American Sands Energy Corp. - FORM 10-K

Attached files

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EX-31.2 - CERTIFICATION - American Sands Energy Corp.	amse_10k-ex3102.htm
EX-31.1 - CERTIFICATION - American Sands Energy Corp.	amse_10k-ex3101.htm
EX-23.1 - CONSENT - American Sands Energy Corp.	amse_10k-ex2301.htm
EX-32.1 - CERTIFICATION - American Sands Energy Corp.	amse_10k-ex3201.htm
EX-32.2 - CERTIFICATION - American Sands Energy Corp.	amse_10k-ex3202.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

	For the fiscal year ended March 31, 2015

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

Commission File Number: 000-53167

American Sands Energy Corp.

(Exact name of registrant as specified in its charter)

Delaware	87-0405708
(State or other jurisdiction of incorporation or organization)	(IRS employer identification number)

201 S. Main St., Suite 1800, Salt Lake City, UT	84111
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (801) 536-6140

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: 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 o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes x No o

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 o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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	o	Accelerated filer	o
	Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity as of the last business day of the registrant’s most recently completed second fiscal quarter was $10,521,622.

The number of shares outstanding of the registrant’s common stock on June 24, 2015, was 33,393,828.

DOCUMENTS INCORPORATED BY REFERENCE

Document Description		10-K Part
Portions of the Registrant's proxy or information statement related to its 2015 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A or 14C within 120 days after Registrant's fiscal year end of March 31, 2015 are incorporated by reference into Part III of this Report.		III

Table of Contents

		Page
PART I

	ITEM 1. BUSINESS	2

	ITEM 1A. RISK FACTORS	8

	ITEM 1B. UNRESOLVED STAFF COMMENTS	16

	ITEM 2. PROPERTIES	16

	ITEM 3. LEGAL PROCEEDINGS	18

	ITEM 4. MINE SAFETY DISCLOSURES	18

PART II

	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	19

	ITEM 6. SELECTED FINANCIAL DATA	19

	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19

	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22

	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	22

	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	22

	ITEM 9A. CONTROLS AND PROCEDURES	22

	ITEM 9B. OTHER INFORMATION	23

PART III

	ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	24

	ITEM 11. EXECUTIVE COMPENSATION	24

	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	24

	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	24

	ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	24

PART IV

	ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES	25

	SIGNATURES	28

Forward-Looking Statements

The statements contained in this annual report on Form 10-K that are not historical facts represent management’s beliefs and assumptions based on currently available information and constitute “forward-looking statements.” All statements, other than statements of historical or present facts, including the information concerning our future operations, business strategies, need for financing, competitive position, potential growth opportunities, ability to retain and recruit personnel, the effects of competition and the effects of future legislation or regulations are forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report. While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, changes in the general economic environment; a downturn in the securities markets; and/or uncertainties associated with our ability to obtain operating capital. Should our underlying assumptions prove incorrect or the consequences of the aforementioned risks worsen, actual results could differ materially from those expected. We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” “the Company” and “our company” refer to American Sands Energy Corp., a Delaware corporation, and its wholly owned subsidiary, Green River Resources, Inc., a Utah corporation.

PART I

ITEM 1. Business

Overview

American Sands Energy Corp. (“ASEC”) is a development stage company that proposes to engage in the clean extraction of bitumen from oil sands prevalent in the Mountain West region of North America using proprietary technology. Since the project’s inception, we have been engaged in the business of acquiring and developing oil sand assets and technologies used to separate the oil contained in oil sands. The Company anticipates that its primary operations will include the mining of oil sands, the separation of oil products therefrom and the sale of oil and oil by-products.

We have obtained a license for a hydrocarbon extraction process that separates oil and other hydrocarbons from sand, shale, dirt and other substances, without leaving behind toxins or other contaminants. We are currently developing our first project on certain hydrocarbon and mineral leases which cover approximately 1,760 acres near Sunnyside, Utah (the “Sunnyside Project”). We have filed an application for a Large Mine Permit with the Utah Department of Oil, Gas & Mining and an application for a Ground Water Discharge Permit (with related Construction Permit) with the Utah Department of Water Quality, which, if granted, will allow the Company to move forward with development of operations on the Sunnyside Project.

To date, we have acquired extensive bitumen resources, have successfully operated a pilot plant using our process technology on oil sands ore from our bitumen resources. This work included:

retaining a leading engineering firm in the North American oil sands extraction industry, AMEC BDR Limited, to complete an engineering and feasibility study with respect to a pilot plant capable of producing 3,000 barrels of oil per day;

engaging a mining engineering firm to prepare a mine plan and feasibility study;

retaining an engineering firm to demonstrate the technology through the pilot plant; and

performing pilot test runs in our pilot plant.

The pilot plant test runs were successful, removing in excess of 99% of the bitumen from the sand and leaving less than the two parts per million (“ppm”) of solvent in the sand. This means that the sand is suitable to be put back into the environment without tailing ponds or other environmental restrictions. Based on additional findings from the recent pilot plant tests and recommendations from our engineers and consultants, we working on the plans for building on to the pilot plant and completing a commercial plant capable of producing 10,000 barrels of oil per day (the “Commercial Facility”). We have submitted applications for mining, environmental and other permits required to operate a large mine on our leases to extract oil sand ore, and to build and operate the Commercial Facility. Based on the information from our consultants, we believe that additional financing of approximately $150 million will be required to procure and install the necessary equipment to begin operation of the Commercial Facility and related mining operations.

Test Results

We have performed lab and pilot plant tests on oil sands from the Utah Green River Formation in which the Sunnyside Project is located to prove the viability of the technology and to understand several key elements in the process. Initial pilot plant test runs were conducted in 2006-2007. We hired AMEC BDR, to witness the initial pilot plant tests and to manage the lab work and review the results. In addition to the initial pilot test, we have run pilot tests on a new system designed by SRS Engineering International during July through September of 2012, and May through June of 2013. In connection with those tests, we ran oil sands from Utah and Africa to acquire additional information on the efficiency of the solvent in removing the bitumen from the sand, the recovery of solvent from the bitumen and sand, and the overall efficiency and energy use of the system. The current test results are summarized as follows:

Virtually all of the bitumen was separated from the sand, leaving the sand “oil” free.

The compositional characteristics of the bitumen were not altered by the process; therefore, management believes the bitumen will be suitable for upgrading and refining to saleable products by conventional refining technology.

The sand product contained less than 2 ppm of solvent residue, presents no environmental liability, and can be returned to the mine site or sold.

Solvent losses to the bitumen product were insignificant. Consequently, because the solvent is recycled with minimal loss in a closed loop system, make-up solvent costs should be minimal.

Our process works on oil sands from other locations in the world. This may allow us to use our process in other locations around the world where other “oil wet” oil sands are located.

Leases and Resources

Of the 24 states in the United States that contain oil sand deposits, approximately 90% of the USGS mapped mineable resource is located in Utah, where in excess of 25 billion barrels of oil are in place. There are eleven oil sands deposit areas located in Utah. The seven major areas are Sunnyside, P. R. Spring, Asphalt Ridge, White Rocks, Tar Sand Triangle, Circle Cliffs, and Hill Creek. Three of these seven areas, Tar Sand Triangle, Circle Cliffs, and Hill Creek, have substantial constraints to resource development including environmental drawbacks related to their location on Indian Reservations and/or National Parks, significant overburden, lack of rich ore, and high sulfur content. The prime oil sand properties include Sunnyside, P. R. Spring, Asphalt Ridge and White Rocks.

We have obtained four leases in the Sunnyside area, on private property. We currently hold:

two leases for an undivided 60% interest pursuant to two freehold hydrocarbon and mineral lease agreements in Section 2, East Half and North West quarters of Section 3 Township 14 South, Range 14 East, SLM containing approximately 1,120 acres; and

two leases for an undivided 21.67% interest pursuant to two freehold hydrocarbon and mineral lease agreements in the North West quarter of Section 3, East half and North West quarter of Section 10, Township 14, Range 14 East, SLM containing approximately 640 acres.

The lease for an undivided 40% interest in the 1,120 acre property has a primary term ending December 31, 2020 while the lease for the remaining undivided 20% interest has a primary term ending on December 31, 2020. The lease for an undivided 16.67% interest in the 640 acre property has a primary term ending December 31, 2019 and the remaining 5% interest in the 640 acres has a primary term ending December 31, 2020. All leases are automatically extended thereafter for so long as an average of 500 barrels of oil is produced per day, subject to certain acceptable interruptions.

We have reviewed previous resource estimates prepared for Chevron and Amoco, as well as USGS estimates of mineable oil sands on our leases. In addition, we retained an outside firm to provide us with a Resource Audit and Classification report which was done in accordance with the provisions of the National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) and prepared as of May 29, 2009 (the “RAC Report”). Due to the nature of the resource and the stage of development, we do not have any proven reserves (within the meaning of Rule 4-10 of the SEC’s Regulation S-X) in Rule 4-10(a) of the SEC’s Regulation S-X to report.

The RAC Report prepared for us under NI 51-101 follows the standards set out in the Canadian Oil and Gas Evaluation (“COGE”) Handbook, prepared jointly by the Society of Petroleum Evaluation Engineers and the Canadian Institute of Mining, Metallurgy & Petroleum. Those standards require that the evaluator plan and perform an evaluation to obtain reasonable assurance as to whether the reserves are free of material misstatement. An evaluation must also include an assessment as to whether the reserves data are in accordance with the principles and definitions presented in the COGE Handbook. The estimate provided in the RAC Report is classified as contingent resources according to the guidelines set forth in NI 51-101 and COGE. The project resource calculation is contingent upon completion of additional exploration drilling, processing and extraction analysis, detailed economic analysis, evolution of legal mining rights, and environmental evaluations. There is no certainty that the project will be commercially viable to produce any portion of the resource. As a result of the differences between the U.S. rules and Canadian standards governing disclosure of reserve or resource estimates, differing estimates of reserves or resources available under our leases are reported, and may in the future be reported, between our website and our periodic reports filed with the SEC.

Our Process

The following diagram demonstrates the stages of the process to remove bitumen from the oil sands using our proprietary bitumen recovery system:

Our process starts with the mixing of oil sand ore with a proprietary solvent. The solvent immediately separates the hydrocarbons contained in the ore from the inorganic insoluble material such as sand, rock and clay. We utilize much less heat than traditional or competing technologies.

The liquid hydrocarbon/solvent mix is then separated from the clean sand by gravity. The sand is heated to evaporate the solvent and the resulting solvent vapors are condensed and reused. The clean sand can be returned to the mine site as reclamation material or sold for industrial purposes.

The liquid hydrocarbon/solvent mix is subject to a simple, refluxed, low pressure, medium temperature distillation process to separate the solvent from the recovered hydrocarbon. The solvent distilled from the recovered hydrocarbon is condensed and reused. The extracted bitumen is transported to a refinery.

Since the process does not generate waste, tailing ponds and other environmental hazards are eliminated from the process, with the attendant reduction in costs and effects on the environment.

In connection with the engineering and development of the technology, we incurred costs of approximately $158,576 and $376,170 for the fiscal years ended March 31, 2015 and 2014, respectively.

Resource Base and Mine Plan

We also have access to and have reviewed detailed mining and operational plans prepared for Amoco in the mid-1990s with respect to our leases. These resources have been helpful in developing our mine and operational plan.

Initially, we intend to obtain our oil sands through underground mining. We have completed an initial mine plan and cost estimate for the mine. The proposed mine plan layout is for an average daily production of 10,000 tons. Mining would occur year-round, with approximately one month overall allowed for shut-downs due to maintenance and repairs. Anticipated yearly mined tonnages include: 10,000 tons of oil sands mined per day; 2,700,000 tons per year (based on 270 days/year of production). Based upon the amount of estimated oil sands contained in the oil sand zone and expected grade, at this mining rate the life of the mine is expected to be between 20 and 30 years.

We intend to use a contract miner to initially mine the oil sands. Contract mining is an accepted practice in this area and has been used in coal mines as well as to mine tar sands for use in road paving. Because of recent coal mine shut downs, there is both excess capacity and excess mining equipment in the area. Mining equipment will consist of dozers, haul trucks, loaders, water trucks, and service trucks. Mined ore will be hauled by trucks via a haul road to the process area, where it can be either discharged directly to the inlet hopper or placed in a temporary storage pile adjacent to the processing facility for off-shift processing. Generally, a 3-day reserve supply of ore will be maintained in stockpiles at the processing facility.

The clean sand generated from processing the oil sands will be stored on surface (unless sold) under our mine plan. We have designated an area on surface to accommodate approximately 3 years of sand. The first 3 years of processed sand will be stored on surface. After that, we anticipate that the processed sand will be disposed of underground in mined out mining panels. The processed sand area will be designed to store approximately 6,000,000 cubic yard of processed sand. The processed sand will be transported to the storage site in the same trucks used for ore haulage.

Overall Market for Oil and Petroleum Products

According to the International Energy Agency (“IEA”), estimates of global petroleum and other liquid fuels consumption grew to 91.2 million bbl/d in 2013. IEA expected that world liquid fuels consumption would grow by 0.8 million bbl/d in 2014, followed by 1.0 million bbl/d growth in 2015, resulting in total world consumption of 93.1 million bbl/d in 2015. Countries outside the Organization for Economic Cooperation and Development (“OECD”) will make up almost all of the growth in consumption forecasted over the next two years, with the largest increases coming from China, other Asian countries, Latin America and the Middle East. The IEA believes 2014 marked the first time that non-OECD demand exceeded OECD demand.

The EIA expects non-OPEC production to grow by 0.7 million bbl/d in 2015 and by 0.4 million bbl/d in 2016, in part because of lower projected oil prices. The slower growth in total non-OPEC supply is largely attributable to slower production growth in the United States and Canada and declining production in Europe and Eurasia. After remaining relatively flat in 2015, production in Eurasia is projected to decline by more than 0.1 million bbl/d in 2016. The projected decline reflects reduced investment in Russia's oil sector stemming from low oil prices and international sanctions.

Projected Markets for the Company’s Oil

The primary product we will produce will be a heavy oil called bitumen. There are numerous refineries within our potential marketing area. Within 150 miles of the Salt Lake City area, there are a number of refineries with cumulative total daily capacity of approximately 175,000 barrels per day, according to the U.S. Energy Administration. These refineries are able to refine bitumen and have sufficient capacity to accept our product. Additionally, refineries in Colorado, Wyoming and New Mexico have daily combined capacity of approximately 417,000 barrels per day.

Pricing is typically benchmarked to leading crude price indices. Historically, bitumen has traded at a discount to West Texas Intermediate (“WTI”) of between 22-30%. Primary factors we will consider when going to market with our product are price and transportation costs. Because of the transportation cost associated with smaller volumes of product, we expect that our entire estimated output from our Commercial Facility will be delivered to the Salt Lake City refining center. If we are able to expand facilities and production, rail transport may become viable, which may open the opportunity for supplying product to multiple refineries with more distant locations versus Salt Lake City.

Government Regulation

We have commenced the process of obtaining the regulatory approvals required in connection with our project. We are committed to environmental responsibility and to meeting or exceeding best practices for environmental stewardship in our industry. We support the principle of sustainable development through adaptive management and we are working with stakeholders in the community, government and industry to protect and sustain air, land and aquatic resources in the region.

The key environmental issues to be managed in the development of our project encompass surface disturbance on the terrestrial ecosystem, effects on traditional land use and historical resources, and effects on wildlife populations and other natural resources. Because the commercial facility to be constructed will be a closed loop system, the only emissions anticipated will be from power generation. Only clean sand and bitumen will be produced.

We are committed to operating our project to achieve compliance with applicable statutes, regulations, codes, regulatory approvals and, to the extent practicable, government guidelines. Where the applicable laws are not clear or do not address all environmental concerns, management will apply appropriate internal standards and guidelines to address such concerns. In addition to complying with statutes, regulations, codes and regulatory approvals and exercising due diligence, we will strive to continuously improve the overall environmental performance of the operation and products.

There are a number of state and federal permits required in connection with the large permit necessary to commence principal operations. The Company has filed for the following permits, which, if granted, will allow the Company to move forward with development of operations on the Sunnyside Project:

Notice of Intent to Commence Large Mining Operations including SWPPP (DOGM)

Utah Groundwater Discharge Permit including SAP and QAPP (DWQ)

Construction Permit (DWQ)

Air Small Source Exemption Registration (DAQ)

These permits require a number of studies and/or clearances. The Large Mine Permit we applied for requires engineering and operation plans and posting of a reclamation bond. The Groundwater Discharge Permit and Construction permit we applied for requires engineering and operations plans to ensure that the Company does not contaminate ground water. We have contracted with an environmental consulting firm and a mine engineering firm to obtain the required studies and engineering and have filed applications for the above listed permits. The permits are currently being reviewed by the relevant agencies of the State of Utah. We also intend to seek the necessary business license from Carbon County and approvals of the county planning and zoning authorities and anticipate being able to obtain the necessary license and approval from Carbon County prior to receiving the large mining permit.

Competition

To our knowledge, there are currently two other companies intending to operate oil sands mining and extraction facilities in the State of Utah; U.S. Oil Sands, a Canadian company, which has publicly announced that it intends to commence operations on a 62-acre plant in eastern Utah to remove bitumen from oil sands using a citrus-based solvent in the fourth quarter of 2015, and MCW Oil Sands Recovery, LLC, which has announced its intention to operate a 250 barrel per day plant near Vernal, Utah. To our knowledge, these companies are not in production and may require significant capital to commence operations. Additionally, many of these companies are using processes that are unproven in commercial production.

Our process is efficient, cost effective, and has a small environmental footprint when compared to other technologies currently known or used for the separation of oil sands. By comparison, the processes utilized in Canada for the extraction of bitumen from oil sand consume significant amounts of water and have a significant environmental impact. In comparing our process to known oil sands extraction systems, we believe our licensed proprietary system offers a significantly reduced operating environmental impact. Our process significantly mitigates or eliminates environmental impacts typically associated with oil sand projects including:

Release of Volatile Organic Hydrocarbons (“VOC’s”): The solvent losses resulting from the operation of our system are minor. The system does not release any solvent to the environment. Solvent consumed by the process is recovered and conserved during the processing of the oil sands. In addition the process does not produce gases to a flare or vent system of any kind.

Substantial Water consumption/contamination: Our process neither consumes nor produces any water. It is a dry process and therefore no water is taken from or returned to the environment.

Emissions: The process can be powered by natural gas or electricity. If it were powered by electricity, emissions associated with the energy consumption of the process could be controlled through standard power plant emission control systems. As noted above, the deposit under lease to GRI is currently serviced by electrical power lines.

Hydrocarbon and water wet tailings stream: Typical oil sands operations produce a waste stream of spent sand that contains a significant amount of residual hydrocarbons and water. The sand product from our process is dry and essentially free of hydrocarbons, either natural or induced through the solvent wetting process. It is directly suitable for use in reclamation efforts or can be sold as a value added product without further processing. Use of the sand in the reclamation process provides for the return of the mined material to the mine site (less the naturally occurring hydrocarbons) with no loss of material.

We believe our process is efficient, cost effective, and simple when compared to other technologies currently known or used for the separation of oil sands. By comparison, the processes utilized in Canada for the extraction of bitumen from oil sand consume significant amounts of water and, therefore, have a significant environmental impact. Approximately 3/4 of a barrel of tailings is produced for every barrel of bitumen produced by Canadian oil sands producers. Consequently, there are thousands of acres of tailing ponds located at Canadian oil sands operations produced as a direct result of the oil sand extraction process. This is one reason why oil sands are being questioned as a source of energy for the United States. Our process uses little or no water, and recaptures virtually all of the solvent used, resulting in only clean sand as a byproduct.

Production costs using our method to recover bitumen are believed to be significantly lower than those used by established producers of bitumen from oil sands in Canada. In addition, the projected capital cost for our Commercial Facility would be significantly lower than the cost of capital for a traditional oil sands project. Thus, our competitive advantages are an environmentally superior process and the ability to be a low-cost producer of high demand energy.

Recent Developments Affecting the Company

Effective January 24, 2012, the Company entered into a License, Development and Engineering Agreement with Universal Oil Recovery Corp. and SRS International (the “License Agreement”) whereby the Company was granted an exclusive non-transferable license to use certain technology in its proposed business to extract bitumen from oil sands. The territory covered by the agreement includes the State of Utah and any other geographic location in which a future designated project is commenced by or through the Company. In conjunction with the License Agreement, the Company terminated its operating agreement with Bleeding Rock. On November 18, 2013, the Company entered into an Amended and Restated License, Development and Engineering Agreement with Universal Oil Recovery LLC (“Amendment”). The Amendment amends and restates the License Agreement. Pursuant to the terms of the Amendment, the previous royalties of 75% on projects outside of Utah and the minimum royalty of $1,000,000 per year on such agreements have been eliminated. Pursuant to the Amendment, the Company will now pay royalties on projects outside of Utah of 15% of the net fees (net of all costs other than general and administrative expenses) collected by the Company on any license of the technology. In addition, the $25,000 per month management fee is eliminated until a permanent financing is closed (minimum of $25,000,000), at which time the payment will be reinstated. In consideration of the amendment, the Company issued to Universal Oil Recovery LLC (“UOR”), 575,000 warrants to purchase common stock of the Company for $0.01 per share, exercisable for ten years (see Note 11). The Company agreed to make certain payments to UOR. The term of the License Agreement is for 20 years and thereafter so long as production of products using the technology is commercially and economically feasible.

In conjunction with entering into the License Agreement, we also entered into a Termination Agreement dated January 24, 2012, with Bleeding Rock (the “Termination Agreement”). The purpose of the Termination Agreement was to terminate the Operating Agreement dated May 31, 2005, as amended, between Bleeding Rock and GRI (the “Operating Agreement”). Pursuant to the Operating Agreement GRI had obtained the rights through Bleeding Rock to utilize a process for the development, engineering and extraction of hydrocarbons from oil sands. In light of conversations with potential investors, management determined that having the technology licensed directly to the Company rather than through Bleeding Rock would be beneficial to fund raising prospects. As a result, the Company entered into the License Agreement described above. In partial consideration for Bleeding Rock agreeing to terminate the Operating Agreement, we entered into a royalty agreement with Bleeding Rock. Under the terms of the Gross Royalty Agreement we are obligated to pay a royalty equal to 1.5% of the gross receipts from future projects using the technology, excluding the current project in Sunnyside, Utah. Bleeding Rock subsequently assigned all of its interest in the Gross Royalty Agreement to Hidden Peak Partners LC (“Hidden Peak”), an entity managed and partially owned by Mr. Gibbs. The Termination Agreement also contains mutual releases by the parties relating to the Operating Agreement.

Employees

We currently have three employees; namely, our CEO, William C. Gibbs; our COO, Robin Gereluk; and our CFO, David B. Hardman. Mr. Gibbs and Mr. Gereluk work full time for the Company. Mr. Hardman works part-time on an hourly basis. We also engage consultants and independent contractors as needed.

ITEM 1A. Risk Factors

Our business activities and the oil and gas industry in general, are subject to a variety of risks. If any of the following risk factors should occur, our profitability, financial condition or liquidity could be materially impacted. As a result, holders of our securities could lose part or all of their investment in American Sands Energy Corp.

Risks Related to Our Company and Its Business

Because of our historic losses from operations since inception, there is substantial doubt about our ability to continue as a going concern.

We have incurred recurring losses since the date of inception that have resulted in an accumulated deficit attributable to common stockholders of approximately $$18,000,000 as of March 31, 2015. Although we had approximately $191,000 of available cash as of March 31, 2015, that amount is not adequate to meet our capital expenditure and operating requirements over the next 12 months. In addition, we estimate that we will require approximately $150,000,000 in capital expenditures and working capital to place our properties into production. These factors raise substantial doubt about our ability to continue as a going concern or to commence principal operations. We are dependent upon obtaining funds from investors to meet our cash flow requirements. If we are unsuccessful in doing so, we will be required to substantially revise our business plan or our proposed business could fail.

The impact of disruptions in the global financial and capital markets may significantly affect our ability to obtain financing.

International economic and political conditions, fluctuations in capital markets, changes in production by oil producing countries, and other events have historically caused volatility in commodity prices. We will continue to need further funding to achieve our business objectives. In the past, the issuance of equity or debt securities has been the major source of capital and liquidity for us. Changes in commodity prices as a result of global conditions has a direct impact on our ability to obtain capital. With the recent substantial volatility in oil prices we are finding limited sources of capital for oil development and, as a result, financing may not be available to us on acceptable terms, if at all. If we are unable to fund future operations by way of financing, including public or private offerings of equity or debt securities, our financial condition and results of operations will be adversely impacted. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses.

We have not commenced principal operations and have a limited operating history and therefore we cannot ensure the long-term successful operation of our business or the execution of our business plan.

We have not commenced principal mining and production operations. As a result, we have a limited operating history upon which to evaluate our proposed business and prospects. Our proposed business operations will be subject to numerous risks, uncertainties, expenses and difficulties associated with early stage enterprises. Such risks include but are not limited to the following:

the absence of a lengthy operating history;

insufficient capital to fully realize our operating plan;

our ability to purchase or lease necessary equipment when required and at reasonable prices;

our ability to obtain regulatory and environmental approvals of our proposed mines and facilities;

expected continual losses for the foreseeable future;

social and political unrest;

disruptions to transportation routes;

our ability to anticipate and adapt to developing markets;

acceptance of our product by consumers;

limited marketing experience;

a competitive environment characterized by well-established and well-capitalized competitors;

the ability to identify, attract and retain qualified personnel; and

reliance on key personnel.

Because we are subject to these risks, evaluating our business may be difficult. We may be unable to successfully overcome these risks which could harm our business. Our business strategy may be unsuccessful and we may be unable to address the risks we face in a cost-effective manner, if at all. If we are unable to successfully address these risks our business will be harmed.

Compliance with government regulations and delays in obtaining necessary mining permits and licenses could delay or otherwise adversely affect our proposed business operations.

Our proposed plan to mine and process oil sands is subject to substantial regulation under federal, state and local laws relating to the exploration for, and the development, upgrading, marketing, pricing, taxation, and transportation of oil sands bitumen and related products and other matters. Amendments to current laws and regulations governing operations and activities of oil sands exploration and development operations could have a material adverse impact on our business. In addition, there can be no assurance that income tax laws, royalty regulations, environmental regulations and government incentive programs related to our permits and oil sands exploration licenses, and the oil sands industry generally, will not be changed in a manner which may adversely affect our progress and cause delays, or cause the inability to explore and develop, resulting in the abandonment of these interests.

Permits, licenses and approvals are required from a variety of regulatory authorities at various stages of exploration and development. There can be no assurance that the various government permits, leases, licenses and approvals sought will be granted, that they will be granted in a timely manner, or, if granted, that they will not be cancelled or will be renewed upon expiration. There is no assurance that such permits, leases, licenses and approvals will not contain terms and provisions which may adversely affect our exploration and development activities.

Environmental groups or other third parties may oppose our project

Permits, licenses and approvals are required from a variety of regulatory authorities in connection with the development of our project. In connection with these permits, regulatory agencies often solicit public comment with respect to a proposed project and take into consideration comments received. In addition, third parties in the area of our project, such as property owners, may also object to the project. Objections from these parties may adversely affect our progress and cause delays, result in litigation and/or cause the inability to explore and develop our property or project, resulting in the abandonment of these interests. In addition, there is also no assurance that objections by such parties to our permits, leases, licenses and other required approvals will not result in terms and provisions which may adversely affect the economics of our project or our exploration and development activities.

On May 28, 2015, the Department of Water Quality received a comment letter from Western Resources Associates and Living Rivers, expressing concerns and objecting to the draft Water Discharge Permit published by the Utah Division of Water Quality. The Division of Water Quality will evaluate these comments and concerns and may require amendments to the proposed permit or may decide not to issue the permit. Any amendments to the permit could adversely affect the feasibility and/or economics of the project.

The exploration for and development of oil sands properties is highly competitive.

Oil sands exploration and development involves many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome. We have no proven or probable reserves of oil sands on our properties. As with any petroleum property, there can be no assurance that commercial deposits of bitumen will be produced from our leased lands in Utah.

Furthermore, the marketability of any resource will be affected by numerous factors beyond our control. These factors include, but are not limited to, market fluctuations of prices, proximity and capacity of processing equipment, equipment and labor availability and government regulations (including, without limitation, regulations relating to prices, taxes, royalties, land tenure, allowable production, importing and exporting of oil and gas, land use and environmental protection). The extent of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital.

If we are unable to hire and retain key personnel, we may not be able to implement our plan of operation and our business may fail.

Our success is largely dependent on our ability to continue to hire and retain highly qualified personnel in both management and operations. These individuals may be in high demand and we may not be able to attract the management staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, including fees associated with persons employed by us, or we may fail to retain such employees after they are hired. Our failure to hire and retain key personnel as needed will have a significant negative effect on our business.

We are dependent upon a few key people and the loss of current management would make it difficult for us to implement our current business plan.

Investors must rely upon the ability, expertise, judgment, discretion, integrity and good faith of our management and directors. Our success is dependent upon our management and key personnel. We do not maintain key-man insurance for any of our employees. The unexpected loss or departure of any of our key officers and employees could be detrimental to our future success.

Environmental and regulatory compliance may impose substantial costs on us.

Our proposed operations will be subject to stringent federal, state, and local laws and regulations relating to improving or maintaining environmental quality. Environmental laws often require parties to pay for remedial action or to pay damages regardless of fault. Environmental laws also often impose liability with respect to divested or terminated operations, even if the operations were terminated or divested many years ago.

Our exploration activities are or will be subject to extensive laws and regulations governing prospecting, development, production, exports, taxes, labor standards, occupational health, waste disposal, land use, protection and remediation of the environment, protection of endangered and protected species, operational safety, toxic substances and other matters. Exploration is also subject to risks and liabilities associated with pollution of the environment and disposal of waste products. Compliance with these laws and regulations will impose substantial costs on us and will subject us to significant potential liabilities. In addition, should there be changes to existing laws or regulations, our competitive position within the oil sands industry may be adversely affected, as many industry players have greater resources than we do.

We are required to obtain and are in various stages of obtaining necessary regulatory permits and approvals in order to explore and develop our properties. The absence of a distinct overlying shale formation on portions of our leases may make it more difficult or costly to obtain regulatory approvals. There is no assurance that regulatory approvals for exploration and development of our properties will be obtained at all or with terms and conditions acceptable to us.

We could encounter third-party liability or environmental liability in connection with our proposed operations.

Our proposed operations could result in liability for personal injuries, property damage, oil spills, discharge of hazardous materials, remediation and clean-up costs and other environmental damages. We could be liable for environmental damages caused by previous owners. As a result, substantial liabilities to third parties or governmental entities may be incurred, and the payment of such liabilities could have a material adverse effect on our financial condition and results of operations. The release of harmful substances in the environment or other environmental damages caused by our activities could result in us losing our operating and environmental permits or inhibit us from obtaining new permits or renewing existing permits. We currently have a limited amount of insurance and, at such time as we commence additional operations, we expect to be able to obtain and maintain additional insurance coverage for our operations, including limited coverage for sudden environmental damages, but we do not believe that insurance coverage for environmental damage that occurs over time is available at a reasonable cost. Moreover, we do not believe that insurance coverage for the full potential liability that could be caused by environmental damage is available at a reasonable cost. Accordingly, we may be subject to liability or may lose substantial portions of our properties in the event of certain environmental damage. We could incur substantial costs to comply with environmental laws and regulations which could affect our ability to operate as planned.

The early stage of our bitumen extraction technology increases the risk that we may not be able to successfully implement an oil sands recovery program using this technology.

We have entered into a license agreement under which the licensing entities have agreed to provide technical and engineering assistance in building an oil sands recovery plant based upon their proprietary solvent. This solvent process has not been installed on a project which meets the projected recovery amounts in our business plan. In addition, the process has only been tested in a pilot plant setting and not in full commercial production facility, so that there is limited experience with the technology on which we are basing our plans to develop the Commercial Facility. There is a risk that the Commercial Facility will not be completed on time or on budget or at all. Additionally, there is a risk that the program may have delays, interruption of operations or increased costs due to many factors, including, without limitation: breakdown or failure of equipment or processes; construction performance falling below expected levels of output or efficiency; design errors; challenges to, or inability to access in a timely or economic fashion; contractor or operator errors; non-performance by third-party contractors; labor disputes, disruptions or declines in productivity; increases in materials or labor costs; inability to attract sufficient numbers of workers; delays in obtaining, or conditions imposed by, regulatory approvals; changes in program scope; violation of permit requirements; disruption in the supply of energy; transportation accidents, disruption or delays in availability of transportation services or adverse weather conditions affecting transportation; unforeseen site surface or subsurface conditions; and catastrophic events such as fires, earthquakes, storms or explosions. There is also a risk that the manufacturer of the equipment and components for our Commercial Facility could fail in production due to labor shortages, price increases, or better opportunities with other customers, which would frustrate and delay our effort to build the Commercial Facility and begin production.

We have significant financial obligations under our mining leases, and if we fail to meet those obligations we would lose the mineral resource on which our business plan depends.

Our interest in certain mining leases is conditioned upon the payments of annual rentals, of royalties, minimum yearly investment in development, tax payments, and other obligations to the owners of the leases. If we are unable to make the required payments or meet the necessary obligations, we could default on our lease agreements which could be terminated and which would void our interest in the leases. There is no certainty we will be able to make every payment and meet all obligations required under the respective lease agreements.

If we do not reach production levels by December 31, 2019, our leases may be terminated.

Two of our four leases are conditioned upon reaching the production stage by December 31, 2020 and other two leases require production by December 31, 2019. If we do not attain average productivity of at least 500 bbl/d by these dates, our interest in the leases may be terminated. The ability to attain productivity is conditioned upon factors of which we are not within complete control such as those listed in this Annual Report. There is no certainty we will ever reach the level of production required to keep our interest in these mining leases from becoming void.

We have no proven or probable reserves or resources.

We have not yet established any reserves. There are numerous uncertainties inherent in estimating quantities of bitumen resources and reserves, including many factors beyond our control, and no assurance can be given that the recovery of bitumen will be realized. In general, estimates of resources and reserves are based upon a number of factors and assumptions made as of the date on which the resources and reserves estimates were determined, such as geological and engineering estimates which have inherent uncertainties, the assumed effects of regulation by governmental agencies and estimates of future commodity prices and operating costs, all of which may vary considerably from estimated results. All such estimates are, to some degree, uncertain and classifications of resources and reserves are only attempts to define the degree of uncertainty involved. For these reasons, estimates of reserves and resources, the classification of such resources and reserves based on risk of recovery, prepared by different engineers or by the same engineers at different times, may vary substantially.

Investors are cautioned not to assume that all or any part of a resource is economically or legally extractable.

We may participate in joint ventures and/or strategic alliances to develop and operate our planned business. These partnerships or the failure to establish them could have a material adverse effect on our ability to develop and manage our business. In addition, such undertakings may not be successful.

Our strategy may include plans to participate in joint ventures and other strategic alliances to develop and operate our business and sell our products. We may develop mining operations in part through joint ventures and strategic alliances with other parties as well as with additional outside funding. Joint ventures and strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. Additionally, we may not be able to identify and secure suitable alliance partners. Even if we identify suitable partners, we may be unable to consummate alliances on terms commercially acceptable to us. If we fail to identify appropriate partners, we may not be able to implement our strategies effectively or efficiently.

In addition to joint venture and strategic alliances, we may raise additional debt and/or equity financing to build and operate our proposed operations. Such capital raises could result in significant dilution to the percentage ownership held by existing stockholders or the failure to secure such capital could impair our ability to execute our business plan.

We anticipate that the cost to build operations on our existing or future properties will be approximately $150,000,000 and we have no current sources for this funding. Offerings using our equity securities or debt instruments convertible into our common stock could require the issuance of a substantial number of additional shares of common stock. These potential offerings and the issuance of additional shares of common stock would have the effect of diluting the percentage ownership of existing stockholders. Moreover, there can be no assurance that such financing will be available, or, if available, that such financing will be at a price that will be acceptable or favorable to us. Failure to generate sufficient revenue or raise additional capital would have an adverse impact on our ability to achieve our longer-term business objectives, and would adversely affect our ability to continue operating as a going concern.

We do not insure against all potential operating risks. We may incur losses and be subject to liability claims as a result of our operations.

We maintain insurance for some, but not all, of the potential risks and liabilities associated with our business. For some risks, we may not obtain insurance if we believe the cost of available insurance is excessive relative to the risks presented. As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially, and in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage. As a result, we may not be able to renew our existing insurance policies or procure other desirable insurance on commercially reasonable terms, if at all. Although we maintain insurance at levels we believe are appropriate and consistent with industry practice, we are not fully insured against all risks. In addition, pollution and environmental risks generally are not fully insurable. Losses and liabilities from uninsured and underinsured events and delay in the payment of insurance proceeds could have a material adverse effect on our financial condition, results of operations and cash flows.

American climate change legislation could negatively affect markets for crude and synthetic crude oil.

Environmental legislation regulating carbon fuel standards in the United States could result in increased costs and/or reduced revenue. For example, both California and the federal governments have passed legislation which, in some circumstances, considers the lifecycle greenhouse gas emissions of purchased fuel and which may negatively affect our business, or require the purchase of emissions credits, which may not be economically feasible.

Our mining production and delivery operations are subject to conditions and events that are beyond our control, which could result in higher operating costs and decreased production levels.

Our mining operations are planned to be conducted primarily in underground mines and possibly in surface mines. The level of our production is subject to operating conditions or events beyond our control that could disrupt operations, decrease production and affect the cost of mining at particular mines for varying lengths of time. Adverse operating conditions and events that oil and gas producers have experienced in the past include:

unfavorable geologic conditions, such as the thickness of the oil and gas deposits and the amount of rock embedded in or overlying the oil and gas deposit;

poor mining conditions resulting from geological conditions or the effects of prior mining;

inability to acquire or maintain, or unexpected delays or difficulties in obtaining, necessary permits or mining or surface rights;

changes in governmental regulation of the mining industry or the utility industry;

market conditions could change and mean the sale of the type of oil and gas being produced from our concessions is no longer saleable at an economic price;

adverse weather conditions and natural disasters;

accidental mine water flooding;

labor-related interruptions;

interruptions due to transportation delays;

mining and processing equipment unavailability and failures and unexpected maintenance problems;

accidents, including fire and explosions from methane and other sources;

surface subsidence from underground mining, which could result in collapsed roofs at our underground mines, among other difficulties;

unavailability of mining equipment and supplies and increases in the price of mining equipment and supplies;

unexpected maintenance problems or key equipment failures; and

increased or unexpected reclamation costs.

If any of these or similar conditions or events occur in the future at any of the mines we plan to develop or affect deliveries of our product to customers, they may increase our costs of mining and delay or halt production at particular mines or sales to our customers, either permanently or for varying lengths of time, which could adversely affect our results of operations, cash flows and financial condition. Our current insurance coverage would cover some but not all of these risks.

A substantial or extended decline in oil and gas prices could reduce our revenues and the value of our oil and gas resources.

Our results of future operations will be dependent upon the prices we receive for our oil and gas and other products as well as our ability to improve productivity and control costs. Declines in prices could adversely affect our results of operations. The prices charged for oil and gas depend upon factors beyond our control, including:

the supply of, and demand for, domestic and foreign oil and gas;

the price elasticity of supply;

the demand for oil and gas;

the proximity to and the capacity and cost of transportation facilities;

governmental regulations and taxes;

air emission standards for oil refineries;

regulatory, legislative, administrative and judicial decisions;

the price and availability of alternative fuels, including the effects of technological developments; and

the effect of worldwide energy conservation measures.

Decreased demand for oil and gas could result in declines in oil and gas prices and require us to increase productivity and lower costs in order to maintain our margins. If we are not able to maintain our margins, our operating results could be adversely affected. Therefore, price declines may adversely affect our operating results for future periods and our ability to generate cash flows necessary to improve productivity and invest in operations.

Inaccuracies in our estimates of oil sands deposits could result in lower than expected revenues and higher than expected costs.

We will base our oil sands deposit information on engineering, economic and geological data assembled and analyzed by various engineers and geologists we retain for that purpose. The estimates of oil sands deposits as to both quantity and quality will be continually updated to reflect the production of bitumen from the deposits and new drilling or other data received. There are numerous uncertainties inherent in estimating quantities and qualities of oil sands deposits and costs to process these deposits, including many factors beyond our control. Estimates of economically recoverable bitumen and net cash flows necessarily depend upon a number of variable factors and assumptions, all of which may vary considerably from actual results, such as:

	·	geological and mining conditions and/or effects from prior mining activities that may not be fully identified by available exploration data or that may differ from experience, in current operations;
	·	the assumed effects of regulation, including the issuance of required permits, and taxes by governmental agencies and assumptions concerning oil and gas prices, operating costs, mining technology improvements, severance and excise tax, development costs and reclamation costs;
	·	historical production from the area compared with production from other similar producing areas; and
	·	assumptions concerning future oil and gas prices, operating costs, capital expenditures, severance taxes and development and reclamation costs.

For these reasons, estimates of the economically recoverable quantities and qualities attributable to any particular group of properties, classifications of reserves and non-reserve deposits based on risk of recovery and estimates of net cash flows expected from particular reserves prepared by different engineers or by the same engineers at different times may vary substantially and vary materially from estimates. As a result, these estimates may not accurately reflect actual reserves or non-reserve deposits. Any inaccuracy in our estimates related to our deposits could result in lower than expected revenues, higher than expected costs and decreased profitability.

We compete with numerous alternative and “green” energy industries.

The U.S. and international petroleum industry is highly competitive in all aspects, including the exploration for, and the development of, new sources of supply, the acquisition of oil interests and the distribution and marketing of petroleum products.

The petroleum industry also competes with other industries in supplying energy, fuel and related products to consumers. Some of these industries benefit from lighter regulation, lower taxes and subsidies. In addition, certain of these industries are less capital intensive.

A number of competing companies are engaged in the oil sands business and are actively exploring for and delineating their resource bases. Some of our competitors have announced plans to begin production of synthetic crude oil, or to expand existing operations. If these plans are effected, they could materially increase the supply of synthetic crude oil and other competing crude oil products in the marketplace and adversely affect plans for development of our lands.

We may be subject to unexpected operational hazards based upon the remote location of our properties.

Our exploration and development activities are subject to the customary hazards of operation in remote areas, such as fires, explosions, migration of harmful substances, and spills. A casualty occurrence might result in the loss of equipment or life, as well as injury, property damage or other liability. While we maintain limited insurance to cover current operations, our property and liability insurance may not be sufficient to cover any such casualty occurrences or disruptions. Equipment failures could result in damage to our facilities and liability to third parties against which we may not be able to fully insure or may elect not to insure because of high premium costs or for other reasons. Our operations could be interrupted by natural disasters such as forest fires or other events beyond our control. Losses and liabilities arising from uninsured or under-insured events could have a material adverse effect on our business, our financial condition and results of our operations.

Risks Related to Our Common Stock

Because our shares are designated as “penny stock,” broker-dealers will be less likely to trade in our stock due to, among other items, the requirements for broker-dealers to disclose to investors the risks inherent in penny stocks and to make a determination that the investment is suitable for the purchaser.

Our shares are designated as “penny stock” as defined in Rule 3a51-1 promulgated under the Exchange Act and thus may be more illiquid than shares not designated as penny stock. The SEC has adopted rules which regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks are defined generally as: non-Nasdaq equity securities with a price of less than $5.00 per share; not traded on a “recognized” national exchange; or in issuers with net tangible assets less than $2,000,000, if the issuer has been in continuous operation for at least three years, or $10,000,000, if in continuous operation for less than three years, or with average revenues of less than $6,000,000 for the last three years. The penny stock rules require a broker-dealer to deliver a standardized risk disclosure document prepared by the SEC, to provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the customer’s account, to make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a stock that is subject to the penny stock rules. Since our securities are subject to the penny stock rules, investors in the shares may find it more difficult to sell their shares. Many brokers have decided not to trade in penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. The reduction in the number of available market makers and other broker-dealers willing to trade in penny stocks may limit the ability of purchasers in this offering to sell their stock in any secondary market. These penny stock regulations, and the restrictions imposed on the resale of penny stocks by these regulations, could adversely affect our stock price.

Future sales of our common stock may cause our stock price to decline.

Our stock price may decline due to future sales of our shares or the perception that such sales may occur. The board of directors has discretion to determine the issue price and the terms of issue of shares of our common stock. Such future issuances may be dilutive to investors. Holders of shares of common stock have no pre-emptive rights under our Certificate of Incorporation to participate in any future offerings of securities.

If we issue additional shares of common stock in private financings under an exemption from the registration requirements, then those shares will constitute “restricted shares” as defined in Rule 144 under the Securities Act. The restricted shares may only be sold if they are registered under the Securities Act, or sold under Rule 144, or another exemption from registration under the Securities Act.

Some of our outstanding restricted shares of common stock are either eligible for sale pursuant to Rule 144 or have been registered under the Securities Act for resale by the holders. We are unable to estimate the amount, timing, or nature of future sales of outstanding common stock. Sales of substantial amounts of our common stock in the public market may cause the stock’s market price to decline.

The public trading market for our common stock is volatile and may result in higher spreads in stock prices.

Our common stock trades in the over-the-counter (“OTC”) market and is quoted on the OTC Markets. The over-the-counter market for securities has historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, as well as economic conditions and quarterly variations in our results of operations, may adversely affect the market price of our common stock. In addition, the spreads on stock traded through the over-the-counter market are generally unregulated and higher than on stock exchanges, which means that the difference between the price at which shares could be purchased by investors in the over-the-counter market compared to the price at which they could be subsequently sold would be greater than on these exchanges. Significant spreads between the bid and asked prices of the stock could continue during any period in which a sufficient volume of trading is unavailable or if the stock is quoted by an insignificant number of market makers. Historically our trading volume has been insufficient to significantly reduce this spread and we have had a limited number of market makers sufficient to affect this spread. These higher spreads could adversely affect investors who purchase the shares at the higher price at which the shares are sold, but subsequently sell the shares at the lower bid prices quoted by the brokers. Unless the bid price for the stock exceeds the price paid for the shares by the investor, plus brokerage commissions or charges, the investor could lose money on the sale. For higher spreads such as those on over-the-counter stocks, this is likely a much greater percentage of the price of the stock than for exchange listed stocks. There is no assurance that at the time an investor in our common stock wishes to sell the shares, the bid price will have sufficiently increased to create a profit on the sale.

We have not paid, and do not intend to pay, dividends on our common stock and therefore, unless our common stock appreciates in value, our investors may not benefit from holding our common stock.

We have not paid any cash dividends on our common stock since inception. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. As a result, investors in our common stock will not be able to benefit from owning our common shares unless the market price of our common stock becomes greater than the price paid for the stock by these investors.

There are a large number of restricted shares and shares issuable upon exercise of our outstanding options, warrants, or other convertible instruments that may be available for future sale, or which may be resold pursuant to Rule 144, the sale of which into our trading market may depress the market price of our common stock.

As of March 31, 2015, we had 33,393,828 shares of common stock issued and outstanding, of which 26,106,281 were designated by our transfer agent as restricted shares pursuant to Rule 144 promulgated by the SEC. In addition, as of March 31, 2015, we had outstanding warrants to purchase up to 16,697,936 shares of common stock, outstanding options to purchase up to 6,522,500 (including 600,000 options granted that vest upon completion of certain future financings) shares of common stock, and Series A Convertible Preferred shares convertible into 16,472,839 common shares. The sale of these shares into the open market may adversely affect the market price of our common stock.

Our board of directors can, without stockholder approval, cause preferred stock to be issued on terms that adversely affect common stockholders.

Under our Certificate of Incorporation, our board of directors is authorized to issue up to 10,000,000 shares of preferred stock, of which none are issued and outstanding as of the date of this registration statement. Also, our board of directors, without stockholder approval, may determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares. If the board of directors causes additional shares of preferred stock to be issued, the rights of the holders of our common stock could be adversely affected. The board of directors’ ability to determine the terms of preferred stock and to cause its issuance, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock. Preferred shares issued by the board of directors could include voting rights, or even super voting rights, which could shift the ability to control us to the holders of the preferred stock. Preferred shares could also have conversion rights into shares of common stock at a discount to the market price of the common stock which could negatively affect the market for our common stock. In addition, preferred shares would have preference in the event of liquidation of the corporation, which means that the holders of preferred shares would be entitled to receive the net assets of the corporation distributed in liquidation before the common stockholders receive any distribution of the liquidated assets. We have no current plans to issue any shares of preferred stock.

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

The JOBS Act permits “emerging growth companies” like us to rely on some of the reduced disclosure requirements that are already available to smaller reporting companies, which are companies that have a public float of less than $75,000,000. As long as we qualify as an emerging growth company or a smaller reporting company, we would be permitted to omit the auditors’ attestation on internal control over financial reporting that would otherwise be required by Section 404 of the Sarbanes-Oxley Act, and are also exempt from the requirement to submit “say-on-pay”, “say-on-pay frequency” and “say-on-parachute” votes to our stockholders and may avail ourselves of reduced executive compensation disclosure that is already available to smaller reporting companies.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as it is an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of these benefits until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of this exemption. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will cease to be an emerging growth company at such time as described in the risk factor immediately above. Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile and could cause our stock price to decline.

Some provisions of our charter documents may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our Certificate of Incorporation and bylaws could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management. These provisions:

	·	authorize the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;
	·	do not provide for cumulative voting in the election of directors, which would otherwise allow for less than a majority of stockholders to elect director candidates;
	·	prohibit stockholder action for the election of directors by written consent, thereby requiring all stockholder actions to elect directors to be taken at a meeting of our stockholders; and
	·	limit the ability of our stockholders to call meetings of stockholders.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, who are responsible for appointing the members of our management. Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

ITEM 1B. Unresolved Staff Comments

We have not received any written comments from the staff of the Securities and Exchange Commission in regard to our periodic or current reports that remain unresolved.

ITEM 2. PROPERTIES

We hold an undivided leasehold interest to approximately 1,760 acres located near Sunnyside, Utah, on which we propose to engage in the extraction of bitumen from oil sands located on the property.

Property Location

We have obtained four leases in the Sunnyside area, on private property. We currently hold:

The lease for an undivided 40% interest in the 1,120 acre property has a primary term ending December 31, 2020 while the lease for the remaining undivided 20% interest has a primary term ending on December 31, 2019. The lease for an undivided 16.67% interest in the 640 acre property has a primary term ending December 31, 2019 and the remaining 5% interest in the 640 acres has a primary term ending December 31, 2020. All leases are automatically extended thereafter for so long as an average of 500 barrels of oil is produced per day, subject to certain acceptable interruptions.

Access

Access to the property from Salt Lake City is via Interstate 15 south to Spanish Fork, and east on Utah Highway 6 to Sunnyside. Railroad service is available to East Carbon City and Sunnyside. Access to the site from the town of Sunnyside is via State roads up Whitmore Canyon and Water Canyon. The last two miles to Bruin Point near the Asphalt Mine consist of a single lane road with steep grades of up to 20%. The planned mine site is approximately seven miles from an existing rail head and major highway.

Topography

The topography in the project area is mountainous, with nearly 2,000 feet of relief. Elevations in this area range from approximately 8,200 feet at the southern extreme end of the property, to over 10,150 feet at Bruin Point in the northwest.

Climate

The area has annual average temperatures ranging from 15^o F to 88^o F, with local climate classified as sub-humid to semi-arid. Average annual precipitation includes 12.5” of rainfall, with September having the highest levels, and an additional 20” of snowfall occurring November through March.

Utilities

The planned plant and mine site are approximately seven miles from an existing power plant and will be served by existing power lines.

Property History

Commercial exploration or exploitation activities have been recorded on the Sunnyside area since 1892. A summary of the more notable activities is given as follows:

	—	1892 – 1903. In 1892, a small quarry operation mined 1,000 tons for street paving in Salt Lake City. This operation was repeated in 1902 - 1903.
	—	1915 – 1917. Utah Asphalt Company opened a new quarry in proximity to Bruin Point and shipped 3,000 tons.
	—	1925 – 1927. Utah Rock Asphalt Corporation built an aerial tramway and reopened the Asphalt Mine in 1927.
	—	1927 – 1931. Utah Rock Asphalt Corporation quarried 25,000 to 30,000 tons.
	—	1931 – 1948. Rock Asphalt Company of Utah removed approximately 335,000 tons, which were used for paving within Utah and Colorado. The company ceased operations in 1948.
	—	1948. The Utah Geological Survey, specifically Holmes, Page & Averitt, published the results of geological fieldwork and reserve estimates.
	—	1956 – 1966. Over this ten-year period, the oil companies Gulf, Arco Phillips Petroleum, Pan American, Shell, Texaco, Mountain Fuel, and Signal Oil and Gas completed approximately 21 exploration drill holes. Steam injection wells built by Shell and Signal Oil and Gas were reported to have been unsuccessful, due to vertical fracturing and low overburden pressures. A horizontal well from the Asphalt mine was also drilled and tested, with results classified as unsuccessful.
	—	1966 – 1979. A hiatus on exploration and development efforts ensued until 1977, when Amoco Production completed five core holes, with drilling and testing efforts concluding in 1978. In 1979, Standard Oil Company of Indiana acquired Section 2 and the northeast, southeast and northwest quarter-sections of Section 3 in Township 14S, Range 14E from Kaiser Steel. This area constituted a major portion of the resource area currently identified as the Hunt Oil Tract. At the time of Standard’s acquisition, it was referred to as the Kaiser Tract, with subsequent naming as the Amoco Tract.
	—	1980 – 1982. Amoco completed 43 exploration core holes.
	—	1984 – 1989. Amoco completed 27 exploration core holes.

Geology

The oil sands at the Sunnyside Project are located along the crest of the Roan Cliffs near Bruin Point, which crests at an elevation of 10,131 feet. The Roan Cliffs contain rocks of Paleocene and Eocene age (ca. 60-40 Ma). In the early stages of this time period, a mountain range existed in central Utah while a sea was located in eastern Utah and Colorado. During a period of sea level regression the marine environment was replaced by a coastal plains fluvial environment. During subsequent orogenic events, a large lake, Lake Uinta, formed in an intermountain basin. Sediment deposited in Lake Uinta during the middle Eocene epoch (ca. 50-40 Ma) formed the sandstone and shale of the Green River Formation. The Green River Formation sandstones would later become the reservoir rocks for the bitumen of the Sunnyside oil sands.

The Green River Formation formed in a lacustrine environment associated with Lake Uinta during middle Eocene time (ca. 50-40 Ma). The Green River Formation consists of three formal members subdivided on the basis of depositional environment: Parachute Creek Member (lake facies); Garden Gulch Member (shore facies); and Douglas Creek Member (delta facies). These three members were delineated in the field on the basis of different colored shale, biota content, presence of oil shale, and abundance and distribution of limestone and sandstone.

Hydrocarbon and Mineral Leases

We have obtained four leases in the Sunnyside area, on private property. We currently hold an undivided 60% interest pursuant to two freehold hydrocarbon and mineral lease agreements in Section 2, East Half and North West quarters of Section 3 Township 14 South, Range 14 East, SLM containing approximately 1,120 acres; and an undivided 21.67% interest pursuant to two further freehold hydrocarbon and mineral lease agreements in the North West quarter of Section 3, East half and North West quarter of Section 10, Township 14, Range 14 East, SLM containing approximately 640 acres, pursuant to which we have the right to extract bitumen from the land. As more fully described above under “Property Location” the primary terms of the leases run through December 31, 2019 and 2020, respectively. All leases are automatically extended thereafter for so long as an average of 500 barrels of oil is produced per day, subject to certain acceptable interruptions.

The leases provide for the payment to the lessors of a royalty in an amount equal to 10% of the market value of the minerals sold by GRI less operating costs, transportation costs, processing costs, value added costs and extraction taxes incurred by us prior to the sale of the oil produced. A guaranteed minimum royalty of $1,000,000 is payable on the 1,120 acre leases each year after three consecutive years of production of oil products in commercial quantities during any portion of the three prior consecutive years. The amount of royalties to be paid is based upon a 100% interest in and to the mineral estate represented by the premises covered by the lease and for any lessor owning less than 100% will be reduced by the same proportion, but less than the minimum guaranteed royalty. The leases for the 1,120 acres also provide for the payment of a 2% royalty on all by-products produced. The leases provide for the annual payment of rentals in lieu of royalties until production begins. These rental payments are not required for any year in which royalties paid for the prior year exceeded the rental amount. Aggregate rentals for the years ended March 31, 2015 and 2014, were $276,880. In addition, each of the leases provides for a development commitment of a minimum of $150,000 per year for the premises represented by the lease, including research, engineering, test work, feasibility studies and other development activities benefiting the property, until production reaches 500 barrels of oil per day.

Recent Property Developments

On March 6, 2014, ASEC filed an application for a Large Mine Permit with the Utah Department of Oil, Gas and Mining. In connection with this Large Mine Permit, we have conducted a number of studies on the property and prepared a mine feasibility study. Those studies have included archaeological and cultural studies, threatened & endangered species studies, soil/vegetation/hydrologic studies and others to assess the impact of the project on the area. We have also prepared a mine feasibility study. Based on these studies, we believe that we will be able to meet the requirements for the Large Mine Permit to be issued.

ITEM 3. LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings reportable pursuant to this item.

ITEM 4. MINE SAFETY DISCLOSURES

There are no reportable events required pursuant to this item.

PART II

ITEM 5. MARKET FOR Registrant’s COMMON EQUITY, RELATED STOCKHOLDER MATTERS and Issuer Purchases of Equity Securities

Market Information

Our common stock is quoted on the OTC Bulletin Board and OTC Markets and our trading symbol is “AMSE.” We do not believe that a material number of our shares of common stock have traded since the approval of the quotation. The table below sets forth for the periods indicated the quarterly high and low bid prices as reported by the OTC Markets. Quotations furnished for the third quarter of 2012 and thereafter reflect the reverse split effective October 18, 2011. These quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

	Quarter	High	Low
For the Fiscal Year Ended March 31, 2015	First	$1.06	$0.56
	Second	$0.90	$0.45
	Third	$0.60	$0.38
	Fourth	$0.38	$0.21

For the Fiscal Year Ended March 31, 2014	First	$0.55	$0.22
	Second	$0.40	$0.25
	Third	$0.50	$0.30
	Fourth	$0.93	$0.34

Unregistered Sales of Securities

On November 30, 2014, the Company issued 170,000 shares of common stock to LIFE Power & Fuels, LLC as per the terms of a Termination Agreement related to a consulting agreement between LIFE Power & Fuels, LLC and the Company. As of November 30, 2014, the Company had no further relationship with LIFE Power & Fuels, LLC.

Holders

As of June 9, 2015, we had approximately 445 holders of record of our common stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

Dividends

We have not declared or paid any cash dividends on our common stock during the two most recent fiscal years and any subsequent interim period. We do not anticipate paying any cash dividends to stockholders of our common stock in the foreseeable future. In addition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant.

Repurchase of Shares

We did not repurchase any of our shares during the fourth quarter of the fiscal year covered by this report.

ITEM 6. SELECTED FINANCIAL DATA

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

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Forward-looking statements include the information concerning our current and future operations, business strategies, need for financing, competitive position, ability to retain and recruit personnel, and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

The following discussion should be read in conjunction with our financial statements and related notes thereto as included with this report.

Overview

The Company is pursuing the development of a mining facility operation for the clean extraction of bitumen from oil sands prevalent in the Mountain West region of North America using proprietary technology. Since inception, the Company has been engaged in the business of acquiring and developing oil sand assets and technologies used to separate the oil contained in oil sands. The Company anticipates that its primary operations will include the mining of oil sands, the separation of oil products therefrom and the sale of oil and oil by-products.

Critical Accounting Policies and Estimates

The selection and application of accounting policies is an important process that has developed as our business activities have evolved and as the accounting rules have changed. Accounting rules generally do not involve a selection among alternatives, but involve an implementation and interpretation of existing rules, and the use of judgment, to the specific set of circumstances existing in our business. Discussed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported. See Note 2 to our audited financial statements included in this Form 10-K for the year ended March 31, 2015, for a discussion of those policies.

Use of Estimates and Going Concern – This discussion and analysis of our financial condition and results of operations is based upon financial statements that have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The preparation of financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements. We have based our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results, however, may differ from these estimates under different assumptions or conditions.

The Company’s financial statements have been prepared on a going concern basis which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations and has negative cash flows from operating activities, which raise substantial doubt about the Company’s ability to continue as a going concern. The Company sustained a net loss for the year ended March 31, 2015 of $3,322,370 and a net loss for the year ended March 31, 2014 of $3,355,378 and has an accumulated deficit of $17,902,541, as of March 31, 2015. In addition, the Company estimates it will require approximately $150,000,000 in capital to commence principal operations.

The Company intends to continue its research and development efforts, but does not have any revenues in order to finance these activities internally. As a result, the Company intends to seek financing in order to fund its operations.

The Company has been able to meet its short-term needs primarily through loans from third parties, private placements of equity and debt securities, and deferring certain payment obligations to related parties. During the years ended March 31, 2015 and 2014, the Company raised over $3,600,000 from the sale of Series A preferred stock units and has approximately $191,000 of cash on hand as of March 31, 2015. The Company plans to continue to obtain additional financing through the sale of equity or debt securities in order to finance operations until it can generate positive cash flows from operating activities. The equity private placements are expected to provide the needed funds for continued operations and further research and development of the Company’s proprietary oil sand refining methods. The Company can provide no assurance that it will be able to obtain sufficient additional financing that it needs to develop its technology and alleviate doubt about its ability to continue as a going concern. If the Company is able to obtain sufficient additional financing proceeds, the Company cannot be certain that this additional financing will be available on acceptable terms. To the extent the Company raises additional funds by issuing equity securities the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Mineral Leases – Due to the uncertainty regarding the recoverability of costs to acquire, maintain, and develop mineral leases, to date all costs to acquire, maintain, and develop mineral leases have been expensed as incurred.

Stock-Based Compensation – The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options, the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period. For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested amounts are revalued using the Black-Scholes model at each reporting period. For warrants issued to lenders, the Company records the grant-date fair value of the warrants and any resulting beneficial conversion feature for convertible debt, as a debt discount. The discount is then amortized over the estimated life of the debt as non-cash interest expense.

Derivative Liability - In connection with the Company issuing its Series A preferred stock units described in Note 6, the Company recorded a derivative liability related to down-round protection provided to the preferred stockholders in the event that the Company sells its common stock at a price below $0.35 per share. With the assistance of a third-party valuation specialist, the Company valued the derivative liability pursuant to the accounting guidance of ASC 820-10, Fair Value Measurements.

As defined in FASB ASC 820-10, fair value is based on 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. In order to increase consistency and comparability in fair value measurements, FASB ASC 820-10 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1		Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.
Level 2		Other inputs that are observable directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.
Level 3		Unobservable inputs that are used when little or no market data is available, which require the Company to develop its own assumptions about how market participants would value the assets or liabilities.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosure each quarter.

Results of Operations:

Years Ended March 31, 2015 and 2014

ASEC did not have revenues for the years ended March 31, 2015 and 2014. During the year ended March 31, 2015, the Company incurred a net loss of $3,322,370 compared to a net loss of $3,355,378 for the year ended March 31, 2014. During the year ended March 31, 2015, our operating expenses were $2,694,841, which represented a 13.17% decrease, compared to the year ended March 31, 2014.

General and administrative expenses decreased by 8.95% from $2,000,478 during the year ended March 31, 2014 to $1,821,533 during the year ended March 31, 2015 due primarily to decreases in costs for financing fees by $810,628 and management services by $49,425. These decreases were offset by increases in stock option expenses of $390,618, professional fees of $68,414, public company expenses of $98,154, payroll and benefits of $41,511, and travel expenses of $58,203. Going forward, we believe that the obligations placed upon us as a result of our reporting requirements under SEC rules and regulations will continue to result in our operating expenses increasing once we raise the needed capital and we move forward with our primary business operations.

Research and development expenses decreased to $596,428 for the year ended March 31, 2015 compared to $923,774 for the year ended March 31, 2014 representing a decrease of 35.44%. Expenses incurred during fiscal 2015 primarily relate to payroll as the Company hired its Chief Operating Officer who previously worked part time as a consultant, engineering fees associated with the Company’s tar sand test unit, and travel and other expenses. Travel expenses increased by $37,895 for the year ended March 31, 2015. The increase was offset by a decrease in expenses for the tar sand test unit of $347,806 which were incurred to further develop and establish the technological feasibility for our proprietary oil sands refining processes.

Interest expense decreased to $0 for the year ended March 31, 2015 from $386,848 for the year ended March 31, 2014. The decrease in interest expense is due to the Company settling all of its debt obligations during the last half of fiscal 2014 resulting in lower interest costs.

During the year ended March 31, 2015, the Company issued shares of its Series A convertible preferred stock. The preferred stock subscription agreement contains provisions that protect the investors from dilution as a result of the Company issuing shares of stock below certain pricing levels. The Company accounted for this down-round protection as an embedded derivative. During the year ended March 31, 2015, the Company recorded a loss of $628,723 related to its embedded derivative as opposed to a $388,152 gain for the year ended March 31, 2014.

Liquidity and Capital Resources

As of March 31, 2015, the Company had $191,460 in cash and working capital of $23,822. As of March 31, 2015, the Company had total liabilities of $1,115,821. As of March 31, 2015, the Company’s total assets were $901,218 consisting of cash, prepaid and other current assets, property and equipment and other assets. Since inception, the Company has raised approximately $8,600,000 through various debt and equity security offerings.

The Company has established a resource position, a working knowledge of the process technology and has submitted applications for the permits required to build a commercial plant. Additional work to be completed as part of the project development phase includes:

	1.	Final mine planning and civil engineering for the Sunnyside Project.

	2.	Acquisition of additional property in areas of interest in order to block-up properties into logical and economical mining units.

	3.	Determination of technical and economic parameters for the commercial scale use of the process, including engineering.

	4.	Receipt of federal and state regulatory agency approval for the Commercial Facility.

	5.	Completion of permitting for the Commercial Facility.

Additional financing of approximately $150,000,000 will be required to procure and install the necessary equipment to begin operations of the Commercial Facility.

The Company is dependent, for the near future, on additional capital to fund development costs and administrative expenses. The report of the Company’s independent registered public accounting firm for the year ended March 31, 2015, expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s operating losses have been funded through the issuance of equity securities and borrowings. We will need additional funding in the future in order to continue our business operations. While we continually look for additional financing sources, in the current economic environment, the procurement of outside funding is extremely difficult and there can be no assurance that such financing will be available, or, if available, that such financing will be at terms that will be acceptable to us. Failure to generate sufficient revenue or raise additional capital would have an adverse impact on our ability to achieve our longer-term business objectives, and would adversely affect our ability to continue operating as a going concern.

Off-Balance Sheet Arrangements

We did not engage in any off-balance sheet arrangements during the period presented in our financial statements and have not entered into any off-balance sheet arrangements since that date.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we have elected not to provide the disclosure required by this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required in response to this item are included immediately following the signature page of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We did not change accountants or have any disagreements with our accountants reportable pursuant to this item.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our principal executive officer (“CEO”) and principal financial officer (“CFO”) conducted an evaluation, as of the end of the period covered by this report, of whether our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were (1) effective to ensure that information required to be disclosed by us in reports filed or submitted by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and (2) designed to ensure that information required to be disclosed by us in such reports is accumulated, organized and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. Based upon this evaluation, our CEO and CFO concluded that, as of March 31, 2015, our disclosure controls and procedures were effective.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of our company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the Company’s assets that could have a material effect on our financial statements.

Management, including our CEO and CFO, conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2015. Management based its assessment on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, accounting policies, and our overall control environment. Based on this evaluation, management concluded that as of March 31, 2015, our internal control over financial reporting was effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the year ended March 31, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 is included under the captions “Directors, Executive Officers and Corporate Governance,” “Audit and Compensation Committees” “Nominating Procedures ” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is included under the captions “Executive Compensation Summary,” “Equity Awards,” “Compensation Committee,” “Compensation Committee Report on Executive Compensation” and “Director Compensation” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 12 with respect to security ownership of certain beneficial owners and management is included under the captions “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Securities Authorized for Issuance under Equity Compensation Plans” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 13 is included under the captions “Director Independence” and “Related Person Transactions” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 is included under the caption “Fees Paid” and “Audit Committee” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES

The following exhibits are included with this report:

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Herewith

3.1	Delaware Certificate of Incorporation, as amended	10-Q	000-53167	3.1	11/17/11
3.1(a)	Certificate of Designation of Series A Preferred Shares	8-K	000-53167	3.1	03/07/14
3.2	Bylaws, as amended August 28, 2012
4.1	2011 Long-Term Incentive Plan	10-K	000-53167	4.1	6/9/11
10.1	Employment Agreement dated August 1, 2007, as amended on August 12, 2009, with William C. Gibbs*	10-K	000-53167	10.1	6/9/11
10.2	Second Amendment dated May 15, 2013, to Employment Agreement with William C. Gibbs*	10-K	000-53167	10.21	7/15/13
10.3	Exchange Agreement between the Company and William C. Gibbs, dated September 30, 2013*	8-K	000-53167	99.2	10/16/13
10.4	Warrant Agreement with William Gibbs*	10-Q	000-53167	10.1	11/19/13
10.5	Employment Agreement dated February 16, 2012, with Daniel F. Carlson*	8-K	000-53167	99.3	2/23/12
10.6	Amendment dated January 14, 2013, to Employment Agreement of Daniel Carlson*	8-K	000-53167	99.1	1/15/13
10.7	Amended and Restated Employment Agreement dated May 15, 2013 with Daniel Carlson*	10-K	000-53167	10.22	7/15/13
10.8	Amendment dated June 10, 2014, to Employment Agreement of Daniel Carlson*	10-K	000-53167	10.45	6/30/14
10.9	Termination of Employment Agreement with Robin Gereluk, effective June 1, 2014, by Green River Resources, Inc.*	10-K	000-53167	10.43	6/30/14
10.10	Employment Agreement dated June 1, 2014, by and between American Sands Energy Corp. and Robin Gereluk*	10-K	000-53167	10.44	6/30/14
10.11	Hydrocarbon and Mineral Lease dated January 14, 2005, as amended, and assignment dated November 8, 2005, Meany Land & Exploration, Inc.	10-K	000-53167	10.7	6/22/12
10.12	Hydrocarbon and Mineral Lease dated February 23, 2005, as amended, and assignment dated November 8, 2005, with Osterbroen Family Limited Partnership, et al.	10-K	000-53167	10.8	6/22/12
10.13	Addendum #8 Hydrocarbon and Mineral Lease dated February 23, 2005, as amended, and assignment dated November 8, 2005, with Osterbroen Family Limited Partnership, et al.	10-Q	000-53167	10.4	11/19/13
10.14	Ninth Addendum to Utah Tar Sands, LLC Hydrocarbon and Mineral Lease	10-Q	000-53167	10.2	11/18/14
10.15	Hydrocarbon and Mineral Lease dated January 14, 2005, as amended, and assignment dated November 8, 2005, with Meany Land & Exploration, Inc.	10-K	000-53167	10.9	6/22/12
10.16	Addendum #6 to Hydrocarbon and Mineral Leases dated January 14, 2005, as amended, and assignment dated November 8, 2005, Meany Land & Exploration, Inc.	10-Q	000-53167	10.3	11/19/13
10.17	Seventh Addendum to Meany Land & Exploration, Inc. Hydrocarbon and Mineral Lease	10-Q	000-53167	10.3	11/18/14

10.18	Hydrocarbon and Mineral Lease dated October 2009, and Affirmation document dated May 6, 2011, with William G. Gibbs	10-K	000-53167	10.10	6/22/12
10.19	Addendum to Hydrocarbon and Mineral Lease dated October 2009, with William G. Gibbs	10-Q	000-53167	10.5	11/19/13
10.20	Second Addendum to Will G. Gibbs Lease Agreement	10-Q	000-53167	10.1	11/18/14
10.21	License, Development and Engineering Agreement dated January 24, 2012 (confidential information has been redacted)	10-K	000-53167	10.12	6/22/12
10.22	Gross Royalty Agreement dated January 24, 2012, with Bleeding Rock LLC, and assignment dated January 31, 2012, to Hidden Peak Partners LC	10-K	000-53167	10.14	6/22/12
10.23	Exchange Agreement between the Company and Hidden Peak Partners LC, dated September 30,2013	8-K	000-53167	99.1	10/16/13
10.24	Second Amendment dated May 15, 2013, to Convertible Promissory Note with Hidden Peak Partners LC	10-K	000-53167	10.24	7/15/13
10.25	Warrant Agreement with Hidden Peak Partners LC	10-Q	000-53167	10.2	11/19/13
10.26	Bleeding Rock Promissory Note dated August 20, 2013	8-K	000-53167	99.1	8/23/13
10.27	Second Amendment dated May 15, 2013, to Convertible Promissory Note with Bleeding Rock, LLC	10-K	000-53167	10.25	7/15/13
10.26	Elizabeth Harley Swindells Trust Convertible Promissory Note dated May 21, 2013	10-Q	000-53167	10.1	8/19/13
10.28	Philip Edward Swindells Trust Convertible Promissory Note dated May 21, 2013	10-Q	000-53167	10.2	8/19/13
10.29	William Evans Swindells Trust Convertible Promissory Note dated May 21, 2013	10-Q	000-53167	10.3	8/19/13
10.30	C14 Convertible Promissory Note dated January 13, 2013	10-Q	000-53167	10.4	8/19/13
10.31	Amended and Restated License, Development and Engineering Agreement dated November 18, 2013	10-Q	000-53167	10.6	11/19/13
10.32	Warrant Agreement with Universal Oil Recovery LLC	10-Q	000-53167	10.1	2/19/14
10.33	Form of Warrant Agreement with an Exercise Price of $0.45 per Share	10-Q	000-53167	10.2	2/19/14
10.34	Form of Warrant Agreement with an Exercise Price of $0.70 per Share	10-Q	000-53167	10.3	2/19/14
10.35	Warrant Agreement with Merriman Capital, Inc.	10-Q	000-53167	10.4	2/19/14
10.36	Agreement dated June 25, 2014 with FLSmidth.					X
14.1	Code of Ethics adopted on November 11, 2011	10-Q	000-53167	99.1	2/17/12
21.1	List of Subsidiaries	10-K	000-53167	21.1	6/22/12
23.1	Consent of Tanner LLC, independent registered public accounting firm					X
31.1	Rule 13a-14 (a) Certification by Principal Executive Officer					X
31.2	Rule 13a-14 (a) Certification by Principal Financial Officer					X
32.1	Section 1350 Certification of Principal Executive Officer					X
32.2	Section 1350 Certification of Principal Financial Officer					X
101.INS	XBRL Instance Document					X
101.SCH	XBRL Taxonomy Schema					X
101.CAL	XBRL Calculation Linkbase					X
101.DEF	XBRL Definition Linkbase					X
101.LAB	XBRL Label Linkbase					X
101.PRE	XBRL Presentation Linkbase					X

*Management contract, or compensatory plan or arrangement, required to be filed as an exhibit.

Financial Statements Index

The following financial statements are filed with this report and are included immediately following the signature page hereof:

AUDITED FINANCIAL STATEMENTS OF AMERICAN SANDS ENERGY CORP.:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of March 31, 2015 and 2014

Consolidated Statements of Operations for the Years Ended March 31, 2015 and 2014

Consolidated Statements of Stockholders’ Deficit for the Years Ended March 31, 2015 and March 31, 2014

Consolidated Statements of Cash Flows for the Years Ended March 31, 2015 and 2014

Notes to Consolidated Financial Statements

SIGNATURE PAGE FOLLOWS

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	American Sands Energy Corp.

Date: July 14, 2015	By:	/s/ William C. Gibbs
		William C. Gibbs, Chief Executive Officer


Date: July 14, 2015	By:	/s/ David B. Hardman
		David B. Hardman, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

NAME	TITLE	DATE


/s/ William C. Gibbs	Chairman & Chief Executive Officer	July 14, 2015
William C. Gibbs	(Principal Executive Officer)


/s/ David B. Hardman	Chief Financial Officer	July 14, 2015
David B. Hardman	(Principal Financial and Accounting Officer)


/s/ Mark F. Lindsey	Director	July 14, 2015
Mark F. Lindsey


/s/ William H. Champion	Director	July 14, 2015
William H. Champion


/s/ Gayle McKeachnie	Director	July 14, 2015
Gayle McKeachnie

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

AMERICAN SANDS ENERGY CORP.

	Page
Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets as of March 31, 2015 and 2014	F-3

Consolidated Statements of Operations for the Years Ended March 31, 2015 and 2014	F-4

Consolidated Statements of Stockholders’ Deficit for the Years Ended March 31, 2015 and 2014	F-5

Consolidated Statements of Cash Flows for the Years Ended March 31, 2015 and 2014	F-6

Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

American Sands Energy Corp.

We have audited the accompanying consolidated balance sheets of American Sands Energy Corp. and subsidiaries (the Company) as of March 31, 2015 and 2014, and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of American Sands Energy Corp. and subsidiaries as of March 31, 2015 and 2014, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the financial statements and as discussed in Note 3 to the financial statements, the Company has incurred significant losses and negative cash flows from operating activities since inception, has an accumulated deficit, and is dependent on additional debt or equity financing in order to continue its operations. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also discussed in Note 3. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Tanner LLC

Salt Lake City, Utah

July 14, 2015

F-2

American Sands Energy Corp.

Consolidated Balance Sheets

	March 31,			March 31,
	2015			2014
Assets
Current assets:
Cash	$	191,460		$	2,006,007
Prepaid and other current assets		256,324			255,498

Total current assets		447,784			2,261,505

Property and equipment, net		1,744			518

Other assets		451,690			38,200

Total assets	$	901,218		$	2,300,223

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable	$	323,247		$	177,799
Accrued expenses		100,715			108,370
Note payable		–			2,228

Total current liabilities		423,962			288,397


Derivative liability		691,859			109,421

Total liabilities		1,115,821			397,818

Commitments and contingencies (Notes 3, 4 and 11)

Stockholders' equity (deficit):
Preferred stock, $.001 par value: 10,000,000 shares authorized; 4,750,000 shares designated as Series A preferred stock; 4,118,210 and 4,412,120 Series A preferred shares outstanding, respectively		4,118			4,412
Common stock, $.001 par value: 200,000,000 shares authorized; 33,393,828 and 30,935,467 shares outstanding, respectively		33,394			30,935
Additional paid-in capital		17,650,426			16,421,288
Accumulated deficit		(17,902,541	)		(14,554,230	)

Total stockholders' equity (deficit)		(214,603	)		1,902,405

Total liabilities and stockholders' equity (deficit)	$	901,218		$	2,300,223

See the accompanying notes to consolidated financial statements.

F-3

American Sands Energy Corp.

Consolidated Statements of Operations

	For the Year Ended
	March 31, 2015			March 31, 2014
Revenues	$	–		$	–

Operating expenses:
General and administrative		1,821,533			2,000,478
Research and development		596,428			923,774
Mineral lease		276,880			179,069

Total operating expenses		2,694,841			3,103,321

Loss from operations		(2,694,841	)		(3,103,321	)

Other (income) expense:

(Gain) loss on derivative		628,723			(388,152	)
(Gain) loss on extinguishment of debt		(1,700	)		252,158
Interest expense		–			386,848

Total other (income) expense		627,023			250,854

Loss before provision for income taxes		(3,321,864	)		(3,354,175	)
Provision for income taxes		(506	)		(1,203	)

Net loss		(3,322,370	)		(3,355,378	)

Less: cumulative preferred stock dividends		(335,315	)		(73,600	)

Net loss attributable to common stockholders	$	(3,657,685	)	$	(3,428,978	)

Net loss per common share - basic and diluted	$	(0.11	)	$	(0.12	)

Weighted average common shares outstanding - basic and diluted		32,486,554			29,520,636

See the accompanying notes to consolidated financial statements.

F-4

American Sands Energy Corp.

Consolidated Statements of Stockholders' Equity (Deficit)

For the Years Ended March 31, 2015 and 2014

											Additional						Total
	Series A preferred						Common Stock				paid-in			Accumulated			stockholders'
	Shares			Amount			Shares		Amount		capital			deficit			equity
Balance as of April 1, 2013		–		$	–			28,990,715	$	28,991	$	6,706,565		$	(11,198,852	)	$	(4,463,296	)

Stock-based compensation		–			–			–		–		367,691			–			367,691

Shares issued for services		–			–			25,000		25		10,475			–			10,500

Shares issued for related-party debt		–			–			535,704		535		226,783			–			227,318

Proceeds from issuance of preferred stock units at $1.40 per unit		2,596,054			2,596			–		–		3,631,881			–			3,634,477

Preferred stock units issued for convertible debt at $1.40 per unit		109,908			110			–		–		153,761			–			153,871

Preferred stock units issued for convertible debt at $1.33 per unit		1,328,831			1,329			–		–		1,770,447			–			1,771,776

Loss on conversion of convertible debt exchanged for preferred stock units at $1.33 per share		–			–			–		–		88,587			–			88,587

Preferred stock units issued for related-party debt at $1.40 per unit		93,643			94			–		–		131,007			–			131,101

Preferred stock units issued for stock offering costs at $1.40 per unit		69,399			69			–		–		(69	)		–			–

Preferred stock units issued for research and development at $1.40 per unit		214,285			214			–		–		299,786			–			300,000

Derivative relating to preferred stock down-round protection rights		–			–			–		–		(497,573	)		–			(497,573	)

Common stock issued for prepaid stock offering costs at $0.35 per share		–			–			375,000		375		130,875			–			131,250

Payroll obligations exchanged for debt exchange warrants		–			–			–		–		1,049,350			–			1,049,350

Accounts payable obligations settled with common stock		–			–			483,333		483		249,684			–			250,167

Payroll obligations settled with common stock at $0.35 per share		–			–			525,715		526		183,474			–			184,000

Related party debt exchanged for debt exchange warrants		–			–			–		–		1,462,651			–			1,462,651

Other common stock warrants issued for financing services		–			–			–		–		445,000			–			445,000

Other common stock warrants issued for research and development		–			–			–		–		201,250			–			201,250

Issuance of new warrants in connection with former convertible note holders		–			–			–		–		83,525			–			83,525

Series A preferred stock offering costs		–			–			–		–		(273,862	)		–			(273,862	)

Net loss		–			–			–		–		–			(3,355,378	)		(3,355,378	)

Balance as of March 31, 2014		4,412,120			4,412			30,935,467		30,935		16,421,288			(14,554,230	)		1,902,405

Stock-based compensation		–			–			–		–		701,743			–			701,743

Proceeds from issuance of preferred stock units at $1.40 per unit		250,000			250			–		–		349,750			–			350,000

Warrants exercised for cash at $0.50 per share		–			–			50,143		50		24,950			–			25,000

Warrants exercised for cash at $0.45 per share		–			–			17,857		18		8,017			–			8,035

Series A preferred stock offering costs		–			–			–		–		(9,001	)		–			(9,001	)

Conversion of preferred stock to common stock		(543,910	)		(544	)		2,175,641		2,176		(1,632	)		–			–

Preferred stock dividends paid with common stock		–			–			44,720		45		25,896			(25,941	)		–

Common stock issued for accounts payable		–			–			170,000		170		83,130			–			83,300

Derivative relating to preferred stock down-round protection rights		–			–			–		–		46,285			–			46,285

Net loss		–			–			–		–		–			(3,322,370	)		(3,322,370	)

Balance as of March 31, 2015		4,118,210		$	4,118			33,393,828	$	33,394	$	17,650,426		$	(17,902,541	)	$	(214,603	)

See the accompanying notes to consolidated financial statements.

F-5

American Sands Energy Corp.

Consolidated Statements of Cash Flows

	For the Year Ended
	March 31, 2015			March 31, 2014
Cash flows from operating activities:
Net loss	$	(3,322,370	)	$	(3,355,378	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		620			1,404
(Gain) loss on extinguishment of debt		(1,700	)		252,158
Loss (gain) on derivative liability		628,723			(388,152	)
Accretion of debt discount		–			267,224
Straight-line of mineral lease payable		–			(14,640	)
Stock offering costs		–			279,908
Stock-based compensation expense		701,743			367,691
Warrants issued for research and development		–			201,250
Stock issued for services		–			10,500
Warrants issued for financing costs		–			445,000
Warrants issued to convertible note holders		–			83,525
Series A preferred stock units issued for research and development		–			300,000
(Increase) decrease in operating assets:
Receivables		–			207,046
Prepaid and other current assets		(826	)		(159,717	)
Related-party receivable		–			22,324
Increase (decrease) in operating liabilities:
Accounts payable		230,448			(63,389	)
Accrued expenses		(7,655	)		(211,386	)
Accrued interest on convertible debt and note payable		–			118,790
Net cash used in operating activities		(1,771,017	)		(1,635,842	)
Cash flows from investing activities:
Acquisition of property and equipment		(1,846	)		–
Mine permitting costs		(413,490	)		(19,135	)
Net cash used in investing activities		(415,336	)		(19,135	)
Cash flows from financing activities:
Proceeds from issuance of preferred stock units, net		340,999			3,360,615
Proceeds from exercise of warrants		33,035			–
Principal and interest payments on notes payable		(2,228	)		(121,139	)
Proceeds from issuance of notes payable		–			19,610
Proceeds from issuance of convertible notes payable		–			150,000
Proceeds from issuance of related-party notes payable		–			53,000
(Increase) decrease in prepaid stock offering costs		–			138,917
Net cash provided by financing activities		371,806			3,601,003
Net increase (decrease) in cash		(1,814,547	)		1,946,026
Cash, beginning of the period		2,006,007			59,981
Cash, end of the period	$	191,460		$	2,006,007

Supplemental disclosures of cash flow information:
Interest paid	$	–		$	29,282
Income taxes paid	$	1,309		$	200

Supplemental disclosures of non-cash investing and financing activities:
Accounts payable obligations settled with common stock	$	83,300		$	250,167
Preferred stock dividends paid with common stock	$	25,941		$	–
Embedded derivative resulting from issuance of preferred stock units	$	46,285		$	497,573
Conversion of convertible note payable to preferred stock units	$	–		$	1,925,647
Loss on convertible note conversion to preferred stock units	$	–		$	88,587
Conversion of related-party convertible note payable to preferred stock units	$	–		$	131,101
Preferred stock units issued for stock offering costs	$	–		$	92,250
Conversion of related-party notes payable to common stock	$	–		$	227,319
Common stock issed for stock offering costs	$	–		$	131,250
Related-party convertible note payable exchanged for warrants	$	–		$	1,462,651
Payroll obligations settled with common stock	$	–		$	184,000
Warrants issued to satisfy payroll liabilities	$	–		$	1,049,350

See the accompanying notes to consolidated financial statements.

F-6

American Sands Energy Corp.

Notes to Consolidated Financial Statements

Note 1 – Description of Business and Nature of Operations

American Sands Energy Corp. (“AMSE” or the “Company”) is a pre-production oil company with oil sands resources located near Sunnyside, Utah that has not commenced planned principal operations. The Company’s activities since inception have consisted principally of acquiring lease rights, raising capital, performing research and development activities with regard to its oil sands extraction technology, working to obtain the required permits necessary to mine the oil sands, and developing the plans to construct a refining facility. The Company’s activities are subject to significant risks and uncertainties including failing to secure the additional funding required to operationalize the Company’s technology.

The Company intends to mine the oil sands ore using conventional mining techniques and use a proprietary solvent to extract oil from the oil sands ore. Management believes that the water-free process produces high quality bitumen, recovers nearly 100% of the solvent, requires no tailings ponds, and its only by-product is reclamation ready sand. Since inception, the Company has been engaged in the business of acquiring and developing oil sands assets and technologies used to separate the oil contained in oil sands. The Company anticipates that its primary operations will include the mining of oil sands, the separation of oil products therefrom and the sale of oil and oil by-products.

The Company has acquired rights to approximately 1,760 acres of prime oil sands deposits in the Sunnyside area of Utah through its mineral leases as more fully described in Note 4 to the consolidated financial statements.

Effective January 24, 2012, the Company entered into a License, Development and Engineering Agreement with Universal Oil Recovery Corp. (“UOR”) and SRS International (the “License Agreement”) whereby the Company was granted an exclusive non-transferable license to use certain technology in its proposed business to extract bitumen from oil sands. The territory covered by the agreement includes the State of Utah and any other geographic location in which a future designated project is commenced by or through the Company. On November 18, 2013, the Company entered into an Amended and Restated License, Development and Engineering Agreement (“Amendment”) with UOR. The Amendment amends and restates the License Agreement. Pursuant to the terms of the Amendment, the previous royalties of 75% on projects outside of Utah and the minimum royalty of $1,000,000 per year on such agreements have been eliminated. Pursuant to the Amendment, the Company will now pay royalties on projects outside of Utah of 15% of the net fees (net of all costs other than general and administrative expenses) collected by the Company on any license of the technology. In addition, the $25,000 per month management fee is eliminated until a permanent financing is closed (minimum of $25,000,000), at which time the payment will be reinstated. In consideration of the amendment, the Company issued to UOR, 575,000 warrants to purchase common stock of the Company for $0.01 per share, exercisable for ten years. The term of the License Agreement is 20 years and thereafter so long as production of products using the technology is commercially and economically feasible.

Note 2 – Significant Accounting Policies

These financial statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“US GAAP”) for annual financial information, as well as the instructions to Form 10-K. Accordingly they include all of the information and notes required by US GAAP for complete financial statements.

The preparation of financial statements, in conformity with US GAAP, requires management to make judgments, estimates, and assumptions that could affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience and on various other assumptions believed to be applicable, and evaluates them on an on-going basis to ensure they remain reasonable under current conditions. Actual results could differ significantly from those estimates.

a) Principles of Consolidation

The consolidated financial statements include the consolidated operations of American Sands Energy Corp. and its wholly owned subsidiary Green River Resources Inc. (“GRI”). All significant intercompany balances and transactions have been eliminated in consolidation.

F-7

American Sands Energy Corp.

Notes to Consolidated Financial Statements

b) Property and Equipment

Property and equipment consist of computers and equipment and are stated at cost and depreciated using the straight-line method over the estimated useful lives of 3 to 7 years.

Maintenance, repairs, minor renewals and betterments, which do not extend the useful life of the asset are charged to expense as incurred. Major renewals and betterments are capitalized. The cost of property and equipment sold or otherwise disposed of and the related accumulated depreciation are removed from the accounts, and any gains or losses arising from the sale or disposal are included in the statements of operations.

c) Mineral Leases

In certain cases, the Company capitalizes costs related to investments in mineral lease interests on a property-by-property basis. Such costs include mineral lease acquisition costs. Costs are deferred until such time as the extent of proved developed reserves has been determined and mineral lease interests are either developed, the property sold or the mineral lease rights are allowed to lapse. To date, all exploration and lease costs have been expensed.

d) Other Assets

During the year ended March 31, 2015 and 2014, the Company capitalized $388,560 and $19,135 of costs, respectively, associated with its mine permitting. As of March 31, 2015 and 2014, the Company had $407,625 and $19,135 of mine permitting costs capitalized, respectively.

As of March 31, 2015 and 2014, the Company has $19,065 of restricted cash that has been paid as part of a reclamation bond related to the Company’s planned mining activities.

e) Income Taxes

The Company uses an asset and liability approach for financial accounting and reporting for income taxes, and recognizes deferred income tax assets and liabilities for the temporary differences between the financial reporting bases and tax bases of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled.

The Company calculates its current and deferred tax provision based on estimates and assumptions that can differ from the actual results reflected in income tax returns filed during the subsequent year. Adjustments based on filed returns are recorded when identified.

The Company recognizes the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the technical merits of the tax position. Interest and penalties related to unrecognized tax benefits are included as a component of income tax expense. As of March 31, 2015, there were no uncertain tax positions requiring accrual or disclosure. As of March 31, 215, the Company’s tax returns for the fiscal years 2012 through 2015 remain subject to selection for examination by tax authorities.

f) Research and Development

The Company continues to develop additional technology related to its licensed proprietary bitumen extraction process. To date, the Company has expensed costs associated with developing its technology as research and development expenses. For the years ended March 31, 2015 and 2014, the Company incurred costs of $596,428 and $923,774, respectively, for research and development of its technologies.

g) Stock-based Compensation

The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options, the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period. For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested amounts are revalued using the Black-Scholes model at each reporting period. For warrants issued to lenders, the Company records the grant-date fair value of the warrants, and any resulting beneficial conversion feature for convertible debt, as a debt discount. The discount is then amortized over the term of the convertible debt as non-cash interest expense.

F-8

American Sands Energy Corp.

Notes to Consolidated Financial Statements

h) Earnings or Loss per Common Share

Basic earnings or loss per common share is computed on the basis of the weighted average number of shares outstanding during the periods. Diluted earnings or loss per common share is computed on the basis of the weighted average number of common shares outstanding during the period plus the effect of potential dilutive shares during the period. Potential dilutive shares include outstanding stock options, warrants, preferred stock and convertible debt instruments. For periods in which a net loss is reported, potential dilutive shares are excluded because they are antidilutive. Therefore, basic loss per common share is the same as diluted loss per common share for the years ended March 31, 2015 and 2014.

i) Concentrations of Risk

Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash. Cash is placed on deposit in major financial institutions in the United States. Such deposits may be in excess of insured limits. Management believes that the financial institutions that hold the Company’s cash are financially sound and, accordingly, minimal credit risk exists with respect to these balances.

j) Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date or earlier if allowed. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

Adoption of ASU 2014-10 Development Stage Entities

In June 2014, the FASB issued Accounting Standards Update (“ASU”) ASU 2014-10 Development Stage Entities. The amendments in ASU 2014-10 remove the definition of a development stage entity from Topic 915 Development Stage Entities, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and shareholder’s equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. ASU 2014-10 is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.

As allowed, the Company early adopted this standard effective April 1, 2014. The Company’s financial statements have been impacted by the adoption of this ASU mainly by the removal of inception-to-date information in the statements of operations, cash flows, and stockholders’ equity (deficit).

ASU 2014-09 Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers. The amendments in ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This

ASU will supersede the revenue recognition requirements in Topic 605 Revenue Recognition, and most industry-specific guidance, and creates a Topic 606 Revenue from Contracts with Customers.

F-9

American Sands Energy Corp.

Notes to Consolidated Financial Statements

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company’s current financial statements will not be affected by the adoption of ASU 2014-09 as the Company has not recognized revenues.

ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going

Concern. This standard sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about the entity’s ability to continue as a going concern, and if so, to provide related note disclosures. The standard is for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December 15, 2016. The Company is currently assessing the impact, if any, of implementing this guidance will have on the Company.

Note 3 – Going Concern

The Company’s financial statements have been prepared assuming the Company is a going concern which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. The Company has no revenues, has incurred substantial losses from operations, has negative working capital, and has negative cash flows from operating activities, which matters raise substantial doubt about the Company’s ability to continue as a going concern. The Company sustained a net loss for the twelve months ended March 31, 2015 of $3,322,370 and has an accumulated deficit of $17,902,541 as of March 31, 2015. In addition, the Company estimates it will require approximately $150,000,000 in capital to commence its principal operations.

The Company intends to continue its research and development efforts, but does not have operating cash flows from which to finance these activities internally. As a result, the Company intends to seek financing in order to fund its operations.

The Company has been able to meet its short-term needs primarily through loans from third parties, private placements of equity and debt securities, and settling certain obligations owed to vendors and related parties through the issuance of equity securities such as preferred stock, common stock, and warrants. The Company plans to continue to obtain financing through the sale of equity or debt securities in order to finance operations until it can generate positive cash flows from operating activities. The private and public equity placements are expected to provide the needed funds for continued operations and further research and development of the Company’s proprietary oil sands refining methods. The Company can provide no assurance that it will be able to obtain sufficient additional financing needed to develop its technology and alleviate doubt about its ability to continue as a going concern. To the extent the Company raises additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 4 – Mineral Leases

During 2005, the Company acquired three oil sands mineral leases: (1) an undivided 40% interest in a 1,120-acre parcel, (2) an undivided 20% interest in the same 1,120-acre parcel, and (3) an undivided 16.666% interest in a 640-acre parcel. These leases are located in Carbon County, Utah. Effective September 5, 2014, the first lease was extended through December 31, 2020 and, effective September 26, 2014, the lease terms on the second and third leases were extended through December 31, 2019. The minimum annual lease payments on the leases total $268,915.

In 2009, a fourth lease was entered into with William G. Gibbs, a relative of the Chief Executive Officer of the Company, for an additional undivided 5% interest in the 640-acre parcel (for a total 21.67% undivided interest in the 640-acre parcel). This lease is located in Carbon County, Utah, adjacent to the 1,120-acre parcel. This lease has a 6-year life with a minimum yearly lease payment of $7,965 and, pursuant to an Addendum dated September 28, 2014, is scheduled to terminate by December 31, 2020, if the property has not reached commercial production.

F-10

American Sands Energy Corp.

Notes to Consolidated Financial Statements

The Company’s interest in these leases is conditioned upon the payments of royalties, minimum yearly investment in development, tax payments, and other obligations to the owners of the leases. Two of the four leases are conditioned upon reaching the production stage by December 31, 2020, while the other leases requires production by December 31, 2019. If the Company does not attain average productivity of at least 500 bbl/d by these dates, the interest in these leases may be terminated.

Upon commencement of operations, each lease requires a production royalty of 10% of the market value of the minerals sold, net of applicable costs and expenses. The Company has the right, but not the obligation, to pool or unitize the leases, such that the ore mined is allocated between, and the royalties paid, on their proportionate interests. If not pooled, the owners will be paid royalties only to the extent the oil sands ore is mined on their respective properties. Through March 31, 2015, no production royalties were accrued or paid because production on these properties had not commenced. After three consecutive calendar years of production on the 1,120-acre parcel, the production royalty on the 1,120-acre parcel shall be the greater of the 10% royalty or $1,000,000 annually. Once production begins, all rents paid count towards the Company’s production royalty commitments.

Future minimum lease payments are as follows for the years ending:

March 31,
2016	$	276,880
2017		276,880
2018		276,880
2019		276,880
2020		188,599

Total future minimum lease payments	$	1,296,119

Note 5 – Derivative Liability

In connection with the Company’s issuance of Series A preferred stock units described in Note 6, the Company recorded a derivative liability related to down-round protection provided to the preferred stockholders in the event that the Company sells its common stock at a price below $0.35 per share. With the assistance of a third-party valuation specialist, the Company valued the derivative liability based on 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. The fair value hierarchy prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1		Quoted prices in active markets that are accessible at the measurement date for assets or liabilities.
Level 2		Other inputs that are observable directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.
Level 3		Unobservable inputs that are used when little or no market data is available, which require the Company to develop its own assumptions about how market participants would value the assets or liabilities.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosure each quarter. Assets and liabilities measured at fair value on a recurring basis as of March 31, 2015 and March 31, 2014 are summarized as follows:

	Fair Value as of March 31, 2015
	Level 1		Level 2		Level 3		Total
Liabilities
Embedded derivative	$	–	$	–	$	691,859	$	691,859

	Fair Value as of March 31, 2014
	Level 1		Level 2		Level 3		Total
Liabilities
Embedded derivative	$	–	$	–	$	109,421	$	109,421

F-11

American Sands Energy Corp.

Notes to Consolidated Financial Statements

The following table presents the fair value reconciliation of Level 3 liabilities measured at fair value on a recurring basis for the year ended March 31, 2015:

	Fair Value Measurements Using
	Significant Unobservable Inputs
	(Level 3)
	Embedded
	Derivative Liability
Beginning balance, March 31, 2014	$	109,421
Issuances and conversions
Embedded derivatives issued in conjunction with Series A preferred stock units		3,755
Conversion of Series A preferred stock to common stock		(50,040	)
Total losses included in net loss		628,723

Ending balance, March 31, 2015	$	691,859

Given the nature of the embedded derivative liability, the carrying amounts of $691,859 and $109,421 reported in the accompanying consolidated balance sheets as of March 31, 2015 and 2014, respectively, were derived from Level 3 inputs and represent management’s best estimate of fair value.

Key assumptions used in the valuation of the embedded derivative liability using a Monte Carlo analysis methodology are as follows:

	March 31,		March 31,
	2015		2014
Threshold barrier	$	0.35	$	0.35
Average price below $0.35 per share	$	0.07	$	0.22
Probability of offer below $0.35 per share		3%		3%
Preferred share conversion price	$	1.40	$	1.40
Conversion ratio		20.00		6.36

Note 6 – Preferred Stock

In October 2013, the Company initiated a preferred stock unit offering to raise up to $2,000,000 with an option to increase the offering by an additional $500,000 based on market conditions and investor interest. On March 20, 2014, the board authorized an increase in the preferred stock unit raise from $2,500,000 to $6,650,000. Each unit of the offering sells for $1.40 and entitles the holder to receive one share of Series A Preferred Stock (the “Series A Stock”) along with one warrant to purchase a share of the Company’s common stock at $0.45 per share and one warrant to purchase the Company’s common stock at $0.70 per share (hereafter, together referred to as “Series A preferred stock units”)

In November 2013, the board of directors adopted resolutions approving “the designation of Series A Preferred Stock,” and a Certificate of Designation was filed with the state of Delaware. On March 4, 2014, the board of directors approved a resolution increasing the total number of authorized shares of Series A Stock from 3,250,000 to 4,750,000. On March 5, 2014, the Company filed with the state of Delaware a Certificate of Designation to effectuate the increase in authorized shares of Series A Stock. There was no change to the original rights, privileges, and preferences of the Series A Stock.

Series A preferred stockholders are entitled to receive dividends of 6% and have a liquidation preference equal to $1.40 per share for each outstanding share of Series A Stock (as adjusted for stock splits, stock dividends and recapitalizations) plus an amount equal to declared but unpaid dividends thereon. As of March 31, 2015 and March 31, 2014, the liquidation preference for the Series A Stock was $5,765,494 and $6,176,968, respectively.

F-12

American Sands Energy Corp.

Notes to Consolidated Financial Statements

Holders of Series A Stock have the right at any time after the date of issuance to convert their Series A Stock to common stock based on a ratio determined by dividing $1.40 by the Conversion Price in effect at the time for such shares. The Conversion Price is the lower of $0.35 per share or the lowest price that any additional shares of common stock were issued after the initial purchase date.

Common shares issued in transactions such as granting of employee incentive options pursuant to the Company’s 2011 Long-Term Incentive Plan, shares issued in certain financings, and shares issued to acquire technology or assets do not reduce the Conversion Price. The Series A Stock automatically converts upon the Company completing a financing transaction of $10,000,000 or more.

The offering was closed for new commitments on March 31, 2014. As of March 31, 2015, the Company had issued a total of 4,662,120 Series A preferred stock units. The Company received net cash proceeds of $3,701,615 from selling 2,846,054 Series A preferred stock units and issued an additional 1,532,382 Series A preferred stock units in connection with conversions of convertible debt and accrued interest totaling $1,925,647 and conversions of related-party debt and accrued interest of $131,101. The Company used a portion of the proceeds to complete required test drilling at its Sunnyside site location in connection with its project permitting process and for general corporate purposes.

During the fiscal year ended March 31, 2015, 543,910 shares of Series A Stock were converted into 2,175,641 shares of common stock and, as of March 31, 2015, there were 4,118,210 shares of Series A Stock outstanding.

Note 7 – Common Stock

During the fiscal year ended March 31, 2015, 543,910 shares of Series A Stock were converted into 2,175,641 shares of common stock. The Company issued an additional 44,720 shares of common stock to settle cumulative dividends for the shares of Series A Stock that were converted.

On November 30, 2014, the Company issued 170,000 shares of common stock to LIFE Power & Fuels LLC in lieu of amounts owed under the LIFE Management Services Agreement, which contract was terminated simultaneous with the issuance of common shares.

During the fiscal year ended March 31, 2015, the Company issued 68,000 shares in connection with the exercise of warrants.

Note 8 – Warrants

The Company has issued various classes of warrants as described below:

Convertible Debt Warrants

In connection with the Company’s $1,750,000 convertible note private offering, the Company granted warrants to the note holders. These warrants give the holders the right to purchase shares of the Company’s common stock at approximately $0.50 per share. In conjunction with the exchange of $1,440,000 of the convertible notes and $331,776 of accrued interest into Series A preferred stock units, 2,663,610 of the convertible debt warrants were returned to the Company and canceled. As of March 31, 2015 and March 31, 2014, there were 0 and 174,485 convertible debt warrants outstanding, respectively. The 174,475 warrants outstanding as of March 31, 2014 expired on April 30, 2014.

Private Placement Warrants

In connection with the Company’s private placement of common stock initiated in 2012, the Company granted warrants to the stock purchasers. These warrants give the holders the right to purchase shares of the Company’s common stock at $1.15 per share for a 2-year period. In March 2014, the Company issued 121,259 3-year warrants to purchase the Company’s common stock at $1.15 to certain convertible note holders who converted their notes to Series A preferred stock units. As of March 31, 2015 and March 31, 2014, there were 121,259 private placement warrants outstanding, respectively of which 44,517 were issued to brokers associated with the transaction.

F-13

American Sands Energy Corp.

Notes to Consolidated Financial Statements

Debt Exchange Warrants

On September 30, 2013, the Company exchanged warrants to purchase 3,260,000 shares of common stock of the Company for a related-party convertible note payable and simultaneously canceled the note. On September 30, 2013, the Company exchanged warrants to purchase 2,260,000 shares of common stock of the Company for the outstanding payroll obligation owed to the Company’s CEO in the amount of $1,049,350. The warrants give the holders the right to purchase the Company’s common stock at $0.01 for a 10-year period. All of the warrants remain outstanding as of March 31, 2015 and 2014.

Series A Preferred Stock Warrants

In connection with the Company’s offering of Series A preferred stock units through March 31, 2015, the Company issued 4,378,436 warrants to purchase the Company’s common stock at $0.45 and 4,378,436 warrants to purchase the Company’s common stock at $0.70 per share. The warrants have a five-year term and a cashless exercise provision. As of March 31, 2015, 8,739,017 warrants remain outstanding.

The Company issued 214,285 Series A preferred stock units for research and development expenses. The issuance included the Company issuing 214,285 warrants to purchase the Company’s common stock at $0.45 per share and 214,285 warrants to purchase the Company’s common stock at $0.70 per share. All of the warrants remain outstanding as of March 31, 2015.

The Company issued 69,399 of Series A preferred stock units to placement agents associated with the offering. The issuance included the Company issuing 69,399 warrants to purchase the Company’s common stock at $0.45 per share and 69,399 warrants to purchase the Company’s common stock at $0.70 per share. All of the warrants remain outstanding as of March 31, 2015.

Broker Warrants

In connection with the Company’s offering of Series A preferred stock units, through March 31, 2015, the Company issued 1,175,292 warrants to purchase the Company’s common stock at $0.35 per share for a five-year period. The warrants were issued to brokers associated with the Series A Stock transactions. All of the warrants remain outstanding as of March 31, 2015.

Other Common Stock Warrants

In connection with the amended License Agreement described in Note 1, the Company issued 575,000 warrants to purchase common stock of the Company at $0.01 per share. The estimated fair value of these warrants of $201,250 was recorded as research and development expense during the year ended March 31, 2014. The warrants remain outstanding as of March 31, 2015.

Note 9 – Stock Option Plan

In April 2011, the Company adopted the 2011 Long-Term Incentive Plan (the “2011 Plan”) which reserves for the issuance of up to 7,000,000 shares of the Company’s common stock. During the year ended March 31, 2015, the Company issued 1,400,000 options to officers and directors of the Company within the 2011 Plan. The options vest over two years, have an exercise price of $0.65 per share, and expire five years from the date of issuance. During the year ended March 31, 2014, the Company issued 360,000 5-year options to third party consultants who help the Company with mine permitting, accounting, and fund raising. 100,000 of these options vested immediately, while 185,000 vest over two years and the remaining 75,000 vest over three years.

The Company recorded $701,743 and $367,691 of compensation expense during the years ended March 31, 2015 and 2014, respectively, in connection with issuing the options described above. The fair value of stock options granted was determined using the Black Scholes option pricing model based on the following assumptions:

	March 31,
Assumption		2015	2014
Dividend yield		–	–
Weighted average volatility		445.11%	686.27%
Risk-free interest rate		1.33%	0.99%
Expected life (years)		4.67	5.00

F-14

American Sands Energy Corp.

Notes to Consolidated Financial Statements

Expected option lives were based on historical data of the Company. Expected stock price volatility was based on data from comparable public companies. The risk free interest rate was calculated using U.S. Treasury constant maturity rates similar to the expected lives of the options, as published by the Federal Reserve. The Company has no plans to declare any future dividends.

A summary of option activity for the years ended March 31, 2015 and 2014 is presented below:

Number of Shares

Weighted Average Exercise Price

Weighted Average Remaining Life (years)

Balance as of April 1, 2013

3,662,500

0.49

2.86

Granted

860,000

0.35

3.33

Exercised

–

Canceled

–

Expired

–

Balance as of March 31, 2014

4,522,500

0.47

3.95

Granted

1,400,000

0.74

4.10

Exercised

–

Canceled

–

Expired

–

Balance as of March 31, 2015

5,922,500

0.53

3.22

Outstanding and exercisable options presented by price range as of March 31, 2015 are as follows:

		Options Outstanding						Options Exercisable
				Weighted
				Average		Weighted				Weighted
		Number of		Remaining		Average		Number of		Average
Exercise		Options		Life		Exercise		Options		Exercise
Price		Outstanding		(Years)		Price		Exercisable		Price
$	0.25		50,000		1.88	$	0.25		37,500	$	0.25
	0.35		860,000		3.33		0.35		347,080		0.35
	0.40		3,087,500		3.00		0.40		3,087,500		0.40
	0.50		75,000		1.46		0.50		56,250		0.50
	0.65		875,000		4.39		0.65		291,667		0.65
	0.72		325,000		4.20		0.72		108,333		0.72
	1.15		650,000		2.11		1.15		500,000		1.15

	$0.25-$1.15		5,922,500		3.22		0.53		4,428,330		0.50

The estimated fair value of the Company’s stock options, less expected forfeitures, is amortized over the options’ vesting period on a straight-line basis. The Company recognized $701,743 and $367,691 of equity-based compensation expense during the years ended March 31, 2015 and 2014, respectively.

As of March 31, 2015, there was $405,318 of total unrecognized compensation cost with a weighted-average vesting period of approximately one year.

As of March 31, 2015 and 2014, the intrinsic values of outstanding and vested stock options were as follows:

	March 31,
	2015		2014
Intrinsic value - options outstanding	$	500	$	2,038,525
Intrinsic value - options exercisable		375		1,746,236
Intrinsic value - options exercised		–		–

F-15

American Sands Energy Corp.

Notes to Consolidated Financial Statements

Note 10 – Income taxes

Provision for income taxes consists of the following components:

	March 31,
	2015			2014
Current	$	(506	)	$	(1,203	)
Deferred		–			–
Total	$	(506	)	$	(1,203	)

Temporary differences and their related deferred income tax assets and (liabilities) are as follows:

	March 31,
	2015			2014
Deferred income tax assets - current:
Accrued liabilities	$	37,492		$	–
Deferred income taxes - long-term:
Net operating loss carry forward		5,534,654			4,844,566
Total deferred income tax assets		5,572,146			4,844,566
Valuation allowance		(5,572,146	)		(4,844,566	)
Net deferred income tax assets	$	–		$	–

A reconciliation of (provision) benefit for income taxes provided at the federal statutory rate (34% for fiscal years 2015 and 2014) to actual provision for income taxes is as follows:

	March 31,
	2015			2014
Benefit for income taxes computed at federal statutory rate	$	1,129,606		$	1,140,420
State income taxes, net of federal tax benefit		109,622			110,688
Non-deductible expenses		(506,928	)		24,591
Other		(5,225	)		14,536
Change in valuation allowance		(727,580	)		(1,291,438	)

Provision for income taxes	$	(505	)	$	(1,203	)

Effective tax rate		0.04%			0.11%

As of March 31, 2015, the Company has available for federal and state income tax purposes net operating loss carry-forwards of approximately $14,900,000, which begin to expire in 2025, that may be used to offset future taxable income, if any. Pursuant to Section 382 of the Internal Revenue Code, current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

The Company has provided a full valuation allowance for the tax benefit of the operating loss carry-forwards and other deferred income tax assets due to the uncertainty regarding realization.

F-16

American Sands Energy Corp.

Notes to Consolidated Financial Statements

Note 11 – Commitments

Effective January 1, 2013, the Company modified its employment contract with its Chief Executive Officer. Pursuant to the terms of the modification, the CEO’s salary was reduced from $400,000 per year to $276,000 per year. Upon completion of a $10,000,000 or more capital raise, the CEO’s salary will increase to $400,000. On September 30, 2013, the CEO’s unpaid salary from inception through 2011 totaling $1,049,350 was exchanged for 2,260,000 warrants to purchase the Company’s common stock for $0.01 per share. The term of the employment agreement is in effect through December 31, 2015. On November 7, 2013, the board voted to settle the CEO’s outstanding salary payable with shares of common stock at $0.35 per share. On March 31, 2014, all of the CEO’s past wages totaling $184,000 were settled by issuing 525,715 shares of the Company’s common stock. The Company entered into a new employment agreement with its Chief Operating Officer on June 1, 2014. Under the terms of the new agreement, the Chief Operating Officer is entitled to pay of $245,000 in annual compensation until such time as the Company completes a capital raise of at least $20,000,000 at which time, the annual compensation will increase to $300,000.

The Company has an amended consulting agreement with C14 Strategies, an entity controlled by the former President, that will remain in force until a Financing Event occurs at which time it will be immediately terminated. Pursuant to the agreement, C14 Strategies provides assistance with respect to strategic objectives of the Company. As compensation for such services, C14 Strategies is paid $2,000 per month. The contract is terminable at any time with 60 days’ notice, or immediately by mutual consent.

Effective January 1, 2013, the Company modified the Chief Financial Officer’s (“CFO”) employment agreement. Under the terms of the agreement the CFO’s annual salary is $175,000.

Note 12 – Subsequent Events

Daniel Carlson served as Vice President, Chief Financial Officer of American Sands Energy Corp. (the “Company”), pursuant to the Amended and Restated Employment Agreement between the Company and Mr. Carlson dated May 15, 2013, as amended June 10, 2014 (the “Agreement”). By its terms, the Agreement expired June 30, 2015, and as a consequence Mr. Carlson’s employment as Vice President, Chief Financial Officer terminated on that date.

David Hardman has been engaged to serve as interim Chief Financial Officer of the Company until his replacement by the board of directors or resignation. The Company is still in the process of obtaining government permits, so for the time being Mr. Hardman will work the hours required to perform the functions of the position and the Company will pay him at a rate of $150 per hour. In addition, the Company will grant an award of stock options to Mr. Hardman to purchase 125,000 shares of Company common stock at an exercise price of $0.34 that expire five years from the date of grant and vest one-third on the date of grant and an additional one-third on the next two anniversaries of the grant date.

F-17

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