--01-31
lbsr
LIBERTY STAR URANIUM & METALS CORP.
2013-04-30
0001172178
No
Smaller Reporting Company
No
10-Q
false
798887451
Yes
2014
Q1
0001172178
2013-06-13
0001172178
2013-02-01
2013-04-30
0001172178
2013-04-30
0001172178
2013-01-31
0001172178
2012-02-01
2012-04-30
0001172178
2001-08-20
2013-04-30
0001172178
2012-01-31
0001172178
2001-08-19
0001172178
2012-04-30
shares
iso4217:USD
iso4217:USD
shares
pure
utr:Y
utr:M
iso4217:USD
utr:M
92335
117716
50000
0
9813
8662
152148
126378
74411
81200
226559
207578
5089
5089
3730174
3730174
129425
151480
292992
276992
1088222
972617
17665
15112
5263567
5151464
11077
12305
5274644
5163769
7711
7408
48207131
47912449
53262927
52876048
-5048085
-4956191
226559
207578
0.00001
0.00001
1250000000
1250000000
771059664
644631457
771059664
644631457
0
0
0
18569
91122
15384109
80613
89847
4349128
26839
7133
882050
8207
12288
929347
38760
14042
1006091
15529
20511
1391657
74244
67756
2477557
5126
2327
278762
0
0
13241020
0
12119
54572
0
0
16092870
267887
317145
56087163
-267887
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-56087163
1
65
198759
116439
106350
6491595
0
0
103437
-2553
7586
-3637751
0
0
1350390
0
0
300000
0
0
505
0
0
7366
-118991
-98699
-8375763
-386878
-415844
-64462926
0.00
0.00
756542165
642160712
0
0
542716
0
0
3632995
0
0
343085
0
0
730174
34984
12999
4572913
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13795973
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1000000
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286227
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182880
14555759
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5772371
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198925
188772
181763
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<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 1 – Interim financial statement disclosure</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The condensed consolidated financial statements included herein have been prepared by Liberty Star Uranium & Metals Corp. without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and should be read in conjunction with our annual report on Form 10-K for the year ended January 31, 2013 as filed with the SEC under the Securities and Exchange Act of 1934 (the “Exchange Act”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, as permitted by the SEC, although we believe the disclosures which are made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position at April 30, 2013 and the results of our operations and cash flows for the periods presented.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Interim results are subject to significant seasonal variations and the results of operations for the three months ended April 30, 2013 are not necessarily indicative of the results to be expected for the full year.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 2– Going concern</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company is in the exploration stage, has incurred losses from operations, requires additional funds for further exploratory activity and to maintain its claims prior to attaining a revenue generating status. There are no assurances that a commercially viable mineral deposit exists on any of our properties. In addition, the Company may not find sufficient ore reserves to be commercially mined. As such, there is substantial doubt about the Company’s ability to continue as a going concern.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Management is working to secure additional funds through the exercise of stock warrants already outstanding, equity financings, debt financings or joint venture agreements, and off-take agreements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 3 – Common stock</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Our common shares are all of the same class, are voting and entitle stockholders to receive dividends as defined. Upon liquidation or wind-up, stockholders are entitled to participate equally with respect to any distribution of net assets or any dividends that may be declared.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In February, March and April, 2013, we issued
22,874,405
shares for gross proceeds of $200,000
related to the investment agreement with Deer Valley Management, LLC. The $50,000
in stock subscriptions receivable as of April 30, 2013, was subsequently received.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In February, 2013, we sold
3,448,276
units to one investor for gross proceeds of $40,000. Each unit consisted of one common share of our company and one non-transferable share purchase warrant. Each share purchase warrant entitles the investor to purchase one additional common share of our company at a price of $0.0162
until February 7, 2016.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In February, 2013, we issued
1,526,718
units to one investor in exchange for services performed for the company with a value of $20,000. Each unit consisted of one common share of our company and one non-transferable share purchase warrant. Each share purchase warrant entitles the investor to purchase one additional common share of our company at a price of $0.0183
until February 15, 2016.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In April, 2013, one investor exercised
3,033,618
of the May 2007 common stock purchase warrants using the cashless exercise provision. We issued
2,500,000
shares of common stock and cancelled
533,618
common stock purchase warrants pursuant to the cashless exercise provision. No cash proceeds were received.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
During the three months ended April 30, 2013 there were no stock options granted. At April 30, 2013 there were
903,500
non-qualified stock options outstanding with a weighted average exercise price of $1.429
per option; of those options
841,000
are exercisable. At April 30, 2013 there were
90,635,375
incentive stock options outstanding with a weighted average exercise price of $0.048
per option; of those options
88,072,875
are exercisable.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
During the three months ended April 30, 2013 we recognized $34,984
of compensation expense related to incentive and non-qualified stock options previously granted to officers, employees and consultants.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
As of April 30, 2013, there were
96,904,505
whole share purchase warrants outstanding and
96,873,255
exercisable. The warrants have a weighted average remaining life of
1.28
years and a weighted average exercise price of $0.057
per whole warrant for one common share. Whole share purchase warrants outstanding at April 30, 2013 are as follows:
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="19%">Number of whole share</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="19%">Weighted average exercise</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="19%">purchase warrants</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="19%">price per share</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Outstanding, January 31, 2013</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="19%">
94,963,129
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="19%">
0.058
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left">Issued</td>
<td align="left" width="1%"> </td>
<td align="right" width="19%">
4,974,994
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="19%">
0.017
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Exercised</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="19%">
(3,033,618
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="19%">
0.002
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr>
<td> </td>
<td width="1%"> </td>
<td width="19%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="19%"> </td>
<td width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Outstanding, April 30, 2013</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="19%">
96,904,505
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="19%">
0.057
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left">Exercisable, April 30, 2013</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" width="19%">
96,873,255
</td>
<td align="left" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" width="19%">
0.057
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="19%">Number of whole share</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="19%">Weighted average exercise</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="19%">purchase warrants</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="19%">price per share</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Outstanding, January 31, 2013</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="19%">
94,963,129
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="19%">
0.058
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left">Issued</td>
<td align="left" width="1%"> </td>
<td align="right" width="19%">
4,974,994
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="19%">
0.017
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Exercised</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="19%">
(3,033,618
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="19%">
0.002
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr>
<td> </td>
<td width="1%"> </td>
<td width="19%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="19%"> </td>
<td width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Outstanding, April 30, 2013</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="19%">
96,904,505
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="19%">
0.057
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left">Exercisable, April 30, 2013</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" width="19%">
96,873,255
</td>
<td align="left" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" width="19%">
0.057
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
94963129
0.058
4974994
0.017
-3033618
0.002
96904505
0.057
96873255
0.057
22874405
200000
50000
3448276
40000
0.0162
1526718
20000
0.0183
3033618
2500000
533618
903500
1.429
841000
90635375
0.048
88072875
34984
96904505
96873255
1.28
0.057
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 4 – Related party transactions</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<i>We entered into the following transactions with related parties during the period ended April 30, 2013:</i>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
Paid or accrued $1,566
in rent. We rented an office from Jim Briscoe, our Chairman of the Board, CEO and CFO, on a month-to-month basis for $522
per month.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
At April 30, 2013 we had a balance of accrued unpaid wages of $277,367
to Jim Briscoe, our Chairman of the Board, CEO and CFO.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
We recognized compensation expense of $12,843
for stock options granted to officers and board members.
</p>
1566
522
277367
12843
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 5 – Fair value of financial instruments</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Our financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities, convertible notes payable, notes payable, and warrant liability. It is management's opinion that we are not exposed to significant interest, currency or credit risks arising from these financial instruments. With the exception of the warrant liability, the fair value of these financial instruments approximates their carrying values based on their short maturities or for long-term debt based on borrowing rates currently available to us for loans with similar terms and maturities, which represent Level 3 input. Gains and losses recognized on changes in estimated fair value of the warrant liability are reported in other income (expense) as gain (loss) on change in fair value.</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
We estimate the fair value of the warrant liability using level 3 inputs and the Black-Scholes valuation model. We use historical volatility as a method to estimate expected volatility. At April 30, 2013 and January 31, 2013 we had
622,138
whole share purchase warrants outstanding that contain a full ratchet down anti-dilution provision which is triggered if we enter into any issuance priced lower than $0.02
per common share. At April 30, 2013 and January 31, 2013 we had
2,500,000
whole share purchase warrants outstanding that contain a full ratchet down anti-dilution provision which is triggered if we enter into any lower priced issuance than $0.0264
per common share. We used the following assumptions to estimate the fair value of the warrant liability at April 30, 2013 and January 31, 2013:
</p>
<div>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left"> </td>
<td align="center" width="18%"> </td>
<td align="center" width="18%">Expected dividend</td>
<td align="center" width="18%"> </td>
<td align="center" width="18%">Risk-free interest</td>
</tr>
<tr valign="top">
<td align="left">
<u>Description</u>
</td>
<td align="center" width="18%">
<u>Expected volatility</u>
</td>
<td align="center" width="18%">
<u>yield</u>
</td>
<td align="center" width="18%">
<u>Expected term</u>
</td>
<td align="center" width="18%">
<u>rate</u>
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Warrant liability at April 30, 2013</td>
<td align="center" bgcolor="#e6efff" width="18%">
123.3%
</td>
<td align="center" bgcolor="#e6efff" width="18%">
0%
</td>
<td align="center" bgcolor="#e6efff" width="18%">
3.34
years
</td>
<td align="center" bgcolor="#e6efff" width="18%">
0.50%
</td>
</tr>
<tr valign="top">
<td align="left">Warrant liability at January 31, 2013</td>
<td align="center" width="18%">
99.8%
</td>
<td align="center" width="18%">
0%
</td>
<td align="center" width="18%">
3.59
years
</td>
<td align="center" width="18%">
0.65%
</td>
</tr>
</table>
</div>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" colspan="7" style="BORDER-BOTTOM: #000000 1px solid">Fair value measurements at reporting date using:</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">Quoted prices in</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">Significant</td>
<td align="center" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">active markets for</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">Significant other</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">unobservable</td>
<td align="center" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">identical liabilities</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">observable inputs</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">inputs</td>
<td align="center" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" style="BORDER-BOTTOM: #000000 1px solid">Description</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="17%">April 30, 2013</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="17%">(Level 1)</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="17%">(Level 2)</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="17%">(Level 3)</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Warrant liability</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="17%">
17,665
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="17%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="17%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="17%">
17,665
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="32%">Fair value measurements using significant</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="32%">unobservable inputs (Level 3):</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" style="BORDER-BOTTOM: #000000 1px solid">Description</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="32%">Warrant liability</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Balance, January 31, 2013</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="32%">
15,112
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left">           Total (gains) or losses</td>
<td align="left" width="1%"> </td>
<td align="right" width="32%">
2,553
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">           Purchases, issuances and settlements</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="32%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left">           Transfers in or out of Level 3</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="32%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Balance, April 30, 2013</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="32%">
17,665
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left"> </td>
<td align="center" width="18%"> </td>
<td align="center" width="18%">Expected dividend</td>
<td align="center" width="18%"> </td>
<td align="center" width="18%">Risk-free interest</td>
</tr>
<tr valign="top">
<td align="left">
<u>Description</u>
</td>
<td align="center" width="18%">
<u>Expected volatility</u>
</td>
<td align="center" width="18%">
<u>yield</u>
</td>
<td align="center" width="18%">
<u>Expected term</u>
</td>
<td align="center" width="18%">
<u>rate</u>
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Warrant liability at April 30, 2013</td>
<td align="center" bgcolor="#e6efff" width="18%">
123.3%
</td>
<td align="center" bgcolor="#e6efff" width="18%">
0%
</td>
<td align="center" bgcolor="#e6efff" width="18%">
3.34
years
</td>
<td align="center" bgcolor="#e6efff" width="18%">
0.50%
</td>
</tr>
<tr valign="top">
<td align="left">Warrant liability at January 31, 2013</td>
<td align="center" width="18%">
99.8%
</td>
<td align="center" width="18%">
0%
</td>
<td align="center" width="18%">
3.59
years
</td>
<td align="center" width="18%">
0.65%
</td>
</tr>
</table>
1.233
0.00
3.34
0.0050
0.998
0.00
3.59
0.0065
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" colspan="7" style="BORDER-BOTTOM: #000000 1px solid">Fair value measurements at reporting date using:</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">Quoted prices in</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">Significant</td>
<td align="center" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">active markets for</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">Significant other</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">unobservable</td>
<td align="center" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="17%"> </td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">identical liabilities</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">observable inputs</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="17%">inputs</td>
<td align="center" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" style="BORDER-BOTTOM: #000000 1px solid">Description</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="17%">April 30, 2013</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="17%">(Level 1)</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="17%">(Level 2)</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="17%">(Level 3)</td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Warrant liability</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="17%">
17,665
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="17%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="17%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="17%">
17,665
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
17665
0
0
17665
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="32%">Fair value measurements using significant</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="32%">unobservable inputs (Level 3):</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" style="BORDER-BOTTOM: #000000 1px solid">Description</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="32%">Warrant liability</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Balance, January 31, 2013</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="32%">
15,112
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left">           Total (gains) or losses</td>
<td align="left" width="1%"> </td>
<td align="right" width="32%">
2,553
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">           Purchases, issuances and settlements</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="32%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left">           Transfers in or out of Level 3</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="32%">
-
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">Balance, April 30, 2013</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="32%">
17,665
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td>
</tr>
</table>
15112
2553
0
0
17665
622138
0.02
2500000
0.0264
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 6 – Subsequent events</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In May and June, 2013, we issued
18,198,326
shares for gross proceeds of $140,000
related to the investment agreement with Deer Valley Management, LLC. As of June 11, 2013, we had not yet received payment for one transaction valued at $25,000.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In May, 2013, we sold
6,042,296
units to one investor for gross proceeds of $50,000. Each unit consisted of one common share of our company and one non-transferable share purchase warrant. Each share purchase warrant entitles the investor to purchase one additional common share of our company at a price of $0.0116
until May 28, 2016.
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
In June, 2013, one investor exercised
4,263,989
of the May 2007 common stock purchase warrants using the cashless exercise provision. We issued
3,587,165
shares of common stock and cancelled
678,824
common stock purchase warrants pursuant to the cashless exercise provision. No cash proceeds were received.
</p>
18198326
140000
25000
6042296
50000
0.0116
4263989
3587165
678824
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">
<b>NOTE 7 – Reclassifications</b>
</p>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Certain amounts in the prior-year financial statements have been reclassified for comparative purposes to conform with the presentation in the current-year financial statements.</p>