Mexus Gold US - Annual Report: 2021 (Form 10-K)

4

Mabel Property

Mexus Gold MX, a fully owned subsidiary of Mexus Gold US, is 90% owner of the Mabel Project comprised of approximately 2,128 hectares (5,258 acres) is located approximately 52Km’s SW from Nogales, Sonora State, Mexico and 34Km’s south of the United States border at Sasabe.

Mexus has decided to continue to validate a Technical Report on the advanced Gold and Porphyry Copper property. Completion of an updated 43‐101 Technical Report will include all exploration results since the last 43‐101 report which was issued on January 14, 2013. The update report will include high density drilling, geologic mapping, geophysics and a preliminary resource estimate.

The 2013 exploration consisted of more than 700 drill holes, 4000 RC drills and surface samples which were analyzed in several independent laboratories.

Preliminary Resource Estimates from a 5% fraction of the project gave 1.3 million tons of 0.7 g/t Au and 23 g/t Ag including 20% with an average grade of 1.9 g/t Au equivalent. Potential resources at productive shallow depths are expected to be approximately 6,000,000 tons.

Ures Property

Mexus Gold US owns mineral rights to approximately 10,000 acres over 9 concessions near Hermosillo, Mexico. The concessions include the Ocho Hermanos, 370, San Ramon, Plan Osa, Edgar 1, Edgar 2, El Scorpio, Los Laureles, and Eusol. The concessions are located in Sonora State, Mexico approximately 80 KM NE of Hermosillo.

In the past year, Mexus has completed leach VAT testing and trenching including assaying with promising results. Historical assaying of the Ocho Hermanos concession has produced assays up to 1 Kg Ag per ton with 10 Gpt Au, 4% lead and 1% copper. One ton of mineralized materials holds 40 metals which is a complex ore. The Company is evaluating production procedures to economically process this ore.

Mexus has done limited drill hole testing of the Scorpio Project concession with results up to 3% copper, 1.5 Gpt Au, and 60 Gpt Ag.

The Company plans to begin drilling on 3 of the 9 concessions by mid-2021.

Non-Material Mining Properties

San Felix Mine Project (formerly known as the Mexus-Trinidad Joint Venture)

In March, 2014, we sold our 50% interest in the Joint Venture to Atzek Mineral S.A. de C.V (“Atzek”). Atzek is currently in default of the sale agreement.

Effective January 13, 2017, our wholly owned subsidiary, Mexus Gold Mining, S.A. de C.V., entered into a purchase agreement with Jesus Leopoldo Felix Mazon, Leonardo Elias Jaime Perez, and Elia Lizardi Perez, wherein we purchased a 50% interest in the “San Felix” mining site located in the La Alameda area of Caborca, State of Sonora, Mexico. The remaining 50% of the site is owned jointly by Mar Holdings S.A. de C.V. and Marco Antonio Martinez Mora. The San Felix mining site contains seven (7) concessions over an area of approximately 26,000 acres. During the year ended March 31, 2018, the Company recorded an impairment of mineral property for the San Felix Project of $75,000 because the payment of $500,000 installment due on August 13, 2017 was not executed in accordance with the purchase agreement pending the receipt of certain required instruments from the Grantor by the Company.

Other Operations

Cable Salvage Operation

The Company completed the first phase of its Cable Recovery Project in Alaskan waters. The cable which was recovered was smaller diameter cable which was excellent for testing the recovery equipment and vessels. The Company evaluated the project and conducted a mapping project and exploration activities in an attempt to identify larger cable.

At March 31, 2017, the Company ceased cable salvage operations in order to fully concentrate on Mexico operations.

5

Mergers and Acquisitions

We will routinely review merger and acquisition opportunities. An appropriate merger and acquisition opportunity must be accretive to the overall value of Mexus Gold US. Our primary focus will be on those opportunities involving precious metal production or near-term production with a secondary focus on other resource-based opportunities. Potential acquisition targets would include private and public companies or individual properties. Although our preference would be for candidates located in the United States and Mexico; Mexus Gold US will consider opportunities located in other countries where the geopolitical risk is acceptable.

Description of Mining Projects

The following properties are located in Mexico and owned by Mexus Gold S.A. de C.V., our wholly owned subsidiary:

Santa Elena Prospects (formerly known as the Caborca Project)

The Company executed a revised Mineral Mining and Purchase Agreement, dated December 3, 2015, with the Concession Owners covering 2,225 acres located in the State of Sonora, Mexico. The Agreement is for a term of 25 years and specifies a purchase privilege, at the discretion of the Company, for all concessions in the amount of $2,000,000 absent the exercise of the purchase privilege a royalty of 40% for lode deposits and 25% for placer deposits and is credited to the purchase price. The Agreement specifies a delayed monthly royalty in the amount of $1,000 and the payment of the semi-annual concession tax.

The Company has conducted geological evaluation of the Santa Elena Prospects comprised of expanding the existing placer facility for the purpose of mineral evaluation, physical geological evaluations including the drilling of reverse circulation and core holes. Situated on the prospect area are caterpillars, haul trucks, maintenance trucks, power generators, pumps, tractor blade, truck mounted winch, water handling supplies and maintenance trailer with supplies. The prospect area is accessed from a state highway on existing roads. There is access to well water which is available for the current and future operations.

On January 5, 2011, Mexus Gold Mining S.A. de C.V. entered into a Purchase Agreement to purchase the Santa Elena Prospect, formerly known as the Caborca Project. The Santa Elena Prospect consists of 7,400 acres (3,000 hectares) about 50 kilometers northwest of the City of Caborca, Sonora State, Mexico. The Caborca Project lies on claims filed by the owners of the Santa Elena Ranch, which controls the surface rights over the project claims. The claims lie near 112^o 25' W, 31^o 7.5" N. These claims were visited near the end of January, 2011. On or about July 11, 2011, we acquired five additional claims surrounding the Santa Elena Prospect consisting of approximately 1,000 additional acres.

We have been unable to locate geologic maps of the area from the Government Geological Survey. However, pursuant to our investigation of the project, the claims were found to be underlain by an igneous complex. The rocks observed included many types of granitic rocks, exhibiting porphyrytic textures, gneissic and equigrannular textures. Quartz was variable. At times quartz "eyes" were observed, that is porphyrytic quartz which many workers consider to be indicative of a porphyry environment. In other localities, no quartz was evident. When no quartz was present, the rock was equigrannular. Quartz veining was evident throughout the claim group. A mine was developed along a major quartz vein, called the Julio 2 Mine with the vein being called the Julio Vein.

There are multiple exploration targets on the Santa Elena Prospect. The two most important are the quartz stockwork zone and the Julio vein system. The first target will be the quartz stockwork zone area. A limited drilling program has been conducted and completed. Production testing has been completed resulting in the construction of the surface production and recovery facilities.

6

Access to the Santa Elena prospect is via dirt road approximately two miles west of paved highway Mexico 1 and approximately 34 miles northwest of the town of Caborca, Sonora, Mexico.

FIGURE 1 – SANTA ELENA PROJECT LOCATION MAP

7

Exhibit 99.1 – PRELIMINARY REPORT AND FIRST STAGE MAPPING

Ures Property Prospects, being comprised of the following projects:

Ocho Hermanos – Guadalupe de Ures Project

The Guadalupe de Ures Project is accessed from Hermosillo by driving via good paved road for 60 kilometers to the town of Guadalupe de Ures and then for 15 kilometers over dirt roads to the prospects. A base camp has been established near the town of Guadalupe de Ures using mainly trailers for accommodation, workshops and kitchen facilities.

FIGURE 2 - GUADALUPE DE URES PROJECT LOCATION MAP

The Ocho Hermanos Project (also called the Guadalupe de Ures Project) consists of the “Ocho Hermanos” and "San Ramon" claims which are covered by the Sales and Production Contract dated the 4^th day of July, 2009 between “Minerales Ruta Dorado de RL de CV” (seller) and “Mexus Gold Mining S.A. de C.V.”, a wholly owned subsidiary of Mexus Gold US (buyer). The Ocho Hermanos Claim consists of 34.9940 hectares (1 acre = 0.4047 hectares) or 86.4690 acres while the San Ramon Claim consists of 80 hectares (197.6773 acres).(Figure 4).

The initial term of the agreement was 5 years. During the term Mexus must pay 40% of the net revenue received for minerals produced to the seller. At the conclusion of the 5 years, the lease could be purchased for USD 50,000. Upon expiration on July 4, 2014, Mexus renewed the agreement with an indefinite term. The renewed agreement requires Mexus to pay $1,500 per month and 20% to the total proceeds upon a sale of the rights.

Minerales Ruta Dorado de RL de CV is a duly constituted Mexican Company and as such can hold mining claims in Mexico.

8

FIGURE 3 - OCHO HERMANOS

PROJECT AREA CLAIM MAP

We did not perform any systematic sampling or any systematic drilling and because of this did not set up a formal QA/QC program. All of the samples were submitted to Certified Laboratories (ALS - Chemex in Hermosillo or American Assay in Reno, Nevada) which insert their own QA/QC samples/duplicates. Also the laboratories run duplicates and blanks from each batch fired. The sequence of events so far is the following:

We located a previously mined area with interesting values – Ocho Hermanos. Mexus began to submit characterization samples to the above noted assay laboratories, in order to determine the range of Au - Ag values present. Mexus then began an investigation into recovery options by using material taken from the areas with the better values.

The Environmental Permits run for 35 years so there is time for further investigation.

The main geologic feature of this project area is an apparent “manto” sulfide zone composed primarily of galena with some pyrite, arsenopyrite and possibly pyrrhotite. Above this zone there is an oxide zone composed of iron and lead oxides. The sulfides themselves are partially oxidized. Reconnaissance and characterization samples taken indicated sporadically high gold and silver values. The deposit occurs in shallow water sediments (principally quartzites, with some limestone and shales) and can be best characterized as a skarn type deposit due to the presence of intrusive rocks within 1 kilometer.

Given the complex nature of the sulfide deposit and the partial oxidization of the material (indicated by the presence of yellow colored lead oxides), a satisfactory recovery method has not yet been found. Consequently, at this time, no further systematic work beyond the initial reconnaissance and characterization sampling has been completed. The entire project was essentially put on hold until a suitable recovery method is found, which is a continuing effort and at this time is being pursued by a member of the faculty at the University of Sonora in Hermosillo. The faculty member teaches metallurgy and assay practices at the University. After a suitable recovery method has been identified, the process will need to be confirmed by a certified metallurgical testing laboratory.

9

The Environmental Permits detail all of the affected flora and fauna. The land is presently used for cattle grazing and the surface rights are owned by the community of Guadalupe de Ures. An agreement is in place with Mexus Gold Mining S.A. de C.V. for surface access and disturbance. The Environmental Permit concludes that no permanent damage or degradation of the present land use will result from the intended activity on the lands. At present, the Environmental Permits cover a total of 4 hectares - 3 hectares cover the initial site of the mineral as presently understood and 1 hectare is permitted for the erection of a suitable extraction plant.

No known contamination from past mining activities was found or is known to locals. The historic workings consisted of a few shallow adits and pits. In the course of obtaining the Environmental Permission the permit stipulated that properly lined ponds etc. must be used to prevent any potential surface or ground water contamination from any proposed activities.

Only separation is proposed to be conducted on site if found to be possible, while final metal recovery will be conducted at a properly licensed and certified metal refining facility. Current efforts to find suitable recovery methods are being conducted off site in a University laboratory. Up sizing the process, if found, will be completed by a licensed, certified metallurgical laboratory.

Figures of the proposed permitted sites are attached. These were extracted from the environmental permit

Application.

FIGURE 4- MICROLOCALIZACION PROYECTO “URES MINING DISTRICT”

10

FIGURE 5 – LOCALIZACION DE AREAS DE EXTRACCION

FIGURE 6 - PLANTA DE BENEFICIO

AREA DE EXTRACCION

370 Area Project

This zone is composed of a sedimentary sequence (limestone, quartzite, shale) intruded by dacite and diorite as well as rhyolite. The dacite exhibits argillic alterations as well as silicification (quartz veins). The entire area is well oxidized on the surface. This is an area of classic disseminated low grade gold and silver mineralization. Surface grab sample assays show 0.14 grams per ton to as high as 29.490 grams per ton gold. This area is an important area for potentially defining an open pit heap leach project.

El Scorpion Project Area

This area has several shear zones and veins which show copper and gold mineralization. Recent assays of an 84’ drill hole shows 1.750% per ton to .750% per ton of copper and 3.971 grams per ton to 0.072 grams per ton of gold. Another assay of rock sample from the area shows greater than 4.690% per ton copper. This land form distribution appears to be synonymous to the ideal porphyry deposit at Baja La Alumbrera, Argentina.

11

Los Laureles

Los Laureles is a vein type deposit mainly gold with some silver and copper. Recent assays from grab samples show gold values of 67.730 grams per ton gold, 38.4 grams per ton silver, 2,800 grams per ton copper.

As of the date of this Report, we have opened up old workings at the Los Laureles claim and have discovered a gold carrying vein running north and south into the mountain to the south.

The San Felix Mine Project

The San Felix mining site contains seven (7) concessions over an area of approximately 26,000 acres located in the La Alameda area of Caborca, Sonora, Mexico. During the year ended March 31, 2018, the Company recorded an impairment of mineral property for the San Felix Project of $75,000 because the requirement payment of $500,000 due on August 13, 2017 was not paid in accordance with the purchase agreement pending the receipt of certain required instruments from the Grantor by the Company.

Employees

We have one employee, Paul D. Thompson, and no other employees at this time in the United States of Mexico. Consultants with specific skills are utilized to assist with various aspects of the requirements of activities such as project evaluation, property management, due diligence, acquisition initiatives, corporate governance and property management. If we complete our planned activation of the operations of the Mexican mining properties, our total workforce will be approximately 20 persons. Mr. Paul D. Thompson is our sole officer and director.

Competition

We compete with other mining companies in connection with the acquisition of gold properties. There is competition for the limited number of gold acquisition opportunities, some of which is with companies having substantially greater financial resources than Mexus Gold US. As a result, Mexus Gold US may have difficulty acquiring attractive gold projects at reasonable prices.

Management of Mexus Gold US believes that no single company has sufficient market power to affect the price or supply of gold in the world market.

Legal Proceedings

There are no legal proceedings to which Mexus Gold US or Mexus Gold S.A. de C.V. is a party or of which any of our properties are the subject thereof.

Property Interests, Mining Claims and Risk

Property Interests and Mining Claims

Our exploration activities and operations in Mexico are subject to the rules and regulations of the United Mexican States. The Ministry (Secretariat) of Mining is the Federal Mexican Government ministry charged with controlling all mining matters. A concession is granted on the acceptance of an application which identifies the specific minerals to be mined and description of the exact location of the lands to be mined. The concession is subject to a semiannual tax to continue the concession in good standing. Usually, our arrangements with a concessionaire describe specific period payments to the concessionaire and a royalty on the minerals recovered from mining operations. Where prospective mineral properties are identified by the Company, some type of conveyance of the mining rights and property acquisition agreement is necessary in order for us to explore or develop such property. Generally, these agreements take the form of long term mineral leases under which we acquire the right to explore and develop the property in exchange for periodic cash payments during the exploration and development phase and a royalty, usually expressed as a percentage of gross production or net profits derived from the leased properties if and when mines on the properties are brought into production. Other forms of acquisition agreements are exploration agreements coupled with options to purchase and joint venture agreements.

Reclamation

We may be required to mitigate long-term environmental impacts by stabilizing, contouring, re-sloping and re-vegetating various portions of a site after mining and mineral processing operations are completed. These reclamation efforts will be conducted in accordance with detailed plans, which must be reviewed and approved by the appropriate regulatory agencies.

12

While the Company, as of March 31, 2020, does not have a legal obligation associated with the disposal of certain chemicals used in its leaching process, the Company estimates it will incur costs up to $50,000 to neutralize those chemicals at the close of the leaching pond.

Risk

Our success depends on our ability to recover precious metals, process them, and successfully sell them for more than the cost of production. The success of this process depends on the market prices of metals in relation to our costs of production. We may not always be able to generate a profit on the sale of gold or other minerals because we can only maintain a level of control over our costs and have no ability to control the market prices. The total cash costs of production at any location are frequently subject to great variation from year to year as a result of a number of factors, such as the changing composition of ore grade or mineralized material production, and metallurgy and exploration activities in response to the physical shape and location of the ore body or deposit. In addition costs are affected by the price of commodities, such as fuel and electricity. Such commodities are at times subject to volatile price movements, including increases that could make production at certain operations less profitable. A material increase in production costs or a decrease in the price of gold or other minerals could adversely affect our ability to earn a profit on the sale of gold or other minerals. Our success depends on our ability to produce sufficient quantities of precious metals to recover our investment and operating costs.

Distribution Methods of the Products

The end product of our operations will usually be doré bars. Doré is an alloy consisting of gold, silver and other precious metals. Doré is sent to refiners to produce bullion that meets the required market standard of 99.95% pure gold. Under the terms of refining agreements, the doré bars are refined for a fee and our share of the refined product is delivered to a buyer for immediate sale or held by the Company for investment purposes.

General Market

The general market for gold has two principal categories, being fabrication and investment. Fabricated gold has a variety of end uses, including jewelry, electronics, dentistry, industrial and decorative uses, medals, medallions and official coins. Gold investors buy gold bullion, official coins and jewelry. The supply of gold consists of a combination of current production from mining and the draw-down of existing stocks of gold held by governments, financial institutions, industrial organizations and private individuals.

Patents, trademarks, licenses, franchises, concessions, royalty agreements, or labor contracts, including duration;

We do not have any designs or equipment which is copyrighted, trademarked or patented.

Effect of existing or probable governmental regulations on the business

Government Regulation

Mining operations and exploration activities in Mexico are subject to the Ministry of Mining federal laws and regulations which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We have obtained or have pending applications for those licenses, permits or other authorizations currently required to conduct our exploration and other programs. We believe that Mexus Gold US is in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder any jurisdiction in which we will operate. We are not aware of any current orders or directions relating to Mexus Gold US with respect to the foregoing laws and regulations.

Environmental Regulation

Our gold projects are subject to various Mexican federal laws and regulations governing protection of the environment. These laws are continually changing and, in general, are becoming more restrictive. It is our policy to conduct business in a way that safeguards public health and the environment. We believe that the actions and operations of Mexus Gold US will be conducted in material compliance with applicable laws and regulations. Changes to current Mexican federal laws and regulations where we operate currently, or in jurisdictions where we may operate in the future, could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of our projects.

Research and Development

We do not foresee any immediate future research and development costs.

13

Costs and effects of compliance with environmental laws

Our gold projects are subject to various federal and state laws and regulations governing protection of the environment. These laws are continually changing and, in general, are becoming more restrictive. It is our policy to conduct business in a way that safeguards public health and the environment. We believe that our operations are and will be conducted in material compliance with applicable laws and regulations. The economics of our current projects consider the costs and expenses associated with our compliance policy.

Changes to current state or federal laws and regulations in Mexico, where we operate currently, or in jurisdictions where we may operate in the future, could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of our projects.

Item 1A. Risk Factors

As a smaller reporting company, we are not required to provide the information required by this Item number.

Item 1B. Unresolved Staff Comments.

None

Item 2. Properties

Real Property

At present, we do not own any property. Our business office is located at 13601 East River Road, Sacramento, CA 95690, in a leased facility where we have local access to all commercial freight systems. The current retail facility is approximately 5,000 square feet of building and one acre of concrete padded yard. This facility contains our administrative and sales as well as our manufacturing facility. Monthly rent is $3,800 and the lease term is month to month.

Item 3. Legal Proceedings

We are not a party to any legal proceedings responsive to this Item number.

Item 4. Mining Safety Disclosures

As a smaller reporting company, we are not required to provide the information required by this Item number.

14

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market information

Our common stock has been quoted on the Over-The-Counter Bulletin Board since on or about March 2009, under the symbol “MXSG.” The stock currently trades on the OTCMarkets trading system under the symbol "MXSG." The following table sets forth the high and low bid prices for our common stock for each quarter during the last two fiscal years, so far as information is reported, as quoted on the Over-the-Counter Bulletin Board. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

As of June 21, 2021, we had 205,151,461 shares of our common stock issued and outstanding, of which 96,259,862 shares were restricted. The closing price of our common stock on June 21, 2021, was $0.0288.

Holders

At of the date of this report, we have approximately 353 holders of record of our common stock.

Dividends

We have not declared any cash dividends on any class of our securities and we do not have any restrictions that currently limit, or are likely to limit, our ability to pay dividends now or in the future.

Securities authorized for issuance under equity compensation plans

On August 11, 2016, our Board adopted the Mexus Gold US 2016 Stock Incentive Plan. The total number of shares of stock which may be purchased or granted directly by Options, Stock Awards or Restricted Stock Purchase Offers, or purchased indirectly through exercise of Options granted under the plan shall not exceed thirty million (30,000,000).

Item 6. Selected Financial Data.

As a smaller reporting company, we are not required to provide the information required by this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Recent Developments – COVID-19 Pandemic

The recent outbreak of the coronavirus COVID-19 has spread across the globe and is impacting worldwide economic activity. Conditions surrounding the coronavirus continue to rapidly evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. The outbreak and the related mitigation measures have had and will continue to have a material adverse impact on global economic conditions as well as on the Company's business activities. The extent to which COVID-19 may impact the Company's business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in the United States, Mexico and other countries to contain and treat the disease. These events are highly uncertain and, as such, the Company cannot determine their financial impact at this time. No adjustments have been made to the amounts reported in the consolidated financial statements as a result of this matter.

15

Critical Accounting Policies

Mineral Property Rights

Costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred either to develop new ore deposits, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates the carrying value of capitalized mining costs and related property and equipment costs, to determine if these costs are in excess of their recoverable amount whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Evaluation of the carrying value of capitalized costs and any related property and equipment costs would be based upon expected future cash flows and/or estimated salvage value in accordance with Accounting Standards Codification (ASC) 360-10-35-15, Impairment or Disposal of Long-Lived Assets.

Long-Lived Assets

In accordance with ASC 360, Property Plant and Equipment the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Asset Retirement Obligations

In accordance with accounting standards for asset retirement obligations (ASC 410), the Company records the fair value of a liability for an asset retirement obligation (ARO) when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. The associated asset retirement costs are supposed to be capitalized as part of the carrying amount of the related mineral properties. As of March 31, 2021 and 2020, the Company has not recorded AROs associated with legal obligations to retire any of the Company’s mineral properties as the settlement dates are not presently determinable.

Revenue Recognition

The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured.

Accounting for Derivative Instruments

Accounting standards require that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. A change in the market value of the financial instrument is recognized as a gain or loss in results of operations in the period of change.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.

16

Results of Operations

The following management’s discussion and analysis of operating results and financial condition of Mexus Gold US is for the years ended March 31, 2021 and 2020. All amounts herein are in U.S. dollars.

Year Ended March 31, 2021 Compared with the Year Ended March 31, 2020

We had a net loss during the year ended March 31, 2021 of $3,332,130 compared to a net loss of $3,218,296 during the same period in 2020. The increase in net loss is primarily attributable (i) an increase in stock-based compensation – consulting services of $774,977 (ii) an increase in interest expense of $141,899 and (iii) an increase in loss on settlement of debt of $194,489. The increase in the net loss is partially offset by (i) an increase in the sale of gold of $75,073 (ii) a decrease in exploration costs of $188,174 (iii) a decrease in general and administration expense of $181,164 and (iv) a gain on the change in the fair value of and settlement of convertible promissory notes and derivative liabilities of $545,583.

Operating Expenses

Total operating expenses increased to $2,360,066 for year ended March 31, 2021, compared to $2,045,900 for the year ended March 31, 2020. The increase in operating expenses was primarily due to increases in stock-based expense – consulting services,

For the year ended March 31, 2021, the Company had recoveries from the sale of gold of $151,360 compared to $76,287 for the year ended March 31, 2020. Sales of gold are reported as a reduction of exploration expense in the consolidated statement of operations since the Company is in the exploration stage.

Other Income (Expense)

We reported $972,064 of other expense during the year ended March 31, 2021 compared to $1,172,396 of other income during the same period in 2020.

The change in other income (expense) is mainly attributable to an increase in the gain on the change in the fair value of and settlement of convertible promissory notes and derivative liabilities which was partially offset by an increase in interest expense and loss on settlement of debt. The increase in interest expense is primarily due to the issuance of the convertible promissory notes.

Liquidity and Capital Resources

On March 31, 2021, we had cash of $8,081 compared to cash of $64,173 on March 31, 2020.

Our property and equipment decreased to $293,392 at March 31, 2021, compared to $330,888 at March 31, 2020. The decrease in equipment is largely due to depreciation expense of $86,496 during the year ended March 31, 2021 and partially offset by $49,000 for the purchase of equipment.

Our mineral properties remained unchanged at $829,947 on March 31, 2021 and 2020.

Total assets decreased to $1,131,420 on March 31, 2021, compared to 1,225,008 on March 31, 2020. The majority of the decrease in assets relates to a $86,496 of depreciation expense which was partially offset by $49,000 for the purchase of equipment and decrease in cash of $56,092.

Our total liabilities increased to $2,632,722 as of March 31, 2021, compared to $2,779,970 as of March 31, 2020. The increase in our total liabilities can be primarily attributed to an increase in accounts payable and notes payable.

Our working capital deficit on March 31, 2021 and 2020 is $2,624,641 and $2,715,797, respectively.

Our net cash used in operating activities for the year ended March 31, 2021 and 2020 is $799,875 and $1,272,864, respectively. Our net loss for the year ended March 31, 2021 of $3,332,130 was the main contributing factor for our negative cash flow offset mainly by depreciation and amortization of $86,496, loss on settlement of debt and accounts payable of $324,252, stock-based compensation – consulting services of $1,312,877 and non-cash interest expense of $1,325,732.

Our net cash (used in) provided by investing activities for the year ended March 31, 2021 and 2020 is $(49,000) and $(44,125), respectively, mainly due to the purchase of equipment.

17

Our net cash provided by financing activities for the year ended March 31, 2021 and 2020 is $792,783 and $1,369,133, respectively, mainly due to issuance of notes payable, convertible promissory notes and common stock.

The Company is dependent upon outside financing to continue operations. It is management’s plans to raise necessary funds through a private placement of its common stock to satisfy the capital requirements of the Company’s business plan. There is no assurance that the Company will be able to raise the necessary funds, or that if it is successful in raising the necessary funds, that the Company will successfully execute its business plan. The Company is unable to predict the effect, if any, that the coronavirus COVID-19 global pandemic may have on its access to the financing markets.

Future goals

The Caborca Properties have become our primary focus after our installation of a small placer recovery plant to conduct tests on prospective placer areas and determine the viability of the placer deposits while we conducted evaluations of the other Mexico properties. We have added additional equipment which will allow the continuation of mining operations of the placer deposits.

The Company has now scheduled the installation of a crushing/milling recovery plant for the high grade Julio quartz deposit as a result of the values of the assay analysis from the deposit which range from .250 to 5.5 ounces of gold per ton.

Therefore, our goal for the current year is to increase the cash flow of the placer mining operation, continue the drilling program which began during 2011, initialize mining operations on the Julio quartz deposit while we conduct a thorough geological study by an independent geological firm of the future potential of other vein deposits located near the Julio deposit.

Foreign Currency Transactions

The majority of our operations are located in United States and most of our transactions are in the local currency. We plan to continue exploration activities in Mexico and therefore we will be exposed to exchange rate fluctuations. We do not trade in hedging instruments and a significant change in the foreign exchange rate between the United States Dollar and Mexican Peso could have a material adverse effect on our business, financial condition and results of operations.

Off-balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We currently do not utilize sensitive instruments subject to market risk in our operations.

Item 8. Financial Statements and Supplementary Data.

Our financial statements and related explanatory notes can be found on the “F” Pages at the end of this Report.

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this annual report.

Based on this evaluation, our chief executive officer and chief financial officer concluded that as of the evaluation date our disclosure controls and procedures were not effective. Our procedures were designed to ensure that the information relating to our company required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure. Management is currently evaluating the current disclosure controls and procedures in place to see where improvements can be made.

18

Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting has been designed 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 generally accepted in the United States of America. The Company's internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorization of management and directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the Company's financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company's internal control over financial reporting at March 31, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control--Integrated Framework. Based on that assessment under those criteria, management has determined that, at March 31, 2021, the Company's internal control over financial reporting was not effective.

This Annual Report on Form 10-K does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.

Inherent Limitations of Internal Controls

Our internal control over financial reporting is designed 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. Our internal control over financial reporting includes those policies and procedures that:

·pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;  

·provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and  

·provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.  

Our management does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed 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 internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has not identified any change in our internal control over financial reporting in connection with its evaluation of our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None

19

PART III

Item 10. Directors, Executive Officers and Corporate Governance. 

The following table sets forth, as of the date of this annual report, the name, age and position of our sole director/executive officer.

The background of our sole director/executive officer is as follows:

Paul D. Thompson

Mr. Paul D. Thompson is our sole director and officer acting in the capacity of Chief Executive Officer, Chief Financial Officer and Secretary. Mr. Thompson is 76 years old and has been involved in mining and the construction of mining equipment since 1959. Past mining companies which Mr. Thompson has established and operated include: Thompson Mining Corp. which developed mining and milling prospects; Thompson Yellow Jacket Mining which performed underground mining and milling; and Golden Eagle Mining Corp. which performed drilling and exploration. Mr. Thompson’s past mining activities include the Centennial Mine Project; the Otter Creek (placer) Project; and the "Big Hole" project on the Cosumnes River all located in El Dorado County, California. In addition, during the late 1980’s Mr. Thompson successfully developed the Crystal Caves Mobil Home Park in South El Dorado County. In Virginia City, Nevada, Mr. Thompson constructed a fully operating 1860's style 2 stamp mill for crushing and processing gold as an ongoing business to educate people on how gold was historically processed. In addition, for the past three years, Mr. Thompson has been conducting mineral exploration in Sonora, Mexico resulting in the acquisition of approximately 9,000 hectares of claims and six mining concessions.

Information about our Board and its Committees.

Audit Committee

We currently do not have an audit committee although we intend to create one as the need arises. Currently, our Board of Directors serves as our audit committee.

Compensation Committee

We currently do not have a compensation committee although we intend to create one as the need arises. Currently, our Board of Directors serves as our Compensation Committee.

Advisory Board

We currently do not have an advisory board although we intend to create one as the need arises.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers, and stockholders holding more than 10% of our outstanding common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in beneficial ownership of our common stock. Executive officers, directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on review of the copies of such reports furnished to us for the period ended March 31, 2021, the Section 16(a) reports required to be filed by our executive officers, directors and greater-than-10% stockholders were not filed on a timely basis.

20

Code of Ethics

Item 11. Executive Compensation

The following table sets forth the compensation paid to executive officers, for services rendered, and to be rendered. No restricted stock awards, long-term incentive plan payouts or other types of compensation, other than the compensation identified in the chart below, were paid to our executive officers during the fiscal years presented. As of the date of this Report, Mr. Thompson is our sole officer and director.

Employment Agreements

On March 31, 2021, the Company entered into a compensation agreement with Paul D. Thompson, the sole director and officer of the Company. Mr. Thompson is compensated $15,000 per month and has the option to take payment in Company stock valued at an average of 5 days closing price, cash payments or deferred payment in stock or cash. In addition, Mr. Thompson is due 2,000,000 shares of common stock at the end of each fiscal quarter.

Compensation of Director

We currently do not compensate our director. In the future, we may compensate our current director or any additional directors for reasonable out-of-pocket expenses in attending board of directors’ meetings and for promoting our business. From time to time we may request certain members of the board of directors to perform services on our behalf. In such cases, we will compensate the directors for their services at rates no more favorable than could be obtained from unaffiliated parties.

The following table sets forth certain information regarding the beneficial ownership of the 205,151,461 issued and outstanding shares of our common stock as of June 21, 2021, by the following persons:

·each person who is known to be the beneficial owner of more than five percent (5%) of our issued and outstanding shares of common stock; 

·each of our directors and executive officers; and 

·all of our Directors and Officers as a group 

21

(1)1805 N. Carson Street, Suite 150, Carson City, NV 89701. 

(2)Includes 20,685,861 shares of common stock held by Mr. Thompson individually; 33,000 shares of common stock held by Tioga Gold, Inc.; 9,146 shares of common stock held by Mexus Gold Mining S.A. C.V.; and 5,689 shares of common stock held by Mexus Gold International. 

(3)Mr. Thompson owns 1,000,000 shares of our Series A Convertible Preferred Stock, $.001 par value. Each share of our Series A Convertible Preferred Stock converts into 10 shares of our common stock. Assuming Mr. Thomson converted 100% of the Series A Convertible Preferred Stock held by him into shares of common stock, he would hold and additional 10,000,000 shares of common stock and a grand total of 30,733,696 shares of commons stock or approximately 14.3% of our issued and outstanding shares of common stock. 

(4)Holders of our Series A Convertible Preferred Stock have such number of votes as is determined by multiplying: (a) the number of shares of Series A Convertible Preferred Stock held by such holder, (b) the number of issued and outstanding shares of the Corporation’s Series A Convertible Preferred Stock and common stock on a fully-diluted basis; and (c) 0.000006. Accordingly, on any stockholders’ vote, Mr. Thompson has a total of 1,230,908,766 votes, and far greater than 50% of the issued and outstanding voting stock of the company. 

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. The number of shares and the percentage beneficially owned by each individual listed above include shares that are subject to options held by that individual that are immediately exercisable or exercisable within 60 days from the date of this annual report and the number of shares and the percentage beneficially owned by all officers and directors as a group includes shares subject to options held by all officers and directors as a group that are immediately exercisable or exercisable within 60 days from the date of this registration statement.

Item 13. Certain Relationships and Related Transactions and Director Independence.

None.

Transactions with Promoters

None.

Item 14. Principal Accounting Fees and Services.

Appointment of Auditors

Our Board of Directors selected RBSM LLP (“RBSM LLP”) as our auditors for the years ended March 31, 2021 and 2020.

Audit Fees

RBSM LLP billed us $76,500 in audit fees during the year ended March 31, 2021.

RBSM LLP billed us $48,000 in audit fees during the year ended March 31, 2020.

Audit-Related Fees

We did not pay any fees to RBSM LLP for assurance and related services that are not reported under Audit Fees above, during our fiscal years ending March 31, 2021 and 2020.

Tax and All Other Fees

RBSM LLP billed us $0 for tax compliance, tax advice, tax planning or other work during our fiscal year ending March 31, 2021.

RBSM LLP billed us $2,500 for tax compliance, tax advice, tax planning or other work during our fiscal year ending March 31, 2020.

Pre-Approval Policies and Procedures

We have implemented pre-approval policies and procedures related to the provision of audit and non-audit services. Under these procedures, our board of directors pre-approves all services to be provided by RBSM LLP and the estimated fees related to these services.

22

With respect to the audit of our financial statements as of March 31, 2021 and 2020, and for the years then ended, none of the hours expended on RBSM LLP’s engagement to audit those financial statements were attributed to work by persons other than RBSM LLPs full-time, permanent employees.

Item 15. Exhibits, Financial Statement Schedules.

23

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant on the capacities and on the dates indicated.

24

MEXUS GOLD US AND SUBSIDARIES

CONSOLIDATED FINANCIAL STATEMENTS

(AN EXPLORATION STAGE COMPANY)

March 31, 2021 and 2020

25

805 Third Avenue

New York, NY 10022

Tel. 212.838.5100

Fax 212.838.2676

www.rbsmllp.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Mexus Gold US. and subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Mexus Gold US. and subsidiaries (The “Company”) as of March 31, 2021 and 2020, and the related consolidated statements of operations, stockholders’ (deficit) equity, and cash flows for each of the years in the two year period ended March 31, 2021 and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2021, and 2020 and the consolidated results of its operations and its cash flows for each of the years in the two year period ended March 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has an accumulated deficit, recurring losses, and expects continuing future losses. At March 31, 2021, the Company is in the exploration stage, these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

F-1

MEXUS GOLD US AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

F-2

MEXUS GOLD US AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

F-3

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

F-4

MEXUS GOLD US AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

F-5

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

1. ORGANIZATION AND BUSINESS OF COMPANY 

Mexus Gold US (the “Company”) was originally incorporated under the laws of the State of Colorado on June 22, 1990, as U.S.A. Connection, Inc. On October 28, 2005, the Company changed its’ name to Action Fashions, Ltd. On September 18, 2009, the Company changed its’ domicile to Nevada and changed its’ name to Mexus Gold US to better reflect the Company’s new planned principle business operations. The Company has a fiscal year end of March 31.

The Company is a mining company engaged in the evaluation, acquisition, exploration and advancement of gold, silver and copper projects in the State of Sonora, Mexico and the Western United States, as well as, the salvage of precious metals from identifiable sources.

2. GOING CONCERN 

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the year ended March 31, 2021, the Company incurred a net loss of $3,332,130 and used cash in operating activities of $799,875, and on March 31, 2021, had an accumulated deficit of $35,677,798. On March 31, 2021, the Company is in the exploration stage. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. The Company’s independent registered public accounting firm, in their report on the Company’s financial statements for the year ending March 31, 2021, expressed substantial doubt about the Company’s ability to continue as a going concern.

The Company is dependent upon outside financing to continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management’s plans to raise necessary funds through a private placement of its common stock to satisfy the capital requirements of the Company’s business plan. There is no assurance that the Company will be able to raise the necessary funds, or that if it is successful in raising the necessary funds, that the Company will successfully execute its business plan. The Company is unable to predict the effect, if any, that the coronavirus COVID-19 global pandemic may have on its access to the financing markets.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and/or liabilities that might be necessary should the Company be unable to continue as a going concern. The continuation as a going concern is dependent upon the ability of the Company to meet our obligations on a timely basis, and, ultimately to attain profitability.

3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES  

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. Certain 2020 financial statement amounts have been reclassified to conform to the financial statement presentation adopted in the current year.

These accounting policies conform to accounting principles generally accepted in the United States of America and are presented in U.S. dollars.

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and controlled subsidiaries, Mexus Gold Mining, S.A. de C.V. (“Mexus Gold Mining), Mexus Enterprises S.A. de C.V. (“Mexus Gold Enterprises”) and Mexus Gold MX S.A. DE C.V. (“Mexus Gold MX”). Significant intercompany accounts and transactions have been eliminated.

F-6

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED) 

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Management believes that the estimates used are reasonable. The more significant estimates and assumptions by management include, among others, the accrual of potential liabilities, the assumptions used in valuing share-based instruments issued for services, valuation of derivative liabilities and the valuation allowance for deferred tax assets.

Cash and cash equivalents

The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

Equipment

Equipment consists of mining tools and equipment, watercraft and vehicles which are depreciated on a straight-line basis over their expected useful lives as follows (see Note 4):

Exploration and Development Costs

Exploration costs incurred in locating areas of potential mineralization or evaluating properties or working interests with specific areas of potential mineralization are expensed as incurred. Development costs of proven mining properties not yet producing are capitalized at cost and classified as capitalized exploration costs under property, plant and equipment. Property holding costs are charged to operations during the period if no significant exploration or development activities are being conducted on the related properties. Upon commencement of production, capitalized exploration and development costs would be amortized based on the estimated proven and probable reserves benefited. Properties determined to be impaired or that are abandoned are written-down to the estimated fair value. Carrying values do not necessarily reflect present or future values.

Mineral Property Rights

Costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred either to develop new ore deposits, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates the carrying value of capitalized mining costs and related property and equipment costs, to determine if these costs are in excess of their recoverable amount whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Evaluation of the carrying value of capitalized costs and any related property and equipment costs are based upon expected future cash flows and/or estimated salvage value in accordance with Accounting Standards Codification (ASC) 360-10-35-15, Impairment or Disposal of Long-Lived Assets.

F-7

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED) 

Long-Lived Assets

In accordance with ASC 360, Property Plant and Equipment the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Fair Value of Financial Instruments

ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.

The Company's financial instruments consist of cash, accounts payable, accrued liabilities, advances, notes payable, and a promissory note payable. The carrying amount of these financial instruments approximate fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Secured convertible promissory note derivative liability is measured at fair value on a recurring basis using Level 3 inputs.

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. The notes payable, loans payable and secured convertible promissory notes have fixed interest rates therefore the Company is exposed to interest rate risk in that they could not benefit from a decrease in market interest rates. In seeking to minimize the risks from interest rate fluctuations, the Company manages exposure through its normal operating and financing activities.

Derivative Instruments

Accounting standards require that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. A change in the market value of the financial instrument is recognized as a gain or loss in results of operations in the period of change.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars in accordance with ASC 740, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

To the extent that the Company incurs transactions that are not denominated in its functional currency, they are undertaken in Mexican Pesos. The Company has not, as of the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

F-8

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED) 

Comprehensive Loss

ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive loss and its components in the consolidated financial statements. For the years ended March 31, 2021 and 2020, the Company had no items that represent a comprehensive loss, and therefore has not included a schedule of comprehensive loss in the consolidated financial statements.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Tax”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Asset Retirement Obligations

In accordance with accounting standards for asset retirement obligations (ASC 410), the Company records the fair value of a liability for an asset retirement obligation (ARO) when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. The associated asset retirement costs are supposed to be capitalized as part of the carrying amount of the related mineral properties. As of March 31, 2021 and 2020, the Company has not recorded AROs associated with legal obligations to retire any of the Company’s mineral properties as the settlement dates are not presently determinable.

Revenue Recognition

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.

Stock-based Compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.

Per Share Data

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share". Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

F-9

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED) 

On March 31, 2021 and 2020, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock as their effect would have been anti-dilutive:

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This update amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity and improves and amends the related EPS guidance for both Subtopics. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2023, which means it will be effective for our fiscal year beginning April 1, 2024. Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are currently evaluating the impact of ASU 2020-06 on our consolidated financial statements.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

4. MINERAL PROPERTIES AND EXPLORATION COSTS 

The following is a continuity of mineral property acquisition costs capitalized on the consolidated balance sheets during the years ended March 31, 2021 and 2020:

F-10

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

4. MINERAL PROPERTIES AND EXPLORATION COSTS (CONTINUED) 

The following is a continuity of exploration costs expensed in the consolidated statements of operation:

(a)Ures Property 

On May 25, 2010, the Company entered into a Mineral Exploration and Mining Lease with Option to Purchase mineral rights approximately 80 km NE of Hermosillo, Sonora, Mexico. The properties comprise approximately 10,000 acres over 9 concessions (including Ocho Hermanos, 370, San Ramon, Plat Osa, Edgar 1, Edgar 2, El Scorpio, Los Laureles and Mexus Gold). These property rights are owned by Mexus Gold S.A. de C.V. The Company is currently evaluating two properties, the El Scorpio and Ocho Hermanos. The evaluation involves trench testing and sampling.

(b)Santa Elena Mine 

Santa Elena Mine (also known as Caborca or Julio) comprise seven concessions with a total of 898.028 hectares of exploration properties located 54km NW of Caborca, State of Sonora, Mexico. These property rights are owned by Mexus Gold Mining S.A. de C.V. On March 31, 2021, a total of $505,947 have been capitalized on the consolidated balance sheet for these property costs.

On May 19, 2016, Mexus entered into a new joint venture agreement to continue the exploration program under the Exploration, Exploitation and Mining Concessions Agreement (“Marmar Agreement”) with Marmar Holdings SA de CV (“Marmar”) for the Santa Elena property (title 221448) and Marta Elena property (title 221447). The Marmar Agreement requires Mexus to contribute its interest in the Santa Elena and Marta Elena properties and Marmar will bear all costs associated with operations and administration. Profits from net revenues will be distributed 5% Mexus and 95% Marmar until Marmar recovers its operating and administration costs. Thereafter, net revenues with be distributed 50% Mexus and 50% Marmar.

On April 16, 2018, the Company announced that it terminated its joint venture agreement with MarMar. The agreement outlined the contractual obligations at the Santa Elena project in Caborca, Sonora State, Mexico. The decision to terminate the agreement was made due to MarMar’s lack of funding for the project, non-compliance with various aspects of the agreement, and their inability to meet environmental standards at the site. The Company intends to move forward on the project with the proper equipment and personnel.

(c)San Felix Project 

Effective January 13, 2017, Mexus Gold Mining, S.A. de C.V., a wholly owned Mexican subsidiary of the Company, entered into a purchase agreement with Jesus Leopoldo Felix Mazon, Leonardo Elias Jaime Perez, and Elia Lizardi Perez, wherein the Company purchased a 50% interest in the “San Felix” mining site located in the La Alameda area of Caborca, State of Sonora, Mexico. The remaining 50% of the site is owned jointly by Mar Holdings S.A. de C.V. and Marco Antonio Martinez Mora.

The San Felix mining site contains seven (7) concessions over an area of approximately 26,000 acres.

F-11

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

4. MINERAL PROPERTIES AND EXPLORATION COSTS (CONTINUED) 

The total purchase price is US$2,000,000 of which the Company is 50% responsible. The required payment schedule is a follows: $150,000 by January 30, 2017, $500,000 by August 13, 2017, $500,000 by March 13, 2018, $500,000 by October 13, 2018, and $350,000 by May 13, 2019. On January 30, 2017, the Company paid $75,000 (50% of $150,000).

During the year ended March 31, 2018, the Company recorded an impairment of mineral property for the San Felix Project of $75,000 because the requirement payment of $500,000 due on August 13, 2017 was not paid in accordance with the purchase agreement.

(d)Project Mabel 

On January 18, 2018, Mexus Gold MX, entered into three Letter of Intent (“LOI”) agreements (collective known as Project Mabel) to exploit and transfer mineral rights owed by Cesar Mauricio Lemas Contreras.

(i)Project “Mabel” – Declaration of Intent dated January 18, 2018 with participation of 90% Mexus Gold MX and 10% Pacific Comox S.A. de C.V. (“Pacific Comox”). The administrator of Pacific Comox is Cesar Maruicio Lemas Contreras. This LOI contemplates transfers of mining rights at concessions 216136, 216137, 218587, 218588, 190649, 172975, 2019102, 172960, 180700, 222782 and 222783, which together add up to 2,128.2003 hectares 

(ii)Project “El Plomito” – Declaration of Intent dated January 23, 2018 with participation of 50% Mexus Gold MX and 50% Pacific Comox. This LOI contemplates transfers of mining rights at concessions 220563, 213711, 215941, 216544, 200395 and 222989, which together add up to 275.02 hectares. 

(iii)Project “La Famosa” – Declaration of Intent dated January 21, 2018 with participation of 50% Mexus Gold MX and 50% Pacific Comox. This LOI contemplates transfers of mining rights at concessions 220394, 220395, 220840, 220841 and 199006, which together add up to 200.0568 hectares. 

On January 23, 2018, the Company paid 300,000 shares of common stock valued at $324,000 ($1.08 per share) to Cesar Maruicio Lemas Contreras as consideration to enter into three Letter of Intent agreements. On March 31, 2018, the payment was recorded as a deposit on mineral property in the consolidated balance sheet. On May 1, 2018, the $324,000 deposit on mineral properties was transferred to property costs on the consolidated balance sheet.

5. PROPERTY & EQUIPMENT 

Depreciation expense for years ended March 31, 2021 and 2020 was $86,496 and $168,757, respectively.

F-12

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

6. ACCOUNTS PAYABLE – RELATED PARTIES 

During the years ended March 31, 2021 and 2020, the Company incurred rent expense to Paul D. Thompson, the sole director and officer of the Company, of $45,600 and $45,600, respectively. On March 31, 2021 and 2020, $147,153 and $107,161 for this obligation is outstanding, respectively.

Compensation

On March 31, 2021, the Company entered into a compensation agreement with Paul D. Thompson Sr., the sole director and officer of the Company. Mr. Thompson is compensated $15,000 per month and has the option to take payment in Company stock, cash payment or deferred payment in stock or cash. In addition. Mr. Thompson is due 2,000,000 shares of common stock at the end of each fiscal quarter. On March 31, 2021 and 2020, $280,949 and $290,308 of compensation due is included in accounts payable – related party, respectively and $51,400 for 2,000,000 shares and $32,600 for 100,000 shares of common stock due is included in share subscriptions payable, respectively.

7. NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTY 

(i)During the period from June 12, 2020 to June 15, 2020, the Company issued two (2) promissory notes (“Notes”) with $20,000 in principal that earns interest at 12% per annum and a term of six months. These promissory notes together with any unpaid accrued interest are payable, at the option of the holder, in cash or shares in the Company valued at the average closing prices of the previous 14 trading days. These Notes has been accounted for in accordance with ASC 480 Distinguishing Liabilities from Equity. 

(ii)On July 2, 2020, the Company issued a promissory note (“Note”) for cash with $35,000 in principal that earns interest at 12% per annum and a term of six months. In conjunction with the issuance of this Note the Company issued 875,000 shares of its common stock to the Note holder which was recorded as a $35,000 debt discount. 

(iii)On August 26, 2020, the Company issued a promissory note (“Note”) for cash with $10,000 in principal that earns interest at 12% per annum and a term of six months. In conjunction with the issuance of this Note the Company issued 416,667 shares of its common stock to the Note holder which was recorded as a $10,000 debt discount. 

(iv)On September 4, 2020, the Company issued a promissory note (“Note”) with a principal of amount of $82,650 bearing interest of 10% per annum to settle $82,650 in accounts payable due for accounting fees. The Note is due on September 30, 2021. The Note holder, in its sole discretion, may convert any part or all of the principal, interest or other charges due and payable under this Note to restricted common stock of the Company at a variable conversion price calculated at 50% of the market price defined as the average of the five closing trading prices during the previous five trading days. The Note was analyzed by the Company in accordance with ASC 470 Debt and it was determined that there was no gain or loss on extinguishment. This Note has been accounted for in accordance with ASC 480 Distinguishing Liabilities from Equity. 

(v)On September 23, 2020, the Company agreed to change certain terms of a promissory note (“Note”) issued on April 15, 2019, with principal of $66,754 and accrued interest of $11,566. The Note had the following original terms (i) bearing interest of 10% per annum (ii) the holder of the Note may convert principal and interest into shares of common stock of the Company at $0.10 per share and (iii) due on June 30, 2020. The Company agreed the Note holder, in its sole discretion, may convert any part or all of the principal, interest or other charges due and payable under this Note to restricted common stock of the Company at a variable conversion price calculated at 50% of the market price defined as the average of the five closing trading prices during the previous five trading days and change the maturity date to September 30, 2021. The Note was analyzed by the Company in accordance with ASC 470 Debt and it was determined that there was no gain or loss on extinguishment. This Note has been accounted for in accordance with ASC 480 Distinguishing Liabilities from Equity. The Note is no longer convertible at a fixed price of $0.10 per share. 

During the year ended March 31, 2021 and 2020, note principal of $2,000 and $255,000, respectively, was paid through the issuance of 50,000 shares and 2,432,493 shares of common stock, respectively. In addition, for year ended March 31, 2021 and 2020, the Company paid $32,000 and $210,000 in cash, respectively, to settle debt.

F-13

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

7. NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTY (CONTINUED) 

Interest and amortization of debt discount was $366,927 and $370,150 for the years ended March 31, 2021 and 2020, respectively.

On March 31, 2021 and 2020, accrued interest of $214,744 and $113,603, respectively, is included in accounts payable and accrued liabilities.

On March 31, 2021, $1,277,775 of notes payable and notes payable – related party were in default. There are no default provisions stated in these notes.

8. PROMISSORY NOTES 

On March 31, 2021 and 2020, outstanding Promissory Notes were $65,000 and $65,000, respectively. The Note bear interest of 4% per annum and are due on December 31, 2013. The Note is secured by all of Mexus Gold US shares of stock in Mexus Resources S.A. de C.V. and a personal guarantee of Paul D. Thompson. As of March 31, 2021, the Company has not made the scheduled payments and is in default on this promissory note. The default rate on the notes is seven percent. On March 31, 2021 and 2020, accrued interest of $46,351 and $38,043, respectively, is included in accounts payable and accrued liabilities.

9. CONVERTIBLE PROMISSORY NOTES 

Power Up Lending Group Ltd.

On November 7, 2018, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $78,000 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing August 30, 2019 for $75,500 in cash. After 170 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $50,690 which was recorded as a debt discount. The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus interest, and between 151 days and 170 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On May 10, 2019, the Company paid $111,531 in cash to Power Up Lending Group Ltd. to fully settle the Note resulting in a gain on settlement of $15,471. Interest and amortization of debt discount was $50,203 for the year ended March 31, 2020.

F-14

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

9. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 

On January 25, 2019, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $73,000 less transaction costs of $3,000 bearing a 12% annual interest rate and maturing November 15, 2019 for $70,000 in cash. After 170 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $76,073, of which $70,000 was recorded as debt discount and the remainder of $6,073 was recorded expensed and included in gain (loss) on derivative liability. The Company may repay the Note in cash if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus interest, and between 151 days and 170 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On July 18, 2019, the Company paid $104,188 in cash to Power Up Lending Group Ltd. to fully settle the Note resulting in a gain on settlement of $14,249. Interest and amortization of debt discount was $91,207 for the year ended March 31, 2020.

On April 5, 2019, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $88,000 less transaction costs of $3,000 bearing a 12% annual interest rate and maturing February 28, 2020 for $85,000 in cash. After 170 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $74,311 which was recorded as a debt discount. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus interest, and between 151 days and 170 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On October 8, 2019, the Company paid $125,830 in cash to Power Up Lending Group Ltd. to fully settle the Note resulting in a gain on settlement of $17,602. Interest and amortization of debt discount was $132,743 for the year ended March 31, 2020.

On May 9, 2019, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $83,000 less transaction costs of $3,000 bearing a 12% annual interest rate and maturing March 15, 2020 for $80,000 in cash. After 170 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $77,741 which was recorded as a debt discount. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus interest, and between 151 days and 170 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. From November 14, 2019 to December 9, 2019, the Company issued 1,343,493 shares of common stock of the Company with the fair value $151,531 to Power Up Lending Group Ltd. to fully settle the Note resulting in a loss on settlement of $16,177. Interest and amortization of debt discount was $133,096 for the year ended March 31, 2020.

F-15

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

9. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 

On June 11, 2019, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $42,500 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing April 15, 2020 for $40,000 in cash. After 170 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $38,450 which was recorded as a debt discount. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus interest, and between 151 days and 170 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On December 11, 2019, the Company paid $60,751 in cash to Power Up Lending Group Ltd. to fully settle the Note resulting in a gain on settlement of $8,413. Interest and amortization of debt discount was $67,614 for the year ended March 31, 2020.

On July 29, 2019, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $85,000 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing June 15, 2020 for $82,500 in cash. After 170 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $105,696 which was recorded as a debt discount. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus interest, and between 151 days and 170 days at 135% of the original principal amount plus interest. From January 31, 2020 to March 6, 2020, the Company issued 2,455,159 shares of common stock of the Company with the fair value $208,240 to Power Up Lending Group Ltd. to fully settle the Note resulting in a loss on settlement of $69,625. Interest and amortization of debt discount was $138,615 for the year ended March 31, 2020.

On October 3, 2019, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $82,500 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing August 15, 2020 for $80,000 in cash. After 170 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $50,377 which was recorded as a debt discount. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus interest, and between 151 days and 170 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On March 31, 2020, the Note is recorded at an accreted value of $112,736 less unamortized debt discount of $20,352. From April 13, 2020 to April 22, 2020, the Company issued 2,489,415 shares of common stock of the Company with the fair value $154,491 to the Holder to fully settle the Note resulting in a loss on settlement of $19,953. Interest and amortization of debt discount was $42,155 and $62,760 for the years ended March 31, 2021 and 2020, respectively.

F-16

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

9. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 

On December 12, 2019, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $57,500 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing September 15, 2020 for $55,000 in cash. After 170 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $49,646 which was recorded as a debt discount. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On March 31, 2020, the Note is recorded at an accreted value of $70,450 less unamortized debt discount of $29,013. From June 17, 2020 to June 24, 2020, the Company issued 1,935,938 shares of common stock of the Company with the fair value $137,709 to the Holder to fully settle the Note resulting in a loss on settlement of $43,940. Interest and amortization of debt discount was $52,332 and $36,084 for the years ended March 31, 2021 and 2020, respectively.

On March 2, 2020, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $52,500 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing December 15, 2020 for $50,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $70,613 which was recorded as a debt discount. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On March 31, 2020, the Note is recorded at an accreted value of $53,617 less unamortized debt discount of $44,714. From September 8, 2020 to September 17, 2020, the Company issued 1,114,824 shares of common stock of the Company with the fair value $90,894 to the Holder to fully settle the Note resulting in a loss on settlement of $5,278. Interest and amortization of debt discount was $76,712 and $8,903 for the years ended March 31, 2021 and 2020, respectively.

On March 26, 2020, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $42,500 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing January 15, 2021 for $40,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $38,003 which was recorded as a debt discount. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On March 31, 2020, the Note is recorded at an accreted value of $40,495 less unamortized debt discount of $37,311. From October 2, 2020 to October 15, 2020, the Company issued 1,357,488 shares of common stock of the Company with the fair value $85,374 to the Holder to fully settle the Note resulting in a loss on settlement of $16,067 Interest and amortization of debt discount was $66,129 and $1,182 for the years ended March 31, 2021 and 2020, respectively.

F-17

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

9. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 

On June 9, 2020, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $52,500 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing April 1, 2021 for $50,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $67,285, of which $50,000 was recorded as debt discount and the remainder of $17,285 was recorded expensed and included in gain (loss) on derivative liability. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. From December 15, 2020 to December 18, 2020, the Company issued 3,399,082 shares of common stock of the Company with the fair value $105,588 to the Holder to fully settle the Note resulting in a loss on settlement of $14,359. Interest and amortization of debt discount was $91,230 for the year ended March 31, 2021.

On July 17, 2020, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $42,500 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing May 17, 2021 for $40,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. From January 22, 2021 to January 26, 2021, the Company issued 3,604,000 shares of common stock of the Company with the fair value $90,943 to Power Up Lending Group Ltd. to fully settle the Note resulting in a loss on settlement of $21,635. Interest and amortization of debt discount was $60,913 for the year ended March 31, 2021.

On September 17, 2020, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $47,500 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing September 17, 2021 for $45,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. From March 23, 2021 to March 30, 2021, the Company issued 3,120,495 shares of common stock of the Company with the fair value $86,666 to Power Up Lending Group Ltd. to fully settle the Note resulting in a loss on settlement of $9,205. Interest and amortization of debt discount was $66,222 for the year ended March 31, 2021.

On October 15, 2020, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $52,500 less transaction costs of $2,500 bearing a 12% annual interest rate and maturing October 15, 2021 for $50,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. At inception, the carrying value of the Note was $11,818 (accreted value of $80,769 less debt discount of $68,951). The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On March 31, 2021, the Note is recorded at an accreted value of $85,205 less unamortized debt discount of $37,404. Interest and amortization of debt discount was $35,982 for the year ended March 31, 2021.

F-18

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

9. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 

On December 15, 2020, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $43,500 less transaction costs of $3,500 bearing a 12% annual interest rate and maturing December 15, 2021 for $40,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. At inception, the carrying value of the Note was $6,797 (accreted value of $66,923 less debt discount of $60,126). The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On March 31, 2021, the Note is recorded at an accreted value of $69,255 less unamortized debt discount of $42,665. Interest and amortization of debt discount was $19,790 for the year ended March 31, 2021.

On January 20, 2021, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $43,500 less transaction costs of $3,500 bearing a 12% annual interest rate and maturing January 20, 2022 for $40,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. At inception, the carrying value of the Note was $0 (accreted value of $66,923 less debt discount of $66,923). The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On March 31, 2021, the Note is recorded at an accreted value of $68,463 less unamortized debt discount of $57,099. Interest and amortization of debt discount was $15,089 for the year ended March 31, 2021.

On March 1, 2021, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $38,500 less transaction costs of $3,500 bearing a 12% annual interest rate and maturing March 1, 2022 for $35,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. At inception, the carrying value of the Note was $1,453 (accreted value of $59,231 less debt discount of $57,778). The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. On March 31, 2021, the Note is recorded at an accreted value of $59,815 less unamortized debt discount of $53,029. Interest and amortization of debt discount was $5,333 for the year ended March 31, 2021.

F-19

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

9. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 

JSJ Investments Inc.

On September 16, 2019, the Company issued a Convertible Promissory Note (“Note”) to JSJ Investments Inc. (“Holder”) in the original principal amount of $142,000 less debt discount of $17,000 bearing a 6% annual interest rate and maturing September 16, 2020 for $125,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 35% discount to the average of the two lowest trading prices during the previous fifteen (15) trading days. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $103,604 which was recorded as a debt discount. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus interest, and between 151 days and 180 days at 135% of the original principal amount plus interest. On March 31, 2020, the Note is recorded at an accreted value of $173,230 less unamortized debt discount of $38,689. Thereafter, the Company does not have the right of prepayment. From April 15, 2020 to April 29, 2020, the Company issued 5,595,893 shares of common stock of the Company with the fair value $305,082 to the Holder to fully settle the Note resulting in a loss on settlement of $78,158. Interest and amortization of debt discount was $92,381 and $113,145 for the years ended March 31, 2021 and 2020, respectively.

On June 9, 2020, the Company issued a Convertible Promissory Note (“Note”) to JSJ Investments Inc. (“Holder”) in the original principal amount of $130,000 less debt discount of $3,000 bearing a 6% annual interest rate and maturing June 9, 2021 for $127,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 35% discount to the average of the two lowest trading prices during the previous fifteen (15) trading days. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $139,417, of which $127,000 was recorded as debt discount and the remainder of $12,417 was recorded expensed and included in gain (loss) on derivative liability. The Company may repay the Note if repaid within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest, between 121 days and 150 days at 130% of the original principal amount plus interest, and between 151 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. From December 11, 2020 to December 21, 2020, the Company issued 3,764,947 shares of common stock of the Company with the fair value $116,076 to the Holder to partially settle the Note resulting in a loss on settlement of $23,769. From January 8, 2021 to January 20, 2021, the Company issued 5,636,923 shares of common stocks of the Company with the fair value $131,734 to JSJ Investments Inc. to fully settle the Note resulting in a loss on settlement of $16,664 Interest and amortization of debt discount was $207,378 for the year ended March 31, 2021.

Crown Bridge Partners, LLC

On November 21, 2019, the Company issued a Convertible Promissory Note (“Note”) to Crown Bridge Partners, LLC (“Holder”) in the original principal amount of $27,500 less transaction costs of $3,250 bearing a 12% annual interest rate and maturing November 21, 2020 for $24,250 in cash. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 60% of the market price defined as the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $18,608 which was recorded as a debt discount. The Company may repay the Note if repaid within 60 days of date of issue at 125% of the original principal amount plus interest, between 61 days and 120 days at 135% of the original principal amount plus interest and between 121 days and 180 days at 145% of the original principal amount plus interest. On March 31, 2020, the Note is recorded at an accreted value of $32,786 less unamortized debt discount of $10,784. Thereafter, the Company does not have the right of prepayment. From June 2, 2020 to August 19, 2020, the Company issued 2,310,089 shares of common stock of the Company with the fair value $171,028 to the Holder to fully settle the Note resulting in a loss on settlement of $132,785. Interest and amortization of debt discount was $29,332 and $16,359 for the years ended March 31, 2021 and 2020, respectively.

F-20

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

9. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 

On August 11, 2020, the Company issued a Convertible Promissory Note (“Note”) to Crown Bridge Partners, LLC (“Holder”) in the original principal amount of $55,000 less transaction costs of $5,000 bearing a 12% annual interest rate and maturing August 10, 2021 for $50,000 in cash. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 60% of the market price defined as the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $91,113 which was recorded as a debt discount. At inception, the carrying value of the Note was $0 (accreted value of $91,667 less debt discount of $91,667). The Company may repay the Note if repaid within 60 days of date of issue at 125% of the original principal amount plus interest, between 61 days and 120 days at 135% of the original principal amount plus interest and between 121 days and 180 days at 145% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature was $91,113, of which $50,000 was recorded as debt discount and the remainder of $41,113 was recorded expensed and included in gain (loss) on derivative liability. On March 31, 2021, the Note is recorded at an accreted value of $98,659 less unamortized debt discount of $33,240. Interest and amortization of debt discount was $65,417 for the year ended March 31, 2021.

Auctus Fund, LLC

On December 19, 2019, the Company entered into a Securities Purchase Agreement with Auctus Fund, LLC, (“Holder”) relating to the issuance and sale of a Convertible Promissory Note (the “Note”) with an original principal amount of $112,750 less an original issue discount of $10,000 and transaction costs of $2,750 bearing a 12% annual interest rate and maturing September 15, 2020 for $100,000 in cash. The Company determined that upon issuance of the Note, the initial fair value of the embedded conversion feature and warrant liability was $110,475 which was recorded as a debt discount. After 180 days after the issue date, the Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price defined as the lowest trading price during the twenty-five trading day period ending on the latest trading day prior to the conversion date. The Company may prepay the Note in cash, if repaid within 90 days of date of issue at 135% of the original principal amount plus interest and between 90 days and 180 days at 150% of the original principal amount plus interest. . On March 31, 2020, the Note is recorded at an accreted value of $145,712 less unamortized debt discount of $61,924. Thereafter, the Company does not have the right of prepayment. On June 15, 2020, the Company paid $178,855 in cash the Holder to fully settle the Note resulting in a gain on settlement of $59,359. Interest and amortization of debt discount was $154,426 and $83,789 for the years ended March 31, 2021 and 2020, respectively.

10. CONVERTIBLE PROMISSORY NOTE DERIVATIVE LIABILITY 

The Convertible Promissory Notes (“Notes”) with Power Up Lending Group Ltd., JSJ Investments Inc., Crown Bridge Partners, LLC and Auctus Fund, LLC was accounted for under ASC 815. The variable conversion price is not considered predominately based on a fixed monetary amount settleable with a variable number of shares due to the volatility and trading volume of the Company’s common stock. The Company’s convertible promissory notes derivative liabilities has been measured at fair value using the Black-Scholes model.

The inputs into the Black-Scholes models are as follows:

The fair value of the conversion option derivative liabilities is $138,539, $486,663 and $113,091 on March 31, 2021, 2020 and 2019, respectively. The initial fair value of the conversion option derivative liabilities for the years ended March 31, 2021 and 2020 was $441,021 and $648,150, respectively. The decrease in the fair value of the conversion option derivative liability for the years ended March 31, 2021 and 2020 of $789,145 and $274,578, respectively, is recorded as a gain in the consolidated statements of operations.

F-21

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

11. WARRANT LIABILITY 

In conjunction with the issuance of the Convertible Promissory Notes with Crown Bridge Partners, LLC on November 21, 2019 and August 11, 2020, the Company issued, with each Note, 1,100,000 warrants with an exercise price of $1.00 and a term of five years.

Also, in conjunction with the issuance of the Convertible Promissory Note with Auctus Fund, LLC (the “Note”) on December 19, 2019, the Company issued 10,000,000 warrants with an exercise price of $0.10 and a term of five years.

These warrants are subject to down round and other anti-dilution protections. These warrants are classified as a liability since there is a possibility during the life of these warrants the Company would not have enough authorized shares available if these warrants are exercised.

The inputs into the Black-Scholes models are as follows:

The fair value of the warrant liability is $12,669, $39,387 and $0 on March 31, 2021, 2020 and 2019, respectively. The initial fair value of the warrant liability for the years ended March 31, 2021 and 2020 was $0 and $35,090, respectively. The decrease (increase) in the fair value of the warrant liability of $26,718 and $(4,297) is recorded as a gain (loss) in the consolidated statements of operations for the years ended March 31, 2021 and 2020, respectively.

12. CONTINGENT LIABILITIES 

An asset retirement obligation is a legal obligation associated with the disposal or retirement of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees. While the Company, as of March 31, 2021, does not have a legal obligation associated with the disposal of certain chemicals used in its leaching process, the Company estimates it will incur costs up to $50,000 to neutralize those chemicals at the close of the leaching pond.

13. STOCKHOLDERS’ EQUITY (DEFICIT) 

On October 6, 2020, a Certificate of Amendment to our Articles of Incorporation was filed with the Secretary of State of Nevada to effect a one-for-twenty reverse stock split of our common stock became effective. All common stock share and per-share amounts for all periods presented in these consolidated financial statements have been adjusted retroactively to reflect the reverse stock split.

The stockholders’ equity of the Company comprises the following classes of capital stock as of March 31, 2021 and 2020:

Preferred Stock, $0.001 par value per share; 9,000,000 shares authorized, 0 issued and outstanding on March 31, 2021 and 2020.

Series A Convertible Preferred Stock (‘Series A Preferred Stock”), $0.001 par value share; 1,000,000 shares authorized: 1,000,000 shares issued and outstanding on March 31, 2021 and 2020.

Holders of Series A Preferred Stock may convert one share of Series A Preferred Stock into ten shares of Common Stock. Holders of Series A Preferred Stock have the number of votes determined by multiplying (a) the number of Series A Preferred Stock held by such holder, (b) the number of issued and outstanding Series A Preferred Stock and Common Stock on a fully diluted basis, and (c) 0.000006.

Common Stock, par value of $0.001 per share; 5,000,000,000 shares authorized: 177,714,055 and 79,699,130 shares issued and outstanding on March 31, 2021 and 2020, respectively. Holders of Common Stock have one vote per share of Common Stock held.

F-22

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

13. STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED) 

Common Stock Issued

(i) Year Ended March 31, 2021 

On April 2, 2020, the Company issued 1,124,167 shares of common stock to satisfy obligations under share subscription agreements of $28,500 for cash and $3,800 for settlement of notes payable and interest included in share subscriptions payable.

From April 14, 2020 to May 1, 2020, the Company issued 8,085,309 shares of common stock to satisfy obligations under share subscription agreements of $459,572 for settlement of convertible notes included in share subscriptions payable.

On May 4, 2020, the Company issued 1,563,732 shares of common stock to satisfy obligations under share subscription agreements of $53,680 for settlement of services and $54,000 for the settlement of note payable included in share subscriptions payable.

On May 11, 2020, the Company issued 67,500 shares of common stock to satisfy obligations under share subscription agreements of $5,130 for settlement of services included in share subscriptions payable.

On May 12, 2020, the Company issued 352,500 shares of common stock to satisfy obligations under share subscription agreements of $14,805 for settlement of services included in share subscriptions payable.

On May 21, 2020, the Company issued 357,895 shares of common stock to satisfy obligations under share subscription agreements of $28,000 for settlement of services included in share subscriptions payable.

From June 4, 2020 to June 25, 2020, the Company issued 3,460,938 shares of common stock to satisfy obligations under share subscription agreements of $244,359 for settlement of convertible notes included in share subscriptions payable.

On June 5, 2020, the Company issued 250,000 shares of common stock to satisfy obligations under share subscription agreements of $5,000 for settlement of cash included in share subscriptions payable.

On July 13, 2020, the Company issued 250,000 shares of common stock to satisfy obligations under share subscription agreements of $20,000 for the settlement of convertible notes included in share subscriptions payable.

On July 23, 2020, the Company issued 1,979,678 shares of common stock to satisfy obligations under share subscription agreements of $33,000 for cash and $32,105 for settlement of services included in share subscriptions payable.

On July 28, 2020, the Company issued 1,395,588 shares of common stock to satisfy obligations under share subscription agreements of $14,000 for cash, $49,300 for settlement of services and $39,690 for the settlement of convertible notes included in share subscriptions payable.

On August 19, 2020, the Company issued 5,566,667 shares of common stock to satisfy obligations under share subscription agreements of $109,516 for cash, $14,800 for settlement of services and supplies and $41,000 for the settlement of interest included in share subscriptions payable.

On August 20, 2020, the Company issued 185,189 shares of common stock to satisfy obligations under share subscription agreements of $17,778 for settlement of convertible notes included in share subscriptions payable.

On September 9, 2020, the Company issued 384,615 shares of common stock to satisfy obligations under share subscription agreements of $33,077 for settlement of convertible notes included in share subscriptions payable.

On September 10, 2020, the Company issued 2,510,901 shares of common stock to satisfy obligations under share subscription agreements of $49,500 for cash, $14,402 for settlement of services and supplies, $4,000 for interest and $47,278 for the settlement of equipment included in share subscriptions payable.

F-23

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

13. STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED) 

On September 15, 2020, the Company issued 300,000 shares of common stock to satisfy obligations under share subscription agreements of $23,400 for settlement of convertible notes included in share subscriptions payable.

On September 18, 2020, the Company issued 430,208 shares of common stock to satisfy obligations under share subscription agreements of $34,417 for settlement of convertible notes included in share subscriptions payable.

From October 2, 2020 to October 16, 2020, the Company issued 1,357,488 shares of common stock to satisfy obligations under share subscription agreements of $85,374 for settlement of convertible notes included in share subscriptions payable.

On October 6, 2020, as a result of the one-for-twenty reverse stock split of our common stock the Company issued 150 shares of common stock due to rounding.

On October 7, 2020, the Company issued 625,000 shares of common stock to satisfy obligations under share subscription agreements of $15,000 for settlement of cash included in share subscriptions payable.

On November 6, 2020, the Company issued 2,135,000 shares of common stock to satisfy obligations under share subscription agreements of $123,830 for settlement of services included in share subscriptions payable.

On December 3, 2020, the Company issued 12,750,000 shares of common stock to satisfy obligations under share subscription agreements of $399,200 for settlement of services included in share subscriptions payable.

On December 10, 2020, the Company issued 4,649,280 shares of common stock to satisfy obligations under share subscription agreements of $111,139 for settlement of cash included in share subscriptions payable.

On December 11, 2020, the Company issued 3,500,000 shares of common stock to satisfy obligations under share subscription agreements of $125,400 for settlement of services included in share subscriptions payable.

From December 15, 2020 to December 22, 2020, the Company issued 7,164,029 shares of common stock to satisfy obligations under share subscription agreements of $221,664 for settlement of convertible notes included in share subscriptions payable.

From January 8, 2021 to January 20, 2021, the Company issued 5,636,923 shares of common stock to satisfy obligations under share subscription agreements of $131,734 for settlement of convertible notes included in share subscriptions payable.

On January 8, 2021, the Company issued 3,075,000 shares of common stock to satisfy obligations under share subscription agreements of $81,675 for settlement of services included in share subscriptions payable.

On January 14, 2021, the Company issued 4,051,666 shares of common stock to satisfy obligations under share subscription agreements of $57,645 for settlement of services and $25,000 for settlement of cash included in share subscriptions payable.

From January 22, 2021, to January 26, 2021, the Company issued 3,604,000 shares of common stock to satisfy obligations under share subscription agreements of $90,943 for settlement of convertible notes included in share subscriptions payable.

On February 2, 2021, the Company issued 1,400,000 shares of common stock to satisfy obligations under share subscription agreements of $8,400 for settlement of services and $15,000 for settlement of cash included in share subscriptions payable.

On February 15, 2021, the Company issued 4,000,000 shares of common stock to satisfy obligations under share subscription agreements of $110,000 for settlement of services included in share subscriptions payable.

On February 19, 2021, the Company issued 2,233,333 shares of common stock to satisfy obligations under share subscription agreements of $16,300 for settlement of services and $22,000 for settlement of cash included in share subscriptions payable.

On February 23, 2021, the Company issued 1,197,674 shares of common stock to satisfy obligations under share subscription agreements of $17,500 for settlement of cash included in share subscriptions payable.

F-24

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

13. STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED) 

On March 1, 2021, the Company issued 7,000,000 shares of common stock to satisfy obligations under share subscription agreements of $129,000 for settlement of services and $21,000 for settlement of cash included in share subscriptions payable.

On March 8, 2021, the Company issued 500,000 shares of common stock to satisfy obligations under share subscription agreements of $10,000 for settlement of cash included in share subscriptions payable.

On March 22, 2021, the Company issued 1,750,000 shares of common stock to satisfy obligations under share subscription agreements of $52,500 for settlement of services included in share subscriptions payable.

From March 23, 2021 to March 30, 2021, the Company issued 3,120,495 shares of common stock to satisfy obligations under share subscription agreements of $86,666 for settlement of convertible notes included in share subscriptions payable.

(ii) Year Ended March 31, 2020 

On April 17, 2019, the Company issued 2,689,964 shares of common stock to satisfy obligations under share subscription agreements of $47,600 for settlement of services, $4,392 for interest and $139,500 for cash receipts included in share subscriptions payable.

On April 30, 2019, the Company issued 772,222 shares of common stock to satisfy obligations under share subscription agreements of $7,000 for settlement of services and $15,500 for cash receipts included in share subscriptions payable.

On May 8, 2019, the Company issued 2,294,107 shares of common stock to satisfy obligations under share subscription agreements of $48,496 for settlement of services, $117,400 to settle accounts payable, $2,254 for interest and $32,100 for cash receipts included in share subscriptions payable.

On June 4, 2019, the Company issued 833,917 shares of common stock to satisfy obligations under share subscription agreements of $13,291 for settlement of services and $23,000 for cash receipts included in share subscriptions payable.

On June 18, 2019, the Company issued 1,172,250 shares of common stock to satisfy obligations under share subscription agreements of $101,078 for settlement of services, $18,050 for cash receipts, $6,500 to settle notes payable and $3,960 for interest included in share subscriptions payable.

On July 2, 2019, the Company issued 250,000 shares of common stock to satisfy obligations under share subscription agreements of $10,000 for cash receipts.

On July 9, 2019, the Company issued 865,700 shares of common stock to satisfy obligations under share subscription agreements of $57,200 for settlement of services and $20,785 for cash receipts included in share subscriptions payable.

On July 10, 2019, the Company issued 3,055,417 shares of common stock to satisfy obligations under share subscription agreements of $90,000 for settlement of services and $90,110 for cash receipts included in share subscriptions payable.

On July 22, 2019, the Company issued 1,104,167 shares of common stock to satisfy obligations under share subscription agreements for $25,500 for cash receipts included in share subscriptions payable.

On July 29, 2019, the Company cancelled 50,000 shares of common stock originally issued to satisfy obligations under share subscription agreements of $5,000 for cash receipts.

On August 9, 2019, the Company issued 1,646,667 shares of common stock to satisfy obligations under share subscription agreements of $63,300 for settlement of services, $29,900 for cash receipts and $38,500 for interest included in share subscriptions payable.

On August 13, 2019, the Company issued 500,000 shares of common stock to satisfy obligations under share subscription agreements of $103,000 for settlement of services included in share subscriptions payable.

F-25

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

13. STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED) 

On August 20, 2019, the Company issued 1,979,167 shares of common stock to satisfy obligations under share subscription agreements of $56,700 for settlement of cash receipts included in share subscriptions payable.

On September 17, 2019, the Company issued 2,158,333 shares of common stock to satisfy obligations under share subscription agreements $62,400 for cash receipts and $10,000 for settlement of notes payable included in share subscriptions payable.

On October 1, 2019, the Company issued 995,625 shares of common stock to satisfy obligations under share subscription agreements of $37,200 for settlement of services, $25,200 for cash receipts, $3,384 for interest and $112,788 for the settlement of notes payable included in share subscriptions payable.

On October 29, 2019, the Company issued 1,499,993 shares of common stock to satisfy obligations under share subscription agreements of $200,000 for settlement of notes payable included in share subscriptions payable.

On November 1, 2019, the Company issued 190,217 shares of common stock to satisfy obligations under share subscription agreements of $53,350 for settlement of services included in share subscriptions payable.

On November 20, 2019, the Company issued 113,636 shares of common stock to satisfy obligations under share subscription agreements of $22,500 for settlement of convertible notes included in share subscriptions payable.

On November 21, 2019, the Company issued 174,419 shares of common stock to satisfy obligations under share subscription agreements of $20,930 for settlement of convertible notes included in share subscriptions payable.

On November 25, 2019, the Company issued 208,333 shares of common stock to satisfy obligations under share subscription agreements of $22,917 for settlement of convertible notes included in share subscriptions payable.

On December 2, 2019, the Company issued 281,250 shares of common stock to satisfy obligations under share subscription agreements of $28,125 for settlement of convertible notes included in share subscriptions payable.

On December 4, 2019, the Company issued 277,778 shares of common stock to satisfy obligations under share subscription agreements of $30,556 for settlement of convertible notes included in share subscriptions payable.

On December 9, 2019, the Company issued 288,077 shares of common stock to satisfy obligations under share subscription agreements of $26,503 for settlement of convertible notes included in share subscriptions payable.

On January 8, 2020, the Company issued 741,250 shares of common stock to satisfy obligations under share subscription agreements of $28,500 for cash receipts, $62,000 for interest and $24,510 for the settlement of notes payable included in share subscriptions payable.

On January 31, 2020, the Company issued 165,000 shares of common stock to satisfy obligations under share subscription agreements of $9,250 for cash receipts and $7,700 for equipment included in share subscriptions payable.

On January 31, 2020, the Company issued 285,714 shares of common stock to satisfy obligations under share subscription agreements of $18,286 for settlement of convertible notes included in share subscriptions payable.

On February 7, 2020, the Company issued 416,667 shares of common stock to satisfy obligations under share subscription agreements of $28,333 for settlement of convertible notes included in share subscriptions payable.

On February 14, 2019, the Company issued 500,000 shares of common stock to satisfy obligations under share subscription agreements of $40,000 for settlement of convertible notes included in share subscriptions payable.

On February 19, 2020, the Company issued 734,868 shares of common stock to satisfy obligations under share subscription agreements of $16,500 for cash receipts and $21,250 for services included in share subscriptions payable.

F-26

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

13. STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED) 

On February 20, 2020, the Company issued 916,667 shares of common stock to satisfy obligations under share subscription agreements of $21,000 for cash included in share subscriptions payable.

On February 21, 2020, the Company issued 210,000 shares of common stock to satisfy obligations under share subscription agreements of $4,000 for cash receipts and $35,100 for services included in share subscriptions payable.

On February 25, 2020, the Company issued 582,500 shares of common stock to satisfy obligations under share subscription agreements of $11,500 for cash receipts and $17,425 for services included in share subscriptions payable.

On March 3, 2020, the Company issued 555,556 shares of common stock to satisfy obligations under share subscription agreements of $63,333 for settlement of convertible notes included in share subscriptions payable.

On March 9, 2020, the Company issued 697,222 shares of common stock to satisfy obligations under share subscription agreements of $58,288 for settlement of convertible notes included in share subscriptions payable.

Common Stock Payable

(iii) Year Ended March 31, 2021 

On March 31, 2021, the Company had total subscriptions payable for 6,645,315 shares of common stock for $54,366 in cash, shares of common stock for interest valued at $27,911, shares of common stock for services valued at $119,769 and shares of common stock for notes payable of $20,673.

(iv) Year Ended March 31, 2020 

On March 31, 2020, the Company had total subscriptions payable for 3,437,035 shares of common stock for $71,882 in cash, shares of common stock for interest valued at $5,111, shares of common stock for equipment of $47,278, shares of common stock for services valued at $182,863 and shares of common stock for notes payable of $20,673.

14. RELATED PARTY TRANSACTIONS 

During the years ended March 31, 2021 and 2020, the Company entered into the following transactions with related parties:

Paul D. Thompson, sole director and officer of the Company

Taurus Gold, Inc., controlled by Paul D. Thompson

Accounts payable – related parties – Note 6

Notes payable and notes payable – related parties – Note 7

F-27

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

15. INCOME TAXES 

The Company had no income tax expense due to operating loss incurred for the years ended March 31, 2021 and 2020.

United States

On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act or Act below). (References to the Code below are references to the Internal Revenue Code of 1986, as amended. Section references below are references to sections of the Act.), provisions relevant to the Company:

Section 2303. Modifications for net operating losses (NOL): Under Code Section 172(a) the amount of the NOL deduction is equal to the lesser of (a) the aggregate of the NOL carryovers to such year and NOL carrybacks to such year, or (b) 80% of taxable income computed without regard to the deduction allowable in this section. Thus, NOLs are currently subject to a taxable-income limitation and cannot fully offset income. The Act temporarily removes the taxable income limitation to allow an NOL to fully offset income.

Section 2306. Modifications of limitation on business interest: The 2017 Tax Cuts and Jobs Act of 2017 (TCJA) generally limited the amount of business interest allowed as a deduction to 30% of adjusted taxable income. The Act temporarily and retroactively increases the limitation on the deductibility of interest expense under Code Section 163(j)(1) from 30% to 50% for tax years beginning in 2019 and 2020. (Code Section 163(j)(10)(A)(i) as amended by Act Section 2306(a)).

The Company has not recorded the necessary provisional adjustments in the financial statements in accordance with its current understanding of the CARES Act and guidance currently available as of this filing. But is reviewing the CARES Act potential ramifications.

Mexico

Corporations resident in Mexico are taxable on their worldwide income from all sources, including profits from business and property. The Company is subject to Mexico tax at a rate of 30% on taxable income, if any, from Mexico operations. Subject to certain limitations, losses incurred in prior years by a business may be carried forward and deducted from income earned over a subsequent ten-year period. Net operating loss carrybacks are not allowed.

The tax effects of temporary differences and tax loss and credit carry forwards that give rise to significant portions of deferred tax assets and liabilities on March 31, 2021 and 2020 are comprised of the following:

F-28

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

15. INCOME TAXES (CONTINUED) 

We have a net operating loss ("NOL") carry forward for U.S. income tax purposes aggregating approximately $22.5M as of March 31, 2021 expiring through the tax year 2038, subject to the Internal Revenue Code Section 382/383, which places a limitation on the amount of taxable income that can be offset by net operating losses after a change in ownership. In addition, to U.S. NOL's, we have a Mexico NOL for our Mexico operations as of March 31, 2021 of approximately $3.3M that expires through 2031.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment. In case the deferred tax assets will not be realized in future periods, the Company has provided a valuation allowance for the full amount of the deferred tax assets on March 31, 2021. The valuation allowance increased by approximately $0.4 million as of March 31, 2021.

The expected tax expense (benefit) based on the U.S. federal statutory rate is reconciled with actual tax expense (benefit) as follows:

The Company has not identified any uncertain tax positions requiring a reserve as of March 31, 2021.

The Company has not filed its U.S. federal income tax returns, including, without limitation, information returns on Internal Revenue Service (“IRS”) Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations for the years ended March 31, 2010 through 2021. Failure to furnish any information with respect to any foreign business entity required, within the time prescribed by the IRS, subjects the Company to certain civil penalties.

16. SUBSEQUENT EVENTS 

Common Stock Issued

On April 7, 2021, the Company issued 1,675,000 shares of common stock to satisfy obligations under share subscription agreements of $43,048 for settlement of services included in share subscriptions payable.

On April 20, 2021, the Company issued 3,735,000 shares of common stock to satisfy obligations under share subscription agreements of $20,000 for cash and $54,870 for settlement of services for the settlement of interest included in share subscriptions payable.

On April 23, 2021, the Company issued 2,307,692 shares of common stock to satisfy obligations under share subscription agreements of $60,692 for settlement of convertible notes included in share subscriptions payable.

On April 28, 2021, the Company issued 10,000,000 shares of common stock to satisfy obligations under share subscription agreements of $212,000 for settlement of services included in share subscriptions payable.

On April 29, 2021, the Company issued 1,153,846 shares of common stock to satisfy obligations under share subscription agreements of $24,519 for settlement of convertible notes included in share subscriptions payable.

On May 3, 2021, the Company issued 812,977 shares of common stock to satisfy obligations under share subscription agreements of $17,398 for settlement of convertible notes included in share subscriptions payable.

On May 20, 2021, the Company issued 4,461,163 shares of common stock to satisfy obligations under share subscription agreements of $89,223 for settlement of notes payable included in share subscriptions payable.

F-29

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

16. SUBSEQUENT EVENTS (CONTINUED) 

On May 28, 2021, the Company issued 400,000 shares of common stock to satisfy obligations under share subscription agreements of $6,000 for cash included in share subscriptions payable.

On June 16, 2021, the Company issued 1,419,753 shares of common stock to satisfy obligations under share subscription agreements of $42,593 for settlement of convertible notes included in share subscriptions payable.

On June 18, 2021, the Company issued 1,471,975 shares of common stock to satisfy obligations under share subscription agreements of $39,891 for settlement of convertible notes included in share subscriptions payable.

Common Stock Payable

As at June 21, 2021, the Company had total subscriptions payable for 2,025,315 shares of common stock for $38,366 in cash, shares of common stock for interest valued at $27,911, shares of common stock for services valued at $26,010 and shares of common stock for notes payable of $24,473.

Power Up Lending Group Ltd.

On April 5, 2021, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $40,000 less transaction costs of $3,500 bearing a 12% annual interest rate and maturing April 5, 2022 for $36,500 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment.

On April 29, 2021, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $38,500 less transaction costs of $3,500 bearing a 12% annual interest rate and maturing April 29, 2022 for $35,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment.

On May 20, 2021, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $43,500 less transaction costs of $3,500 bearing a 12% annual interest rate and maturing May 20, 2022 for $40,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment.

F-30

MEXUS GOLD US AND SUBSIDIARIES

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

March 31, 2021 and 2020

16. SUBSEQUENT EVENTS (CONTINUED) 

On June 14, 2021, the Company issued a Convertible Promissory Note (“Note”) to Power Up Lending Group Ltd. (“Holder”) in the original principal amount of $43,500 less transaction costs of $3,500 bearing a 12% annual interest rate and maturing June 14, 2022 for $40,000 in cash. After 180 days after the issue date, this Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price defined as the average of the lowest two trading prices during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The Company may repay the Note if repaid in cash within 30 days of date of issue at 110% of the original principal amount plus interest, between 31 days and 60 days at 115% of the original principal amount plus interest, between 61 days and 90 days at 120% of the original principal amount plus interest, between 91 days and 120 days at 125% of the original principal amount plus interest and between 121 days and 180 days at 135% of the original principal amount plus interest. Thereafter, the Company does not have the right of prepayment.

F-31