Shareholders’ Deficit

6 Months Ended

Sep. 30, 2011

Notes to Financial Statements

Shareholders’ Deficit

Common Stock

2011

For the six months ended September 30, 2011, the Company issued 2,500,000 shares of common stock for the acquisition of Cross Creek Trucking Inc. The stock was valued at $0.40 per share, its fair market value at the date of issuance.

For the six months ended September 30, 2011, the Company issued 1,976,206 shares of common stock to various holders for services provided to the Company. The stock was valued between $0.275 and $0.40 per share, its fair market value at the date of issuance.

For the six months ended September 30, 2011, the Company issued 616,000 shares of common stock to various debt holders as an equity inducement. The stock was valued at $0.32 per share, its fair market value at the date of issuance.

For the six months ended September 30, 2011, the Company issued 650,000 shares of common stock to various holders as a result of a ratchet provision in their debt agreement, which enabled the holders to benefit from any deal done after their investment that had better terms. The stock was valued at $0.32 per share, its fair market value at the date of issuance.

For the six months ended September 30, 2011, the Company issued 325,000 shares of common stock as a result of an exercise of stock purchase warrants. The stock was converted at $0.10 per share.

Warrants to Purchase Common Stock

2011

For the six months ended September 30, 2011, the Company issued 300,000 common stock purchase warrants, at an exercise price of $0.40, an expiration of 6 years, relating to a maturity extension of a convertible note.

For the six months ended September 30, 2011, the Company issued 1,500,000 common stock purchase warrants, at an exercise price ranging from $0.50 to $3.00, an expiration of 3 years, relating to acquisition of Cross Creek.

For the six months ended September 30, 2011, the Company issued 400,000 common stock purchase warrants, at an exercise price of $0.40, an expiration of 3 years, relating to a services rendered.

For the six months ended September 30, 2011, the Company issued 116,000 common stock purchase warrants, at an exercise price of $0.40, an expiration of 5 years, relating to the issuance of debt obligations.

For the three months ended September 30, 2011, The Company issued 304,500 common stock purchase warrants at an exercise price of $0.40, an expiration of 5 years relating to the issuance of debt obligations.

The fair value for the warrants was estimated at the date of valuation using the Black-Scholes option-pricing model with the following assumptions: 

Risk-free interest rate	1.27- 2.19%
Dividend yield	0.00	%
Volatility factor	172	%
Expected life	3-5 years

The relative fair value of the warrants issued for the six months ended September 30, 2011, calculated in accordance with ASC 470-20, Debt with Conversion and Other Options; totaled $27,405..  The relative fair value of the warrants issued for the year ended March 31, 2011, totaled $. The relative fair value of the warrants issued with the debenture has been charged to additional paid-in capital with a corresponding discount on the note payable.  The discount is amortized over the life of the debt. As the discount is amortized, the reported outstanding principal balance of the notes will approach the remaining unpaid value.   

AA summary of the grant activity for the six months ended September 30, 2011 is presented below:

	Stock Awards Outstanding & Excercisable	Weighted Average Exercise price	Weighted Average Remaining Contractual Term
Balance, March 31, 2011	12,403,890	0.35	3 Years
Granted	2,620,500	0.62	3 years
Exercised	325,000	0.10	N/A
Expired/Cancelled	-	-	N/A
Balance, September 30, 2011	14,699,390	$                   0.49	3 Years

As of September 30, 2011 and March 31, 2011, the number of warrants that were currently vested and expected to become vested was 14, 699,390 and 12,403,890, respectively.