UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-Q  xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended:February 28, 2011oroTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period:Commission File Number:000-50703  U.S. PRECIOUS METALS, INC.(Exact name of registrant as specified in its charter)  Delaware14-1839426(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)15122 Tealrise Way
Lithia, Florida33547(Address of principal executive offices)(Zip Code)813-260-1865(Registrants telephone number, including area code)(Former name, former address and former fiscal year, if changed since last report) 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. [X] Yes   [  ]  No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [  ] Yes    [X] No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated fileroAccelerated fileroNon-accelerated fileroSmaller reporting companyx Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [   ]s   [X] No  1   APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date:
73,468,146shares of common stock issued and outstanding as of April 13, 2011.   2   NOTE REGARDING FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. This quarterly report on Form 10-Q (this  Quarterly Report ) contains certain forward-looking statements that are subject to risks and uncertainties. The statements contained in this Quarterly Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this Quarterly Report, the words anticipate, believe, plan, target, estimate, intend, expect and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding our strategy, future plans for exploration and production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material. All forward-looking statements in this Quarterly Report are based upon information available to our management on the date of this Quarterly Report. Forward-looking statements are subject to a number of risks and uncertainties and there can be no assurance that such statements will be accurate. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially and adversely from those described herein as anticipated, believed, planned, targeted, estimated, intended or expected. Although we believe the assumptions underlying and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Actual results could differ materially and adversely from those discussed in this Quarterly Report. Factors that could affect the accuracy of our forward-looking statements include, but are not limited to, those factors discussed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2010, filed with the Securities and Exchange Commission ( SEC ) on September 14, 2010 (the  Annual Report ) under  Item 1A. Risk Factors. More broadly, these factors include, but are not limited to:  ·our current financial condition and immediate need for capital;·potential dilution resulting from the issuance of new securities for any funding;·unexpected changes in business and economic conditions;·change in interest rates and currency exchange rates;·timing and amount of production, if any;·technological changes in the mining industry;·our costs;·changes in exploration and overhead costs;·access to and availability of materials, equipment, supplies, labor and supervision, power and water;·results of future feasibility studies, if any;·the level of demand for our products;·changes in our business strategy;·interpretation of drill hole results and the geology, grade and continuity of mineralization;·the uncertainty of mineralized material estimates and timing of development expenditures;·commodity price fluctuations; and·changes in exploration results. In addition to the above, currently we have not paid $1,120,000 in principal and $332,304 in accrued interest as of February 28, 2011 due under the terms of the 2009 convertible notes that were originally due on December 31, 2010. If we fail to make such payment in the immediate future, such event may have a material adverse affect on us and our business such that we may have to seek or be forced into bankruptcy under the federal bankruptcy laws. We qualify all of our forward-looking statements by the cautionary statements listed above, as well as those factors described in our Annual Report under Item 1A. Risk Factors. The list above, together with the factors described in our Annual Report under Item 1A. Risk Factors, is not exhaustive of the factors that may affect the accuracy of our forward-looking statements. You should read this Quarterly Report completely and with the understanding that our actual future results may be materially and adversely different from what we expect. These forward-looking statements represent our beliefs, expectations and opinions only as of the date of this Quarterly Report. Except as required by applicable law, including the securities laws of the United States, we assume no obligation to update any such forward-looking statements.  3   U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
Form 10-Q
Table of Contents  PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements.Consolidated Balance Sheets at February 28, 2011 (unaudited) and at May 31, 2010 (audited).5Consolidated Statements of Operations (unaudited) for the three month periods ended February 28, 2011 and February 28, 2010, and for the period May 9, 2002 (Date of Inception of Exploration Stage) to February 28, 2011.6Consolidated Statements of Cash Flows (unaudited) for the nine  month periods ended February 28, 2011 and February 28, 2010, and for the period May 9, 2002 (Date of Inception of Exploration Stage) to February 28, 2011.8Notes to Consolidated Financial Statements (unaudited).9Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.13Item 4. Controls and Procedures.14PART II  OTHER INFORMATIONItem 1. Legal Proceedings.14Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.14Item 3. Defaults Upon Senior Securities.14Item 6. Exhibits.15Signatures16   4


U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS  February 28, 2011May 31, 2010(unaudited)(audited)ASSETSCurrent Assets:Cash$86,618$393,322Miscellaneous receivables134,793-Prepaid expenses6,06564,343Total current assets227,476457,665Property and Equipment:Vehicles41,87741,877Machinery and equipment92,51592,515Total property and equipment134,392134,392Less:  accumulated depreciation(64,529)(54,891)Net property and equipment69,86379,501Other Assets:Investment in mining rights262,500216,588Deposits-5,374Total other assets262,500221,962Total Assets$559,839$759,128LIABILITIES AND STOCKHOLDERS DEFICIENCYCurrent Liabilities:Accounts payable and accrued expenses$2,506,893$2,282,014Accrued compensation-378,603426,914Convertible notes payable1,170,0001,145,000Accrued interest on notes340,962204,189Total current liabilities4,396,4584,058,117Long Term Liabilities:Convertible notes payable, net of discount1,346,376892,735Accrued interest on note203,13422,045Total Long Term Liabilities1,549,510914,780Stockholders DeficiencyPreferred stock authorized 10,000,000 shares of $.00001 par value;No shares issued and outstandingCommon stock authorized 100,000,000 shares of $.00001 par value;Issued and outstanding 69,518,146 and 53,319,686 shares,Respectively695533Additional paid in capital13,208,80512,110,922Additional paid in capital options2,775,7492,255,749Additional paid in capital warrants11,500-Deficit accumulated during exploration stage(21,402,878)(18,580,973)Total stockholders deficiency(5,386,129)(4,213,769)Total Liabilities and Stockholders Deficiency$559,839$759,128 The accompanying notes are an integral part of these financial statements.


5   U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) May 9, 2002(Date of InceptionThree Months Ended February 28,of Exploration Stage)
to February 28,201120102011Revenues$-$-$-Expenses228,470632,99420,705,951Operating Loss(228,470)(632,994)(20,705,951)Other Income (Expense):Interest income-17,960Interest expense(151,805)(45,382)(714,887)Loss accumulated during theexploration stage$(380,275)$(678,376)$(21,402,878)Net Loss per ShareBasic and Diluted$(0.01)$(0.01)Weighted Average Numberof Shares Outstanding -Basic and Diluted67,315,31150,081,277  The accompanying notes are an integral part of these financial statements.   6   U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) May 9, 2002(Date of InceptionNine Months Ended February 28,of Exploration Stage)
to February 28,201120102010Revenues$-$-$-Expenses2,344,7252,768,32120,705,591Operating Loss(2,344,725)(2,768,321)(20,705,951)Other Income (Expense):Interest income--17,960Interest expense(477,180)(125,398)(714,887)Loss accumulated during theexploration stage$(2,821,905)$(2,893,719)$(21,402,878)Net Loss per ShareBasic and Diluted$(0.05)$(0.06)Weighted Average Numberof Shares Outstanding -Basic and Diluted61,623,39851,143,563  The accompanying notes are an integral part of these financial statements.  7   U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Nine Months Ended February 28,May 9, 2002 (Date of Inception of Exploration Stage)
to February2011201028, 2011Operating Activities:Net Loss$(2,821,905)$(2,893,719)$(21,402,878)Adjustments required to reconcile net loss to cashused by operating activities:Charges not requiring outlay of cash:Depreciation9,63813,43064,529Equity securities issued for services1,204,2101.040,84411,525,310Amortization of debt discount149,521-157,255Bad debt expense--109,259Accrued interest on convertible notes326,244124,464553,419Changes in operating assets and liabilities:Prepaid expenses and other current assets(71,141)17,611(122,843)Deposits-(19,925)-Accounts payable and accrued expenses259,8911,116,0992,885,486Net Cash Consumed in Operating Activities(943,542)(601,196)(6,230,463)Investing Activities:Investment in mining rights(45,912)(32,257)(247,500)Loan to affiliated company--(361,275)Repayment of loan by the affiliated company--253,000Acquisition of equipment-(388)(134,392)Net Cash consumed in Investing Activities(45,912)(32,645)(490,167)Financing Activities:Proceeds from sale of common stock287,750-3,780,250Proceeds from exercises of warrants--267,498Proceeds from convertible notes395,000645,0002,757,500Loan from affiliated company--70,000Repayment of loan to the affiliated company--(68,000)Loans from officers-116,300117,700Repayment of loans from officers-(94,600)117,700Net Cash Provided by Financing Activities682,750666,7006,807,248Net increase (decrease) in cash(306,704)32,85986,618Cash beginning of period393,32221,081-Cash end of period$86,618$53,94086,618 The accompanying notes are an integral part of these financial statements.  8   U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2011
(Unaudited) 1.BASIS OF PRESENTATION The unaudited interim consolidated financial statements of U.S. Precious Metals, Inc. and its subsidiary, U.S. Precious Metals de Mexico, S.A. de C.V. (collectively, the  Company ) as of February 28, 2011 and for the three and nine month periods ended February 28, 2011 and February 28, 2010, have been prepared in accordance with United States generally accepted accounting principles ( GAAP ). In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such comparable periods. The results of operations for the nine month period ended February 28, 2011 are not necessarily indicative of the results to be expected for the full fiscal year ending May 31, 2011. Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the SEC, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements contained in the Companys Annual Report on Form 10-K as filed with the SEC on September 14, 2010. 2. MINE DEVELOPMENT COSTS Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines. Costs incurred before mineralized material is classified as proven and probable reserves are expensed as mine development costs. At the point the Company reaches its operating stage, such costs will be capitalized and will be written off as depletion expense as the mineralized material is mined. 3. PROVEN AND PROBABLE RESERVES The definition of proven and probable reserves is set forth in SEC Industry Guide 7. Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. In addition, reserves cannot be considered proven and probable until they are supported by a feasibility study, indicating that the reserves have had the requisite geologic, technical and economic work performed and are economically and legally extractable at the time of the reserve determination. As of February 28, 2011, none of the Companys mineralized material met the definition of proven or probable reserves.   9   U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2011
(Unaudited)   4. SUPPLEMENTAL CASH FLOW INFORMATION There was no cash paid for income taxes or interest during either of the nine month periods presented. During the nine month period ended February 28, 2011, the Company issued 1,600,000 shares of its common stock for the services of employees and a consultant; these were valued at $149,200.  The Company also issued 4,737,500 shares and 934,049 warrants to purchase common stock for the services of a broker who assisted with the issuance of convertible notes in both the prior year and the current year.  The value of the shares issued to the broker was $990,125, of which $612,500 was expensed in the prior year.  The value of the warrants was $152,250, of which $111,532 was expensed in the prior year.  Additionally, the Company issued 7,000,000 options to officers and directors and 1,000,000 shares as compensation to its directors.  The options were valued at $520,000 and the shares were valued at $200,000.  Of those amounts, $636,667 was expensed in the current nine month period.  Thus, the total amount expensed during the current year for equity securities issued for services was $1,204,210. During the nine month period ended February 28, 2010, the Company issued 400,000 shares for services of consultants, valued at $117,000, of which $75,188 was expensed during the current nine month period.  It also issued 2,000,000 shares to officers and directors.  The value of those shares was $460,000, of which $329,000 was expensed in the current period.  Additionally, the Company issued 3,000,000 shares valued at $600,000 and modified certain outstanding options at an additional cost of $36,656.  Thus, the total amount expensed during the prior nine month period for equity securities issued for services was $1,040,844.  5.CONVERTIBLE NOTES PAYABLE
As of February 28, 2011, the Company had convertible notes outstanding of $2,717,500; and related unpaid interest totaled $544,096. Of these convertible notes, $395,000 were sold in the nine month period ended February 28, 2011, and interest of $326,244 accrued on the convertible notes during that period, and is included in the $544,096 liability noted above.
As of February 28, 2010, the Company had outstanding convertible notes of $1,375,000, and an obligation for related interest of $158,781. Of these convertible notes, $ 645,000 were sold in the nine month period ended February 28, 2010, and interest of $124,464 accrued on those notes and was not paid.
The Notes bear simple interest at an annual rate of 16% and are denominated in two tranches, 2009 notes and 2010 notes.  The 2009 notes, which now total $1,170,000, may be converted to common stock of the Company at the option of the holder.  Conversion prices range between $0.25 and $0.30, depending the dates of issuance.  Conversion prices may be subject to certain restrictions if the holder has been advised that (a) the Company is actively negotiating its next financing or (b) the Company has entered into a definitive agreement providing for a change of control.  Two of these notes mature December 31, 2011; the others matured December 31, 2010 and are now due and payable.  Subsequent to December 31, 2010, $25,000 of those notes, together with related interest, was converted to common stock.   10   U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2011 (Unaudited)   5.  CONVERTIBLE NOTES PAYABLE (Contd)  The 2010 Notes, which total $1,547,500, mature on the earliest of (a) the date of an automatic conversion (see below) or (b) on May 17, 2012.  The conversion price is $.163.  All of the convertible notes will automatically convert into shares of the Companys common stock if the Company completes any financing that results in proceeds of at least $10,000,000, or upon the occurrence of a change in control of the Company.  6.          COMMON STOCK AND WARRANTS During the nine month period ended February 28, 2011, the Company issued 8,750,000 stock units for cash proceeds of $287,750. A unit is comprised of one share of stock and one-half warrant.  There was no stock sold for cash during the nine month period ended February 28, 2010. During the nine month period ended February 28, 2011, the Company issued 1,600,000 shares for services, valued at $ 149,200. The Company also issued 4,737,500 shares and 934,049 warrants for the services of a broker.  The shares were valued at $ 990,125, and the warrants were valued at $152,250.  There were no warrants issued for services during the nine month period ended February 28, 2010. The following table summarizes warrant activity during the nine month period ended February 28, 2011.  Warrants for services earned as of May 31, 2010707,055Warrants for services earned after May 31, 2010226,994Total warrants issued for services during the 2011 nine month period934,049Warrants sold as part of stock units4,375,000Warrants expired(687,500)Warrants outstanding  as of  February 28, 20114,621,549 The warrants issued for services were issued in August 2010 and are exercisable at $0.16 cents for a period of five years. The warrants issued with the units described above are exercisable for periods of either six months or twelve months, and are exercisable at prices of either $0.05 or $0.25 cents.  All warrants issued during the first quarter of the current fiscal year have expired.     11    U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2011 (Unaudited) 7.          GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company has experienced continuing losses, has a working capital deficit of $4,168,982, accumulated losses of $21,402,878 since inception, recurring negative cash flows from operations and does not presently have sufficient resources to accomplish its objectives during the next twelve months. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation. The Companys present plans, the realization of which cannot be assured, to overcome these difficulties include, but are not limited to, the continuing effort to raise capital in the public and private markets and a search for a joint venture partner.  8.          LEGAL PROCEEDINGS  On January 7, 2010, the Company purportedly entered into agreements with Duane Morris LLP, the Companys former law firm, whereby the Mexican subsidiary agreed to grant and pledge, as security for the payment of a purported debt, a security interest in and a lien on all of its rights to the Companys mining concessions. The Company is contesting the validity of the agreements and the lien.  As initially reported on the Companys Form 8-K filed on September 20, 2010, the Company filed an original complaint in the Supreme Court of the State of New York, County of New York, Case Number 651504/2010 on September 15, 2010 against Duane Morris LLP, Keli Isaacson Whitlock, and Michael Jack Kugler.  As further reported on the Companys amended Form 8-K filed on September 30, 2010, the Company filed an Amended Complaint against the defendants on September 29, 2010 with respect to this matter. As of the date of this filing, all of the defendants have been served by the Company, and the defendants have filed their respective answers or other pleadings with respect to this action.  Discovery has been commenced by the parties.   9.          EXPENSES  The following is the details of expenses for nine month periods ended February 28, 2011 and February 28, 2010:   2011 2010 Salaries$     217.463$     509,369Consulting fees704,654523,859Stock based compensation636,667636,700Selling expense for notes39,500-Professional fees273,537929,298Drilling and excavation272,228-Travel and entertainment34,96239,591Office expense7,10529,999Rental expense31,46340,865Insurance expense22,78424,237Depreciation expense9,52713,430Other tax expense48,8331,750Miscellaneous expense46,00219,223Total expense$2,344,725$2,768,321                 12    Item 2. Managements Discussion And Analysis of Financial Condition And Results Of Operations.  Managements discussion and analysis of financial condition, changes in financial condition and results of operations is provided as a supplement to the accompanying consolidated financial statements and notes to help provide an understanding of the Companys financial condition and results of operations.  Overview  We were formed as a mineral exploration company on January 21, 1998. We are engaged in the acquisition, exploration and development of mineral properties. We focus on gold and base minerals primarily located in the State of Michoacán, Mexico where we own exploration and exploitation concessions to approximately 37,000 contiguous acres of land (the Solidaridad Property). Mineral exploration requires significant capital and our assets and resources are limited. We have never earned revenue from our operations and have relied on equity and debt financing to fund our operations to date.  We are considered an exploration stage company for accounting purposes because we have not demonstrated the existence of proven or probable reserves. In accordance with accounting principles generally accepted in the United States of America, all expenditures for exploration and evaluation of our properties have been expensed as incurred. Furthermore, unless our mineralized material is classified as proven or probable reserves, substantially all expenditures have been or will be expensed as incurred. Since substantially all of our expenditures to date have been expensed and we expect to expense significant expenditures during the fiscal year 2011, most of our investment in mining properties do not appear as an asset on our balance sheet. Liquidity and Capital Resources There is no assurance that commercially viable mineral deposits exist in sufficient amounts in our areas of exploration to justify exploitation. Further exploration will be required before a final evaluation as to the economic and legal feasibility of the mining rights we own can occur. Because we are still in our exploration stage, we have no revenues and have had only losses since our inception. Our plan of operations for the next 12 months is to continue the drilling program and begin a small exploitation program, provided that we receive sufficient funding to do so. However, we have made no commitments for capital expenditures over the next 12 months. As of February 28, 2011, our management estimates that approximately $1,000,000 will be required over the next 12 months to maintain our current operating status. This amount does not include any exploitation or any additional exploration nor does it include payments due on our convertible notes. We estimate these expenses to include approximately $600,000 for salaries, outsourced labor and consulting services, $80,000 for professional services, including work undertaken by the independent accountant and legal fees, $120,000 for rent, maintenance, office expenses and utilities, $114,000 for permits and expenses required to maintain our mining rights, $43,000 for taxes and insurance, and $43,000 for other miscellaneous expenses, including travel expenses. As of February 28, 2011, the Company had convertible notes outstanding of $2,717,500; and related unpaid interest totaled $544,096. Of the total amount, $1,120,000 in principal was due December 31,2010 and $ 50,000 in principal is due on December 31, 2011. As of February 28, 2011, there was $340,962 in accrued interest, of which $332,304 is attributable to the past due notes. There also is  $1,547,500 in long-term convertible notes due May 17, 2012, with $ 203,134 in accrued interest as of February 28, 2011. Depending on market conditions and the options available to us, we may attempt to enter into a joint venture with an operating company or permit an operating company or third party to undertake exploration work on the Solidaridad Property, or we may seek equity or debt financing (including borrowing from commercial lenders) or we may consider a sale of the Company or its assets.  We do not intend to hire any additional employees at this time. All of the work related to our business will be conducted by our current employees and independent contractors. To the extent we receive funding, this is likely to change. All of the Companys plans are predicated on the Companys ability to raise sufficient capital to implement and complete such plan, which we cannot assure you will occur in a timely manner, on terms acceptable to the Company, or at all. If we are not able to obtain additional funding, we will not be able to continue our drilling program or execute a small exploitation program. Because the exploration phase of our business plan is essentially a research and development activity, the results of our exploration activities will have a significant effect on our future business model. This model can change substantially based upon our exploration activities, liquidity position or other factors. Accordingly, estimating expenditures is an imprecise process, made even more so by the unpredictable nature of our business plan. We believe it would, therefore, not be helpful to estimate beyond the next 12 months. Even these estimates are subject to change depending on our ability to raise additional capital and execute our business plan in accordance with our estimates. To date, we have raised capital through the sale of shares of our common stock and sales of convertible promissory notes. For the nine months  ended February 28, 2011, the Company issued 8,750,000 stock units for cash proceeds of $287,750. A unit is comprised of one share of stock and one-half warrant. A full warrant is required to purchase an one additional share of stock. The warrants issued with the units described above are exercisable for periods of either six months or twelve months, and are exercisable at prices of either $0.05 or $.25 cents.  All warrants issued during the first quarter of the current fiscal year have expired. We have $2,717,500 in convertible promissory notes outstanding which can be converted into shares of common stock of the Company at the option of the holder or automatically under certain circumstances as described above in Note 5 to the Consolidated Financial Statements. Of the total amount of convertible notes outstanding, $1,120,000 were due and payable December 31, 2010 and $50,000 is due December 31, 2011. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through sales of additional convertible promissory notes or otherwise to meet our obligations over the next 12 months. We must obtain additional funding to continue our operations. There can be no guarantee that we will be able to obtain additional funding on terms that are favorable to the Company or at all. As an exploration stage company, the Company has no current ability to generate revenue and no plans to do so in the foreseeable future. Our assets consist of cash, prepaid expenses, nominal equipment and certain mineral property interests. There can be no assurance that we will obtain sufficient funding to continue operations, or if, we do receive funding, to generate revenues in the future or to operate profitably in the future. We have incurred net losses in each fiscal year since inception of our operations. These conditions raise substantial doubt about our ability to continue as a going concern. As of the fiscal quarter ended February 28, 2011, we had total current assets of $227,476 consisting of cash in the amount of $86,618 and various other assets of $ 140,858. In addition, we have total current liabilities of $4,396,458 which includes accounts payable and accrued expenses of $2,506,893 due principally to Duane Morris, LLP, our former attorneys, and $1,170,000 in convertible notes payable. We also have long term liabilities of $1,549,510 which represents convertible notes and related interest due. These notes are payable on May 17, 2012. On January 7, 2010, the Companys Mexican subsidiary purported to grant and pledge to Duane Morris, as security for the payment of outstanding legal bills, a security interest in and a lien on all of its rights to the Companys mining concessions in Mexico.  In addition, a Payment Agreement and General Release was signed by the Mexican subsidiary which purported to impose restrictions on the Companys ability to conduct its business with the prior written consent of Duane Morris.  It also purported to release Duane Morris and,inter alia, its partners, from any and all liabilities or claims the Company may have had in connection with the provision of legal services rendered by Duane Morris. As previously disclosed by the Company, we have commenced litigation against Duane Morris and Jack Kugler, our former chairman (See our Form 8-K/A filed on September 30, 2010 for a more detailed description of such litigation). As mentioned above, we have $1,120,000 in principal of convertible notes which have been due and payable since December 31, 2010 along  with related accrued interest of $332,304 as of February 28, 2011. As of the date of this report, we have not paid the holders of these notes as required under their terms. If we are unable to pay these notes in the immediate future or otherwise re-negotiate their terms, we may be required to seek protection under the US bankruptcy laws or otherwise be forced into bankruptcy. Since we do not anticipate generating any revenue for the foreseeable future, we will have to continue to seek additional funding from outside sources. However, we are facing declining and volatile financial markets that may make it difficult to satisfy our need for additional capital to finance our plan of operations for fiscal 2011 through either debt or equity. As a result, we continue to seek appropriate opportunities that are likely to provide the Company with adequate fiscal resources to execute its plan of operations in the current fiscal year and beyond. Because of the exploratory nature of our current business plan, we anticipate incurring operating losses for the foreseeable future. Our future financial results also are uncertain due to a number of factors, some of which are outside our control. These factors include, but are not limited to:  i.our ability to raise sufficient additional funding;ii.the results of our proposed exploration programs on the Solidaridad Property; andiii.assuming significant mineral deposits, our ability to be successful in commercially producing mineral deposits, find joint venture partners for the development of our property interests or find a purchaser for the property interests.   13   Consolidated Statement of Operations for Comparative Three Month Periods Ending February 28, 2011 and 2010. We did not earn any revenues and have had only losses since our inception, including during the three month periods ended February 28, 2011 and 2010. We incurred operating expenses in the amount of $228,470 and $632,994 during the quarters ended February 28, 2011 and 2010, respectively. The $404,524 net decrease in operating expenses during the current comparative period, is mostly due to a significant reduction in legal fees as a result of the replacement of our attorney and the elimination of corporate executive salaries. We had $151,805 and $45,382 in interest expense for the nine month periods ended February 28, 2011 and 2010, respectively. The increased interest expense is due to the amortization of the discount on the 2010 convertible notes. Consolidated Statement of Operations for Comparative Nine Month Periods Ending February 28, 2011 and 2010. We did not earn any revenues and have had only losses since our inception, including during the nine month periods ended February 28, 2011 and 2010. We incurred operating expenses in the amount of $ 2,344,725 and $2,768,321 during the nine months ended February 28, 2011 and 2010, respectively. The $423,596 net decrease in operating expenses during the current comparative period, is mostly due to net decreases of legal fees as discussed above in the amount of $655,861 and decreases in corporate salaries of $291,906 as discussed above, partially offset by net increases during the current period of $180,795 in consulting fees. In addition, during the current period, we had drilling and excavations costs of $272,228 compared with nil for the prior period.  We had $477,180 and $125,398 in interest expense for the nine month periods ended February 28, 2011 and 2010, respectively. The increased interest expense is due to the amortization of the discount on the 2010 convertible notes. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. Critical Account Policies and Estimate The Company has determined from the significant accounting policies disclosed in Note 2 of the Companys financial statements, that the following disclosures are critical accounting policies: Proven and Probable Reserves The definition of proven and probable reserves is set forth in SEC Industry Guide 7. Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. In addition, reserves cannot be considered proven and probable until they are supported by a feasibility study, indicating that the reserves have had the requisite geologic, technical and economic work performed and are economically and legally extractable at the time of the reserve determination. Mine Development Costs Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines. Costs incurred before the mineralized material is classified as proven and probable reserves are expensed and classified as mine development costs. Revenue Recognition Policy Revenue will be recognized when the price is determinable, upon delivery and transfer of title to the customer and when there is a reasonable assurance of collection of the sales proceeds. The Company has not yet entered into any contractual obligation to deliver ore product or finished metals. Item 4. Controls And Procedures.   Evaluation of Disclosure Controls and Procedures. Our management team, under the supervision and with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the  Exchange Act ), as of the last day of the fiscal period covered by this report, February 28, 2011. The term disclosure controls and procedures means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of February 28, 2011. Changes in Internal Control over Financial Reporting.  During the fiscal quarter ended February 28, 2011, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  PART II - OTHER INFORMATION  Item 1. Legal Proceedings  As initially reported on the Companys form 8-K filed on September 20, 2010, the Company filed an original complaint in the Supreme Court of the State of New York, County of New York, Case Number 651504/2010 on September 15, 2010 against Duane Morris LLP, Keli Isaacson Whitlock, and Michael Jack Kugler. As further reported on the Companys amended Form 8-K filed on September 30, 2010, the Company filed an Amended Complaint against the defendants on September 29, 2010 with respect to this matter.  As of the date of this filing, all of the defendants have been served by the Company, and the defendants have filed their respective answers or other pleadings with respect to this action. Discovery has been commenced by the parties.  Item 2. Unregistered Sales of Equity Securities And Use of Proceeds.  During the quarter ended February 28, 2011, we received $83,000 from the sale of  2,075,000 units. Each unit consists of one share of our common stock, and one half of a warrant. The conversion price of the warrant is $0.25 during an exercise period of six months. The transactions were exempt under Section 4(2) and 3(b) of the Securities Act of 1933, as amended, and the rules and regulations promulgated there under, including Regulations D, due to the facts that the investors were accredited investors, they each has acquired the shares for investment purposes and not with a view for re-distribution, she had access to sufficient information concerning the Company, and the certificate(s) representing such shares will bear a restrictive legend.  Item 3. Default of Senior Securities.  As of February 28, 2011, the Company had $1,120,000 in face amount of convertible notes which was due and payable as of December 31, 2010, along with accrued and unpaid interest in the amount of $332,304 as of February 28, 2011.  As of the date of this report, the Company has not paid the holders of these notes as required under their the terms.  14   Item 6. Exhibits.  Incorporation by ReferenceExhibit NumberExhibit DescriptionFormFile NumberExhibitFile DateFiled herewith31.1Certification of Principal Executive Officer as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amendedX31.2Certification of Principal Financial Officer as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amendedX32.1Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)X32.2Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)X  15   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.  U.S. Precious Metals, Inc.By:/s/ Dave BurneyName: Dave BurneyTitle: PresidentDate: April 19, 2011   U.S. Precious Metals, Inc.By:/s/ Jack WagentiName: Jack WagentiTitle: Chief Financial OfficerDate: April 19, 2011  16   INDEX TO ATTACHED EXHIBITS  EXHIBIT31.1Certification of Principal Executive Officer as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.31.2Certification of Principal Financial Officer as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.32.1Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).32.2Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).     17