Item 3.02. Unregistered Sales of Equity Securities.

U.S. Precious Metals, Inc. ("USPR") sold a $50,000 Convertible Promissory Note on July 16, 2009 (the "Note") to one accredited investor pursuant to a private offering by USPR of up to $2,500,000 of Notes, which sale was not subject to any underwriting discounts or commissions.

The terms of this Note are: at the option of the holder, the Note may be converted, at any time after August 31, 2009 and on or before the maturity date, into shares of USPR's common stock ("Common Stock"); provided, however, that if USPR is actively negotiating its next financing or if USPR has entered into a definitive agreement providing for a change of control, optional conversion features will not be applicable.

The Note bears simple, annual interest at 16%. The maturity date of the Note is the earlier of (A) an offering of securities by USPR in a transaction or series of related transactions in which at least $10,000,000 in gross proceeds is received by USPR (a "Qualified Financing"), (B) a change of control of USPR, or
(C) the date that is 2 years after the date of issuance of the applicable Note.

If, prior to any optional conversion, USPR completes a Qualified Financing or experiences a change of control, the principal and outstanding interest will automatically convert into shares of USPR's Common Stock.

USPR is relying on Rule 506 of Regulation D as the applicable exemption from the registration requirements of the Securities Act of 1933. The Offering is being made only to "accredited investors," as such term is defined in Rule 501 of Regulation D.

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