COMMITMENTS AND CONTINGENCIES

12 Months Ended

Apr. 30, 2014

COMMITMENTS AND CONTINGENCIES [Text Block]

10. COMMITMENTS AND CONTINGENCIES

Lease obligations – The Company has operating leases for its corporate office, corporate housing and plant facilities. Future minimum lease payments under the operating leases as of April 30, 2014 are as follows:

Fiscal year ending April 30, 2015	$	94,700
Fiscal year ending April 30, 2016	$	56,608
Fiscal year ending April 30, 2017	$	42,016
Fiscal year ending April 30, 2018	$	21,008

Lease expense was $145,054 and $247,701 for the years ended April 30, 2014 and 2013, respectively.

Legal proceedings – The Company received a verified complaint (the “Complaint”), dated September 12, 2013, that was filed in Arizona Superior Court, Maricopa County, by McKendry Enterprises, Inc. Profit Sharing Plan and Retirement Trust (the “Landlord”), alleging breach of contract and breach of covenant of good faith and fair dealing in relation to the lease agreement dated June 6, 2007, between the Landlord and the Company, as amended (the “Lease Agreement”). The Complaint seeks to recover damages of at least $108,581, including, but not limited to: (1) $56,358 rent; (ii) $52,223 for maintenance, clean-up costs and construction; and (3) undetermined damages for additional repair, clean up and legal fees. The Company is vigorously defending this lawsuit. There is no assurance that the Company will be able to successfully defend the lawsuit. The Company is currently evaluating the merits of the lawsuit and the probability of a favorable outcome. Rent expense of $50,858 is recorded as an account payable as of April 30, 2014. In the event of an unfavorable outcome, the Company will be required to record additional liability.

No other legal proceedings are pending, threatened or contemplated.