x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Oregon
|
91-1580146
|
(State
or Other Jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No)
|
(1)
|
Yes
|
x
|
No
|
(2)
|
Yes
|
x
|
No
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
As
at
31
January
2009
(Unaudited)
|
As
at
30
April
2008
(Audited)
|
|||||||
$
|
$
|
|||||||
Assets
|
||||||||
Current
|
||||||||
Cash
and cash equivalents
|
4,794 | 7,645 | ||||||
Prepaid
expenses
|
1,850 | 872 | ||||||
6,644 | 8,517 | |||||||
Liabilities
|
||||||||
Current
|
||||||||
Bank
indebtedness
|
- | 2,347 | ||||||
Accounts
payable and accrued liabilities
|
177,129 | 124,592 | ||||||
Due
to related parties (Note 3)
|
544,840 | 151,434 | ||||||
721,969 | 278,373 | |||||||
Stockholders’
deficiency
|
||||||||
Capital stock (Note
4)
|
||||||||
Authorized
|
||||||||
100,000,000
common shares, without par value
|
||||||||
Issued
and outstanding
|
||||||||
31
January 2009 – 27,973,824 common shares, without par value
|
||||||||
30
April 2008 – 27,926,824 common shares, without par value
|
6,865,423 | 6,834,547 | ||||||
Additional
paid-in capital
|
2,550,350 | 2,326,784 | ||||||
Donated capital (Note
3)
|
1,110,000 | 997,500 | ||||||
Deficit,
accumulated during the development stage
|
(11,241,098 | ) | (10,428,687 | ) | ||||
(715,325 | ) | (269,856 | ) | |||||
6,644 | 8,517 |
For
the period from the date of inception on 27 July 1992 to
31
January
2009
|
For
the
three
month period ended
31
January
2009
|
For
the
three
month period ended 31 January 2008
|
For
the
nine
month
period
ended
31
January
2009
|
For
the
nine
month period ended 31 January 2008
|
||||||||||||||||
$
|
$
|
$
|
$
|
$
|
||||||||||||||||
Expenses
|
||||||||||||||||||||
Amortization
|
130,533 | - | - | - | - | |||||||||||||||
General
and administrative (Note 4)
|
6,066,162 | 124,472 | 151,429 | 505,804 | 758,010 | |||||||||||||||
Stock-based
compensation (Note 4)
|
988,944 | - | - | 223,566 | 217,556 | |||||||||||||||
Impairment
loss
|
72,823 | - | - | - | - | |||||||||||||||
Research
and development
|
4,172,287 | 24,251 | 41,594 | 83,041 | 101,569 | |||||||||||||||
Net
loss before other item
|
(11,430,749 | ) | (148,723 | ) | (193,023 | ) | (812,411 | ) | (1,077,135 | ) | ||||||||||
Other
item
|
||||||||||||||||||||
Write-off
of accounts payable (Note 6)
|
189,651 | - | - | - | - | |||||||||||||||
Comprehensive
loss for the period
|
(11,241,098 | ) | (148,723 | ) | (193,023 | ) | (812,411 | ) | (1,077,135 | ) | ||||||||||
Basic
and diluted loss per common share
|
(0.01 | ) | (0.01 | ) | (0.03 | ) | (0.04 | ) | ||||||||||||
Weighted
average number of common shares used in per share
calculations
|
27,961,000 | 27,786,000 | 27,944,000 | 27,467,000 | ||||||||||||||||
For
the period from the date of inception on 27 July 1992 to
31
January 2009
|
For
the three
month
period ended
31
January 2009
|
For
the three
month
period ended
31
January 2008
|
For
the nine
month
period ended
31
January 2009
|
For
the nine
month
period ended
31
January 2008
|
||||||||||||||||
$
|
$
|
$
|
$
|
$
|
||||||||||||||||
Cash
flows used in operating activities
|
||||||||||||||||||||
Loss
for the period
|
(11,241,098 | ) | (148,723 | ) | (193,023 | ) | (812,411 | ) | (1,077,135 | ) | ||||||||||
Adjustments
to reconcile loss to net cash used by operating activities
|
||||||||||||||||||||
Write-off
of accounts payable
|
(189,651 | ) | - | - | - | - | ||||||||||||||
Amortization
|
130,533 | - | - | - | - | |||||||||||||||
Impairment
loss
|
72,823 | - | - | - | - | |||||||||||||||
Stock-based
compensation (Note 4)
|
988,944 | - | 15,923 | 223,566 | 236,663 | |||||||||||||||
Amortization
of deferred compensation
|
373,795 | - | - | - | - | |||||||||||||||
Donated
services (Note 3)
|
1,110,000 | 37,500 | 37,500 | 112,500 | 112,500 | |||||||||||||||
Write-off
of intellectual property
|
578,509 | - | - | - | - | |||||||||||||||
Shares
issued for services (Note 4)
|
112,950 | 14,850 | 5,850 | 29,550 | 30,050 | |||||||||||||||
Changes
in operating assets and liabilities
|
||||||||||||||||||||
Increase
in accounts receivable
|
(3,000 | ) | - | - | - | - | ||||||||||||||
(Increase)
decrease in prepaid expenses
|
(1,850 | ) | 924 | 4,233 | (978 | ) | 29,148 | |||||||||||||
Increase
(decrease) in accounts payable and accrued liabilities
|
374,936 | (3,032 | ) | 10,204 | 52,537 | 51,292 | ||||||||||||||
(7,693,109 | ) | (98,481 | ) | (119,313 | ) | (395,236 | ) | (617,482 | ) | |||||||||||
Cash
flows used in investing activities
|
||||||||||||||||||||
Patent
protection costs
|
(38,197 | ) | - | - | - | - | ||||||||||||||
Purchase
of equipment
|
(198,419 | ) | - | - | - | - | ||||||||||||||
- | ||||||||||||||||||||
(236,616 | ) | - | - | - | ||||||||||||||||
Cash
flows from financing activities
|
||||||||||||||||||||
Advances
from (repayments to) related parties
|
873,637 | 109,244 | (59,481 | ) | 410,956 | (140,690 | ) | |||||||||||||
Proceeds
from convertible debentures
|
5,000 | - | - | - | - | |||||||||||||||
Proceeds
from common shares issued for cash
|
7,170,387 | - | 191,209 | - | 627,506 | |||||||||||||||
Shares
issuance costs
|
(114,505 | ) | (11,971 | ) | (4,377 | ) | (16,224 | ) | (45,665 | ) | ||||||||||
Subscriptions
received
|
- | - | 1,870 | - | 32,870 | |||||||||||||||
7,934,519 | 97,273 | 129,221 | 394,732 | 474,021 | ||||||||||||||||
Increase
(decrease) in cash and cash equivalents
|
4,794 | (1,208 | ) | 9,908 | (504 | ) | (143,461 | ) | ||||||||||||
Cash
and cash equivalents, beginning of period
|
- | 6,002 | 10,540 | 5,298 | 163,909 | |||||||||||||||
Cash
and cash equivalents, end of period
|
4,794 | 4,794 | 20,448 | 4,794 | 20,448 |
Supplemental
Disclosures
|
||||||||||||||||||||
Interest
paid
|
- | - | - | - | - | |||||||||||||||
Income
tax paid
|
- | - | - | - | - |
Deficit
|
||||||||||||||||||||||||||||||||
Accumulated
|
Total
|
|||||||||||||||||||||||||||||||
Additional
|
Common
|
During
the
|
Stockholders’
|
|||||||||||||||||||||||||||||
Paid-in
|
Stock
|
Donated
|
Deferred
|
Development
|
Equity
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Subscribed
|
Capital
|
Compensation
|
Stage
|
(Deficiency)
|
|||||||||||||||||||||||||
#
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||||||||
Balance
– 27 July 1992 (date of inception)
|
– | – | – | – | – | – | – | – | ||||||||||||||||||||||||
Stock
issued for intellectual property at $0.001 per share
|
5,700,000 | 57,000 | – | – | – | – | – | 57,000 | ||||||||||||||||||||||||
Stock
issued for cash
|
300,000 | 3,000 | – | – | – | – | – | 3,000 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (23,492 | ) | (23,492 | ) | ||||||||||||||||||||||
Balance
– 30 April 1993
|
6,000,000 | 60,000 | – | – | – | – | (23,492 | ) | 36,508 | |||||||||||||||||||||||
Stock
issued for cash pursuant to a public offering
|
500,000 | 500,000 | – | – | – | – | – | 500,000 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (394,263 | ) | (394,263 | ) | ||||||||||||||||||||||
Balance
– 30 April 1994
|
6,500,000 | 560,000 | – | – | – | – | (417,755 | ) | 142,245 | |||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Options
exercised
|
10,000 | 1,000 | – | – | – | – | – | 1,000 | ||||||||||||||||||||||||
Private
placement
|
250,000 | 562,500 | – | – | – | – | – | 562,500 | ||||||||||||||||||||||||
Warrants
exercised
|
170,200 | 213,000 | – | – | – | – | – | 213,000 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (1,225,743 | ) | (1,225,743 | ) | ||||||||||||||||||||||
Balance
– 30 April 1995
|
6,930,200 | 1,336,500 | – | – | – | – | (1,643,498 | ) | (306,998 | ) | ||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Options
exercised
|
232,500 | 75,800 | – | – | – | – | – | 75,800 | ||||||||||||||||||||||||
Warrants
exercised
|
132,200 | 198,300 | – | – |
–
|
– | – | 198,300 | ||||||||||||||||||||||||
A
private offering
|
341,000 | 682,000 | – | – | – | – | – | 682,000 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (796,905 | ) | (796,905 | ) | ||||||||||||||||||||||
Balance
– 30 April 1996
|
7,635,900 | 2,292,600 | – | – | – | – | (2,440,403 | ) | (147,803 | ) | ||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Options
exercised
|
137,000 | 13,700 | – | – | – | – | – | 13,700 | ||||||||||||||||||||||||
Warrants
exercised
|
185,400 | 278,100 | – | – | – | – | – | 278,100 | ||||||||||||||||||||||||
Private
placements
|
165,000 | 257,500 | – | – | – | – | – | 257,500 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (510,184 | ) | (510,184 | ) | ||||||||||||||||||||||
Balance
– 30 April 1997
|
8,123,300 | 2,841,900 | – | – | – | – | (2,950,587 | ) | (108,687 | ) | ||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Options
exercised
|
50,000 | 5,000 | – | – | – | – | – | 5,000 | ||||||||||||||||||||||||
A
units offering
|
500,000 | 500,000 | – | – | – | – | – | 500,000 | ||||||||||||||||||||||||
Stock
issued for acquisition of AVFS rights
|
400,000 | 288,251 | – | – | – | – | – | 288,251 | ||||||||||||||||||||||||
Stock
issued for financial consulting services
|
125,000 | 170,250 | – | – | – | – | – | 170,250 | ||||||||||||||||||||||||
Stock
issued to settle an accrued liability
|
50,000 | 25,000 | – | – | – | – | – | 25,000 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (580,901 | ) | (580,901 | ) | ||||||||||||||||||||||
Balance
– 30 April 1998
|
9,248,300 | 3,830,401 | – | – | – | – | (3,531,488 | ) | 298,913 | |||||||||||||||||||||||
Stock
issued for financial consulting services
|
100,000 | 71,046 | – | – | – | – | – | 71,046 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (397,924 | ) | (397,924 | ) | ||||||||||||||||||||||
Balance
– 30 April 1999
|
9,348,300 | 3,901,447 | – | – | – | – | (3,929,412 | ) | (27,965 | ) | ||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
A
private placement
|
852,101 | 639,075 | – | – | – | – | – | 639,075 | ||||||||||||||||||||||||
Cash
commission paid
|
– | (47,607 | ) | – | – | – | – | – | (47,607 | ) | ||||||||||||||||||||||
Warrants
exercised
|
17,334 | 17,334 | – | – | – | – | – | 17,334 | ||||||||||||||||||||||||
Stock-based
compensation
|
– | – | 15,417 | – | – | – | – | 15,417 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (413,495 | ) | (413,495 | ) | ||||||||||||||||||||||
Balance
– 30 April 2000
|
10,217,735 | 4,510,249 | 15,417 | – | – | – | (4,342,907 | ) | 182,759 |
Deficit
|
||||||||||||||||||||||||||||||||
Accumulated
|
Total
|
|||||||||||||||||||||||||||||||
Additional
|
Common
|
During
the
|
Stockholders’
|
|||||||||||||||||||||||||||||
Paid-in
|
Stock
|
Donated
|
Deferred
|
Development
|
Equity
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Subscribed
|
Capital
|
Compensation
|
Stage
|
(Deficiency)
|
|||||||||||||||||||||||||
#
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||||||||
Balance
– 30 April 2000
|
10,217,735 | 4,510,249 | 15,417 | – | – | – | (4,342,907 | ) | 182,759 | |||||||||||||||||||||||
Stock
issued for cash pursuant to warrants exercised
|
4,000 | 2,000 | – | – | – | – | – | 2,000 | ||||||||||||||||||||||||
Stock-based
compensation
|
– | – | 18,500 | – | – | – | – | 18,500 | ||||||||||||||||||||||||
Stock
to be issued
|
– | – | – | 72,000 | – | – | – | 72,000 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (808,681 | ) | (808,681 | ) | ||||||||||||||||||||||
Balance
– 30 April 2001
|
10,221,735 | 4,512,249 | 33,917 | 72,000 | – | – | (5,151,588 | ) | (533,422 | ) | ||||||||||||||||||||||
Stock
issued for cash pursuant to a private placement
|
1,066,200 | 266,550 | – | (72,000 | ) | – | – | – | 194,550 | |||||||||||||||||||||||
Amount
receivable
|
– | (3,000 | ) | – | – | – | – | – | (3,000 | ) | ||||||||||||||||||||||
Stock-based
compensation
|
– | – | 3,083 | – | – | – | – | 3,083 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (156,090 | ) | (156,090 | ) | ||||||||||||||||||||||
Balance
– 30 April 2002
|
11,287,935 | 4,775,799 | 37,000 | – | – | – | (5,307,678 | ) | (494,879 | ) | ||||||||||||||||||||||
Stock
issued to settle debt
|
6,100,000 | 305,000 | – | – | – | – | – | 305,000 | ||||||||||||||||||||||||
Stock
issued for services
|
250,000 | 16,500 | – | – | – | – | – | 16,500 | ||||||||||||||||||||||||
Stock
issued for convertible debenture
|
50,000 | 5,000 | – | – | – | – | – | 5,000 | ||||||||||||||||||||||||
Stock
to be issued
|
– | – | – | 25,968 | – | – | – | 25,968 | ||||||||||||||||||||||||
Donated
consulting services
|
– | – | – | – | 187,500 | – | – | 187,500 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (220,972 | ) | (220,972 | ) | ||||||||||||||||||||||
Balance
– 30 April 2003
|
17,687,935 | 5,102,299 | 37,000 | 25,968 | 187,500 | – | (5,528,650 | ) | (175,883 | ) | ||||||||||||||||||||||
Donated
consulting services
|
– | – | – | – | 210,000 | – | – | 210,000 | ||||||||||||||||||||||||
Stock
issued for cash pursuant to a private placement
|
173,120 | 25,968 | – | (25,968 | ) | – | – | – | – | |||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Warrants
exercised
|
550,000 | 86,000 | – | – | – | – | – | 86,000 | ||||||||||||||||||||||||
Stock
options exercised
|
100,000 | 20,000 | – | – | – | – | – | 20,000 | ||||||||||||||||||||||||
Stock-based
compensation
|
– | – | 78,184 | – | – | (78,184 | ) | – | – | |||||||||||||||||||||||
Stock
issued for services
|
400,000 | 92,000 | – | – | – | (92,000 | ) | – | – | |||||||||||||||||||||||
Stock
issued to settle debt
|
3,320,000 | 166,000 | – | – | – | – | – | 166,000 | ||||||||||||||||||||||||
Deferred
compensation
|
– | – | – | – | – | 142,355 | – | 142,355 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (609,913 | ) | (609,913 | ) | ||||||||||||||||||||||
Balance
– 30 April 2004
|
22,231,055 | 5,492,267 | 115,184 | – | 397,500 | (27,829 | ) | (6,138,563 | ) | (161,441 | ) | |||||||||||||||||||||
Stock
issued for services
|
150,000 | 24,000 | – | – | – | (24,000 | ) | – | – | |||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Options
exercised
|
133,750 | 29,750 | – | – | – | – | – | 29,750 | ||||||||||||||||||||||||
Warrants
exercised
|
173,120 | 34,624 | – | – | – | – | – | 34,624 | ||||||||||||||||||||||||
Private
placement
|
1,032,800 | 258,200 | – | – | – | – | – | 258,200 | ||||||||||||||||||||||||
Stock-based
compensation
|
– | – | 23,304 | – | – | – | – | 23,304 | ||||||||||||||||||||||||
Donated
consulting services
|
– | – | – | – | 150,000 | – | – | 150,000 | ||||||||||||||||||||||||
Deferred
compensation
|
– | – | – | – | – | 38,829 | – | 38,829 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (584,889 | ) | (584,889 | ) | ||||||||||||||||||||||
Balance
– 30 April 2005
|
23,720,725 | 5,838,841 | 138,488 | – | 547,500 | (13,000 | ) | (6,723,452 | ) | (211,623 | ) | |||||||||||||||||||||
Re-class
deferred compensation to additional paid in capital
|
– | – | (13,000 | ) | – | – | 13,000 | – | – | |||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Options
exercised
|
212,000 | 53,313 | – | – | – | – | – | 53,313 | ||||||||||||||||||||||||
Warrants
exercised
|
406,400 | 142,240 | – | – | – | – | – | 142,240 | ||||||||||||||||||||||||
Private
placement
|
1,500,000 | 881,088 | – | – | – | – | – | 881,088 | ||||||||||||||||||||||||
Common
stock subscribed
|
– | – | – | 3,750 | – | – | – | 3,750 | ||||||||||||||||||||||||
Stock-based
compensation
|
– | – | 124,793 | – | – | – | – | 124,793 | ||||||||||||||||||||||||
Deferred
compensation
|
– | – | 12,000 | – | – | – | – | 12,000 | ||||||||||||||||||||||||
Donated
consulting services
|
– | – | – | – | 150,000 | – | – | 150,000 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (1,055,358 | ) | (1,055,358 | ) | ||||||||||||||||||||||
Balance
– 30 April 2006
|
25,839,125 | 6,915,482 | 262,281 | 3,750 | 697,500 | – | (7,778,810 | ) | 100,203 |
Deficit
|
||||||||||||||||||||||||||||||||
Accumulated
|
Total
|
|||||||||||||||||||||||||||||||
Additional
|
Common
|
During
the
|
Stockholders’
|
|||||||||||||||||||||||||||||
Paid-in
|
Stock
|
Donated
|
Deferred
|
Development
|
Equity
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Subscribed
|
Capital
|
Compensation
|
Stage
|
(Deficiency)
|
|||||||||||||||||||||||||
#
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||||||||
Balance
– 30 April 2006
|
25,839,125 | 6,915,482 | 262,281 | 3,750 | 697,500 | – | (7,778,810 | ) | 100,203 | |||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Options exercised
|
662,250 | 143,938 | – | (3,750 | ) | – | – | – | 140,188 | |||||||||||||||||||||||
Warrants exercised
|
268,833 | 217,666 | – | – | – | – | – | 217,666 | ||||||||||||||||||||||||
Private placement
|
120,000 | 120,000 | – | – | – | – | – | 120,000 | ||||||||||||||||||||||||
Private placement costs
|
– | (3,504 | ) | – | (13,673 | ) | – | – | – | (17,177 | ) | |||||||||||||||||||||
Common stock subscribed
|
– | – | – | 272,700 | – | – | – | 272,700 | ||||||||||||||||||||||||
Stock
issued for services
|
29,000 | 60,000 | – | – | – | – | – | 60,000 | ||||||||||||||||||||||||
Warrants
issued for equity line of credit
|
– | (1,561,406 | ) | 1,561,406 | – | – | – | – | – | |||||||||||||||||||||||
Stock-based
compensation
|
– | – | 260,569 | – | – | – | – | 260,569 | ||||||||||||||||||||||||
Deferred
compensation
|
– | – | 1,000 | – | – | – | – | 1,000 | ||||||||||||||||||||||||
Donated
consulting services
|
– | – | – | – | 150,000 | – | – | 150,000 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (1,413,294 | ) | (1,413,294 | ) | ||||||||||||||||||||||
Balance
– 30 April 2007
|
26,919,208 | 5,892,176 | 2,085,256 | 259,027 | 847,500 | – | (9,192,104 | ) | (108,145 | ) | ||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Options
exercised
|
38,500 | 12,125 | – | – | – | – | – | 12,125 | ||||||||||||||||||||||||
Warrants
exercised
|
99,166 | 96,666 | – | (10,000 | ) | – | – | – | 86,666 | |||||||||||||||||||||||
Private
placement
|
833,950 | 833,950 | – | (262,700 | ) | – | – | – | 571,250 | |||||||||||||||||||||||
Private
placement costs
|
– | (47,170 | ) | – | 13,673 | – | – | – | (33,497 | ) | ||||||||||||||||||||||
Options
exercised for services
|
36,000 | 46,800 | – | – | – | – | – | 46,800 | ||||||||||||||||||||||||
Stock-based
compensation
|
– | – | 241,528 | – | – | – | – | 241,528 | ||||||||||||||||||||||||
Donated
consulting services
|
– | – | – | – | 150,000 | – | – | 150,000 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (1,236,583 | ) | (1,236,583 | ) | ||||||||||||||||||||||
Balance
– 30 April 2008
|
27,926,824 | 6,834,547 | 2,326,784 | – | 997,500 | – | (10,428,687 | ) | (269,856 | ) | ||||||||||||||||||||||
Stock
issued for cash pursuant to:
|
||||||||||||||||||||||||||||||||
Options
exercised for services
|
47,000 | 47,100 | – | – | – | – | – | 47,100 | ||||||||||||||||||||||||
Private
placement costs
|
– | (16,224 | ) | – | – | – | – | – | (16,224 | ) | ||||||||||||||||||||||
Stock-based
compensation (Note 4)
|
– | – | 223,566 | – | – | – | – | 223,566 | ||||||||||||||||||||||||
Donated
consulting services (Note 3)
|
– | – | – | – | 112,500 | – | – | 112,500 | ||||||||||||||||||||||||
Net
loss
|
– | – | – | – | – | – | (812,411 | ) | (812,411 | ) | ||||||||||||||||||||||
Balance
– 31 January 2009
|
27,973,824 | 6,865,423 | 2,550,350 | – | 1,110,000 | – | (11,241,098 | ) | (715,325 | ) |
1.
|
Nature
and Continuance of Operations
|
2.
|
Significant
Accounting Policies
|
|
Use
of estimates
|
|
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts of
assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenditures during the reporting period. Actual
results could differ from these estimates. The Company
regularly evaluates estimates and assumptions related to useful life and
recoverability of long-lived assets, stock-based compensation and deferred
income tax asset valuation allowances. The Company bases its estimates and
assumptions on current facts, historical experience and various other
factors that it believes to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying
values of assets and liabilities, and the accrual of costs and expenses
that are not readily apparent from other sources. The actual results
experienced by the Company may differ materially and adversely from the
Company’s estimates. To the extent there are material differences between
the estimates and the actual results, future results of operations will be
affected.
|
3.
|
Due
to Related Parties
|
4.
|
Capital
Stock
|
a)
|
Stock
Option Plan
|
|
The
Company has a Stock Option Plan to issue up to 2,500,000 shares to certain
key directors and employees, approved 30 April 1993 and amended 5 December
2000 (the “2000 Plan”).
|
||
The
Company records stock-based compensation in accordance with SFAS No.
123(R), “Share-Based
Payment”, using the fair value method.
|
||
All
transactions in which goods or services are the consideration received for
the issuance of equity instruments are accounted for based on the fair
value of the consideration received or the fair value of the equity
instrument issued, whichever is more reliably measurable. Equity
instruments issued to employees and the cost of the services received as
consideration are measured and recognized based on the fair value of the
equity instruments issued.
|
||
All
options granted by the Company under the 2000 Plan have the following
vesting schedule:
|
|
i)
|
Up
to 25% of the option may be exercised at any time during the term of the
option; such initial exercise is referred to as the “First
Exercise”.
|
ii)
|
The
second 25% of the option may be exercised at any time after 90 days from
the date of First Exercise; such second exercise is referred to as the
“Second Exercise”.
|
iii)
|
The
third 25% of the option may be exercised at any time after 90 days from
the date of Second Exercise; such third exercise is referred to as the
“Third Exercise”.
|
iv)
|
The
fourth and final 25% of the option may be exercised at any time after 90
days from the date of the Third
Exercise.
|
v)
|
The
options expire 60 months from the date of
grant.
|
|
All
options granted by the Company under the 2007 Plan have the following
vesting schedule:
|
i)
|
Up
to 25% of the option may be exercised 90 days after the grant of the
option.
|
|
ii)
|
The
second 25% of the option may be exercised at any time after 1 year and 90
days after the grant of the option.
|
iii)
|
The
third 25% of the option may be exercised at any time after 2 years and 90
days after the grant of the option.
|
iv)
|
The
fourth and final 25% of the option may be exercised at any time after 3
years and 90 days after the grant of the
option.
|
v)
|
The
options expire 60 months from the date of
grant.
|
As
at
31
January
2009
|
As
at
30
April
2008
(Audited)
|
|||||||
Risk
free interest rate
|
1.26% - 2.12 | % | 3.49 | % | ||||
Expected
life
|
3.0
– 4.0 years
|
2.5
years
|
||||||
Annualized
volatility
|
88% - 110 | % | 110 | % | ||||
Expected
dividends
|
- | - |
Number
of options
|
Weighted
average exercise price
|
|||||||
$
|
||||||||
Outstanding
at 30 April 2007
|
1,888,500 | 1.12 | ||||||
Granted
|
25,000 | 1.30 | ||||||
Exercised
|
(74,500 | ) | 0.79 | |||||
Expired
|
- | - | ||||||
Outstanding
at 30 April 2008
|
1,839,000 | 1.13 | ||||||
Weighted
average fair value of options granted during the year ended 30 April
2008
|
0.62 | |||||||
Outstanding
at 30 April 2008
|
1,839,000 | 1.13 | ||||||
Granted
|
200,000 | 0.55 | ||||||
Exercised
|
(47,000 | ) | 1.00 | |||||
Expired
|
(250,000 | ) | 0.29 | |||||
Cancelled
|
(25,000 | ) | 2.09 | |||||
Outstanding
at 31 January 2009
|
1,717,000 | 1.18 | ||||||
Weighted
average fair value of options granted during the period ended 31 January
2009
|
0.21 |
Expiry
Date
|
Exercise
price
|
Number
of options outstanding
|
Number
of options exercisable
|
Remaining
contractual
life (years)
|
||||||||||||
$
|
||||||||||||||||
10
May 2009
|
0.20 | 75,000 | 18,750 | 0.28 | ||||||||||||
30
September 2009
|
0.35 | 25,000 | 25,000 | 0.67 | ||||||||||||
27
May 2010
|
0.45 | 50,000 | 12,500 | 1.32 | ||||||||||||
21
April 2011
|
2.20 | 75,000 | 18,750 | 2.22 | ||||||||||||
1
October 2011
|
0.60 | 80,000 | 5,000 | 2.67 | ||||||||||||
1
November 2011
|
1.37 | 125,000 | 31,250 | 2.75 | ||||||||||||
30
January 2012
|
1.30 | 200,000 | 50,000 | 3.00 | ||||||||||||
12
April 2012
|
1.30 | 962,000 | 449,500 | 3.20 | ||||||||||||
7
November 2012
|
1.30 | 25,000 | 6,250 | 3.77 | ||||||||||||
13
January 2013
|
0.50 | 100,000 | - | 3.95 | ||||||||||||
Total
|
1,717,000 | 617,000 |
Number
of options
|
Weighted
average grant date fair value
|
|||||||
$
|
||||||||
Non-vested
at 1 May 2008
|
1,200,000 | 0.87 | ||||||
Granted
|
200,000 | 0.21 | ||||||
Cancelled
|
(18,750 | ) | 1.69 | |||||
Vested
|
(281,250 | ) | 0.79 | |||||
Non-vested
at 31 January 2009
|
1,100,000 | 0.76 |
b)
|
Performance
Stock Plan
|
|
The
Company has allotted 2,500,000 shares to be issued pursuant to a
Performance Stock Plan approved and registered on 27 June 1997, and
amended in June 2004. On 27 April 2007, the Company further amended the
Plan so that the term of the Plan is extended to the twentieth anniversary
of the effective date.
|
||
c)
|
Non-Cash
Consideration
|
|
Shares
issued for non-cash consideration to third parties were valued based on
the fair market value of the services provided.
|
||
During
the year ended 30 April 2007, the Company entered into a Financial
Advisory Agreement valued at $120,000 for services to be rendered over a
one-year period. Part of this agreement stated that $60,000 was to be paid
by issuance of the Company’s shares of common stock. At the date of this
obligation, 29,000 shares were issued when the value of the Company’s
stock was $2.07 per share. During the fiscal year ended 30 April 2008, the
Company charged $12,500 (30 April 2007 – $47,500) to operations for the
pro-rata portion of stock-based compensation related to the services
performed.
|
||
During
the nine month period ended 31 January 2009, a consultant exercised 27,000
stock options with a fair value of $35,100 for services rendered; 50% was
charged to research and development and the other 50% charged to a related
party as per the agreement.
|
||
During
the nine month period ended 31 January 2009, a consultant exercised 20,000
stock options with a fair value of $12,000 for services rendered and was
charged to research and development.
|
Number
of warrants
|
Weighted
average exercise price
|
|||||||
$
|
||||||||
Outstanding
at 30 April 2007
|
2,733,167 | 1.02 | ||||||
Issued
|
873,950 | 1.29 | ||||||
Exercised
|
(99,166 | ) | 0.97 | |||||
Expired
|
(455,001 | ) | 1.00 | |||||
Outstanding
at 30 April 2008
|
3,052,950 | 1.16 | ||||||
Outstanding
at 30 April 2008
|
3,052,950 | 1.16 | ||||||
Issued
|
- | - | ||||||
Exercised
|
- | - | ||||||
Expired
|
- | - | ||||||
Outstanding
at 31 January 2009
|
3,052,950 | 1.16 | ||||||
Expiry
Date
|
Exercise
price
|
Number
of
warrants
|
||||||
$
|
||||||||
15
October 2009
|
1.50 | 40,000 | ||||||
17
November 2011
|
1.00 | 2,059,000 | ||||||
21
February 2012
|
1.50 | 120,000 | ||||||
30
July 2012
|
1.50 | 579,950 | ||||||
4
October 2012
|
1.50 | 32,000 | ||||||
7
November 2012
|
1.50 | 76,000 | ||||||
17
December 2012
|
1.50 | 95,000 | ||||||
14
February 2013
|
1.50 | 51,000 | ||||||
Warrants
Outstanding
|
3,052,950 |
f)
|
Other
|
|
During
the year ended 30 April 2008, the Company issued 13,500 shares at $0.25
per share upon the exercise of stock options for proceeds of
$3,375.
|
||
During
the year ended 30 April 2008, the Company issued 25,000 shares at $0.35
per share upon the exercise of stock options for proceeds of
$8,750.
|
||
During
the year ended 30 April 2008, the Company issued 36,000 shares at $1.30
per share upon the exercise of stock options for services rendered with a
fair value of $46,800.
|
||
During
the year ended 30 April 2008, the Company issued 86,666 shares at $1 per
share upon the exercise of warrants for proceeds of $86,666.
|
||
During
the year ended 30 April 2008, the Company issued 12,500 shares at $0.80
per share upon the exercise of warrants for proceeds of
$10,000.
|
||
During
the year ended 30 April 2008, the Company issued 833,950 units at $1 per
unit pursuant to a private placement for cash proceeds of $786,780, net of
issue costs of $47,170. Each unit consists of one share and one warrant.
Each warrant enables the holder to purchase one additional share at an
exercise price of $1.50 per share for five years after closing
date.
|
||
During
the year ended 30 April 2008, the Company increased its number of
authorized shares without par value to 100,000,000.
|
||
During
the nine month period 31 January 2009, the Company issued 27,000 shares at
$1.30 per share upon the exercise of stock options for consulting services
rendered with a fair value of $35,100.
|
||
During
the nine month period 31 January 2009, the Company issued 20,000 shares at
$0.60 per share upon the exercise of stock options for consulting services
rendered with a fair value of $12,000.
|
5.
|
Commitments
|
|
a)
|
Pursuant
to a letter of understanding dated 13 December 1993 between the Company,
Rand and Reg (collectively called the grantors) and West Virginia
University Research Corporation (“WVURC”), the grantors have agreed that
WVURC shall own 5% of all patented technology with regards to RC/DC Engine
technology and will receive 5% of all net profits from sales, licenses,
royalties or income derived from the patented
technology.
|
|
b)
|
Pursuant
to an agreement dated 20 August 1992, the Company acquired the U.S. rights
to the original RC/DC Engine from Rand. The Company will pay Rand and the
original owner a net profit royalty of 5% and 1%,
respectively.
|
|
c)
|
The
Company is committed to fund 50% of the further development of the RC/DC
Engine.
|
d)
|
The
Company entered into an agreement with a professional law firm (the “Law
Firm”) in which a partner of the Law Firm is an officer and director of
the Company. The Company agreed to pay a cash fee equal to 5% of any
financings with parties introduced to the Company by the Law Firm. The
Company also agreed to pay an equity fee equal to 5% of the equity issued
by the Company to parties introduced by the Law Firm, in the form of
options, warrants or common stock (Note
3).
|
6.
|
Contingency
|
Accounts
payable in the amount of $189,651 determined to be no longer payable have
been written-off since
inception.
|
7.
|
Income
Taxes
|
The
Company has losses carried forward for income tax purposes to 31 January
2009. There are no current or deferred tax expenses for the
period ended 31 January 2009 due to the Company’s loss
position. The Company has not reserved for any benefits of
these losses. The deferred tax consequences of temporary
differences in reporting items for financial statement and income tax
purposes are recognized, as appropriate. Realization of the future tax
benefits related to the deferred tax assets is dependent on many factors,
including the Company’s ability to generate taxable income within the net
operating loss carry forward period. Management has considered
these factors in reaching its conclusion as to the valuation allowance for
financial reporting purposes.
|
|
The
provision for refundable federal income tax consists of the
following:
|
For
the nine months
ended
31
January
2009
|
For
the nine months
ended
31
January
2008
|
|||||||
$
|
$
|
|||||||
Deferred
tax asset attributable to:
|
||||||||
Current
operations
|
284,344 | 377,003 | ||||||
Stock-based
compensation
|
(78,248 | ) | (76,146 | ) | ||||
Compensation
recognized as donated capital
|
(39,375 | ) | (39,376 | ) | ||||
Non-deductible
meals and entertainment
|
(126 | ) | - | |||||
Less:
Change in valuation allowance
|
(166,595 | ) | (261,481 | ) | ||||
Net
refundable amount
|
- | - |
As
at
31
January
2009
|
As
at
30
April 2008
(Audited)
|
|||||||
$
|
$
|
|||||||
Net
operating loss carry forward
|
9,065,000 | 8,589,000 | ||||||
Statutory
federal income tax rate
|
35 | % | 35 | % | ||||
Effective
income tax rate
|
0 | % | 0 | % | ||||
Deferred
tax asset
|
3,172,750 | 3,006,200 | ||||||
Less:
Valuation allowance
|
(3,172,750 | ) | (3,006,200 | ) | ||||
Net
deferred tax asset
|
- | - |
The
potential income tax benefit of these losses has been offset by a full
valuation allowance.
|
|
As
at 31 January 2009, the Company has unused net operating losses for U.S.
federal income tax purposes of approximately $9,065,000 that are available
to offset future taxable income. This unused net operating loss
carry forward balance for income tax purposes expires between the years
2024 and 2029.
|
8.
|
Non-Cash
Investing and Financing Activities
|
For
the period from the date of inception on 27 July 1992 to
31
January 2009
(Unaudited)
|
For
the nine
months
ended
31
January 2009
|
For
the nine
months
ended
31
January
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Warrants
issued for equity line of credit
|
1,561,406 | - | - | |||||||||
Shares
issued to settle debt
|
496,000 | - | - | |||||||||
Shares
issued for convertible debenture
|
5,000 | - | - | |||||||||
Shares
issued for intellectual property
|
345,251 | - | - | |||||||||
Shares
issued for services
|
143,000 | 47,100 | 35,100 | |||||||||
Consulting
services reflected as donated capital
|
1,110,000 | 112,500 | 112,500 | |||||||||
Affiliate’s
shares issued for intellectual property
|
200,000 | - | - |
9.
|
Subsequent
Events
|
The
following events occurred subsequent to 31 January
2009:
|
|
a)
|
In
February 2009, the Company issued 3,000 shares at $1.30 per share upon the
exercise of stock options for consulting services rendered with a fair
value of $3,900.
|
|
b)
|
In
February 2009, the Company issued 5,000 shares at $0.60 per share upon the
exercise of stock options for consulting services rendered with a fair
value of $3,000.
|
Nine
Months Ended January 31,
|
||||||||||||
Percentage
|
||||||||||||
Increase
/ (Decrease)
|
||||||||||||
2009
|
2008
|
|||||||||||
$
|
$
|
%
|
||||||||||
Revenue
|
Nil
|
Nil
|
N/A | |||||||||
Expenses
|
(812,411 | ) | (1,077,135 | ) | (24.6 | ) | ||||||
Interest
Income
|
Nil
|
Nil
|
N/A | |||||||||
Net
Income (Loss)
|
(812,411 | ) | (1,077,135 | ) | (24.6 | ) |
Nine
Months Ended January 31,
|
||||||||||||
Percentage
|
||||||||||||
Increase
/ (Decrease)
|
||||||||||||
2009
|
2008
|
|||||||||||
$
|
$
|
%
|
||||||||||
Amortization
|
Nil
|
Nil
|
N/A | |||||||||
Management
fees
|
||||||||||||
General
and administrative:
|
||||||||||||
Accounting
and legal
|
104,240 | 111,518 | (6.5 | ) | ||||||||
Consulting
fees
|
206,880 | 158,346 | 30.7 | |||||||||
Investor
relations
|
89,785 | 170,110 | (47.2 | ) | ||||||||
Other
|
16,779 | 90,689 | (81.5 | ) | ||||||||
Travel
and accommodation
|
29,377 | 93,962 | (68.7 | ) | ||||||||
Wages
and benefits
|
58,743 | 133,385 | (56.0 | ) | ||||||||
Stock-based
compensation
|
223,566 | 217,556 | 2.8 | |||||||||
Research
and development
|
83,041 | 101,569 | (18.2 | ) | ||||||||
Total
|
812,411 | 1,077,135 | (24.6 | ) |
Working Capital
|
||||||||
At
January 31, 2009
|
At
April 30, 2008
|
|||||||
Current
Assets
|
$ | 6,644 | $ | 8,517 | ||||
Current
Liabilities
|
721,969 | 278,373 | ||||||
Working
Capital (Deficit)
|
$ | (715,325 | ) | $ | (269,856 | ) |
Cash Flows
|
||||||||
Nine
Months Ended January 31,
|
||||||||
2009
|
2008
|
|||||||
Cash
Flows Used In Operating Activities
|
$ | 395,236 | $ | 617,482 | ||||
Cash
Flows Used In Investing Activities
|
Nil
|
Nil
|
||||||
Cash
Flows From Financing Activities
|
394,732 | 474,021 | ||||||
Net
Increase (Decrease) In Cash During Period
|
$ | (504 | ) | $ | (143,461 | ) |
-
|
The
RadMax® Diesel Engine Design has been completed by our engineers and is
awaiting final approval by the Fortune 1000
company.
|
-
|
The
computer COSMOS analysis, started 5 weeks ago (see press release dated
December 9, 2008, is on schedule for completion next
month.
|
-
|
Following
the successful completion of the COSMOS analysis, and review /approval by
the Fortune 1000 company’s engineers and executives, we will commence
building the prototype diesel engine. Estimate time for completion
of the prototype is 60 to 90 days.
|
-
|
Testing
the prototype is a joint effort with the Fortune 1000 company to be
followed by a formal test report, scheduled for release to the
public.
|
(b)
|
Changes
in internal control over financial reporting.
|
|
There
was no significant change in our internal control over financial reporting
that occurred during the nine months ended January 31, 2009 that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting. Nor were there any significant
deficiencies or material weaknesses in our internal controls requiring
corrective actions.
|
PART II
|
OTHER INFORMATION
|
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
|
None.
|
||
ITEM 1A.
|
RISK
FACTORS
|
|
The
Company is a smaller reporting company and is not required to provide the
disclosure under this item.
|
||
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
|
None.
|
||
ITEM 3.
|
DEFAULTS UPON SENIOR
SECURITIES
|
|
None.
|
||
ITEM 4.
|
SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
|
None.
|
||
ITEM 5.
|
OTHER INFORMATION
|
|
None.
|
||
ITEM 6.
|
EXHIBITS
|
|
Exhibits:
|
|
|
|
|