Oakridge Global Energy Solutions, Inc.

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 3 – Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability. The Company's valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of the Company's debt instruments and all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data.

The Company entered into a securities purchase agreement effective as of June 21, 2016 with JMJ Financial to which the Company agreed to issue and the Purchaser agreed to purchase a 10% Original Discount Unsecured Convertible Promissory Note in the principal amount of up to $555,000, and a warrant to purchase 1,068,374 shares of the Company's common stock for an aggregate exercise price of $416,666 (the "Warrant"). The Warrant can be exercised at any time on or before the five year anniversary of the date the Warrant was issued.  The warrant is exercisable at the lessor of $0.39 per share or the lowest trade price in the 10-day period preceding the exercise date and may be exercisable on a cashless basis.  Furthermore, the warrant exercise price is subject to adjustment in the event the Company issues any securities at an effective price per share less than the exercise price of the warrant.

The Company has accounted for the Warrant expense in accordance with ASC 470-20.

The convertible promissory note matures June 21, 2017. The convertible promissory note is convertible at any time, in whole or in part, at JMJ Financial's option into shares of the Company's common stock at the lesser of $.39 or 65% of the average of the lowest two closing prices in the 25-day pricing period preceding a conversion. However, at no time will JMJ Financial be entitled to convert any portion of the note to the extent that after such conversion, JMJ Financial would beneficially own more than 4.99% of our outstanding shares common stock as of such date. The Company agreed to reserve at least 25,000,000 shares of common stock for conversion of the note. The note also provides for penalties and rescission rights if the Company does not deliver shares of common stock upon conversion with the require timeframes. The Company is currently negotiating an extension on its registration statement filing requirement.

The Company has dedicated substantial resources required to research and development of the Company's products which included the general and administrative expenses associated with its organization and product development. We expect operating losses to continue, due to the anticipated costs to develop products. These conditions raise substantial doubt about the Company's ability to continue as a going concern. We require financing for our plan of operations.  Current cash on hand is not sufficient to maintain our current operations and there is no assurance that future sales and marketing efforts will be successful enough to achieve the level of revenue sufficient to provide cash to sustain operations. To the extent such revenues and corresponding cash flows do not materialize, we will attempt to fund working capital requirements through third party financing, including a private placement of our securities. In the absence of revenues, we currently believe we require a minimum of $10 million to maintain our current operations through the next 12 months and up to $5 million to continue our research and development. We cannot provide any assurances that required capital will be obtained or that the terms of such required capital may be acceptable to us. If we are unable to obtain adequate financing, we may reduce our operating activities until sufficient funding is secured or revenues are generated to support operating activities.