Force Minerals 10K/A 2013 Annual report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

(Amendment No.1)

(Mark One)

[X]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the Fiscal Year EndedNovember 30, 2013

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ________ to ________

FORCE MINERALS CORP.

(Exact name of registrant as specified in its charter)



Nevada	000-52494	98-0462664
(State or other jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)
	6302 Mesedge Drive, Colorado Springs, CO 80919 (Address of principal executive offices)

	(970) 660-8197 (Registrant’s Telephone Number)

Securities registered under Section 12(b) of the Exchange Act:

Title of each class Name of each exchange on which registered

None

Not Applicable

Securities registered under Section 12(g) of the Exchange Act:

Title of class

Common Stock, Par Value $0.001

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes[ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

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

Yes [X] No[]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ] (Do not check if a smaller reporting company)	Smaller reporting company	[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of May 31, 2013was $632,864.97 based upon the price ($0.290) at which the common stock was last sold as of the last business day of the most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws. Our common stock is traded in the over-the-counter market and quoted on the Over-The-Counter Bulletin Board.

As of February 21, 2014, there were4,393,194shares of the registrant’s $0.001 par value common stock issued and outstanding.

Documents incorporated by reference: None

Explanatory Note

The purpose of this Amendment No. 1 (this “Amendment”) to the Annual Report on Form 10-K of Force Minerals Corporation, formerly known as Force Energy Corp. (the “Company”), for the fiscal year ended November 30, 2013, and filed with the Securities and Exchange Commission on March 17, 2014 (the “Original Filing”), is to include an audit opinion for certain of the Company’s financial statements that were included in the Original Filing. Specifically, the Original Filing included corrections to the Company’s financial statements for the fiscal year ended November 30, 2011, which were included in the Original Filing, but omitted an audit opinion for those financial statements before the corrections. Accordingly, this Amendment includes such an audit report, which complies with the requirements of Rule 2-05 of Regulation S-X. For convenience of the reader, this amendment specifies the Original Filing in its entirety, as amended by this Amendment. Except for the inclusion of the audit opinion for those financial statements, this Amendment does not amend or otherwise update any other information in the Original Filing. Accordingly, this Amendment should be read in conjunction with the Original Filing.

As required by the provisions of Rule 12b-15 promulgated pursuant to the Securities Exchange Act of 1934, new certifications by the Company’s Principal Executive Officer and Principal Financial Officer are filed as exhibits to this Amendment.

Table of Contents



		Page
	PART I

Item 1	Business	5
Item 1A	Risk Factors	9
Item 1B	Unresolved Staff Comments	12
Item 2	Properties	12
Item 3	Legal Proceedings	12
Item 4	Mine Safety Disclosures	12

	PART II

Item 5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	13
Item 6	Selected Financial Data	15
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A	Quantitative and Qualitative Disclosures about Market Risk	19
Item 8	Financial Statements and Supplementary Data	F-1
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	20
Item 9A	Controls and Procedures	21
Item 9B	Other Information	22

	PART III

Item 10	Directors and Executive Officers and Corporate Governance	23
Item 11	Executive Compensation	24
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	29
Item 13	Certain Relationships and Related Transactions	29
Item 14	Principal Accountant Fees and Services	30

	PART IV

Item 15	Exhibits	31

FORWARD-LOOKING STATEMENTS

The availability and adequacy of our cash flow to meet our requirements;

Economic, competitive, demographic, business and other conditions in our local and regional markets;

Changes or developments in laws, regulations or taxes in our industry;

Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;

Competition in our industry;

The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;

Changes in our business strategy, capital improvements or development plans;

The availability of additional capital to support capital improvements and development; and

Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC.

This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Term

Except as otherwise indicated by the context, references in this report to “Company”,“FORC”,“Force Energy Corp.,”“we”, “us” and “our” are references toForce Minerals Corp.All references to “USD” or United States Dollars refer to the legal currency of the United States of America.

PART I

ITEM 1. BUSINESS

Corporate History

We are currently engaged in the business of identifying, evaluating, and qualifying potential natural gas and oil wells; investing in interests in those wells with the goal of producing commercially marketable quantities of oil and natural gas. We have recently expanded our business model to include the exploration of mineral claims for rare earth minerals.

The Company was incorporated in the state of Nevada, United States of America on November 1, 2006. The Company was formed for the purpose of acquiring exploration and development stage natural resource properties.

Effective December 28, 2006, the Board of Directors authorized a 3 for 1 forward stock split of the common shares. The authorized number of common shares increased from 90,000,000 to 270,000,000 common shares with a par value of $0.001. All references in the accompanying financial statements to the number of common shares have been restated to reflect the forward stock split.

On February 12, 2008, the Company acquired 100% of the common shares of Force Energy Corp. an inactive company incorporated in Nevada on July 19, 2005, for $100, to effect a name change of the Company. On February 12, 2008, the Company and Force Energy Corp filed articles of merger with the Secretary of State of Nevada to effectuate a merger between the two companies. The surviving entity of the merger was the Company. Immediately thereafter the Company changed its name to Force Energy Corp.

Effective June 28, 2013, the Company with the approval from the Financial Industry Regulatory Authority (“FINRA”), the Company has among other things (i) changed its name from “Force Energy Corp.” to “Force Minerals Corporation”, and (ii) authorized and approved a reverse stock split of One for One Hundred (1:100) of our total issued and outstanding shares of common stock (the "Stock Split"). The Stock Split decreased our total issued and outstanding shares of common stock from 230,992,890 to 2,309,928 shares of common stock. The common stock will continue to be $0.001 par value. The shareholder record date was June 14, 2013. The Stock Split shares are payable upon surrender of certificates to the Company's transfer agent. Fractional shares will be rounded upward.

On October 28, 2013, the Board of Directors of the Company with the approval of a majority vote of its shareholders, designated four million (4,000,000) shares of the ten million (10,000,000) authorized preferred stock of our company as “Series A Preferred Stock” by filing a Certificate of Designation with the Secretary of State of the State of Nevada. The Series A Preferred Stock has 100 votes per share and is convertible into shares of our common stock. The Holders of the Series A Preferred Stock, may not convert and hold more than 9.9% of the common stock outstanding at any one time.

The Hayter Well

We presently hold a 50% working interest of the County Line Energy Corp. interest in the Hayter Well located in Alberta, Canada.

County Line Energy Corp. is the operator of the Hayter well. The Hayter well has been cased and cemented in anticipation of the completion of the drill program. County Line plans to enter the Hayter well, perforate the potential pay zones and conduct regular production testing of the zones. Should the testing confirm adequate oil reserves and potential economic flow rates, County Line is expected to install adequate pumping equipment and other surface facilities in anticipation of the projected flow rates. Currently, there are no known oil reserves on the Hayter well.

We have not incurred any development costs on the Hayter Well for the year ended November 30, 2013.

La Predilecta Properties

On May 30, 2013, the Companyentered into a Mineral Property Acquisition Agreement (the "MPAA") with Highlander Overseas, Inc., a West Indies corporation (“Highlander”). Pursuant to the terms and conditions of the MPAA, Highlander shall grant the Company with the right to acquire one hundred percent (100%) of the mining interests in those certain four concessions known as La Predilecta, La Predilecta II, La Crus, and La Cascada (the “Property”) which is comprised of a total of approximately Three Thousand One Hundred Eighty One Hectares (3,181 ha) and is located in Miahuatlan District, in the Southern portion of Valles Centrales Region within Oaxaca State, Mexico. In exchange, the Company is required to: (i) pay two cash payments of Fifty Thousand dollars ($50,000) to Highlander for a total of One Hundred Thousand dollars ($100,000), the first payment of $50,000 is to be paid within 60 days after both parties have executed the MPAA, and the second payment is to be paid 90 days after both parties have executed the MPAA, and (ii) issue an aggregate of four million (4,000,000) restricted shares of the Company’s preferred common stock to Highlander, per the terms and conditions of the MPAA.

The Hayter Well

Purchase of Interest in the Hayter Well

On August 1, 2006, County Line Energy Corp. (“County Line”) signed a participation agreement with Black Creek Resources Ltd. (“BCR”) in which County Line acquired the right to become the operator and drill the Hayter well (10D Hayter 10-8-40-1 W4M) located in Alberta, Canada. In order to exercise that interest and acquire the rights to drill the Hayter well, County Line agreed to pay 100% of all costs associated with the seismic option agreement and pay 100% of the funds required to purchase rights to any existing seismic on the property which may be for sale and or shoot additional 2D and 3D on the property as required, pursuant to standard industry costs and practices.

Pursuant to a Participation Agreement dated December 21, 2006 between Black Creek Resources Ltd (“BCR”) and Nuance Exploration Ltd. (“NEL”), a wholly owned subsidiary of the Company, we acquired a 100% ownership in the interpretation of 3D seismic data covering four sections of certain land located in the province of Alberta, Canada by paying $82,650 for the purpose of acquiring and interpreting the seismic data. On October 15, 2007, prior to the evaluation of the 3D seismic data, County Line sold to BCR its 100% interest in the subject property and received as consideration a non-interest bearing promissory note for $111,144 (CDN$110,000) to be repaid by November 30, 2007.

On November 30, 2007, County Line did not repay the amounts owing pursuant to the promissory note and NEL and County Line entered into a Participation Agreement whereby NEL accepted a 20% interest of the Grantor’s working interest in the County Line 10D Hayter 10-8-40-1 W4M well as full and final settlement of the promissory note. Pursuant to the terms of the Participation agreement NEL agreed to assume 20% of all revenues, costs and expenses associated with the project.

During our first fiscal quarter of 2009 we advanced $23,938 (CDN$29,000) to County Line Energy Corp for costs and expenses associated with the Hayter Well as an unsecured loan. On October 16, 2009 we entered into an amendment to our participation agreement with County Line pursuant to which we acquired an additional 30% working interest in the Hayter Well in consideration of a release by Force from all amounts owed by County Line to Force. Following our entry into the amended participation agreement we now hold a 50% working interest in the County Line Energy Corp. interest in the Hayter Well.

We have not incurred any development costs on the Hayter Well for the year ended November 30, 2013.

Location of Hayter Well

Force Energy Corp. has a 50% working interest of the County Line Energy Corp. interest in the Hayter Well (10D Hayter 10-8-40-1 W4M) located in Alberta, Canada. The well was spudded in January 2007 and drilled to a total depth. The well logs revealed a gas zone of 4 to 5 meters of thickness in a shallow zone and a heavy oil pay zone of 2 meters of thickness in the target Dina Sand zone.

County Line completed a $650,000 3D seismic program covering nine sections of land in pursuit of a potential multi well heavy oil drilling opportunity. The geological model was based on interpretation from a previous well, which produced 16,000 barrels of heavy oil. The seismic program was designed to determine whether the structure found in this well existed to a larger extent on the subject property. The 3D seismic revealed an extremely large anomaly with similar characteristics. The nature of this large anomaly suggested that a multi well drilling opportunity might exist.

County Line Energy Corp. is the operator of the Hayter well. The Hayter well has been cased and cemented in anticipation of the completion of the drill program. County Line plans to enter the Hayter well, perforate the potential pay zone(s) and conduct regular production testing of the zone(s). Should the testing confirm adequate oil reserves and potential economic flow rates, County Line is expected to install adequate pumping equipment and other surface facilities in anticipation of the projected flow rates. Currently, there are no known oil reserves on the Hayter well.

Oil and Gas Properties and Wells

On March 9, 2009, Force received a report on reserves data for the Hayter Well prepared by its independent engineers, Chapman Petroleum Engineering Ltd.

The following table sets forth the number of wells in which the Company held a working interest as at November 30, 2009:

The Company has not since the beginning of its most recently completed fiscal year, filed any annual estimates of proved oil and gas reserves with any federal agencies. As at November 30, 2012, the 50% working interest of the Hayter Well was recorded at $135,427.

Competition

The mineral exploration and oil and gas industries, in general, are intensely competitive and even if commercial quantities of reserves are discovered, a ready market may not exist for the sale of the reserves.

Most companies operating in this industry are more established and have greater resources to engage in the production of mineral or oil and gas claims (the “claims”). Our resources at the present time are limited. We may exhaust all of our resources and be unable to complete full exploration of our claims. There is also significant competition to retain qualified personnel to assist in conducting mineral exploration activities. If a commercially viable deposit is found to exist and we are unable to retain additional qualified personnel, we may be unable to enter into production and achieve profitable operations. These factors set forth above could inhibit our ability to compete with other companies in the industry and enter into production of the claims if a commercial viable deposit is found to exist.

Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in not receiving an adequate return on invested capital.

Compliance with Government Regulation

We are required to obtain licenses and permits from various governmental authorities. These permits or licenses may include water and surface use permits, occupation permits, fire permits, timber permits,drilling and abandonment bonds, reports concerning operations, the spacing of wells, and pooling of properties and taxation. Prior to being issued the various permits or licenses, the applicant must file a detailed work plan with the applicable government agency. Permits are issued on the basis of the work plan submitted and approved by the governing agency. Additional work on a given mineral property or a significant change in the nature of the work to be completed would require an amendment to the original permit or license.

As part of the permit or licensing requirements, the applicant may be required to post an environmental reclamation bond in respect to the work to be carried out on the mineral property. The amount of such bond is determined by the amount and nature of the work proposed by the applicant. The amount of a bond may also be increased with increased levels of development on the property.

We anticipate that we will be able to obtain all necessary licenses and permits to carry on the activities which we intend to conduct, and that we intend to comply in all material respects with the terms of such licenses and permits. As we have not proceeded to the development of our properties, we have not incurred any expenditures related to complying with such laws, or for remediation of existing environmental contamination. The requirements imposed by such laws and regulations are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations.

Subsidiaries

We have two wholly owned subsidiaries, FRC Exploration Ltd. (a British Columbia Corporation) and Nuance Exploration Ltd. (a British Columbia Corporation).

Employees

Currently our only employee is Tim DeHerrera. We do not expect any material changes in the number of employees over the next twelve month period. We anticipate that we will be conducting most of our business through agreements with consultants and third parties. We plan to outsource independent consultant engineers and geologists on a part time basis to conduct specific corporate business and exploration programs on our properties in order to carry out our plan of operations for the foreseeable future. Consultants will be retained on the basis of ability and experience.

WHERE YOU CAN GET ADDITIONAL INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549. You can obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site,www.sec.gov.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

An investment in the Company's common stock involves a high degree of risk. One should carefully consider the following risk factors in evaluating an investment in the Company's common stock. If any of the following risks actually occurs, the Company's business, financial condition, results of operations or cash flow could be materially and adversely affected. In such case, the trading price of the Company's common stock could decline, and one could lose all or part of one's investment. One should also refer to the other information set forth in this report, including the Company's consolidated financial statements and the related notes.

Our common stock is considered a "penny stock". The application of the "penny stock" rules to our common stock could limit the trading and liquidity of the Common stock, adversely affect the market price of our common stock and increase the transaction costs to sell those shares.

Our common stock is a "low-priced" security or "penny stock" under rules promulgated under the Securities Exchange Act of 1934, as amended. In accordance with these rules, broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document, which describes the risks associated with such stocks, the broker-dealer's duties in selling the stock, the customer's rights and remedies and certain market and other information. Furthermore, the broker-dealer must make a suitability determination approving the customer for low-priced stock transactions based on the customer's financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing to the customer, obtain specific written consent from the customer, and provide monthly account statements to the customer. The effect of these restrictions will likely decrease the willingness of broker-dealers to make a market in our common stock, will decrease liquidity of our common stock and will increase transaction costs for sales and purchases of our common stock as compared to other securities.

The company continues to use significant amounts of cash for its business operations, which could result in us having insufficient cash to fund the company's operations and expenses under our current business plan.

The Company's liquidity and capital resources remain limited. There can be no assurance that the Company's liquidity or capital resource position would allow us to continue to pursue our current business strategy. Any fluctuations or downturn in the securities market could adversely affect the value of our outstanding securities. As a result, without achieving growth in our business along the lines we have projected, we would have to alter our business plan or further augment our cash flow position through cost reduction measures, sales of assets, additional financings or a combination of these actions. One or more of these actions would likely substantially diminish the value of its common stock.

Because of the unique difficulties and uncertainties inherent in the mineral exploration business, we face a high risk of business failure.

Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of mineral properties. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The search for valuable minerals also involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. At the present time, we have no coverage to insure against these hazards. The payment of such liabilities may have a material adverse effect on our financial position. In addition, there is no assurance that the expenditures to be made by us in the exploration of the mineral claims will result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.

If we are unable to successfully compete within the mineral exploration business, we will not be able to achieve profitable operations.

The mineral exploration business is highly competitive. This industry has a multitude of competitors and no small number of competitors dominates this industry with respect to any of the large volume metallic minerals. Our exploration activities will be focused on attempting to located commercially viable mineral deposits on our claims. Many of our competitors have greater financial resources than us. As a result, we may experience difficulty competing with other businesses when conducting mineral exploration activities on our claims. If we are unable to retain qualified personnel to assist us in conducting mineral exploration activities on our claims; if a commercially viable deposit is found to exist, we may be unable to enter into production and achieve profitable operations.

There is substantial uncertainty about the ability of Force Minerals Corp. to continue its operations as a going concern.

In their audit report, our auditors have expressed an opinion that substantial doubt exists as to whether we can continue as an ongoing business. Because our officers may be unwilling or unable to loan or advance any additional capital to Force Minerals Corp., we believe that if we do not raise additional capital within 12 months, we may be required to suspend or cease the implementation of our business plans. As such we may have to cease operations and you could lose your entire investment.

Because the Company has been issued an opinion by its auditors that substantial doubt exists as to whether it can continue as a going concern it may be more difficult to attract investors.

Risks Related To Our Financial Condition

Because we anticipate our operating expenses will increase prior to our earning revenues, we may never achieve profitability.

Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We expect to incur continuing and significant losses into the foreseeable future. As a result of continuing losses, we may exhaust all of our resources and be unable to complete the exploration of our properties. Our accumulated deficit will continue to increase as we continue to incur losses. We may not be able to earn profits or continue operations if we are unable to generate significant revenues from the exploration of our mineral claims. There is no history upon which to base any assumption as to the likelihood that we will be successful, and we may not be able to generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

If we do not obtain adequate financing, our business will fail, resulting in the complete loss of your investment.

If we are not successful in earning revenues once we have started our planned sales activities, we may require additional financing to sustain business operations. Currently, we do not have any arrangements for financing and we may be unable to obtain financing when required. Obtaining additional financing would be subject to a number of factors, including the Company’s ability to attract customers. The Company may be unable to access to capital markets in the future or that financing, adequate to satisfy the cash requirements of implementing our business strategies, will be available on acceptable terms. The inability of the Company to gain access to capital markets or obtain acceptable financing could have a material adverse effect upon the results of its operations and upon its financial conditions.

The company’s management could issue additional shares, since the company has 5,000,000,000 authorized common shares, diluting the current shareholders’ equity.

The Company has 5,000,000,000 common shares, of which 4,393,194are currently issued and outstanding. The Company’s management could, without the consent of the existing shareholders, issue substantially more shares, causing a large dilution in the equity position of the Company’s current shareholders. Additionally, large share issuances would generally have a negative impact on the Company’s share price. It is possible that, due to additional share issuance, you could lose a substantial amount, or all, of your investment.

Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and may grant voting powers, rights and preference that differ from or may be superior to those of the registered shares.

Our articles of incorporation allow us to issue 10,000,000 shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. Furthermore, TimDeHerrera serves as our sole director and, therefore, has the ability to issue preferred stock without shareholder approval. As a result, our sole director could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.

Future sales of our common stock could put downward selling pressure on our common stock, and adversely affect the per share price. There is a risk that this downward pressure may make it impossible for an investor to sell share of common stock at any reasonable price, if at all.

Future sales of substantial amounts of our common stock in the public market or the perception that such sales could occur, could put downward selling pressure on our common stock and adversely affect its market price.

We do not anticipate paying dividends in the foreseeable future.

We do not anticipate paying dividends on our common stock in the foreseeable future, but plan rather to retain earnings, if any, for the operation, growth and expansion of our business. Because the Company does not anticipate paying cash dividends in the foreseeable future which may lower expected returns for investors, and as such our stockholders will not be able to receive a return on their investment unless they sell their shares of common stock.

Because we expect to incur losses in the future, failure to generate revenues will cause us to go out of business and your entire investment could be lost.

Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and not generating revenues. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.

Our operating results may prove unpredictable, which could result in the complete loss of your investment.

Our operating results are likely to fluctuate significantly in the future due to a variety of factors, many of which we have no control. Factors that may cause our operating results to fluctuate significantly include: our ability to generate enough working capital from future equity sales; the level of commercial acceptance by the public of our services; fluctuations in the demand for secure online storage; the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations, infrastructure and general economic conditions.

If realized, any of these factors could have a material adverse effect on our business, financial condition and operating results, which could result in the complete loss of your investment.

As the company’s sole officer and director has other outside business activities, he may not be in a position to devote a majority of his time to the company, which may result in periodic interruptions or business failure.

Mr. DeHerrera our sole officer and director, has other business interests and currently devote approximately 20 hours per week to our operations. If the demands of the Company’s business requires more business time of our sole officer and director, he is prepared to adjust his timetable to devote more time to the Company’s business. However, he may not be able to devote sufficient time to the management of the Company’s business, which may result in periodic interruptions in implementing the Company’s plans in a timely manner. Such delays could have a significant negative effect on the success of the business.

Key management personnel may leave the company, which could adversely affect the ability of the company to continue operations.

The Company is entirely dependent on the efforts of its sole officer and director. The Company does have an employment agreement in place with its sole officer and directors. Their departure or the loss of any other key personnel in the future could have a material adverse effect on the business. The Company believes that all commercially reasonable efforts have been made to minimize the risks attendant with the departure by key personnel from service. However, there is no guarantee that replacement personnel, if any, will help the Company to operate profitably. The Company does not maintain key person life insurance on its sole officer and directors.

In the case if the company is dissolved, it is unlikely that there will be sufficient assets remaining to distribute to the shareholders.

In the event of the dissolution of the Company, the proceeds realized from the liquidation of its assets, if any, will be distributed to the shareholders only after the claims of the Company’s creditors are satisfied.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal executive offices are located at 6302 Mesedge Drive, Colorado Springs, Denver, CO 80919.A description of our oil and gas properties is set forth above in this Annual Report under the heading “Business.” As of the date of this filing, the Company has not sought to move our office. Additional space may be required as the Company expands its operations. Management does not foresee any significant difficulties in obtaining any required additional space. The Company currently does not own any real property.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 4. MINE SAFETY DISCLOSURE

None.

PART II

ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Stock

Our common stock is currently quoted on the OTC Markets. Our common stock has been quoted on the OTC Markets since October 3, 2007 trading under the symbol “NUNC”. On February 25, 2008, our symbol was changed to “FORC” to reflect our Company’s name change Because we are quoted on the OTC Markets, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

The following table sets forth the high and low bid prices for our Common Stock per quarter as reported by the OTCQB for the period from December 1, 2012, through November 30, 2013,based on our fiscal year end November 30. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission and may not represent actual transactions.



	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
2013 – High		1.60	.35	.12
2013 – Low		0.21	.059	0.025
2012 – High	2.00
2012 – Low	0.25

Record Holders

As of February 21, 2014, there were 4,393,194shares of the registrant’s $0.001 par value common stock issued and outstanding and were owned by approximately 31 holders of record, based on information provided by our transfer agent.

Penny Stock Regulation

Shares of our common stock will probably be subject to rules adopted the SEC that regulate broker-dealer practices in connection with transactions in “penny stocks”. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in those securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the SEC, which contains the following:

a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of securities’ laws;

a brief, clear, narrative description of a dealer market, including "bid" and "ask” prices for penny stocks and the significance of the spread between the "bid" and "ask" price;

a toll-free telephone number for inquiries on disciplinary actions;

definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks; and

such other information and is in such form (including language, type, size and format), as the SEC shall require by rule or regulation.

Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:

the bid and offer quotations for the penny stock;

the compensation of the broker-dealer and its salesperson in the transaction;

the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Holders of shares of our common stock may have difficulty selling those shares because our common stock will probably be subject to the penny stock rules.

Description of Registrant’s Securities

We have authorized capital stock consisting of 750,000,000 shares of common stock, $0.001 par value per share (“Common Stock”) and 10,000,000 shares of preferred stock, $0.001 par value per share (“Preferred Stock”).

Preferred Stock

Equity Compensation Plans

We do not have any equity compensation plans in place, whether approved by the shareholders or not.

Warrants, Options and Convertible Securities

We do not have any outstanding warrants, options or convertible securities.

Recent Sales of Unregistered Securities

Between December 12, 2012 and February 28, 2013, we issued an aggregate of 17,884,615 common shares with an aggregate fair value of $76,202, upon the conversion $38,000 of a convertible note which was due upon demand.

On January 12, 2013, we issued 5,000,000 common shares with an aggregate fair value of $24,200, upon the conversion $12,000 of a convertible note which falls due on March 14, 2013.

Between December 12, 2012 and May 31, 2013, we issued an aggregate of 245,868 common shares with an aggregate fair value of $100,200, upon the conversion of $50,000 of a convertible note which was due upon demand.

Between January 12, 2013, and May 31, 2013, we issued 192,576 common shares with an aggregate fair value of $86,500, upon the conversion of accrued interest of $1,700 and $42,500 principal of a convertible note which falls due on March 14, 2013.

Between May 2, 2013 and May 31, 2013, we issued 189,679 common shares with an aggregate fair value of $51,300, upon the conversion of $25,900 of a convertible note which fell due on May 21, 2013.

We issued 500,000 shares to our officer and director, Tim DeHerrera, to settle amounts owing under a prior contract of $22,125 and 278,750 shares are to be earned over the period of his employment agreement.

On June 26, 2013, we issued 4,000,000 shares of preferred stock to Highlander Overseas, Inc. in connection with a Mineral Property Acquisition Agreement.

From August 31, 2013 until November 30, 2013, we issued 586,139 common shares with an aggregate fair value of $16,826 upon the conversion of $10,900 of a convertible note which fell due on June 14, 2013.

Subsequent Issuances

From December 1, 2013 to February 14, 2014, the holders of a convertible notes converted a total of $21,023 of principal into 1,388,584shares of our common stock.

Other than as previously disclosed, none.

Re-Purchase of Equity Securities

None.

Dividends

We have not paid any cash dividends on our common stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our common stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on our common stock will be paid in the future.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Working Capital



	November 30, 2013 $	November 30, 2012 $
Current Assets	-	35,442
Current Liabilities	523,739	442,056
Working Capital (Deficit)	(523,739)	(-406,614)

Cash Flows



	November 30, 2013 $	For the Period from November 1, 2006 (date of inception) to November 30, 2013 $
Cash Flows from (used in) Operating Activities	(279,920)	(1,800,864)
Cash Flows from (used in) Investing Activities	(1,160,000)	(1,662,267)
Cash Flows from (used in) Financing Activities	1,404,991	3,476,336
Net Increase (decrease) in Cash During Period	(35,442)	0

Results for the Year Ended November 30, 2013Compared to the Year Ended November 30, 2012

Revenues:

The Company’s revenues were $nil for the year ended November 30, 2013compared to $nil in 2012.

Cost of Revenues:

The Company’s cost of revenue was $nil for the year ended November 30, 2013, compared to $nil in 2012.

General and Administrative Expenses:

General and administrative expenses for the year ended November 30, 2013, and November 30, 2012, were $485,741 and $660,180, respectively. General and administrative expenses consisted primarily of consulting fees, management fees, office expenses and preparing reports and SEC filings relating to being a public company. The increase was primarily attributable to an increase in management fees for normal operations.

Other Income (Expense):

Other income (expense) consisted of gain on derivative valuation and interest expense. The gain on derivative valuation is directly attributable to the change in fair value of the derivative liability from date of issuance during 2012 through November 30, 2013. Interest expense is primarily attributable to the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms. Interest associated with the derivative instruments for the year ended November 30, 2013 amounted to approximately $(306,706), compared to $(341,484) in 2012. The change in value on derivative valuation expense for the year ended November 30, 2013 was $(107,920), compared to $(40,600) in 2012.

Net Loss:

Net loss for the year ended November 30, 2013, was $(897,593) compared with a net loss of $(1,073,628) for the year ended November 30, 2012. The decreased net loss is due to a decrease in consulting fees, general and administrative expenses and convertible note expenses.

Results for the Period from November 1, 2006 (Inception of Exploration Stage) through November 30, 2013

Revenues:

The Company’s revenues were $nil for the year ended November 30, 2013, compare to $nil for the period from inception to November 30, 2013.

Cost of Revenues

The Company’s cost of revenue was $nil for the year ended November 30, 2013, compared to $nil for the period from inception to November 30, 2013.

General and Administrative Expenses:

General and administrative expenses consisted primarily of consulting fees, rent, travel, meals and entertainment, and preparing reports and SEC filings relating to being a public company. For the year ended November 30, 2013, general and administrative expenses was $485,741 compared to $3960,75 for the period from inception to November 30, 2013.

Other Income (Expense):

Other income (expense) for the period November 1, 2006 (Inception of Exploration Stage) through November 30, 2013was $(849,094). Other income (expense) consisted of gain on derivative valuation and interest expense. The gain on derivative valuation is directly attributable to the change in fair value of the derivative liability from date of issuance during 2012 through November 30, 2013. Interest expense is primarily attributable to the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms. Interest associated with the derivative instruments amounted to approximately $(728,879).

Net Loss.

Net loss for the period November 1, 2006 (Inception of Exploration Stage) through November 30, 2013,was $(4,809,844). The net loss for this period was primarily related to general and administrative expenses exceeding the amount of revenues for the period indicated.

Impact of Inflation

We believe that the rate of inflation has had a negligible effect on our operations.

Liquidity and Capital Resources

The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. Since its inception, the Company has been funded by related parties through capital investment and borrowing funds.

As of November 30, 2013, total current assets were $nil, which consisted primarily of cash, inventory and deposits.

As of November 30, 2013, total current liabilities were $523,739, which consisted primarily of accounts payable and accrued expenses and convertible debentures. We had negative net working capital of $(523,739) as of November 30, 2013.

During the period from November 1, 2006 (Inception of Exploration Stage) through November 30, 2013, operating activities used cash of $(1,820,610). The cash used by operating activities related to general and administrative expenses, the purchase of inventory for resale and non-cash items related to derivative instruments. Except for cash in the amount of $nil from sales of our products, all of the cash during this period was provided by related party transactions, capital contributions and convertible debentures.

Intangible Assets

The Company’s intangible assets were $nil as of November 30, 2013.

Material Commitments

The Company’s material commitments were $nil as of November 30, 2013.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Contractual Obligations

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FORCE MINERALS CORP.

(F/K/A Force Energy Corporation)

( AN EXPLORATION STAGE COMPANY )

Index to Consolidated Financial Statements


Table of Contents		Page

Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of November 30, 2013and 2012		F-3
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended November 30, 2013and 2012		F-5
Consolidated Statement of Changes in Stockholders' Equity for the Years Ended November 30, 2013and 2012		F-7
Consolidated Statements of Cash Flows for the Years Ended November 30, 2013and 2012		F-11
Notes to Consolidated Financial Statements		F-13

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Force Minerals Corporation

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANT

We have audited the accompanying consolidated balance sheets of Force Energy Corp. (“the Company”) as of November 30, 2013 and 2012 and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit and cash flows for the year ended November 30, 2013 and from November 1, 2006 (date of inception) through November 30, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company, at November 30, 2013 and 2012, and the results of its operations and its cash flows for the years ended November 30, 2013 and 2012 and from inception (November 1, 2006) through to November 30, 2013, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As described in Note 1 to the consolidated financial statements, the Company has incurred net losses since inception and has an accumulated deficit at November 30, 2013. These and other factors discussed therein raise a substantial doubt about the ability of the Company to continue as a going concern. Management’s plans in regard to those matters are also described in Note 1. The Company’s ability to achieve its plans with regard to those matters, which may be necessary to permit the realization of assets and satisfaction of liabilities in the ordinary course of business, is uncertain. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Noblesville, Indiana

October 29, 2014


FORCE MINERALS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS

	November 30, 2013	November 30, 2012
ASSETS
Current Assets
Cash	$ -	$ 35,442
Total Current Assets	$ -	$ 35,442

Mineral property option	$ 1,500,099	$ 340,099

TOTAL ASSETS	$ 1,500,099	$ 375,541

LIABILITIES
Current Liabilities:
Bank Overdraft	$ 23	$ -
Accounts payable and accrued liabilities	$ 97,942	$ 43,713
Advances Payable	$ 20,000	$ 20,000
Due to related parties	$ 1,593	$ 4,625
Convertible notes payable, net of discount	$ 313,884	$ 315,518
Derivative liabilities	$ 90,297	$ 58,200
Total Current Liabilities	$ 523,739	$ 442,056

Asset retirement obligation	$ 18,861	$ 16,845

Total Liabilities	$ 542,600	$ 458,901

STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value 10,000,000 shares authorized	$ 4,000	$ -
4,000,000 issued and outstanding at November 30, 2013
Common stock, $0.1 par value 750,000,000 authorized	$ 300,461	$ 105,417
3,004,610 shares issued and outstanding at November 30, 2013
1,054,169 shares issued and outstanding at November 30, 2012
Additional paid in capital	$ 5,520,454	$ 3,812,334
Deferred stock compensation	$ (64,112)	$ (95,400)
Accumulated other comprehensive income	$ 6,540	$ 6,027
Deficit accumulated during the development stage	$ (4,803,304)	$ (3,911,738)
Total Stockholders' Equity	$ 964,039	$ (83,360)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,506,639	$ 375,541

NOTE: All common share amounts and per share amounts in these financial statements, reflect the one hundred-for-one reverse stock split of the issued and outstanding shares of the common stock of the Company, effective June 14, 2013, including retroactive adjustment of common share amounts. See Note 11.

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


FORCE MINERALS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(Audited)

	For The Year Ended November 30, 2013	For The Year Ended November 30, 2012	From Inception (November 1, 2006) through November 30, 2013

Operating Expenses:
Accounting and audit fees	$ 39,928	$ 22,825	$ 349,874
Accretion of ARO	$ 2,529	$ 2,238	$ 9,686
Advertising and promotion	$ 78,000	$ -	$ 78,000
Bank charges	$ 223	$ 1,176	$ 5,666
Consulting fees	$ 19,900	$ 213,439	$ 641,839
Depreciation	$ -	$ -	$ 4,651
Investor relations	$ -	$ -	$ 61,443
Legal fees	$ 13,288	$ 28,514	$ 234,607
Management fees	$ 314,162	$ 234,825	$ 1,696,762
Mineral property exploration costs	$ 50,000	$ 8,639	$ 114,250
Office expenses	$ 247	$ 4,771	$ 44,440
Oil and gas exploration costs	$ -	$ -	$ 15,000
Rent	$ 2,116	$ 3,113	$ 48,930
Tax penalties and interest	$ (41,814)	$ 421	$ 1,096
Transfer and filing fees	$ 7,162	$ 2,657	$ 88,564
Travel	$ -	$ 2,135	$ 12,476
Write-off of oil and gas costs	$ -	$ 135,427	$ 553,466
Total Operating Expenses	$ 485,741	$ 660,180	$ 3,960,750

Operating Loss	$ (485,741)	$ (660,180)	$ (3,960,750)

Other Income and Expense
Interest income	$ 2,261	$ -	$ 2,419
Interest expense	$ (306,706)	$ (341,484)	$ (728,879)
Total Other Income and Expense	$ (304,445)	$ (341,484)	$ (726,460)

Extraordinary Items
Debt forgiveness	$ -	$ -	$ 15,286
Loss on settlement of advance payable	$ -	$ (30,000)	$ (30,000)
Change in fair value of derivative liability	$ (107,920)	$ (40,600)	$ (107,920)
Total Extraordinary Items	$ (107,920)	$ (70,600)	$ (122,634)

Net Loss for the Period	$ (898,106)	$ (1,072,264)	$ (4,809,844)

Foreign currency exchange gain/(loss)	$ 513	$ (1,364)	$ 6,540

Comprehensive Loss for the Period	$ (897,593)	$ (1,073,628)	$ (4,803,304)

Net gain (loss) per share:
Basic and diluted	$ (0.3945)	$ (0.0151)

Weighted average number of shares outstanding: Basic and diluted	2,275,120	70,979,728

NOTE: All common share amounts and per share amounts in these financial statements, reflect the one hundred-for-one reverse stock split of the issued and outstanding shares of the common stock of the Company, effective June 14, 2013, including retroactive adjustment of common share amounts. See Note 11.

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


FORCE MINERALS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
From Inception (November 1, 2006) to November 30, 2013

	Common Stock			Preferred Stock			Additional		Deferred			Total
	Number of		Number of			Paid-in		Stock		Accumulated	Shareholders'
	Shares	Par Value	Shares		Par Value	Capital		Compensation		Gain (Deficit)	Equity

Common Shares issued for cash at $0.005	23,000,000	$ 23,000				$ 84,000					$ 107,000
Net comprehensive loss at November 30, 2006										$ (8,944)	$ (8,944)
Balance, November 30, 2006	23,000,000	$ 23,000				$ 84,000		$ -		$ (8,944)	$ 98,056

Pursuant to agreement of merger and plan of reorganization	21,354,000	$ 21,354				$ (24,058)					$ (2,704)
Common Shares issued for cash at $0.25	240,000	$ 240				$ 59,760					$ 60,000
Common Shares issued for cash at $0.50	100,000	$ 100				$ 49,900					$ 50,000
Net comprehensive loss at November 30, 2007										$ (79,859)	$ (79,859)
Balance, November 30, 2007	44,694,000	$ 44,694				$ 169,602		$ -		$ (88,803)	$ 125,493

Pursuant to consulting service agreements at $1.35	300,000	$ 300				$ 404,700					$ 405,000
Common Shares issued for cash at $0.75	1,000,000	$ 1,000				$ 749,000					$ 750,000
Net comprehensive loss at November 30, 2008										$ (786,407)	$ (786,407)
Balance, November 30, 2008	45,994,000	$ 45,994				$ 1,323,302		$ -		$ (875,210)	$ 494,086

Common Shares issued for oil and gas property	450,000	$ 450				$ 143,550					$ 144,000
Common Shares issued for cash at $0.28	900,000	$ 900				$ 251,100					$ 252,000
Net comprehensive loss at November 30, 2009										$ (403,082)	$ (403,082)
Balance, November 30, 2009	47,344,000	$ 47,344				$ 1,717,952		$ -		$ (1,278,292)	$ 487,004

Pursuant to management services contract at $0.22	2,500,000	$ 2,500				$ 547,500		$ (264,000)			$ 286,000
Common Shares issued for cash at $0.20	500,000	$ 500				$ 99,500					$ 100,000
Common Shares issued for debt settlement at $0.25	643,267	$ 643				$ 160,174					$ 160,817
Common Shares issued for cash at $0.20	250,000	$ 250				$ 49,750					$ 50,000
Amortization of deferred compensation								$ 93,800			$ 93,800
Net comprehensive loss at November 30, 2010										$ (1,051,852)	$ (1,051,852)
Balance, November 30, 2010	51,237,267	$ 51,237				$ 2,574,876		$ (170,200)		$ (2,330,144)	$ 125,769

Pursuant to management services contract at $0.05	2,500,000	$ 2,500				$ 122,500		$ (125,000)			$ -
Common Shares issued for cash at $0.25	200,000	$ 200				$ 49,800					$ 50,000
Common Shares issued for mineral propety option agreement at $0.08	1,000,000	$ 1,000				$ 79,000					$ 80,000
Amortization of deferred compensation								$ 215,600			$ 215,600
Net comprehensive loss at November 30, 2011										$ (501,939)	$ (501,939)
Balance, November 30, 2011	54,937,267	$ 54,937				$ 2,826,176		$ (79,600)		$ (2,832,083)	$ (30,570)

Intrinsic value of the beneficial coversion feature of convertible notes payable						$ 97,000					$ 97,000
Pursuant to convertible note payable settlement	2,486,549	$ 2,487				$ 62,813					$ 65,300
Pursuant to convertible note payable settlement	6,956,813	$ 6,957				$ 68,643					$ 75,600
Pursuant to conversion of advance payable	14,344,432	$ 14,344				$ 246,056					$ 260,400
Pursuant to consultancy agreement at $0.02	3,000,000	$ 3,000				$ 57,000					$ 60,000
Pursuant to consultancy agreement at $0.0208	2,691,926	$ 2,692				$ 51,146					$ 53,838
Pursuant to management services contract at $0.02	6,000,000	$ 6,000				$ 118,500					$ 124,500
Pursuant to mineral property option agreement at $0.02	7,500,000	$ 7,500				$ 142,500		$ (150,000)			$ -
Pursuant to management services contract at $0.12	7,500,000	$ 7,500				$ 142,500					$ 150,000
Amortization of deferred compensation								$ 134,200			$ 134,200
Net comprehensive loss at November 30, 2012										$ (1,073,628)	$ (1,073,628)
Balance, November 30, 2012	105,416,987	$ 105,417				$ 3,812,334		$ (95,400)		$ (3,905,711)	$ (83,360)

Intrinsic value of the beneficial coversion feature of convertible notes payable						$ 248,000					$ 248,000
Conversion of promissory note to stock	22,884,615	$ 22,885				$ 27,115					$ 50,000
Conversion of promissory note to stock	39,927,652	$ 39,927				$ 30,172					$ 70,099
Conversion of promissory note to stock	23,610,236	$ 23,610				$ (6,110)					$ 17,500
Conversion of promissory note to stock	58,613,900	$ 58,614				$ (46,874)					$ 11,740
Elimination of derivative liabilities						$ 234,823					$ 234,823
Stock for property option			4,000,000		$ 4,000	$ 1,156,000					$ 1,160,000
Pursuant to management services contract	22,125,000	$ 22,125				$ 28,764					$ 50,889
Stock for deferred remuneration	27,875,000	$ 27,875				$ 36,237		$ (64,112)			$ -
Amortization of deferred compensation								$ 95,400			$ 95,400
Rounding from partial to full shares	7,610	$ 8				$ (8)					$ -
Reverse stock split 100:1	(297,456,390)										$ -
Net comprehensive loss at November 30, 2013										$ (897,593)	$ (897,593)
Balance, November 30, 2013	3,004,610	$ 300,461	4,000,000		$ 4,000	$ 5,520,453		$ (64,112)		$ (4,803,304)	$ 957,498

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


FORCE MINERALS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Audited)
	For The Year Ended November 30, 2013	For The Year Ended November 30, 2012	From Inception (November 1, 2006) through November 30, 2013
Operating activities:
Net loss for the period	$ (897,593)	$ (1,073,628)	$ (4,803,304)
Adjustment to reconcile net loss to net cash used by operations
Accrued interest	$ 159,956	$ 32,723	$ 198,429
Interest expense	$ 146,750	$ 127,000	$ 273,750
Accretion and elimination of discount on convertible notes	$ -	$ 211,761	$ 248,100
Revaluation of derivative liability to fair value	$ 107,920	$ 40,600	$ 146,520
Consulting fees paid in stock	$ 50,889	$ 178,338	$ 634,227
Share based compensation	$ 95,400	$ 134,200	$ 825,000
Debt forgiveness	$ -	$ -	$ (15,286)
Accretion of ARO	$ 2,529	$ 2,238	$ 9,683
Depreciation	$ -	$ -	$ 4,651
Write-off of oil and gas costs	$ -	$ 135,427	$ 553,466
Prepaid expenses	$ -	$ 1,119	$ -
Advance payable	$ -	$ -	$ 50,000
Accounts payable and accrued liabilities	$ 54,229	$ (5,158)	$ 73,900
Net cash used by operating activities	$ (279,920)	$ (215,380)	$ (1,800,864)

Financing activities:
Bank Overdraft	$ 23		$ 23
Proceeds from issuance of common stock	$ -	$ -	$ 1,419,000
Proceeds from issuance of preferred stock	$ 1,160,000		$ 1,160,000
Convertible note payable	$ 248,000	$ 337,500	$ 755,500
Settlement of Convertible note payable	$ -	$ 4,000	$ 165,442
Cash acquired on reverse acquisition	$ -		$ 37,058
Due to related party	$ (3,032)	$ (57,655)	$ (60,687)
Net cash provided by financing activities	$ 1,404,991	$ 283,845	$ 3,476,336

Investing activities:
Property and Equipment	$ -	$ -	$ (4,651)
Mineral property option	$ (1,160,000)	$ (50,499)	$ (1,270,099)
Development costs of oil and gas properties	$ -	$ -	$ (387,517)
Net cash provided by investing activities	$ (1,160,000)	$ (50,499)	$ (1,662,267)

Effect of foreign currency translation	$ (513)	$ 1,083	$ (13,205)

Net increase/(decrease) in cash	$ (35,442)	$ 19,049	$ -

Cash, beginning of period	$ 35,442	$ 16,393	$ -
Cash, end of period	$ -	$ 35,442	$ -


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

F-12

FORCE MINERALS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2013 and 2012

Note 1:Organization and Basis of Presentation

On June 6, 2013, the Board of Directors changed the name of the Company to Force Minerals Corporation. Also on June 6, 2013, the Board of Directors authorized a 100:1 reverse stock split of the common shares. The name change and reverse stock split received regulatory approval on June 28, 2013. The record date for the reverse stock split was June 14, 2013. The authorized number of common shares remained unchanged. All references in the accompanying financial statements to the number of common shares have been restated to reflect the reverse stock split.

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. The Financial Statements and related disclosures as of November 30, 2013 are audited pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Unless the context otherwise requires, all references to “Force Minerals Corporation,” “we,” “us,” “our” or the “company” are to Force Energy Corp and any subsidiaries.

Note 2: Summary of Significant Accounting Policies

The financial statements of the Company are presented on the accrual basis. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.

The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America. This requires management to make estimates and assumptions that affect the reported amounts and disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates.

Development Stage Activities

The Company is a development stage exploration company. All losses accumulated since inception have been considered as part of the Company’s development stage activities.

F-13

The Company is subject to several categories of risk associated with its development stage activities. Mineral exploration and natural gas and oil exploration and production is a speculative business, and involves a high degree of risk. Many factors have a direct bearing on the Company’s prospects and there are inherent uncertainties in these activities. Mineral exploration is dependent upon finding an ore body that is economic to develop. Uncertainties that exist with natural gas exploration include estimating natural gas and oil reserves, future hydrocarbon production, and cash flows, particularly with respect to wells that have not been fully tested and with wells having limited production histories; access to additional capital; changes in the price of natural gas and oil; availability and cost of services and equipment; and the presence of competitors with greater financial resources and capacity.

Principles of Consolidation

These consolidated financial statements include the accounts of Force Energy Corp and its wholly-owned subsidiaries, FRC Exploration Ltd. (a company incorporated in British Columbia, Canada,) (“FRC”) and Nuance Exploration Ltd. (a company incorporated in British Columbia, Canada) (“NEL”). All significant inter-company balances and transactions have been eliminated.

Foreign Currency Translation

The reporting currency is the U.S. dollar. The functional currency of the Company is the local currency, the Canadian dollar. The financial statements of the Company are translated into United States dollars in accordance with ASC 830, Foreign Currency Matters, using year-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income. At November 30, 2013 and 2012, the cumulative translation adjustment of $6,540 and $6,027, respectively, was classified as an item of other comprehensive income in the stockholders' equity (deficit) section of the consolidated balance sheets. For the years ended November 30, 2013 and 2012, the foreign currency translation adjustment to Accumulated Other Comprehensive income was $513 and ($1,364) respectively.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of cash and highly liquid investments with original maturity dates of less than three months that may not be reported as investments. While the Company may maintain cash and cash equivalents in bank deposit accounts, which at times exceed Federal Deposit Insurance Corporation insured limits, they have not experienced any losses in such accounts.

Management believes it is not exposed to any significant credit risk on cash and cash equivalents.

Oil and Gas Properties

The Company follows the full cost method of accounting for oil and gas operations whereby all costs of exploring for and developing oil and gas reserves are initially capitalized on a country-by-country (cost center) basis. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling and overhead charges directly related to acquisition and exploration activities.

Costs capitalized, together with the costs of production equipment, are depleted and amortized on the unit-of-production method based on the estimated gross proven reserves. Petroleum products and reserves are converted to a common unit of measure, using 6 MCF of natural gas to one barrel of oil.

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Costs of acquiring and evaluating unproven properties are initially excluded from depletion calculations. These unevaluated properties are assessed periodically to ascertain whether impairment has occurred. When proven reserves are assigned or the property is considered to be impaired, the cost of the property or the amount of the impairment is added to costs subject to depletion calculations.

If capitalized costs, less related accumulated amortization and deferred income taxes, exceed the “full cost ceiling” the excess is expensed in the period such excess occurs. The “full cost ceiling” is determined based on the present value of estimated future net revenues attributed to proven reserves, using current prices less estimated future expenditures plus the lower of cost and fair value of unproven properties within the cost center.

Proceeds from a sale of petroleum and natural gas properties are applied against capitalized costs, with no gain or loss recognized, unless such a sale would alter the relationship between capitalized costs and proven reserves of oil and gas attributable to a cost center.

Impairment of Long-lived Assets

The carrying value of intangible assets and other long-lived assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. Impairment on the properties with unproven reserves is evaluated by considering criteria such as future drilling plans for the properties, the results of geographic and geologic data related to the unproven properties and the remaining term of the property leases.

Mineral Properties

Mineral property acquisition costs are capitalized in accordance with FASB ASC 930-805, “Extractive Activities-Mining,” when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed as incurred if the criteria for capitalization are not met.

In the event that mineral property acquisition costs are paid with Company shares, those shares are recorded at the estimated fair value at the time the shares are due in accordance with the terms of the property agreements.

Mineral property exploration costs are expensed as incurred.

When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves and pre-feasibility, the costs incurred to develop such property are capitalized.

Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis.

Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.

To date the Company has not established any proven or probable reserves on its mineral properties.

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Asset Retirement Obligations

Asset Retirement Obligations (“ARO”) associated with the retirement of a tangible long-lived asset, including natural gas and oil properties, are recognized as liabilities in the period in which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated assets. The cost of tangible long-lived assets, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the assets. The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted fair value is accreted to the expected settlement value. The fair value of the ARO is measured using expected future cash flow, discounted at the Company’s credit-adjusted risk-free interest rate.

Derivative Liabilities and Classification

Free-standing financial instruments (or embedded derivatives) indexed to the Company’s common stock are evaluated to properly classify such instruments within equity or as liabilities in the financial statements. Accordingly, the classification of an instrument indexed to our stock, which is carried as a liability, must be reassessed at each balance sheet date. If the classification changes as a result of events during a reporting period, the instrument is reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. There are no material uncertain tax positions for any of the reporting periods presented.

Basic Loss per Share

Net loss per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. For the twelve months ended December 31, 2013 and 2012, the assumed exercise of share options are anti-dilutive due to the Company’s net loss and are excluded from the determination of net loss per share – basic and diluted. Accordingly, net loss per share basic and diluted are equal in all periods presented.

Comprehensive Income

F-16

Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive income (loss) requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. For the years presented, the Company's comprehensive income (loss) includes net income (loss) and foreign currency translation adjustments and is presented in the consolidated statements of changes in operations.

Fair Value of Financial Instruments

Effective July 1, 2009, the Company adopted Accounting Standards Codification Topic 820,Fair Value Measurements(ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair market hierarchy, which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels based on the reliability of the inputs to determine the fair value:

Level 1 – defined as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3 – defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments consist of cash, accounts receivable, accounts payable and notes payable. The carrying amount of cash, accounts receivable and accounts payable approximates fair value because of the short-term nature of these items.

Financial assets and liabilities measured at fair value on a recurring basis:


	Fair Value	November 30, 2013		November 30, 2012
	Input Level	Carrying Amount	Estimated Fair Value	Carrying Amount	Estimated Fair Value
Derivative Liability	3	$ 90,297	$ 90,297	$ 58,200	$ 58,200
Total Financial Liabilities		$ 97,297	$ 97,297	$ 58,200	$ 58,200

In management’s opinion, the fair value of convertible notes payable and advances payable approximatesthe carrying value as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current market. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.

Note 3 Recent Accounting Pronouncements

F-17

In May 2011, the FASB issued ASU 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS) of Fair Value Measurement – Topic 820.” ASU 2011-04 is intended to provide a consistent definition of fair value and improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRS. The amendments include those that clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements, as well as those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. This update is effective for annual and interim periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on the Company’s financial statements.

The FASB issued Accounting Standards Update (ASU) No. 2012-02—Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, on July 27, 2012, to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s financial statements.

In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, (“ASU 2011-11”). ASU 2011-11 requires an entity to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Retrospective disclosure is required for all comparative periods presented. The adoption of ASU 2011-11 did not have a material impact on the Company’s financial statements.

In October 2012, the FASB issued ASU No. 2012-04, Technical Corrections and Improvements, (“ASU 2012-04”). This update includes source literature amendments, guidance clarification, reference corrections and relocated guidance affecting a variety of topics in the Codification. The update also includes conforming amendments to the Codification to reflect ASC 820’s fair value measurement and disclosure requirements. The amendments in this update that will not have transition guidance are effective upon issuance. The amendments in this update that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on the Company’s financial statements.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”). This update clarifies that ordinary trade receivables and receivables are not in the scope of ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). Specifically, ASU 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the FASB Accounting Standards Codification or subject to a master netting arrangement or similar agreement. The Company is required to apply the amendments in ASU 2013-01 beginning January 1, 2013. The adoption of ASU 2013-01 by the Company did not have a material impact on the consolidated financial statements.

In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update, or ASU, 2013-02, Comprehensive Income (Topic 220), Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This update requires companies to provide information regarding the amounts reclassified out of accumulated other comprehensive income by component. In addition, companies are required to present,

F-18

either on the face of the statement where net income is presented or in the accompanying notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. ASU 2013-02 is effective for annual reporting periods beginning on or after December 15, 2012, and interim periods within those annual periods. ASU 2013-02 was adopted January 1, 2013 and did not have a significant impact on our financial statements.

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint andSeveral Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. Theamendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligationsresulting from joint and several liability arrangements for which the total amount of the obligation within the scopeof this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S.GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this standard is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15,2013. The Company is evaluating the effect, if any, adoption of ASU No. 2013-04 will have on their consolidated financial statements.

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon De-recognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The amendments in ASU No. 2013-05 resolve the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. The amendments in this standard is effective prospectively for fiscal years, and interim reporting periods within those years, beginning December 15, 2013. The Company is evaluating the effect, if any, adoption of ASU No. 2013-05 will have on their consolidated financial statements.

In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Income Taxes (Topic 740) (“ASU 2013-11”), which requires the financial statement presentation of an unrecognized tax benefit in a particular jurisdiction, or a portion thereof, as a reduction to a deferred tax asset for a net operating loss (“NOL”) carry forward, a similar tax loss, or a tax credit carry forward, unless the uncertain tax position is not available to reduce, or would not be used to reduce, the NOL or carry forward under the tax law in the same jurisdiction; otherwise, the unrecognized tax benefit should be presented as a gross liability and should not be combined with a deferred tax asset. ASU 2013-11 is effective for interim and annual periods beginning after December 15, 2013. The Company is currently evaluating the impact of this guidance on their consolidated financial position, results of operations, and cash flows.

F-19

Note 4: Oil and Gas Properties


	November 30, 2012		November 30, 2011
	Canada	Total	Canada	Total
Unproven Properties
Acquisition Costs	$ 119,640	$ 488,640	$ 119,640	$ 488,640
Development Costs	$ 7,365	$ 36,404	$ 7,365	$ 36,404
Asset Retirement Obligation	$ 8,422	$ 8,422	$ 8,422	$ 8,422
	$ 135,427	$ 533,466	$ 135,427	$ 533,466
Written Off	$(135,427)	$(533,466)		$(398,039)
	$ -	$ -	$ 135,427	$ 135,427

Hayter Prospect, Alberta, Canada

By a participation agreement dated December 21, 2006, Nuance Exploration Ltd. (“NEL”), a wholly owned subsidiary of the Company acquired a 100% ownership in the interpretation of 3D seismic data covering four sections of certain land, known as the Hayter Prospect, located in the province of Alberta, Canada by paying $82,650 (CDN$95,000) in costs of acquiring and interpreting the seismic data.

On October 15, 2007, prior to the evaluation of the 3D seismic data, NEL sold to the original grantor (the Grantor) its 100% interest in the 3D seismic data and received as consideration a non-interest bearing promissory note for $111,144 (CDN$110,000) to be repaid by November 30, 2007.

On November 30, 2007, the Grantor did not pay the promissory note and NEL and the Grantor entered into a Participation Agreement whereby NEL accepted a 20% interest of the Grantor’s working interest in the County Line 10D Hayter 10-8-40-1 W4M well as full and final settlement of the promissory note totaling $95,702 after considering the effects of the foreign exchange on the note.

On October 16, 2009, the Company entered into an amendment to its Participation Agreement pursuant to which it acquired an additional 30% working interest in the Hayter Well in consideration of a release by Force from an amount of $23,938 owed by the Grantor to the Company. The Company holds a 50% working interest of the Grantor’s interest in the Hayter Well.

The addendum was subsequently amended by the parties on February 1, 2010 to replace the reference to the Company in the agreement with Nuance Exploration Ltd., the Company’s wholly owned subsidiary.

During the year ended November 30, 2012, due to financial restrictions in the current capital markets, management determined the focus of the Company in the future would predominantly be the exploration and development of the Zoro Mineral Property (See Note 5). Accordingly, as no current plans to further develop the Hayter property exist, the company recorded an impairment provision of $135,427.

At November 30, 2012, the 50% working interest of the Hayter Well was recorded at $0. The company also recorded $16,845 as an asset retirement obligation (See Note 10).

F-20

Note 5: Mineral Properties

On May 30, 2013, the Company entered into a Property Option Agreement to acquire an option to purchase a 100%interest in four mining concessions known as La Predilecta; La Predilecta II; La Crus and La Cascada comprising approximately 1,181 hectares (approximately 2,918 acres) in the Miahuatlan District, in the southern portion of Centrales Region within Oaxaca State Mexico. The Company will hold its interest via a wholly owned Mexican subsidiary, which is yet to be ncorporated until the option holder receives $100,000 cash.

In order to exercise the option, the Company must pay cash or issue stock to the option holder as follows:

$50,000 within 60 days of signing the agreement.

$50,000 within 90 days of signing the agreement.

Issue an aggregate of 4,000,000 shares of Preferred stock.

Each preferred share shall have an underlying voting right equivalent to 100 shares of Common stock and shall be convertible into 100 shares of Common stock.

As of this reporting period the initial $50,000 payment had been made and is being paid by an outside investor. The remaining $50,000 is past due as of August 31, 2013.

The Company is now waiting for the Seller to verify the current standing with all taxes on the property. As soon as this is confirmed the Company will authorize second payment. Once the tax verification comes from the country of Mexico the Mexican subsidiary will be established and ownership of property will be held within the Mexican subsidiary.

On July 6, 2010, the Company entered into a Property Option Agreement (amended May 11, 2011) to acquire an option to purchase a 100% interest in the property known as the Zoro 1 property, a mineral property comprising 52 hectares (approximately 128.50 acres) in the Snow Lake region of Manitoba Canada. In order to exercise the option, the Company must pay cash or issue stock to the option holder by the following dates:

$59,600 (CDN 62,000) on signing the agreement (paid)

$102,900 (CDN 100,000) or issue 1,000,000 shares of common stock on or before June, 15, 2011. (1,000,000 shares issued with a fair value of $80,000)

$50,500 cash (CDN 50,000) and issue 7,500,000 common stock on or before June, 15, 2012. ($50,500 paid (CDN 50,000) and 7,500,000 shares issued with a fair value of $150,000)

$403,560 (CDN 400,000) or issue a specified number of common shares still to be determined by the parties on or before June, 15, 2013.

During the year ended November 30 2013, the Company incurred $0 in exploration expenditures on the property.

Note 6: Advances Payable

On February 1, 2011, the Company received a cash advance of $30,000. The advance is unsecured, non-interest bearing and has no fixed repayment terms. On June 13, 2012, this advance was settled by the issuance of 3,000,000 shares of common stock with a fair value of $60,000. The excess of fair value over the face value of the note was recorded as an interest expense with a corresponding credit to additional paid in capital.

On March 21, 2011, the Company received a cash advance of $20,000. The advance is unsecured, non-interest bearing and has no fixed repayment terms.

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Note 7: Related Party Transactions

Amounts due to related parties comprise:


	2013	2012
Amounts due to Director
Tim DeHerrera	$ 250	$ 4,625
Syndication Capital	$ 1,343	$ -
	$ 1,593	$ 4,625

All amounts due to related parties are unsecured, non-interest bearing and have no specific terms for repayment.

On July 23, 2010, the Company entered into an employment contract with a director which expired July 22, 2011. Pursuant to the contract, the Director received $5,000 per month remuneration. On December 31, 2010 the Director resigned and the employment contract was terminated.

On August 4, 2010, the Company entered into a share for debt settlement agreement with the Company’s former President whereby 643,267 common shares having a fair value of $0.25 each were issued to settle in full management fees of $154,600 rent expense of $1,000 and other expenses of $5,216, totaling $160,817.

On July 23, 2010, the Company entered into an employment contract with the Company President which expired July 22, 2011. Pursuant to the contract, the President received 2,500,000 common shares having a fair value of $550,000. Should the contract be terminated prior to completion, the President will return 100,000 shares to treasury for each unfulfilled month of the contract. The President will also receive $2,500 per month for months 1-3, $4,000 per month for months 4-6 and $5,000 per month for months 7-12 of the contract.

The fair value of 13,000 shares (as adjusted by the 100:1 reverse stock split) issuedwere earned immediately and were expensed as stock based compensation of $286,000. The fair value of the remaining 12,000 shares (as adjusted by the 100:1 reverse stock split), which are to be earned over the term of the contract,were charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders’ equity until earned.

Pursuant to this stock award the Company did not record any management fees for the years ended November 30, 2013 and 2012. Management fees of $170,200 for the year ended November 30, 2011 and $93,800 for the year ended November 30, 2010 were recorded.

On July 18, 2011, the Company entered into a new employment contract with the Company President which expires July 18, 2013. Pursuant to the contract, the President receives 2,500,000 common shares having a fair value of $125,000. The President will receive $7,500 per month for the term of the contract. Unless the contract is terminated by either party giving 45 days written notice the contact will automatically renew. Should the contract be renewed then the President will receive 2,500,000 shares of common stock and an annual increase of $2,500 per month upon each renewal. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of the President any accrued unpaid fees may be converted into common stock at $0.025 per share.

The fair value of the 250,000 shares (as adjusted by the 100:1 reverse stock split), which are to be earned over the term of the contract will be charged to operations over the life of the employment contract. The stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders’ equity until earned. Pursuant to the stock award the Company did not record any management fees for

F-22

the year ended November 30, 2013, but recorded management fees of $79,600 for the year ended November 30, 2012 and $45,400 for the year ended November 30, 2011.

On July 16, 2012, the Company entered into an addendum to the contract which expires July 15, 2014. Pursuant to the contract, the President received 75,000 (as adjusted by the 100:1 reverse stock split) common shares on July 2012, and will continue to receive 75,000 (as adjusted by the 100:1 reverse stock split) common shares upon each anniversary date of the addendum. The fair value of the shares received was $150,000. The President will receive $10,000 per month for the term of the addendum and an annual monthly increase of $2,500 per month thereafter. Unless the contract is terminated by either party giving 45 days written notice the contact will automatically renew. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of the President any accrued unpaid fees may be converted into common stock at $0.01 per share.

The fair value of the 75,000 shares (as adjusted by the 100:1 reverse stock split), which are to be earned over the term of the contract will be charged to operations over the life of the employment contract. The stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders’ equity until earned. Pursuant to this stock award the Company recorded management fees of $54,600 for the year ended November 30, 2012.

During the years ended November 30, 2013 and 2012 the Company recorded management fees of $95,400 and $54,600 respectively, pursuant to this stock award.

On May 30, 2013, the Company entered into a second addendum to the contract, which expires May 30, 2015.Pursuant to the contract, the President received 500,000 common shares upon signing the agreement, 221,250 shares were issued to settle amounts owing under prior contract of $22,125 and 278,750 shares are to be earned over the period of the contract. As before the President will receive $10,000 per month for months 25-36 of the addendum and an annual monthly increase of $2,500 per month thereafter. Unless the contract is terminated by either party giving90 days written notice the contact will automatically renew. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of the President any accrued unpaid fees may be converted into common stock at $0.001 per share.

The fair value of the shares issued in settlement of amounts owing of $22,125 was $50,889. The difference between the recorded amount payable and the fair value of stock issued being $28,762 was charged to operations as management fees upon issuance.

The fair value of the 278,750 shares issued with a fair value of $64,113, which are to be earned over the term of the contract, will be charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders’ equity until earned. During the year ended November 30, 2013, the Company recorded management fees of $120,000 pursuant to this stock award.

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Note 8: Convertible Notes Payable

At November 30, 2013 and November 30, 2012 convertible notes payable are recorded net of unamortized debt discount of $101,250 for 2010 and $0for 2012.


	2013	2012
Promissory Note #6	$ 20,000	$ 20,000
Promissory Note #7	$ 20,000	$ 20,000
Promissory Note #8	$ 20,000	$ 20,000
Promissory Note #10	$ 30,000	$ 30,000
Promissory Note #11	$ -	$ 42,500
Promissory Note #12	$ -	$ 42,500
Promissory Note #13	$ 64,060	$ 75,000
Promissory Note #14	$ -	$ 50,000
Promissory Note #15	$ 88,000	$ -
Promissory Note #16	$ 11,000	$ -
Promissory Note #17	$ 11,000	$ -
Promissory Note #18	$ 50,000	$ -
Promissory Note #19	$ 11,000	$ -
Promissory Note #20	$ 11,000	$ -
Promissory Note #21	$ 16,000	$ -
Promissory Note #22	$ 50,000	$ -
	$ 402,060	$ 300,000
Debt Discount	$ (101,250)
Accrued Interest	$ 13,074	$ 15,518
	$ 313,884	$ 315,518

Promissory Note #6

On February 15, 2012, the Company received $20,000 cash and issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand.

On October11, 2013, the Company authorized and directed to amend and restate the note into a new promissory note to Direct Capital Group Inc. and to provide conversion features equal to the lower of (i) $0.001 per share or (ii) 60% of the lowest closing bid price of the last day of 5 trading days prior to conversion.

Promissory Note #7

On February 15, 2012, the Company received $20,000 cash and issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand.

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Promissory Note #8

On February 15, 2012, the Company received $20,000 cash and issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand.

Promissory Note #10

On March 20, 2012, the Company received $30,000 cash and issued a convertible promissory note in the amount of $30,000. The promissory note is unsecured, interest free and repayable upon demand.

The note is convertible at the option of the holder into Common stock of the Company. The fixed conversion price is $0.01 per share. Accordingly the note may be converted into 3,000,000 common shares of the Company.

The note also contains a provision whereby should the Company perform a stock split or reverse stock split, theconversion price of the note reverts to the lesser of 40% of market value at the time of conversion, or $0.01 pershare. Accordingly, subsequent to the period end on June 14, 2013, this conversion provision was triggered.

The Company determined that Promissory notes # 6, 7, 8, and 10 should be accounted for in accordance with FASBASC 470-20, which addresses “Accounting for Convertible Securities with Beneficial Conversion Features".The intrinsic value of the conversion feature is calculated as the difference between the conversion price $0.01 and the fair value of the common stock into which the debt is convertible at the commitment date (being $0.05 for notes # 6,7 and 8 and $0.02 for note 10), multiplied by the number of shares into which the debt is convertible. The valuation of the beneficial conversion feature is calculated as pro rata portion of the proceeds from issuance of the convertible debt, being equal to proceeds received multiplied by intrinsic value divided by the total value received (i.e. the aggregate of proceeds and intrinsic value). This beneficial conversion feature is allocated to debt discount and additional paid in capital. Because the debt is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.

During the years ended November 30, 2013 and 2012, interest expense relating to the beneficial conversion feature of convertible notes of $0 and $97,000 respectively, was recorded in the financial statements with a corresponding increase to additional paid in capital.

Promissory Note #11

On June 12, 2012, the Company received $42,500 cash and issued a convertible promissory note in the amount of $42,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 14, 2013. During the years ended November 30, 2013and 2012, the Company accrued $107 and $1,593 in interest expense respectively.

After 180 days the note is convertible at the option of the holder into Common stock of the Company. The conversion price is defined as “55% multiplied by market price where market price is determined as the average bid

F-25

price for the shares as quoted on the OTCBB where the shares are traded for the three consecutive business days prior to the date of conversion”. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holder’s conversion rights were triggered.

In December 2012, upon the holder’s option to convert becoming active, the Company recorded debt discount and a derivative liability of $38,600 being the fair value of the conversion feature, which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the year ended November 30, 2013, the Company recorded a loss of $4,300 due to the change in value of the derivative liability during the period, and debt discount of $38,600 was accreted to the statement of operations.

During the year ended November 30, 2013, the Company issued 192,576 common shares upon the conversion of$42,500 of the principal balance plus $1,700 accrued interest into common stock, and $42,300 of the derivative liability was re-classified as additional paid in capital upon conversion.

Accrued interest of $0 and $1,593 for the years ended November 30, 2013 and 2012 was recorded.

Promissory Note #12

On August 17, 2012, the Company received $42,500 cash and issued a convertible promissory note in the amount of $42,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 21, 2013. During the year ended November 30, 2012 the Company accrued $978 in interest expense.

After 180 days the note is convertible at the option of the holder into Common stock of the Company. The conversion price is defined as “48% multiplied by market price where market price is determined as the average bid price for the shares as quoted on the OTCBB where the shares are traded for the three consecutive business days prior to the date of conversion”. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holder’s conversion rights were triggered.

In February 2013, upon the holder’s option to convert becoming active, the Company recorded debt discount and a derivative liability of $43,600 being the fair value of the conversion feature, which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the year ended November 30, 2013, the Company recorded a loss of $60,551 due to the change in value of the derivative liability during the period, and debt discount of $43,600was accreted to the statement of operations.

During the year ended November 30, 2013 the Company issued 425,781 common shares upon the conversion of$42,500of the principal balance and $1,700 of accrued interest into common stock. $104,151 of the derivative liability was re-classified as additional paid in capital upon conversion.

Accrued interest of $0 and $978 for the years ended November 30, 2013 and 2012 was recorded.

F-26

Promissory Note #13

On September 12, 2012, the Company received $75,000 cash and issued a convertible promissory note in the amount of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 14, 2013. During the year ended November 30, 2012 the Company accrued $1,299 in interest expense.

After 180 days the note is convertible at the option of the holder into Common stock of the Company. The conversion price is defined as “50% multiplied by market price where market price is determined as the average of the lowest three (3) closing bid prices during the ten trading days prior to the date of conversion”. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holder’s conversion rights were triggered.

In March 2013, upon the holder’s option to convert becoming active, the Company recorded debt discount of$75,000, charged $1,800 to interest expense and also recorded a derivative liability of $76,800 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the year ended November 30, 2013, the Company recorded a loss of $33,869 due to the change in value of the derivative liability during the period, and debt discount of $75,000was accreted to the statement of operations.

During the year ended November 30, 2013, the Company issued 558,167 common shares upon the conversion of$10,940 of the principal balance into common stock, and $20,372 of the derivative liability was re-classified as additional paid in capital upon conversion.

Accrued interest of $7,181 and $1,299 for the years ended November 30, 2013 and 2012 was recorded. A derivative liability of $90,297 was recorded as of November 30, 2013.

Promissory Note #14

On October 24, 2012, Notes 5 and 9 were amalgamated and a new amended note was created, in the amount of $50,000. The promissory note is unsecured, bears interest at 10% per annum, and is due upon demand.

The note is convertible at the option of the holder at any time into Common stock of the Company. The conversion price is defined as “50% multiplied by the market price, where market price is determined as the lowest three (3) closing bid prices during the ten trading day period ending the day prior to conversion. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms.

Upon inception the Company recorded a debt discount and a derivative liability of $45,200 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount has been charged immediately to the statement of operations as the note is due upon demand. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the year ended November 30, 2013, the Company recorded a loss of $6,300 due to the change in value of the derivative liability during the period.

F-27

During the year ended November 30, 2013, the Company issued 245,867 common shares upon the conversion of$50,000 of the principal balance of the note into common stock, and $51,500 of the derivative liability was reclassified as additional paid in capital upon conversion. The holder of the note waived the remaining interest balance and a credit of $2,095 was charged to the statement of operations.

Accrued interest of $0 and $507 for the years ended November 30, 2013 and 2012 was recorded respectively. A derivative liability of $45,200was recorded as of November 30, 2012.

Promissory Note #15

On June 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of$88,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on December 1, 2013.

The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. Thetransaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.

During the year ended November 30, 2013, the Company accrued $3,510 in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.

During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $88,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital.

Promissory Note #16

On July 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of$11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on January 1, 2014.