Common Stock Options and Warrants

12 Months Ended

Jan. 31, 2012

Common Stock Options and Warrants [Abstract]

Common Stock Options and Warrants [Text Block]

Note 11.  Common Stock Options and Warrants

The Company’s Stock Option Plan states that the exercise price of each option will be granted at an amount that equals the market value at the date of grant. All options vest at a time determined at the discretion of the Company’s Board of Directors. All options expire if not exercised within 10 years from the date of grant, unless stated otherwise by the Board of Directors upon issuance.

The Company records compensation expense for the fair value of options granted under the Company’s stock option plan.  The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model.

During the year ended January 31, 2008, stock options were granted to purchase 2,000,000 shares of common stock at an exercise price of $0.10 per share and a term of 5 years. The Company also extended the option expiry date for two directors on options for 1,000,000 shares to June 30, 2009.

No stock options were granted during the year ended January 31, 2009, nor were any stock options exercised.

During the year ended January 31, 2010, the Company granted stock options to purchase a total of 3,750,000 shares of common stock at various exercise prices: 3,150,000 stock options at $0.06 per share; 500,000 stock options at $0.08 per share; and 100,000 stock options at $0.30 per share.  The fair value of these options was determined to be $138,799 based on the following assumptions:  stock price at date of grant of $0.06, expected life of 5 years, dividend yield of 0%, interest rate of 2.4% and volatility of 77%.

During the year ended January 31, 2011, the Company granted stock options to purchase 600,000 shares of common stock at $0.05.  The fair value of these options was determined to be $7,138 based on the following assumptions:  stock price at date of grant of $0.04, expected life of 1.5 years, dividend yield of 0%, interest rate of 0.44% and volatility of 76%.

During the year ended January 31, 2012, the Company granted stock options to purchase 2,000,000 shares of common stock at $0.05.  The fair value of these options was determined to be $76,741 based on the following assumptions:  stock price at date of grant of $0.04 expected life of 5 years, dividend yield of 0%, interest rate of 1.6% and volatility of 185.6%.

 

The following table summarizes the stock option activity:

	Stock Options	Weighted-average Price per share
Outstanding January 31, 2009	16,400,000	$0.28
Granted	3,750,000	$0.07
Exercised	--	--
Expired	(1,750,000)	$0.08
Outstanding January 31, 2010	18,400,000	$0.26
Granted	600,000	$0.05
Exercised	--	--
Expired	(4,000,000)	$0.30
Outstanding January 31, 2011	15,000,000	$0.24
Issued	2,000,000	$0.05
Exercised	(300,000)	$0.10
Expired/Cancelled	(3,250,000)	$0.09
Outstanding January 31, 2012	13,450,000	$0.26

The following table summarizes information about fixed-price stock options at January 31, 2012:

Range of Prices	Weighted Average Number Outstanding	Contractual Life	Weighted Average Exercise Price	Weighted Average Number Exercisable	Weighted Average Exercise Price
$0.05	2,000,000	4.3 yrs	$0.05	2,000,000	$0.05
$0.06	3,150,000	3.0 yrs	$0.06	3,150,000	$0.06
$0.08	500,000	3.0 yrs	$0.08	500,000	$0.08
$0.10	1,700,000	0.3 yrs	$0.10	1,700,000	$0.10
$0.30	100,000	3.0 yrs	$0.30	100,000	$0.30
$0.40	4,000,000	0.9 yrs	$0.40	4,000,000	$0.40
$0.60	2,000,000	3.9 yrs	$0.60	2,000,000	$0.60

 

During the year ended January 31, 2011, the Company issued 6,626,486 warrants in connection with a private placement.  The warrants are exercisable for a period of two years for $0.12 per share.  However, if the common shares trade at over $0.18 per share in any 20-day period during the life of the warrants, the Company has the right to accelerate the expiry date of the warrants.

Warrants in the amount of 2,859,820 were exercised by two shareholders in settlement of debt.

At January 31, 2012, the Company had the following outstanding warrants:

Exercise Price	Number of Shares	Remaining Contractual Life	Exercise Price Times Number of Shares	Weighted Average Exercise Price	Aggregate Intrinsic Value
$0.12	3,766,666	0.25 yrs	$452,000	$0.12	-