of $112.00 and expire after a term of five years. In the case that after six months there is no registration statement available for the resale of our common shares from exercising of these warrants, the warrants may be exercised on a cashless basis at a price as set out in the warrant.

Loan Agreement with Louis Feld

On February 6, 2015, Louis Feld provided our company with an aggregate investment of $88,500 in consideration of our issuance of a $88,500 convertible promissory note and warrants to acquire 13,828 common shares with an aggregate exercise price of $88,500. We issued Mr. Feld a convertible promissory note with 12% interest due August 6, 2016 and convertible into common shares on a cashless basis at a price of 65% of the lowest closing bid price of our common shares during the prior 20 trading days. During the period ended December 31, 2015, an interest expense of $7,650 was accrued. As at the date of this report, we have made the following issuances of common stock in conversion of promissory note:

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Loan Agreement with River North Equity LLC

On February 24, 2015, River North provided our company with an aggregate investment of $100,000 in consideration of our issuance of a convertible promissory note with a face value of $118,000. The face value of the note includes minimum interest for 18 months at the rate of 12% per annum, calculated monthly. The promissory note, which is due August 24, 2016, is convertible into common shares on a cashless basis at a price of 65% of the lowest closing bid price of our common shares during the prior 25 trading days including the delivery of any related conversion notice.

Bridge Loan Agreement with JDF Capital Inc.

On April 15, 2015, JDF Capital provided our company with a $50,000 loan with 10% interest per annum due April 15, 2015. On or about May 22, 2015 we prepaid the aggregate of $50,493.15, in full repayment of the loan, and aggregate accrued interest of $493.15.

Recent Loan Agreements

On August 3, 2015, we entered into a securities purchase agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF Capital acquired a convertible promissory note with an aggregate face value of $36,000 due on February 3, 2016, which amount includes an issuance discount of 10% and carries interest at the rate of 10% per annum after 12 months. The note is convertible at a 35% discount to the lowest sale price for the 20 days trading days immediately prior to (i) the date of the purchase agreement, or (ii) the voluntary conversion date, subject to various prescribed conditions.

On September 9, 2015, we entered into a securities purchase agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF Capital acquired a convertible promissory note with an aggregate face value of $30,000 due on September 9, 2016, which amount includes an issuance discount of 10% and carries interest at the rate of 10% per annum after 12 months. The note is convertible at a 35% discount to the lowest sale price for the 20 days trading days immediately prior to (i) the date of the purchase agreement, or (ii) the voluntary conversion date, subject to various prescribed conditions.

On September 30, 2015, we entered into a securities purchase agreement with LG Capital Funding, LLC. Pursuant to the terms of the agreement, JDF Capital acquired a convertible redeemable promissory note with an aggregate principal amount $27,000 due on September 30, 2016 which amount includes an issuance discount of 10% and carries interest at the rate of 10% per annum after 12 months. The note is convertible at the lower of 65% discount of the lowest trading price for the 20 days prior to conversion date subject to various prescribed conditions.

On November 6, 2015, we entered into another securities purchase agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF Capital acquired a convertible promissory note with an aggregate face value of $12,000 due on November 6, 2016, which amount includes an issuance discount of 10% and carries interest at the rate of 10% per annum after 12 months. The note is convertible at a 35% discount to the lowest sale price for the 20 days trading days immediately prior to (i) the date of the purchase agreement, or (ii) the voluntary conversion date, subject to various prescribed conditions.

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On December 1, 2015, we entered into a securities purchase agreement with JDF Capital Inc. dated December 1, 2015 pursuant to which we issued to JDF a convertible promissory note in the aggregate principal amount of $18,000, which amount includes the purchase price of $15,000, 10% pre-paid interest (per annum, for 12 months) of $1,500, and $1,500 in respect of legal fees incurred by JDF. The convertible note has a maturity date of December 1, 2016 and is convertible in whole or in part into shares of our common stock at price per share equal to 65% of the lowest reported sale price of our common shares during the 20 trading days prior to December 1, 2015 or prior to the applicable conversion date.

On December 1, 2015, we entered into a securities purchase agreement with VES Investment Trust dated December 1, 2015 pursuant to which we issued to VES Investment Trust a convertible promissory note in the aggregate principal amount of $18,000, which amount includes the purchase price of $15,000, 10% pre-paid interest (per annum, for 12 months) of $1,500, and $1,500 in respect of legal fees incurred by VES Investment Trust. The convertible note has a maturity date of December 1, 2016 and is convertible in whole or in part into shares of our common stock at price per share equal to 65% of the lowest reported sale price of our common shares during the 20 trading days prior to December 1, 2015 or prior to the applicable conversion date.

On December 3, 2015, we entered into a securities purchase agreement with LG Capital Funding pursuant to which we issued to LG Capital a convertible redeemable note with an aggregate face value of $17,000 due December 3, 2016 and bearing interest form issuance at the rate of 10% per annum payable on maturity. The holder of the note is entitled, at its option, before or after maturity, to convert all or a part of the principal or interest outstanding into shares of our common stock at a price equal to 65% of lowest trading price during the 20 trading days on the date the notice of conversion is delivered. In the event that we experience a DTC “Chill” on our shares, the conversion price shall be decreased to 55% instead of 65% while that “Chill” is in effect.

On January 27, 2016, we entered into a securities purchase agreement with VES Investment Trust. Pursuant to the terms of the agreement, VES Investment acquired a 10% convertible note with an aggregate face value of $5,500, with an issuance discount of $500 and maturity of one year. The holder of this note is entitled, at its option, to convert all or a part of the principal outstanding at the date into shares of our company’s common stock.

On January 27, 2016, we entered into a securities purchase agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF Capital acquired a 10% convertible note with an aggregate face value of $24,750, with an issuance discount of $2,250 and legal fees of $2,500. The note matures in one year. The holder of this note is entitled, at its option, to convert all or a part of the principal outstanding at the date into shares of our company’s common stock.

On March 1, 2016, we entered into a securities purchase agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF Capital acquired a 10% convertible note with an aggregate face value of $13,200, with an issuance discount of $1,200 and $2,000 of legal fees. The note matures in one year. The holder of this note is entitled, at its option, to convert all or a part of the principal outstanding at the date into shares of our company’s common stock.

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Agreements with Executive Officers, Directors and Consultants

Regardless of their date, the transactions described below are adjusted on a post reverse stock split basis. The adjustments included our first reverse share split approved by our board of directors on January 19, 2015 (on the basis of 20 old shares of common stock for one (1) new share of common stock), and our second reverse stock split, approved by our board of directors on July 13, 2015 (on the basis of 200 old shares of common stock for one (1) new share of common stock).

On October 24, 2012, we entered into a share exchange agreement dated October 18, 2012, with Alexander Walsh, our president and director. Pursuant to the agreement, on October 25, 2012 we issued to Mr. Walsh 5,000 Series A Convertible Preferred shares in our capital stock in consideration of the cancellation and return to treasury of 5,000 shares of our common stock held by Mr. Walsh. The Series A Convertible Preferred Shares have a par value of $0.001 per share and are convertible on a one for one basis into shares of our common stock after a one year hold period. There are no other preferential rights attached to the Series A Convertible Preferred Shares. Mr. Walsh established a series of a 10b5-1 Sales Plans in connection with an overall asset diversification strategy. Sales transactions occurring under Mr. Walsh’s 10b5-1 Plans were disclosed publicly through Form 4 filings with the SEC and are subject to the restrictions and filing requirements of Rule 144.

On July 25, 2013, we entered into a consulting agreement with Advanced Capital Trading, LLC, pursuant to which Advanced Capital performed financial consulting services for our company for a period of three months with an extension of an additional three months based on performance, such services commenced effective August 1, 2013. Compensation payable to Advanced Capital of $10,000 was paid upon execution of the consulting agreement.

Effective January 1, 2014, we entered into a consulting agreement for a term of 12 months with International Compass, LLC for the services of Bryan Kleinlein as chief financial officer of our company. As compensation, we agreed to pay to International Compass $12,000 per month during the term of the agreement payable in cash and/or common shares of our company that were previously registered on Form S-8 at our sole discretion. The value of the shares of our company issued as compensation, if any, shall be based on the volume weighted average trading closing price of the shares of our company in the five (5) trading days immediately preceding the date(s) which the shares are due. Mr. Kleinlein was first appointed as our chief financial officer on May 15, 2012. Effective October 22, 2014, we entered into an amending agreement with International Compass. Pursuant to this amending agreement, the term of the agreement dated January 1, 2014 with International Compass was reduced from 12 months to 10 months. As consideration to International Compass for agreeing to enter into the amending agreement, we agreed to pay Mr. Kleinlein an aggregate of $30,000, payable in our S-8 shares with a deemed price per share equal to the volume weighted average trading close price of the shares in the five trading days immediately preceding the amending agreement. As a result, we issued Mr. Kleinlein an aggregate of 1,908 S-8 shares on October 22, 2014 Mr. Kleinlein resigned as our chief financial officer as of November 1, 2014.

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Effective January 12, 2014, we entered into an employment agreement with Alexander Walsh for provision of services as our president and chief executive officer. The employment agreement will terminate on January 12, 2016. Pursuant to the terms of the employment agreement, Mr. Walsh will receive an annual salary of $120,000 payable in monthly cash installments or, in the event cash is unavailable, in shares of our company’s common stock. The employment agreement also provides for liability insurance and any travel and out-of-pocket expenses incurred and approved by our company.

On April 28, 2014, we entered into a consulting agreement, with our director, Brandon Colker, to provide services on behalf of our company. Pursuant to the terms of the consulting agreement, Mr. Colker was to receivem my May 15, 2014, compensation of $12,000 payable in unregistered restricted common shares of our company's common stock at a deemed value of $200 per share (Subsequent to the agreement, on February 12, 2015, Mr. Colker resigned as a director and consultant of the company and, accordingly, the common shares were not issued.

Effective May 30, 2014, we entered into a consulting agreement with Robert Gomer. Pursuant to this agreement, Mr. Gomer is to assist us with the current business of testing ultrasonic generator technology and performing services customary expected of a consultant for a term of six months. In exchange for these services that are to be provided to us, we agreed to issue an aggregate of $10,000 per month, payable in two sums of $30,000 and in our S-8 shares with a deemed price per share equal to the volume weighted average trading close price of the shares in the five trading days immediately preceding the amending agreement. As a result, we issued Mr. Gomer an aggregate of 292 S-8 shares on September 1, 2014. The agreement expired and was not subsequently renewed.

Effective August 1, 2014, we entered into a consultant agreement with TEN Associates LLC. Pursuant to this agreement, TEN Associates is to provide advice relative to corporate and business services and to perform other related activities as directed by us. In exchange for these services that are to be provided to us, we agreed to issue 500 common shares of our company to TEN Associates.

Our company was made aware that a shareholder, who is also a director and officer of our company, had sold an aggregate amount of shares that would cause the shareholder to be required to pay our company with respect to a short swing profit. Our company informed the shareholder that the shareholder was liable to our company for an aggregate short swing profit of $80,523.58 under Section 16(b) of the Securities Exchange Act of 1934, as amended, for the profit realized from transactions in our company’s common stock. Our company and the shareholder entered into a settlement agreement dated December 31, 2014 wherein, in exchange for the forbearance of legal action by our company pursuant to Section 16(b) of the Act, the shareholder agreed to disgorge the short swing profit to our company as of the effective date of the short swing settlement agreement. Payment of the short swing profit from the shareholder was received by our company on December 31, 2014.

On December 15, 2010, Alexander Walsh, a director and officer of our company, entered into an assignment of debt agreement with Nanuk Warman, which was also acknowledged by our company, whereby the debt of $47,537 advanced by Mr. Warman to our company and outstanding as of December 6, 2010, was assigned to Mr. Walsh.

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On December 23, 2014, Mr. Walsh made demand for repayment of the debt by our company. In connection with the assignment of debt agreement and the demand, Mr. Walsh and our company entered into a settlement agreement dated December 23, 2014 wherein our company is to repay the debt to Mr. Walsh in full. Our company also agreed to pay an aggregate of $150,000 to Mr. Walsh as a performance bonus for the services provided by Mr. Walsh for the period from August 2013 to March 2014 as related to the acquisition of Tero Oilfield Services Ltd. due on the following terms:

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Operating expenses for the three months ended December 31, 2015 decreased as a result of decreases in selling, general and administrative expenses.