As filed with the Securities and Exchange Commission on November 6, 2013
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LIBERTY STAR URANIUM & METALS CORP.
(Exact name of registrant in its charter)
Nevada
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1000
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90-0175540
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(State or other jurisdiction of
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(Primary Standard Industrial Classification
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(I.R.S. Employer Identification Number)
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Incorporation or organization)
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Code Number)
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5610 E. Sutler Lane
Tucson, Arizona 85712
(520) 731-8786
(Address, including zip code, and
telephone number,
including area code, of registrants principal executive
offices)
Nevada Agency and Transfer Company
50 West
Liberty Street
Suite 880
Reno, NV 89501
(775) 322-0626
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copies of communications to:
Gregg E. Jaclin, Esq.
Szaferman, Lakind, Blumstein, &
Blader, P.C.
101 Grovers Mill Road, Second Floor
Lawrenceville, New Jersey 08648
Tel. No.: (604) 275-0400
Fax No.: (604) 275-4511
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this Registration Statement becomes
effective. If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933, please check
the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.
[ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act of 1933, check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act of 1933, check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ]
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Accelerated
filer
[ ]
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Non-accelerated filer [ ]
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Smaller reporting company [X]
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(Do not check if a smaller reporting company)
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CALCULATION OF REGISTRATION FEE
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Proposed
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Proposed
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Maximum
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Maximum
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Amount of
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Title of Each Class of Securities
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Amount to be
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Offering Price
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Aggregate
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Registration
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to be
Registered
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Registered (1)
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Per Share (2)
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Offering Price
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Fee
(3)
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Common Stock, par value $0.00001 per share, issuable
pursuant to the KVM Investment Agreement
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244,500,000
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$
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0.02
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$
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4,890,000
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$
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667
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Total
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244,500,000
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$
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0.02
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$
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4,890,000
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$
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667
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(1)
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We are registering 244,500,000 shares of our common stock that we will put to KVM Capital Partners LLC pursuant to that certain investment agreement (the “KVM Investment Agreement”). The KVM Investment Agreement was entered into on October 30, 2013. In the event of stock splits, stock dividends or similar transactions involving the common stock, the number of common shares registered shall, unless otherwise expressly provided, automatically be deemed to cover the additional securities to be offered or issued pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). In the event that the adjustment provisions of the KVM Investment Agreement require the registrant to issue more shares than are being registered in this registration statement, for reasons other than those stated in Rule 416 of the Securities Act, the registrant will file a new registration statement to register those additional shares.
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(2)
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The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(o) of the Securities Act on the basis of the closing bid price of the common stock of the registrant as reported on the OTCBB on October 30, 2013.
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(3)
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Offset pursuant to Rule 457(p) under the Securities Act by the registration fee of 667 paid on September 26, 2013 pursuant to the Registrant’s S-1Registration Statement, File No. 333-191408
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The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the commission, acting pursuant to said
section 8(a), may determine.
2
The information in this prospectus is not complete and may
be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
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SUBJECT TO COMPLETION, DATED NOVEMBER 6, 2013
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244,500,000 Shares of Common Stock
LIBERTY STAR URANIUM & METALS CORP.
This prospectus relates to the resale of up to 244,500,000
shares of common stock of Liberty Star Uranium & Metals Corp. (we or the
Company), par value $0.00001 per share, issuable to KVM pursuant to that
certain investment agreement. The investment agreement permits us to put up to
$8,000,000 in shares of our common stock to KVM over a period of up to
thirty-six (36) months. We will not receive any proceeds from the resale of
these shares of common stock. However, we will receive proceeds from the sale of
securities pursuant to our exercise of the put right offered by KVM. KVM is
deemed an underwriter for our common stock.
The selling stockholder may offer all or part of the shares for
resale from time to time through public or private transactions, at either
prevailing market prices or at privately negotiated prices. KVM is paying all of
the registration expenses incurred in connection with the registration of the
shares except for accounting fees and expenses and we will not pay any of the
selling commissions, brokerage fees and related expenses.
Our common stock is quoted on the OTCQB under the ticker symbol “LBSR.” On October 29, 2013, the closing price of our common stock was $0.02 per share.
Investing in our common stock involves a high degree of
risk. See Risk Factors beginning on page 5 to read about factors you should
consider before investing in shares of our common stock.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Date of This Prospectus Is: _____________, 2013
3
TABLE OF CONTENTS
4
PROSPECTUS SUMMARY
This summary highlights selected information contained
elsewhere in this Prospectus. This summary does not contain all the information
that you should consider before investing in the common stock of Liberty Star
Uranium & Metals Corp. (referred to herein as the Company, Liberty Star,
we, our, and us). You should carefully read the entire Prospectus,
including Risk Factors, Managements Discussion and Analysis of Financial
Condition and Results of Operations and the financial statements before making
an investment decision.
Business Overview
We were formerly Liberty Star Gold Corp. and formerly Titanium
Intelligence, Inc. (Titanium). Titanium was incorporated on August 20, 2001
under the laws of the State of Nevada. On February 5, 2004 we commenced
operations in the acquisition and exploration of mineral properties business.
Big Chunk Corp. (Big Chunk) is our wholly owned subsidiary and was
incorporated on December 14, 2003 in the State of Alaska. Big Chunk is engaged
in the acquisition and exploration of mineral properties business in the State
of Alaska. Redwall Drilling Inc. (Redwall) was our wholly owned subsidiary and
was incorporated on August 31, 2007 in the State of Arizona. Redwall performed
drilling services on the Companys mineral properties. Redwall ceased drilling
activities in July 2008 and was dissolved on March 30, 2010. In April 2007, we
changed our name to Liberty Star Uranium & Metals Corp. to reflect our
current efforts on uranium, copper, gold, silver, lead, zinc and other mineral
and metal exploration. We are considered to be an exploration stage company, as
we have not generated any revenues from operations. A more detailed discussion
of this technology and its anticipated benefits is provided under the section
Description of Business.
Our common stock is traded over-the-counter on the OTCQB under
the ticker symbol LBSR.
Investment Agreement with KVM
On October 30, 2013, we entered into an investment agreement with KVM Capital Partners LLC, a New York limited liability company (“KVM”). Pursuant to the terms of the KVM Investment Agreement, KVM committed to purchase up to $8,000,000 of our common stock over a period of up to thirty-six (36) months. From time to time during the thirty-six (36) months period commencing from the effectiveness of the registration statement, we may deliver a put notice to KVM which states the dollar amount that we intend to sell to KVM on a date specified in the put notice. The maximum investment amount per notice shall be no more than two hundred and fifty percent (250%) of the average daily volume of the common stock up to $250,000 for the ten consecutive trading days immediately prior to date of the applicable put notice. The purchase price per share to be paid by KVM shall be calculated at a twenty percent (20%) discount to the lowest volume weighted average price of the common stock as reported by Bloomberg, L.P. during the five (5) consecutive trading days immediately prior to the receipt by KVM of the put notice. We initially reserved 244,500,000 shares of our common stock for issuance under the KVM Investment Agreement.
In connection with the KVM Investment Agreement, we also entered into a registration rights agreement with KVM, pursuant to which we are obligated to file a registration statement with the SEC covering 244,500,000 shares of our common stock underlying the KVM Investment Agreement within 21 days after the closing of the transaction. In addition, we are obligated to use all commercially reasonable efforts to have the registration statement declared effective by the SEC and maintain the effectiveness of such registration statement until termination of the KVM Investment Agreement.
The 244,500,000 shares to be registered herein represent 29.40% of the shares issued and outstanding, assuming that the selling stockholder will sell all of the shares offered for sale. The 244,500,000 shares to be registered herein represent 33.2% of the shares issued and outstanding held by non-affiliates of the Company.
The KVM Investment Agreement is not transferable and any benefits attached thereto may not be assigned.
At an assumed purchase price of $0.016 (equal to 80% of the closing price of our common stock of $0.02 on October 29, 2013), we will be able to receive up to $3,912,000 in gross proceeds, assuming the sale of the entire 244,500,000 shares being registered hereunder pursuant to the KVM Investment Agreement. We agreed to register 244,500,000 shares of our common stock to register the maximum amount of shares permitted under Rule 415. Accordingly, we would be required to register additional 255,500,000 shares to obtain the balance of $4,088,000 under the KVM Investment Agreement. We are currently authorized to issue 1,250,000,000 shares of our common stock. We may be required to increase our authorized shares in order to receive the entire purchase price. KVM has agreed to refrain from holding an amount of shares which would result in KVM owning more than 4.99% of the then-outstanding shares of our common stock at any one time.
5
There are substantial risks to investors as a result of the
issuance of shares of our common stock under the KVM Investment Agreement. These
risks include dilution of stockholders percentage ownership, significant
decline in our stock price and our inability to draw sufficient funds when
needed.
KVM will periodically purchase our common stock under the KVM
Investment Agreement and will, in turn, sell such shares to investors in the
market at the market price. This may cause our stock price to decline, which
will require us to issue increasing numbers of common shares to KVM to raise the
same amount of funds, as our stock price declines.
The aggregate investment amount of $8 million was determined based on numerous factors, including the following: the Company is involved in the Hay Mountain Super Project for copper, molybdenum, gold and silver in South East Arizona. These monies will be completey absorbed by technical activities, drilling and attendant environmental, archeological and permitting studies. The Company will need the full amount of $8 million funding under the KVM Investment Agreement to fund the preparation and initiation of diamond core drilling connected to the Hay Mountain Super Project Porphyry Copper-Gold-Molybdenum-Rare Earth Element Mining Target in the Tombstone Mining District of Cochise County, Arizona. We may have to increase the number of our authorized shares in order to issue the shares to KVM if we reach our current amount of authorized shares of common stock. Accordingly, because our ability to draw down any amounts under the KVM Investment Agreement is subject to a number of conditions, there is no guarantee that we will be able to draw down any portion or all of the proceeds of $8,000,000 under the KVM Investment Agreement. We believe that it is likely that we will be able to drawn down on the full amount of the Agreement, however, prior to drawing down on the full amount, we may not be able to draw down on the full amount without filing an amendment to our Articles of Incorporation to increase the Company’s authorized shares of common stock. Pursuant to state law, the filing of the amendment to increase the authorized shares of common stock may require board and shareholder approval. As such, we cannot make any guarantee that we will be successful in accessing the full amount under the equity line.
Where You Can Find Us
Our principal office is located at 5610 E Sutler Lane, Tucson, Arizona 85712. Our telephone number is (520) 731-8786.
THE OFFERING
Common stock outstanding
before the
offering
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831,522,859 shares of common stock as of October 29, 2013.
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Common stock outstanding after
the offering
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1,076,022,859 shares of common stock.
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Use of proceeds
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We will not receive any proceeds from the sale of shares
by the selling stockholder. However, we will receive proceeds from the
sale of securities pursuant to the KVM Investment Agreement. The proceeds
received under the KVM Investment Agreement will be used for general
corporate and working capital purposes and acquisitions or assets,
businesses or operations or for other purposes that the Board of
Directors, in its good faith deem to be in the best interest of the
Company.
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OTCQB Trading Symbol
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LBSR
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Risk Factors
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The common stock offered hereby involves a high degree of
risk and should not be purchased by investors who cannot afford the loss
of their entire investment. See Risk Factors.
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RISK FACTORS
You should carefully consider the risks described below
together with all of the other information included in this Prospectus before
making an investment decision with regard to our securities. The statements
contained in or incorporated into this Prospectus that are not historic facts
are forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those set forth in or
implied by forward-looking statements. If any of the following risks actually
occurs, our business, financial condition or results of operations could be
harmed. In that case, the trading price of our common stock could decline, and
you may lose all or part of your investment.
6
Much of the information included in this annual report includes
or is based upon estimates, projections or other "forward-looking statements".
Such forward-looking statements include any projections or estimates made by us
and our management in connection with our business operations.
While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein.
Such estimates, projections or other "forward-looking
statements" involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other "forward-looking statements".
RISKS RELATED TO OUR BUSINESS
BECAUSE OF THE SPECULATIVE NATURE OF THE EXPLORATION OF
NATURAL RESOURCE PROPERTIES, THERE IS SUBSTANTIAL RISK THAT THIS BUSINESS WILL
FAIL.
There is no assurance that any of the claims we explore or
acquire will contain commercially exploitable reserves of minerals. Exploration
for natural resources is a speculative venture involving substantial risk.
Hazards such as unusual or unexpected geological formations and other conditions
often result in unsuccessful exploration efforts. We may also become subject to
significant liability for pollution or hazards, which we cannot insure or which
we may elect not to insure. There is substantial risk that our business will
fail.
IF WE CANNOT COMPETE SUCCESSFULLY FOR FINANCING AND FOR
QUALIFIED MANAGERIAL AND TECHNICAL EMPLOYEES, OUR EXPLORATION PROGRAM MAY
SUFFER.
Our competition in the mining industry includes large
established mining companies with substantial capabilities and with greater
financial and technical resources than we have. As a result of this competition,
we may be unable to acquire additional financing on terms we consider acceptable
because investors may choose to invest in our competitors instead of investing
in us. We also compete with other mining companies in the recruitment and
retention of qualified managerial and technical employees. Our success will be
largely dependent on our ability to hire and retain highly qualified personnel.
These individuals are in high demand and we may not be able to attract the
personnel we need. We may not be able to afford the high salaries and fees
demanded by qualified personnel, or may lose such employees after they are
hired. If we are unable to successfully compete for financing or for qualified
employees, our exploration program may be slowed down or suspended.
EXPLORATION AND EXPLOITATION ACTIVITIES ARE SUBJECT TO
COMPREHENSIVE REGULATION WHICH MAY CAUSE SUBSTANTIAL DELAYS OR REQUIRE CAPITAL
OUTLAYS IN EXCESS OF THOSE ANTICIPATED CAUSING AN ADVERSE EFFECT ON OUR COMPANY.
Exploration and exploitation activities are subject to federal,
state, and local laws, regulations and policies, including laws regulating the
removal of natural resources from the ground and the discharge of materials into
the environment. Exploration and exploitation activities are also subject to
federal, state, and local laws and regulations which seek to maintain health and
safety standards by regulating the design and use of drilling methods and
equipment.
Various permits from government bodies are required for
drilling operations to be conducted; no assurance can be given that such permits
will be received. Environmental and other legal standards imposed by federal,
state, or local authorities may be changed and any such changes may prevent us
from conducting planned activities or increase our costs of doing so, which
would have material adverse effects on our business. Moreover, compliance with
such laws may cause substantial delays or require capital outlays in excess of
those anticipated, thus causing an adverse effect on us. Additionally, we may be
subject to liability for pollution or other environmental damages which we may
not be able to or elect not to insure against due to prohibitive premium costs
and other reasons. Any laws, regulations or policies of any government body or
regulatory agency may be changed, applied or interpreted in a manner which will
alter and negatively affect our ability to carry on our business.
7
THERE ARE NO KNOWN RESERVES OF MINERALS ON OUR MINERAL
CLAIMS AND WE CANNOT GUARANTEE THAT WE WILL FIND ANY COMMERCIAL QUANTITIES OF
MINERALS.
We have not found any mineral reserves on our claims and there
can be no assurance that any of our mineral claims contain commercial quantities
of any minerals. Even if we identify commercial quantities of minerals in any of
our claims, there can be no assurance that we will be able to exploit the
reserves or, if we are able to exploit them, that we will do so on a profitable
basis.
BECAUSE THE PROBABILITY OF AN INDIVIDUAL PROSPECT EVER
HAVING RESERVES IS EXTREMELY REMOTE, ANY FUNDS SPENT ON EXPLORATION WILL
PROBABLY BE LOST.
The probability of an individual prospect ever having reserves
is extremely remote. In all probability our properties do not contain any
reserves. As such, any funds spent on exploration will probably be lost which
would most likely result in a loss of your investment.
RISKS RELATED TO OUR COMPANY
WE HAVE A LIMITED OPERATING HISTORY AND AS A RESULT THERE IS
NO ASSURANCE WE CAN OPERATE ON A PROFITABLE BASIS.
We have a limited operating history and must be considered in
the exploration stage. Our operations will be subject to all the risks inherent
in the establishment of an exploration stage enterprise and the uncertainties
arising from the absence of a significant operating history. Potential investors
should be aware of the difficulties normally encountered by mineral exploration
companies and the high rate of failure of such enterprises, especially those
with a limited operating history. The likelihood of success must be considered
in light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that we
plan to undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates. The expenditures to be made by us in
the exploration of the mineral claim may not result in the discovery of mineral
deposits. Problems such as unusual or unexpected formations of rock or land and
other conditions are involved in mineral exploration and often result in
unsuccessful exploration efforts. If the results of our exploration do not
reveal viable commercial mineralization, we may decide to abandon our claim and
acquire new claims for new exploration or cease operations. The acquisition of
additional claims will be dependent upon us possessing capital resources at the
time in order to purchase such claims. If no funding is available, we may be
forced to abandon our operations. No assurance can be given that we will ever
operate on a profitable basis.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL
FAIL AND OUR INVESTORS COULD LOSE THEIR INVESTMENT.
We had cash in the amount of $194,906 and negative working capital of $(5,295,628) as of July 31, 2013. We currently do not generate revenues from our operations. Our business plan calls for substantial investment and cost in connection with the acquisition and exploration of our mineral properties currently under lease and option. Any direct acquisition of any of the claims under lease or option is subject to our ability to obtain the financing necessary for us to fund and carry out exploration programs on the subject properties. The requirements are substantial. There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable. Obtaining additional financing would be subject to a number of factors, including market prices for minerals, investor acceptance of our properties, contractual restrictions on our ability to enter into further financing arrangements, and investor sentiment. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us and our business could fail.
BECAUSE THERE IS NO ASSURANCE THAT WE WILL GENERATE
REVENUES, WE FACE A HIGH RISK OF BUSINESS FAILURE.
8
We have not earned any revenues as of the date of this filing and have never been profitable. We do not have an interest in any revenue generating properties. We were incorporated on August 20, 2001 and took over our current business on February 5, 2004. To date we have been involved primarily in organizational and exploration activities. We will incur substantial operating and exploration expenditures without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We have limited operating history upon which an evaluation of our future success or failure can be made. Our net loss from inception to July 31, 2013 is $(65,103,763). We recognize that if we are unable to generate significant revenues from our activities, we will not be able to earn profits or continue operations. Based upon current plans, we also expect to incur significant operating losses in the future. We cannot guarantee that we will be successful in raising capital to fund these operating losses or generate revenues in the future. We can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail and our investors could lose their investment.
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT
STATES THAT THERE IS A SUBSTANTIAL DOUBT THAT WE WILL BE ABLE TO CONTINUE AS A
GOING CONCERN.
Our independent registered public accounting firm, Malone
Bailey LLP, state in their audit report attached to our audited financial
statements for the fiscal year ended January 31, 2013 that since we are an
exploration stage company, have no established source of revenue and are
dependent on our ability to raise capital from shareholders or other sources to
sustain operations, there is a substantial doubt that we will be able to
continue as a going concern
.
THE EXISTENCE OF OUR MINING CLAIMS DEPENDS ON OUR ABILITY TO
FUND EXPLORATORY ACTIVITY OR TO PAY FEES.
Our mining claims, which are the central part of our business,
require that we either pay fees, or incur certain minimum development costs
annually, or the claims will be forfeited. Due to our current financial
situation we may not be able to meet these obligations and we could therefore
lose our claims. This would impair our ability to raise capital and would
negatively impact the value of the Company.
RISKS RELATED TO OUR COMMON STOCK
BECAUSE WE WILL LIKELY ISSUE ADDITIONAL SHARES OF OUR COMMON
STOCK, INVESTMENT IN OUR COMPANY COULD BE SUBJECT TO SUBSTANTIAL DILUTION.
Investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share when we issue additional shares. Our formation documents previously authorized the issuance of up to 200,000,000 shares of common stock with a par value of $0.001. At our shareholder meeting held on May 27, 2009 the shareholders voted to increase the number of authorized shares to 10,000,000,000 shares of common stock with a par value of $0.001. We filed a certificate of amendment on June 4, 2009 to increase the number of authorized shares to 5,000,000,000 shares of common stock with a par value of $0.001. On September 1, 2009 we completed a one for four reverse stock split of our authorized and outstanding common stock resulting in a decrease in authorized shares to 1,250,000,000 with a par value of $0.00001. As of October 29, 2013, there were 831,522,859 of our common shares issued and outstanding. We anticipate that all or at least some of our future funding, if any, will be in the form of equity financing from the sale of our common stock. If we do sell more common stock, investors' investment in our company will likely be diluted. Dilution is the difference between what you pay for your stock and the net tangible book value per share immediately after the additional shares are sold by us. If dilution occurs, any investment in our company's common stock could seriously decline in value.
THE SALE OF OUR STOCK UNDER THE CONVERTIBLE NOTES AND THE
COMMON SHARE PURCHASE WARRANTS COULD ENCOURAGE SHORT SALES BY THIRD PARTIES,
WHICH COULD CONTRIBUTE TO THE FUTURE DECLINE OF OUR STOCK PRICE.
9
In many circumstances, the provision of financing based on the distribution of equity for companies that are traded on the OTC Bulletin Board has the potential to cause a significant downward pressure on the price of common stock. This is especially
the case if the shares being placed into the market exceed the market's ability to take up the increased stock or if we have not performed in such a manner to show that the equity funds raised will be used to grow our business. Such an event could
place further downward pressure on the price of our common stock. Regardless of our activities, the opportunity exists for short sellers and others to contribute to the future decline of our stock price. If there are significant short sales of our
common stock, the price decline that would result from this activity will cause the share price to decline more, which may cause other shareholders of the stock to sell their shares, thereby contributing to sales of common stock in the market. If
there are many more shares of our common stock on the market for sale than the market will absorb, the price of our common shares will likely decline.
TRADING IN OUR COMMON STOCK ON THE OTCQB IS LIMITED AND SPORADIC MAKING IT DIFFICULT FOR OUR SHAREHOLDERS TO SELL THEIR SHARES OR LIQUIDATE THEIR INVESTMENTS.
Our common stock is currently listed for public trading on the OTCQB. The trading price of our common stock has been subject to wide fluctuations. Trading prices of our common stock may fluctuate in response to a number of factors, many of which
will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can
be no assurance that trading prices and price earnings ratios previously experienced by our common stock will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common stock, regardless of
our operating performance. In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs
for us and a diversion of management's attention and resources.
OUR BY-LAWS CONTAIN PROVISIONS INDEMNIFYING OUR OFFICERS AND DIRECTORS AGAINST ALL COSTS, CHARGES AND EXPENSES INCURRED BY THEM.
Our By-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him,
including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officers.
OUR BY-LAWS DO NOT CONTAIN ANTI-TAKEOVER PROVISIONS WHICH COULD RESULT IN A CHANGE OF OUR MANAGEMENT AND DIRECTORS IF THERE IS A TAKE-OVER OF OUR COMPANY.
We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and
directors. This could result in a disruption to the activities of our company, which could have a material adverse effect on our operations.
WE DO NOT INTEND TO PAY DIVIDENDS ON ANY INVESTMENT IN THE SHARES OF STOCK OF OUR COMPANY AND ANY GAIN ON AN INVESTMENT IN OUR COMPANY WILL NEED TO COME THROUGH AN INCREASE IN OUR STOCK'S PRICE, WHICH MAY NEVER HAPPEN.
We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit
the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock's price. This may never happen and investors may lose all of their investment in
our company.
10
BECAUSE OUR SECURITIES ARE SUBJECT TO PENNY STOCK RULES, YOU MAY HAVE DIFFICULTY RESELLING YOUR SHARES.
Our shares as penny stocks, are covered by Section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell our company's securities including the delivery of a standardized
disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. These rules apply to companies whose shares are not traded on a national stock
exchange or on the Nasdaq system, trade at less than $5.00 per share, or who do not meet certain other financial requirements specified by the Securities and Exchange Commission. These rules require brokers who sell "penny stocks" to persons
other than established customers and "accredited investors" to complete certain documentation, make suitability inquiries of investors, and provide investors with certain information concerning the risks of trading in such penny stocks. These rules
may discourage or restrict the ability of brokers to sell our shares of common stock and may affect the secondary market for our shares of common stock. These rules could also hamper our ability to raise funds in the primary market for our shares of
common stock.
FINRA SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority (known as "FINRA") has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's
financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers.
FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common shares, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
KVM WILL PAY LESS THAN THE THEN-PREVAILING MARKET PRICE FOR OUR COMMON STOCK.
The Common Stock to be issued to KVM pursuant to the KVM Investment Agreement will be purchased at a 20% discount to the lowest trading price of our Common Stock during the five (5) consecutive trading days immediately before KVM receives our notice
of sale. KVM has a financial incentive to sell our Common Stock immediately upon receiving the shares to realize the profit equal to the difference between the discounted price and the market price. If KVM sells the shares, the price of our Common
Stock could decrease. If our stock price decreases, KVM may have a further incentive to sell the shares of our Common Stock that it holds. These sales may have a further impact on our stock price.
YOUR OWNERSHIP INTEREST MAY BE DILUTED AND THE VALUE OF OUR COMMON STOCK MAY DECLINE BY EXERCISING THE PUT RIGHT PURSUANT TO THE KVM INVESTMENT AGREEMENT.
Pursuant to the KVM Investment Agreement, when we deem it necessary, we may raise capital through the private sale of our Common Stock to KVM at a price equal to a discount to the lowest volume weighted average price of the common stock for the five
(5) consecutive trading days before KVM receives our notice of sale. Because the put price is lower than the prevailing market price of our Common Stock, to the extent that the put right is exercised, your ownership interest may be diluted.
WE ARE REGISTERING AN AGGREGATE OF 244,500,000 SHARES OF COMMON STOCK TO BE ISSUED UNDER THE KVM INVESTMENT AGREEMENT. THE SALES OF SUCH SHARES COULD DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.
We are registering an aggregate of 244,500,000 shares of Common Stock under the registration statement of which this prospectus is a part, pursuant to the KVM Investment Agreement. Notwithstanding KVM’s ownership limitation, the 244,500,000 shares would represent approximately 29.40% of our shares of Common Stock outstanding immediately after our exercise of the put right under the Investment Agreement. The sale of these shares into the public market by KVM could depress the market price of our Common Stock.
11
WE MAY NOT HAVE ACCESS TO THE FULL AMOUNT AVAILABLE UNDER
THE
KVM INVESTMENT AGREEMENT.
Our ability to draw down funds and sell shares under the KVM Investment Agreement requires that this resale registration statement be declared effective and continue to be effective. This registration statement registers the resale of 244,500,000 shares issuable under the KVM Investment Agreement, and our ability to sell any remaining shares issuable under the KVM Investment Agreement is subject to our ability to prepare and file one or more additional registration statements registering the resale of these shares. These registration statements may be subject to review and comment by the staff of the SEC, and will require the consent of our independent registered public accounting firm. Therefore, the timing of effectiveness of these registration statements cannot be assured. The effectiveness of these registration statements is a condition precedent to our ability to sell all of the shares of Common Stock to KVM under the KVM Investment Agreement. Even if we are successful in causing one or more registration statements registering the resale of some or all of the shares issuable under the KVM Investment Agreement to be declared effective by the SEC in a timely manner, we may not be able to sell the shares unless certain other conditions are met. For example, we might have to increase the number of our authorized shares in order to issue the shares to KVM. Accordingly, because our ability to draw down any amounts under the KVM Investment Agreement is subject to a number of conditions, there is no guarantee that we will be able to draw down any portion or all of the proceeds of $8,000,000 under the KVM Investment Agreement. We believe that it is likely that we will be able to drawn down on the full amount of the Agreement, however, prior to drawing down on the full amount, we may not be able to draw down on the full amount without filing an amendment to our Articles of Incorporation to increase the Company’s authorized shares of common stock. Pursuant to state law, the filing of the amendment to increase the authorized shares of common stock may require board and shareholder approval. As such, we cannot make any guarantee that we will be successful in accessing the full amount under the KVM Investment Agreement.
CERTAIN RESTRICTIONS ON THE EXTENT OF PUTS AND THE DELIVERY OF ADVANCE NOTICES MAY HAVE LITTLE, IF ANY, EFFECT ON THE ADVERSE IMPACT OF OUR ISSUANCE OF SHARES IN CONNECTION WITH THE KVM INVESTMENT AGREEMENT, AND AS SUCH, KVM MAY SELL A LARGE NUMBER OF SHARES, RESULTING IN SUBSTANTIAL DILUTION TO THE VALUE OF SHARES HELD BY EXISTING SHAREHOLDERS.
KVM has agreed, subject to certain exceptions listed in the KVM
Investment Agreement, to refrain from holding an amount of shares which would
result in KVM or its affiliates owning more than 4.99% of the then-outstanding
shares of our Common Stock at any one time. These restrictions, however, do not
prevent KVM from selling shares of Common Stock received in connection with a
put, and then receiving additional shares of Common Stock in connection with a
subsequent put. In this way, KVM could sell more than 4.99% of the outstanding
Common Stock in a relatively short time frame while never holding more than
4.99% at one time.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements.
When used in this Prospectus or in any other presentation, statements which are
not historical in nature, including the words anticipate, estimate,
should, expect, believe, intend, may, project, plan or continue,
and similar expressions are intended to identify forward-looking statements.
They also include statements containing a projection of revenues, earnings or
losses, capital expenditures, dividends, capital structure or other financial
terms.
The forward-looking statements in this Prospectus are based
upon our managements beliefs, assumptions and expectations of our future
operations and economic performance, taking into account the information
currently available to them. These statements are not statements of historical
fact. Forward-looking statements involve risks and uncertainties, some of which
are not currently known to us that may cause our actual results, performance or
financial condition to be materially different from the expectations of future
results, performance or financial condition we express or imply in any
forward-looking statements. These forward-looking statements are based on our
current plans and expectations and are subject to a number of uncertainties and
risks that could significantly affect current plans and expectations and our
future financial condition and results.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this Prospectus might not occur. We qualify
any and all of our forward-looking statements entirely by these cautionary
factors. As a consequence, current plans, anticipated actions and future
financial conditions and results may differ from those expressed in any
forward-looking statements made by or on our behalf. You are cautioned not to
unduly rely on such forward-looking statements when evaluating the information
presented herein.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the
selling stockholder. However, we will receive proceeds from the sale of
securities pursuant to the KVM Investment Agreement. The proceeds received from
any Puts tendered to KVM under the KVM Investment Agreement will be used for
general corporate and working capital purposes and acquisitions or assets,
businesses or operations or for other purposes that the Board of Directors, in
its good faith deem to be in the best interest of the Company.
DILUTION
The sale of our common stock to KVM in accordance with the KVM
Investment Agreement will have a dilutive impact on our shareholders. As a
result, our net loss per share could increase in future periods and the market
price of our common stock could decline. In addition, the lower our stock price
is at the time we exercise our put option, the more shares of our common stock
we will have to issue to KVM in order to drawdown pursuant to the KVM Investment
Agreement. If our stock price decreases during the Pricing Period, then our
existing shareholders would experience greater dilution.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Public Market for Common Stock
The following table summarizes the high and low historical
closing prices reported by the OTCQB Historical Data Service for the periods
indicated. OTCQB quotations reflect inter-dealer prices, without retail mark-up,
mark down or commissions, so those quotes may not represent actual transactions.
Quarter Ended
|
High
|
Low
|
July 31, 2013
|
$0.0237
|
$0.0083
|
April 30, 2013
|
$0.0169
|
$0.0096
|
January 31, 2013
|
$0.024
|
$0.0109
|
October 31, 2012
|
$0.0345
|
$0.022
|
July 31, 2012
|
$0.0405
|
$0.017
|
April 30, 2012
|
$0.0387
|
$0.0202
|
January 31, 2012
|
$0.00
|
$0.00
|
October 31, 2011
|
$0.00
|
$0.00
|
July 31, 2011
|
$0.00
|
$0.00
|
April 30, 2011
|
$0.042
|
$0.00
|
Holders
On October 29, 2013, the shareholders' list for our common stock showed 831,522,859 shares issued and outstanding with 96 registered stockholders and approximately 8,500 stockholders whose names and contact information we have and an unknown number of unregistered stockholders whose shares are held in their brokerage accounts.
Dividends
13
There are no restrictions in our articles of incorporation or
bylaws that restrict us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to
the distribution of the dividend:
|
1.
|
we would not be able to pay our debts as they become due
in the usual course of business; or
|
|
|
|
|
2.
|
our total assets would be less than the sum of our total
liabilities, plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving the
distribution.
|
We have not declared any dividends. We do not plan to declare
any dividends in the foreseeable future.
Equity Compensation Plans
Other than the shares of common stock to be issued to Mr.
Ferris under his Employment Agreement, as described more fully in Executive
Compensation below, we have no equity compensation program, including no stock
option plan, and none are planned for the foreseeable future.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Our discussion includes forward-looking statements based
upon current expectations that involve risks and uncertainties, such as our
plans, objectives, expectations and intentions. Actual results and the timing of
events could differ materially from those anticipated in these forward-looking
statements as a result of a number of factors, including those set forth under
the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and
Business sections in this Prospectus. We use words such as anticipate,
estimate, plan, project, continuing, ongoing, expect, believe,
intend, may, will, should, could, and similar expressions to identify
forward-looking statements.
Our Business
Liberty Star Uranium & Metals Corp. was formerly Liberty
Star Gold Corp. and formerly Titanium Intelligence, Inc. We were incorporated on
August 20, 2001 under the laws of the State of Nevada. Big Chunk is our wholly
owned subsidiary and was incorporated on December 14, 2003 in the State of
Alaska. Big Chunk is engaged in the acquisition and exploration of mineral
properties business in the State of Alaska. We are an exploration stage company,
as we have not generated revenues from operations. We use the term Super
Project to indicate a project in which numerous mineral targets have been
identified, any one or more of which could potentially contain commercially
viable quantities of minerals. Our significant projects are:
North Pipes Super Project (NPSP):
Located in Northern
Arizona on the Arizona Strip, we plan to ascertain whether the North Pipes Super
Project claims possess commercially viable deposits of uranium and associated
co-product metals. We have not identified any ore reserves to date.
Big Chunk Super Project (Big Chunk):
Located in the
Iliamna region of Southwestern Alaska, we plan to ascertain whether the Big
Chunk claims possess commercially viable deposits of copper, gold, molybdenum,
silver, palladium rhenium and zinc. We have not identified any ore reserves to
date.
Tombstone Super Project (Tombstone)(formerly referred to
as Tombstone Porphyry Precious Metals Project):
Tombstone is located in
Cochise County, Arizona. We plan to ascertain whether the land holding at the
Hay Mountain Project within the Tombstone Super Project area possess
commercially viable deposits of copper, molybdenum, gold, silver, lead, zinc,
manganese and other metals. While exploring for the afore said metals, we found
in addition to a very large porphyry copper style geochemical anomaly containing
those metals, we also found a very spatially large anomaly of Rare Earth
Elements (REEs). This anomaly covers approximately seven to nine square miles.
It is still under evaluation but at this time, its symmetry , draped around the
east end of the porphyry anomaly, suggests they are related at least in space
and possibility genetically. Study is ongoing. Prior to this discovery there were no significant nor potentially minable anomalies of REEs, in Arizona. Because we have not drilled, we have not identified any ore reserves to date.
14
East Silver Bell Porphyry Copper Project (“East Silver Bell”):
Located northwest of Tucson, Arizona, we plan to ascertain whether the East Silver Bell claims possess commercially viable deposits of copper. We have not identified
any ore reserves to date.
The mineral resource business generally consists of three stages: exploration, development and production. Mineral resource companies that are in the exploration stage have not yet found mineral resources in commercially exploitable quantities, and
are engaged in exploring land in an effort to discover them. Mineral resource companies that have located a mineral resource in commercially exploitable quantities and are preparing to extract that resource are in the development stage, while those
engaged in the extraction of a known mineral resource are in the production stage. We are in the exploration stage – as we have not found any mineral resources in commercially exploitable quantities.
There is no assurance that a commercially viable mineral deposit exists on any of our properties, and further exploration is required before we can evaluate whether any exist and, if so, whether it would be economically feasible to develop or
exploit those resources. Even if we complete our current exploration program and we are successful in identifying a mineral deposit, we would be required to spend substantial funds on further drilling and engineering studies before we could know
whether that mineral deposit will constitute a reserve (a reserve is a commercially viable mineral deposit). Please refer to the section entitled "Risk Factors" in this Form 10-Q and in our Form 10-K for the year ended January 31, 2013 for
additional information about the risks of mineral exploration.
To date, we have not generated any revenues and we remain in the exploration stage. Our ability to pursue our business plan and generate revenues is subject to our ability to obtain additional financing, and we cannot give any assurance that we will
be able to do so.
Agreement with Northern Dynasty Minerals Ltd
On July 15, 2010, we issued a secured convertible promissory note (the "2010 Convertible Note") to Northern Dynasty Minerals Ltd ("Northern Dynasty"). The original advanced amount is $4,000,000 and bears interest at a rate of 10% per annum
compounded monthly (the "Loan"). On August 17, 2010, we transferred 95 of our Alaska State mineral claims from the Big Chunk Super Project to Northern Dynasty for consideration of $1,000,000 of the original advanced amount under the Convertible
Note, leaving $3,000,000 of the Loan amount outstanding. No interest accrued on the $1,000,000 of the original advanced amount. Effective September 1, 2011, the agreement with Northern Dynasty was amended to increase the 2010 Convertible
Note by $561,816 to reimburse Northern Dynasty for assessment work, rental fees, cash in lieu of assessment work and filing fees on the mineral claims that was paid in fiscal 2011 and fiscal 2012 because we could not come to an agreement on an
earn-in option and joint venture agreement with Northern Dynasty. On February 29, 2012, with effect from November 30, 2011, we executed an additional convertible promissory note (the "2011 Convertible Note" and together with the 2010 Convertible
Note, the "Convertible Notes") in the amount of $168,358 in reimbursement to Northern Dynasty of assessment work, rental fees and filing fees on our mineral claims. The principal balance of the Convertible Notes at April 30, 2013 was
$3,730,174 with accrued interest on the Convertible Notes at April 30, 2013 at $1,088,222.
As part of the transactions noted above, we entered into a letter agreement with Northern Dynasty whereby, subject to negotiating and signing a definitive earn-in option and joint venture agreement, Northern Dynasty can earn a 60% interest in our
Big Chunk project in Alaska (the "Joint Venture Claims") by spending $10,000,000 on those properties over six years. Details of this agreement may be found in Liberty Star news releases and in the public record.
To date, no joint venture agreement has been agreed upon. Northern Dynasty has demanded payment of the funds due under the Convertible Notes. On November 14 2012 the Parties (NDM-U-5 Resources) and Liberty Star negotiated a settlement where in Liberty Star transferred a certain number of non critical mineral lands to NDM-U-5 Resources in satisfaction of the debt.
15
On November 14, 2012, we signed a loan settlement agreement with Northern Dynasty which would have discharged the $3,730,174 principal balance and $1,088,222 of accrued interest for the 2010 Convertible Note and would have terminated
Northern Dynasty’s earn-in rights. In exchange for the settlement, we initiated the transfer of 199 Alaska mining claims to Northern Dynasty’s subsidiary, U5 Resources. However, since a third party filed liens against the claims before
the transfer could be completed, we have not recorded the settlement transaction as of April 30, 2013, pending resolution of the lien claims. “We are unable to complete the settlement with Northern Dynasty while the lien claims are
outstanding. We are vigorously disputing the lien claims and working to have them vacated.
Financing Agreement with Deer Valley Capital Offshore Ltd.
On January 19, 2012, we entered into a financing agreement (the “Deer Valley Agreement”) with Deer Valley Capital Offshore Ltd. (“Deer Valley Capital”), whereby Deer Valley Capital will provide for a non-brokered financing
arrangement of up to $10,000,000. The financing allows but does not require us to issue and sell up to the number of shares of common stock having an aggregate purchase price of $10,000,000 to Deer Valley Capital. On May 1, 2012, we entered
into an amendment to the Investment Agreement (the “Amendment”). Pursuant to the Amendment, the Investment Agreement will only expire upon any of the following events: (i) when the Investor has purchased an aggregate of Ten Million
dollars ($10,000,000) in the shares of our common stock pursuant to the Investment Agreement; or (ii) on the date which is thirty-six (36) months after the effective date of the Investment Agreement; or (iii) at such time that the Registration
Statement registering the shares of common stock contemplated by the Investment Agreement is no longer in effect. In addition, we may terminate the Investment Agreement upon thirty (30) days written notice. Subject to the terms and conditions of the
Deer Valley Agreement and a registration rights agreement entered into concurrently (the “Registration Rights Agreement”), we may, in our sole discretion, deliver a notice to Deer Valley Capital which states the dollar amount which we
intend to sell to Deer Valley Capital on a certain date. The amount that we shall be entitled to sell to Deer Valley Capital shall be equal to two hundred percent (200%) of the average daily volume (U.S. market only) of our shares of common stock
for the ten (10) trading days prior to the applicable notice date. Such shares of our common stock will be valued at a 27.5% discount from the weighted average trading price of our stock for the five (5) trading days before Deer Valley Capital
receives our notice of sale. The shares of common stock that we sell to Deer Valley Capital must be registered stock, among other conditions of investment.
Pursuant to the Registration Rights Agreement, we agreed to file a registration statement on Form S-1 with the Securities and Exchange Commission within twenty-one (21) days of the date of the Registration Rights Agreement and to have a registration
statement declared effective by the Securities and Exchange Commission within one hundred and twenty (120) calendar days from January 19, 2012. The registration statement was filed on March 13, 2012 and has been declared effective. In August 2013,
we decided to terminate the Deer Valley Agreement due to their violation of the payment terms pursuant to the agreement. No further shares issuances to Deer Valley Management, LLC are expected to occur. On August 7, 2013, we filed a Post-Effective
Amendment to the registration statement, which de-registered the shares that were not sold under the registration statement. The amendment was declared effective on August 16, 2013.
Recent Development
KVM Investment Agreement
On October 30, 2013, we entered into an investment agreement with KVM Capital Partners LLC, a New York limited liability company (“KVM”). Pursuant to the terms of the KVM Investment Agreement, KVM committed to purchase up to $8,000,000 of our common stock over a period of up to thirty-six (36) months. From time to time during the thirty-six (36) months period commencing from the effectiveness of the registration statement, we may deliver a put notice to KVM which states the dollar amount that we intend to sell to KVM on a date specified in the put notice. The maximum investment amount per notice shall be no more than two hundred and fifty percent (250%) of the average daily volume of the common stock up to $250,000 for the ten consecutive trading days immediately prior to date of the applicable put notice. The purchase price per share to be paid by KVM shall be calculated at a twenty percent (20%) discount to the lowest volume weighted average price of the common stock as reported by Bloomberg, L.P. during the five (5) consecutive trading days immediately prior to the receipt by KVM of the put notice. We initially reserved 244,500,000 shares of our common stock for issuance under the KVM Investment Agreement.
16
In connection with the KVM Investment Agreement, we also entered into a registration rights agreement with KVM, pursuant to which we are obligated to file a registration statement with the SEC covering 244,500,000 shares of our common stock underlying the KVM Investment Agreement within 21 days after the closing of the transaction. In addition, we are obligated to use all commercially reasonable efforts to have the registration statement declared effective by the SEC and maintain the effectiveness of such registration statement until termination of the KVM Investment Agreement.
The KVM Investment Agreement may not be transferred and the benefits attached thereto may not be assigned.
We plan to use the proceeds from the sale of the common stock under the KVM Investment Agreement for general corporate and working capital purposes and acquisitions or assets, businesses or operations or for other purposes that the Board of
Directors, in its good faith deem to be in the best interest of the Company.
Results of Operations
Material Changes in Financial Condition for the Six Month Period Ended July 31, 2013
We had cash and cash equivalents in the amount of $194,906 as of July 31, 2013 compared to $117,716 as of January 31, 2013. We had negative working capital of $5,295,628 as of July 31, 2013 compared to $(5,025,086) as of January 31,
2013. We received $669,558 net cash inflows from financing activities during the six months ended July 31, 2013 which was utilized for working capital. We also utilized our cash funds to continue exploration activities at our Hay Mountain
mineral lands by working on geochemical soil, rock chip and vegetation sampling. We purchased $1,418 in new equipment during the six months ended July 31, 2013. We have been raising capital from selling equity by way of private placements. We
intend to continue to raise capital from such sources. In addition, we previously entered into the Investment Agreement with Deer Valley whereby we were permitted, but not required, to issue and sell up to the number of shares of our common stock
having an aggregate purchase price of $10,000,000 to Deer Valley. In addition to seeking sources of funding through the sale of equity, we may seek to enter into joint venture agreements, or other types of agreements with other companies to
finance our projects for the long term. In addition, we may choose to sell a portion of our assets to finance our projects. Should our properties prove to be commercially viable, we may be in a position to seek debt financing to help build
infrastructure, and finally, we eventually hope to obtain revenues from commercial mining of our properties.
Material Changes in Results of Operations for the Three and Six Month Periods Ended July 31, 2013 and July 31, 2012
We had a net loss of $640,837 and $1,027,717 for the three and six months ended July 31, 2013, respectively, compared to a net loss of $591,609 and $1,007,454 for the three and six months ended July 31, 2012, respectively. During the
three and six months ended July 31, 2013 we incurred a decrease of approximately $54,745 and $127,299, respectively, in geological and geophysical costs compared to the three and six months ended July 31, 2012 due to reduced geochemical
sampling and mapping being performed on our Hay Mountain project. We incurred an increase in legal expense of approximately $33,900 and $58,619 during the three and six months ended July 31, 2013, respectively, as compared to the three and
six months ended July 31, 2012, due to the costs associated with defending a lien claim by a former associate. We incurred an increase in interest expense of approximately $12,885 and $22,974 during the three and six months ended July 31,
2013, respectively, as compared to the three and six months ended July, 31, 2012 due to the compounding effect this year compared to last year. We incurred an increase in investor relation expenses of approximately $82,324 and $102,031
during the three and six months ended July 31, 2013, respectively, as compared to the three and six months ended July 31, 2012 due to our efforts to increase market awareness and search for additional funding sources.
Results of Operations for the year ended January 31, 2013
17
We had a net loss of $(2,644,787) for the twelve-month period ended January 31, 2013 compared to a net loss of $(2,461,459) for the twelve-month period ended January 31, 2012. The two periods were comparable, and there were no significant
changes in the level of expenditures by category.
Critical Accounting Policies
The condensed consolidated financial statements of Liberty Star have been prepared in conformity with accounting principles generally accepted in the United States of America. Our significant accounting policies are described in Note 2 to the
consolidated financial statements included in Item 8 in our Form 10-K for the year ended January 31, 2013. The critical accounting policies adopted by our company are as follows:
Going Concern
Since we have not generated any revenue, we have negative cash flows from operations, and negative working capital we have included a reference to the substantial doubt about our ability to continue as a going concern in connection with our
consolidated financial statements for the period ended April 30, 2013. Our total stockholders’ equity (deficit) at April 30, 2013 was $(5,048,085).
These condensed consolidated financial statements have been prepared on the going concern basis, which assumes that adequate sources of financing will be obtained as required and that our assets will be realized, and liabilities settled in the
ordinary course of business. Accordingly, these condensed consolidated financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should we be
unable to continue as a going concern.
Mineral claims
We account for costs incurred to acquire, maintain and explore mineral properties as charged to expense in the period incurred until the time that an ore body is established at which point development of the mineral property would be capitalized.
Currently, we do not have any proven mineral resources on any of our mineral properties.
Convertible promissory notes
We reviewed the convertible promissory notes and the related subscription agreements to determine the appropriate reporting within the financial statements. We report convertible promissory notes as liabilities at their carrying value less
unamortized discounts in accordance with the applicable accounting guidance. We bifurcate conversion options and detachable common stock purchase warrants, and report them as liabilities at fair value at each reporting period when required in
accordance with the applicable accounting guidance. No gain or loss is reported when the notes are converted into shares of our common stock in accordance with the note’s terms.
Common stock purchase warrants
We report common stock purchase warrants as equity unless a condition exists which requires reporting as a derivative liability at fair market value. For common stock purchase warrants reported as a derivative liability, as well as new and modified
warrants reported as equity, we utilize the Black-Scholes valuation method in order to determine fair value.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources that are material to stockholders.
18
DESCRIPTION OF BUSINESS
Business overview
Liberty Star Uranium & Metals Corp. was formerly Liberty
Star Gold Corp. and formerly Titanium Intelligence, Inc. (Titanium). Titanium
was incorporated on August 20, 2001 under the laws of the State of Nevada. On
February 5, 2004 we commenced operations in the acquisition and exploration of
mineral properties business. Big Chunk Corp. (Big Chunk) is our wholly owned
subsidiary and was incorporated on December 14, 2003 in the State of Alaska. Big
Chunk is engaged in the acquisition and exploration of mineral properties
business in the State of Alaska. Redwall Drilling Inc. (Redwall) was our
wholly owned subsidiary and was incorporated on August 31, 2007 in the State of
Arizona. Redwall performed drilling services on our mineral properties. Redwall
ceased drilling activities in July 2008 and was dissolved on March 30, 2010. In
April 2007, we changed our name to Liberty Star Uranium & Metals Corp. to
reflect our current general exploration for base and precious metals. We are
considered to be an exploration stage company, as we have not generated any
revenues from operations.
Our current business
We are an exploration stage company engaged in the acquisition
and exploration of mineral properties in the States of Arizona and Alaska.
Claims in the State of Alaska are held in the name of our wholly-owned
subsidiary, Big Chunk Corp. Claims in the State of Arizona are held in the name
of Liberty Star. We use the term Super Project to indicate a project in which
numerous mineral targets have been identified, any one or more of which could
potentially contain commercially viable quantities of minerals. Our significant
projects are described below.
North Pipes Super Project (North Pipes and NPSP):
Located in Northern Arizona on the Arizona Strip, we plan to ascertain
whether the NPSP claims possess commercially viable deposits of uranium and
associated co-product metals. We have not identified any ore reserves to date.
Big Chunk Super Project (Big Chunk):
Located in the
Iliamna region of Southwestern Alaska, we plan to ascertain whether the Big
Chunk claims possess commercially viable deposits of copper, gold, molybdenum,
silver, palladium rhenium and zinc. We have not identified any ore reserves to
date.
Bonanza Hills Project (Bonanza Hills):
Located in the
Iliamna region of Southwestern Alaska, our plans have been to ascertain whether
the Bonanza Hills claims possess commercially viable deposits of gold and
silver. We have not identified any ore reserves. Bonanza Hills is hampered by
its remote location. We have completely relinquished any rights we had to
Bonanza Hills.
Tombstone Super Project (Tombstone)(formerly referred to
as Tombstone Porphyry Precious Metals Project):
Tombstone is located in
Cochise County, Arizona and the Super Project covers the Tombstone caldera and
its environs. Within the Tombstone Caldera is the Hay Mountain target where we
are concentrating our work at this time. We plan to ascertain whether the
Tombstone, Hay Mountain claims possess commercially viable deposits of copper,
molybdenum, gold, silver, lead, zinc, manganese and other metals including Rare
Earth Elements (REEs). We have not identified any ore reserves to date.
East Silver Bell Porphyry Copper Project (East Silver
Bell):
Located northwest of Tucson, Arizona, we plan to ascertain whether
the East Silver Bell claims possess commercially viable deposits of copper. We
have not identified any ore reserves to date.
Title to mineral claims involves certain inherent risks due to
difficulties of determining the validity of certain claims as well as potential
for problems arising from the frequently ambiguous conveyancing history
characteristic of many mineral properties. We have investigated title to all the
Companys mineral properties and, to the best of its knowledge, title to all
properties are in good standing.
The mineral resource business generally consists of three
stages: exploration, development and production. Mineral resource companies that
are in the exploration stage have not yet found mineral resources in
commercially exploitable quantities, and are engaged in exploring land in an effort to discover them. Mineral resource companies that have located a mineral resource in commercially exploitable quantities and are preparing to extract that resource are in the
development stage, while those engaged in the extraction of a known mineral resource are in the production stage. We are in the exploration stage – as we have not found any mineral resources in commercially exploitable quantities.
19
There is no assurance that a commercially viable mineral deposit exists on any of our properties, and further exploration is required before we can evaluate whether any exist and, if so, whether it would be economically feasible to develop or
exploit those resources. Even if we complete our current exploration program and we are successful in identifying a mineral deposit, we would be required to spend substantial funds on further drilling and engineering studies before we could know
whether that mineral deposit will constitute an ore reserve (an ore reserve is a commercially viable mineral deposit).
To date, we have not generated any revenues and we remain in the exploration stage. Our ability to pursue our business plan and generate revenues is subject to our ability to obtain additional financing, and we cannot give any assurance that we will
be able to do so.
Competition
We are a mineral resource exploration stage company engaged in the business of mineral exploration. We compete with other mineral resource exploration stage companies for financing from a limited number of investors that are prepared to make
investments in mineral resource exploration stage companies. The presence of competing mineral resource exploration stage companies may impact our ability to raise additional capital in order to fund our property acquisitions and exploration
programs if investors are of the view that investments in competitors are more attractive based on the merit of the mineral properties under investigation and the price of the investment offered to investors.
We also compete for mineral properties of merit with other exploration stage companies. Competition could reduce the availability of properties of merit or increase the cost of acquiring additional mineral properties.
Many of the resource exploration stage companies with whom we compete may have greater financial and technical resources than we do. Accordingly, these competitors may be able to spend greater amounts on acquisitions of properties of merit and on
exploration of their properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of resource properties. This competition could result in our competitors having resource properties of greater
quality and interest to prospective investors who may finance additional exploration and to senior exploration stage companies that may purchase resource properties or enter into joint venture agreements with junior exploration stage companies. This
competition could adversely impact our ability to finance property acquisitions and further exploration.
Compliance with Government Regulation
We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in the States of Arizona and Alaska.
We are required to perform annual assessment work in order to maintain the Big Chunk Alaska State mining claims. If annual assessment work is not performed we must pay the assessment amount in cash in order to maintain the claims. Completion of
annual assessment work in the amount of $400 per 1/4 section (160 acre) claim or $100 per 1/16 section (40 acre) claim extends the claims for a one year period. Assessment work performed in excess of the required amount may be carried
forward for up to 4 years to reduce future obligations for assessment work. We estimate that the required annual assessments to maintain the claims will be approximately $238,200.
The annual state rentals for the Big Chunk Alaska State mining claims vary from $70 to $280 per mineral claim and escalate with the age of the mining claim. The rental period begins at noon September 1
st
through the following
September 1
st
and annual rental payments are due on November 30
th
of each year. Annual rent is due in full within 45 days of staking a new claim and covers the period from staking until the next September 1
st
. The
rentals of $113,120 to extend the Big Chunk claims through September 1, 2013 were paid in November 2012. The estimated state rentals due for the Big Chunk claims by November 30, 2013 for the period from September 1, 2013 through September 1, 2014 are
$113,120. Alaska State production royalty is three percent of net income. State law prescribes that after a 3.5 -year exemption from state taxes a metal mine is liable for a 15% state licensing tax on net income from the mine.
20
Our North Pipes claims are Federal lode mining claims located on U.S. Federal Lands and administered by the Department of Interior, Bureau of Land Management. The Bureau of Land Management (“BLM”) has prepared an environmental impact
statement (“EIS”) addressing potential for contamination of significant amounts of uranium leaking into the Colorado River. The EIS indicated the danger of such contamination insignificant. Regardless, the United States Secretary of the
Interior, Kenneth Salazar, through executive order has withdrawn Federal lands from locatable mineral exploration and mining North of the Grand Canyon along the Utah border in Arizona, the so-called “Arizona Strip”. Nearly 1 million
acres of land managed by the BLM and the Forest Service were segregated in July 2009 by the Secretary of Interior. The executive order has resulted in the withdrawal of an area of the Arizona Strip from mining in particular, and the moratorium now
is instated for the next 20 years. However, the moratorium permits existing claims and mines to continue as before, including our North Pipes lode mining claims.
We are required to pay annual rentals to maintain our North Pipes Federal lode mining claims in good standing. The rental period begins at 12:01 PM on September 1
st
through the following September 1
st
at 12:00 and rental
payments are due by the first day of the rental period starting at 12:01 PM. The annual rental is $140 per claim. Additional fees of $45 per claim are due in the first year of filing a Federal lode mining claim along with the first
year’s rent. The rentals of $58,380 for the period from September 1, 2012 to September 1, 2013 have been paid. The annual rentals due by September 1, 2013 of 58,380 are required to maintain the North Pipes claims are for the period from
September 1, 2013 through September 1, 2014. There is no requirement for annual assessment or exploration work on the Federal lode mining claims, this having been supplanted by the rental fee. There are no royalties associated with the Federal lode
mining claims.
We are required to pay annual rentals for our Federal lode mining claims for our East Silver Bell project in the State of Arizona. The rental period begins at noon on September 1
st
through the following September 1
st
and rental
payments are due by the first day of the rental period. The annual rental is $140 per claim. The rentals fees of $3,640 for the period from September 1, 2012 to September 1, 2013 have been paid. The annual rentals due by September 1, 2013 of
$3,640 are required to maintain the East Silver Bell claims are for the period from September 1, 2013 through September 1, 2014. There is no requirement for annual assessment or exploration work on the Federal lode mining claims, this having
been supplanted by the rental fee. There are no royalties associated with the Federal lode mining claims.
We are required to pay annual rentals for our Federal lode mining claims for our Tombstone project in the State of Arizona. The rental period begins at noon on September 1
st
through the following September 1
st
and rental
payments are due by the first day of the rental period. The annual rental is $140 per claim. Additional fees of $45 per claim are due in the first year of filing a Federal lode mining claim along with the first year’s rent. The rentals
and initial filing fees for the period from September 1, 2012 to September 1, 2013 have been paid. The annual rentals due by September 1, 2013 of $13,360 are required to maintain the Tombstone claims for the period from September 1, 2013 through
September 1, 2014. There is no requirement for annual assessment or exploration work on the Federal lode mining claims, this having been supplanted by the rental fee. There are no royalties associated with the Federal lode mining claims. Beginning
September 1, 2011 at 12:01 PM, Liberty Star started and subsequently completed staking 9 Federal lode mining claims along the east edge of old patented mining claims in the main producing part of the old Tombstone mining area. These new claims are
adjacent to the south end of the Walnut Creek TS claim block and are also named the TS claims. These claims occupy fractional land areas open to location by federal lode claim
We are required to pay annual rentals for our Arizona State Land Department (“ASLD”) Mineral Exploration Permits (“AZ MEP”) at our Tombstone Hay Mountain Project in the State of Arizona. A mineral exploration permit is
permission from ASLD to prospect and explore for minerals on State Trust land. Exploration is any activity conducted for the purpose of determining the existence of a valuable mineral deposit, such as: geologic mapping, drilling, geochemical
sampling, and geophysical surveys. Prior to exploration, the Plan of Operations must be approved by ASLD. The permitting process for an exploration permit takes a minimum of sixty (60) days. If the application is approved, the initial rent is $2 per acre. If
renewed, no additional rents are due for the second year. Rents are set at $1
per acre for years 3 thru 5. Work expenditure requirements are: $10 per acre for
years 1-2; and $20 per acre for years 3-5. Removal of any minerals or materials
from State Trust land without the appropriate lease or permit is prohibited. The
permit is valid for one year from the due date of the rental and bond. If
renewal requirements are met, the permit can be renewed annually for up to five
years. If discovery of a valuable mineral deposit is made, the permitee must
apply for a mineral lease before actual mining activities can begin. A mineral
lease permits the mining of minerals discovered under the exploration permit.
The approval process takes a minimum of six (6) months. The mineral lease is
issued for a term of twenty (20) years. Leases may be renewed for an additional
term. Both rents and royalties are determined by appraisal. Royalties may be
based on: 1) a fixed rate subject to annual adjustment; or 2) a sliding-scale
rate which is linked to a commodity index price and the operation's break-even
price. There is a statutory minimum royalty rate of 2% of gross value. These AZ
MEPs require a reclamation bond of $3,000 which we currently hold. The first
years rental has been paid for these MEPs and the escalating rental is due on
the anniversary of the MEP each year. After the end of the 4th year, the MEPs
must transition to a State Mineral Lease upon satisfaction of the State Mineral
Inspector that economic indications of a minable deposit exist. After
commencement of mining, the State of Arizona shall be paid a minimal net smelter
return after taking into consideration any extenuating mining challenges royalty
but not less than a 2% gross royalty. The rental period begins on September
30
th
through the following September 29
th
and rental
payments are due by the first day of the rental period. We hold AZ MEP permits
for 7,515 acres at our Tombstone project. We paid initial rental fees from the
date of application through September 29, 2012 of $8,254. Required minimum work
expenditures for the period ended September 29, 2013 are $71,150. The annual
rentals due by September 30, 2013 to maintain the AZ MEP permits are $7,515.
21
With respect to the foregoing properties, additional approvals
and authorizations may be required from other government agencies, depending
upon the nature and scope of the proposed exploration program. The amount of
these costs is not known at this time as we do not know the size, quality of any
resource or reserve at this time, and it is extremely difficult to assess the
impact of any capital expenditures on earnings or our competitive position.
Personnel
Currently we employ one full time geologist who is also our
CEO, CFO, and Chairman of the Board, James Briscoe. We also employ one full time
executive, one full time executive assistant/accountant, one as-needed PhD
consulting geologist specializing in GIS computer mapping and database creation,
one full time geo-tech, who is also our manager of field operations, one
investor relations representative, a part time administrative assistant, and one
CPA on an as needed basis. We hire consultants for investor relations,
exploration and administrative functions also on an as needed basis.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
All directors of our company hold office until the next annual
meeting of the stockholders or until their successors have been elected and
qualified. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office. Our
directors, executive officers and significant employees, their ages, positions
held, and duration as such, are as follows:
Name
|
Position Held with the
Company
|
Age
|
Date First Elected
or
Appointed
|
James Briscoe
|
Chief Executive
Officer, Chief Financial Officer, Chairman of the Board and Director,
Former President
|
72
|
February 3, 2004
|
Larry Liang
|
Former President
and Former Director(1)
|
33
|
December 29, 2009
|
Gary Musil
|
Secretary and Director
|
61
|
October 23, 2003
|
John Guilbert
|
Director
|
81
|
February 5, 2004
|
Keith Brill
|
Director
|
35
|
December 23, 2009
|
Pete OHeeron
|
Director
|
50
|
September 6, 2012
|
22
|
(1)
|
Mr. Liang gave notice of to the Board of Directors of his
resignation from all of his positions with the Company on August 27, 2013
and it was accepted on September 5, 2013.
|
Business Experience
James Briscoe - Chief Executive Officer, Chief Financial
Officer and Chairman of the Board and Director
Mr. Briscoe was appointed as our Chief Executive Officer,
President, Chairman and a director on February 3, 2004. Mr. Briscoe became the
interim Chief Financial Officer on July 31, 2008. Mr. Briscoe is a Registered
Professional Geologist in the states of Arizona and California. From 1996 to
April 2005, Mr. Briscoe was the Vice President of Exploration, and Chairman of
the Board of JABA Exploration Inc., a TSX Venture Exchange Canadian public
company. Mr. Briscoe was also the President, Chief Executive Officer and a
Geologist of JABA (US) Inc. and President of Compania Minera JABA, S.A. de C.V.
in Mexico. Compania Minera JABA, S.A. de C.V. is no longer active and is in the
process of dissolution. During the periods of time indicated below, Mr. Briscoe
served in the positions listed for the following two Canadian public companies:
Company
|
Title
|
From
|
To
|
|
|
|
|
1. Excellon
|
VP Exploration
|
April 1994
|
January 1996
|
2. JABA Inc.
|
CEO
|
January 1980
|
April 2005
|
We believe Mr. Briscoe is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experience as described above.
Larry Liang Former Director & Former President
Mr. Liang has a strong background in international business
development both in China and the United States. As a banker and real estate
broker, Mr. Liang has negotiated multi-million dollar transactions for Chinese,
American and other international clients. His current focus is on
entrepreneurial projects that will utilize his expertise in public and private
mergers and acquisitions, joint ventures and strategic alliances. Previously,
Mr. Liang had practiced corporate law for the Tian Lun Law Firm, one of southern
China s largest law firms. He holds law degrees from the Southwest University
of Political Science and Law, Chong Qing, China and from the James E. Rogers
College of Law, University of Arizona, Tucson, Arizona.
We believe Mr. Lang was qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experience as described above.
Gary Musil Secretary and Director
Mr. Gary Musil was appointed as one our directors on October
23, 2003 and is presently our corporate Secretary. Mr. Musil was our Chief
Executive Officer and Chief Financial Officer from October 23, 2003 to February
3, 2004. Mr. Musil has more than 30 years of management and financial consulting
experience. Mr. Musil has served as an officer and director on numerous public
mining companies since 1988. This experience has resulted in his overseeing
exploration projects in Peru, Chile, Eastern Europe (Slovak Republic), British
Columbia, Ontario, Quebec and New Brunswick (Canada). Prior to this, he was
employed for 15 years with Dickenson Mines Ltd. and Kam-Kotia Mines Ltd. as a
controller for the producing silver/lead/zinc mine in the interior of British
Columbia, Canada. Mr. Musil currently serves as an officer/director of four TSX
Venture Exchange public companies in Canada. Mr. Musil has been the President,
Chief Executive Officer, Chief Financial Officer and a director of International
Montoro Resources Inc., a TSX Venture company and a reporting issuer in Canada,
since February 1999. Mr. Musil has been the chief financial officer and
secretary and a director of Belmont Resources Inc., a TSX Venture company and a
reporting issuer in Canada, since August 1992. Mr. Musil has been the chief
financial officer and a director of Megastar Development Corp, a TSX Venture
company and a reporting issuer in Canada, since July 2006. Mr. Musil has been the Chief Financial Officer and secretary of Highbank Resources Ltd., a TSX Venture company and a reporting issuer in Canada, since December 1988.
23
We believe Mr. Musil is qualified to serve on our board of directors because of his knowledge of our company’s history and current operations, which he gained from working for our company as described above, in addition to his education and
business experience as described above.
John Guilbert – Director
Dr. Guilbert was appointed as one of our directors on February 5, 2004. Dr. Guilbert is a Professor Emeritus at the University of Arizona and is a world-renowned geologist and author of the book The Geology of Ore Deposits, a popular 900 page text
used throughout the world and a co-developer of the Lowell-Guilbert porphyry copper model and recipient of two mining awards, the R.A.F. Penrose Medal and the D.C. Jackling Award. These gold medal awards, the most coveted in American Mining, were
awarded back-to-back in seccesive years. Dr. Guilbert has served as a director of Excellon Inc. a Vancouver Stock Exchange listed company from 1992 – 1996. Dr. Guilbert has served as a Board Chairman and director for JABA Inc., an Alberta
Stock Exchange (later CDNX then TSX) listed company from 1996 – 2002.
We believe Dr. Guilbert is qualified to serve on our board of directors because of his knowledge of our company’s history and current operations, which he gained from working for our company as described above, in addition to his education and
business experience as described above.
Keith Brill – Director
Mr. Brill was appointed as one of our directors on December 23, 2009. Mr. Brill received an International Master of Business Administration (IMBA) from the Moore School of Business, University of South Carolina in May 2005. He graduated from the
South Carolina Honors College, University of South Carolina in May 2003 with a Bachelor of Science, magna cum laude, major in Economics and Finance, minor in Spanish. Mr. Brill has been a management consultant with PA Consulting Group, Inc., a
leading global consulting firm, since 2004. He has provided multinational Fortune 500 companies with consulting advice on topics including cost reduction, operational efficiency, and IT strategy. Mr. Brill has extensive experience in conducting ROI
analysis, developing business cases, and providing strategic financial advice on major business transformation programs.
We believe Mr. Brill is qualified to serve on our board of directors because of his knowledge of our company’s history and current operations, which he gained from working for our company as described above, in addition to his education and
business experience as described above.
Pete O’Heeron – Director
Mr. O’Heeron joined the board in September, 2012. Mr. O’Heeron leads an operational investment group which identifies early stage opportunities in the medical field with strong intellectual property positions. Through his 20+ years of
medical product development experience, Mr. O’Heeron brings together the resources from strategic disciplines necessary to commercialize unique technologies. Prior to founding Advanced Medical Technologies LLC, Mr. O’Heeron founded
NeoSurg Technologies, Inc. to develop a minimally invasive access system. As a result of his efforts, NeoSurg Technologies was successful in developing the T2000 Minimally Invasive Access System, the world leader in reposable surgical
instrumentation. Mr. O’Heeron completed the sale of NeoSurg Technologies to CooperSurgical in 2005. Mr. O’Heeron graduated from Texas State University with a BS in Healthcare Administration and a minor in Business Administration. He
received his Masters in Healthcare Administration from the University of Houston. Mr. O’Heeron currently holds 5 patents and has 4 patents pending.
Family Relationships
There are no family relationships among our directors or officers.
24
Board and Committee Meetings
The board of directors of our company held four formal meetings in the year ended January 31, 2013 and four formal meetings in the year ended January 31, 2012. All proceedings of the board of directors were conducted by resolutions consented to in
writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada
General Corporate Law and the By-laws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
There have been no material changes to the procedures by which our shareholders may recommend nominees to our board of directors during the year ended January 31, 2013. Shareholders may contact our President, James A. Briscoe, to recommend nominees
to our board of directors.
For the year ended January 31, 2013 our only standing committee of the board of directors was our audit committee. We do not have a nominating committee or a compensation committee.
Audit Committee
Currently our audit committee consists of our entire board of directors. We do not have a separately-designated standing audit committee established in accordance with section 3(a)(58)(A) of the Exchange Act.
During fiscal years ended January 31, 2013 and January 31, 2012, there were no special meetings held by this committee. The business of the Audit Committee was conducted by resolutions consented to in writing by all the members of the board and
filed with the minutes of the proceedings of the board.
Audit Committee Financial Expert
Our board of directors has determined that it does not have a member of its board of directors or audit committee that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, or who is "independent" as
the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.
We believe that the members of our board of directors are collectively capable of analyzing and evaluating our consolidated financial statements and understanding internal controls and procedures for financial reporting. In addition, we believe that
retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not
generated any material revenues to date.
Involvement in Certain Legal Proceedings
Our directors and executive officers have not been involved in any of the following events during the past ten years:
1.
|
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
|
|
2.
|
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
|
|
|
3.
|
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
|
|
|
4.
|
being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
25
5.
|
being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any federal or
state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil
money penalty or temporary or permanent cease- and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or,
|
|
|
6.
|
being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self- regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934), any
registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
|
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and
Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the year ended January 31,
2013, all filing requirements applicable to its officers, directors and greater than 10% percent beneficial owners were complied with.
Code of Ethics
Effective March 15, 2004, our company's board of directors adopted a Code of Business Conduct and Ethics that applies to, among other persons, our company's president and secretary (being our principal executive officer, principal financial officer
and principal accounting officer), as well as persons performing similar functions. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:
1.
|
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
|
|
|
2.
|
full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;
|
|
|
3.
|
compliance with applicable governmental laws, rules and regulations;
|
|
|
4.
|
the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and
|
|
|
5.
|
accountability for adherence to the Code of Business Conduct and Ethics. Our Code of Business Conduct and Ethics requires, among other things, that all of our company's Senior Officers commit to timely, accurate and consistent
disclosure of information; that they maintain confidential information; and that they act with honesty and integrity.
|
In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly Senior Officers, have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting
principles, and federal and state securities laws. Any Senior Officer who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it
to our company. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is
against our company policy to retaliate against any individual who reports in
good faith the violation or potential violation of our company's Code of
Business Conduct and Ethics by another.
26
Our Code of Business Conduct and Ethics was filed with the
Securities and Exchange Commission on March 13, 2004 as Exhibit 14.1 to our
annual report. We will provide a copy of the Code of Business Conduct and Ethics
to any person without charge, upon request. Requests can be sent to: Liberty
Star Uranium & Metals Corp., 5610 E Sutler Ln, Tucson, Arizona 85712.
EXECUTIVE COMPENSATION
Following are the particulars of all compensation paid or
accruing to our named executive officers for the last two fiscal years ended.
Summary Compensation Table
Name and
Principal
Position
|
Year
|
Salary
(US$)
|
Bonus
(US$)
|
Stock
Awards
(US$)
|
Option
Awards
(US$)
|
Nonequity
Incentive Plan
Compensation
(US$)
|
Non-qualified
Deferred
Compensation
Earnings
(US$)
|
All Other
Compensation
(US$)
(1)
|
Total
(US$)
|
James Briscoe,
Principal Executive Officer,
CEO, CFO, Chairman and
Director
|
2013
2012
|
70,000
84,000
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
78,000
(2)
89,667
(2)
|
$148,000
$173,667
|
Larry Liang,
Former President & Former
Director(5)
|
2013
2012
|
21,965
65,625
|
Nil
Nil
|
Nil
Nil
|
Nil
198,000 (4)
|
Nil
Nil
|
Nil
Nil
|
$15,625
(3)
Nil
|
$37,590
$263,625
|
Eduardo Othon
Former Director & Vice
President
Global Business Development
|
2013
2012
|
Nil
47,500
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
$47,500
|
(1)
|
The value of perquisites and other personal benefits,
securities and property for the officers that do not exceed the lesser of
$10,000 or 10% of the total of the annual salary and bonus and is not
reported herein.
|
(2)
|
Mr. Briscoes other compensation represents accrued and
unpaid wages during the twelve months ended January 31, 2012 and 2013 of
$89,667 and $78,000, respectively.
|
(3)
|
Mr. Liangs other compensation represents accrued and
unpaid wages during the twelve months ended January 31, 2013 of
$15,625.
|
27
(4)
|
Mr. Liang was awarded 10,000,000 incentive stock options
on January 10, 2012 with a grant date fair value of $0.022 per share. The
assumptions used to determine the grant date fair value can be found in
Note 8 to our audited consolidated financial statements.
|
(5)
|
Mr. Liang provided notice on August 27, 2013 of his
resignation from all of his positions with the Company and it was accepted
on September 5, 2013.
|
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth for each named executive officer
certain information concerning the outstanding equity awards as of January 31,
2013.
|
Option Awards
|
Stock Awards
|
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Number
of
Shares
or
Units of
Stock
that
Have
Not
Vested
|
Market
Value
of
Shares
or
Units
of
Stock
that
Have
Not
Vested
|
Equity
Incentive
Plan
Awards :
Number
of
Unearned
Shares,
Units
or Other
Rights
that
Have Not
Vested
|
Equity
Incentive
Plan
Awards :
Market
or
Payout
Value
of
Unearned
Shares,
Units
or Other
Rights
that
Have Not
Vested
|
James Briscoe
|
52,500,000
|
Nil
|
Nil
|
$0.038
|
8/10/2015
|
Nil
|
Nil
|
Nil
|
Nil
|
James Briscoe
|
75,000
|
Nil
|
Nil
|
$0.88
|
5/21/2018
|
Nil
|
Nil
|
Nil
|
Nil
|
Larry Liang(2)
|
7,500,000
|
2,500,000
|
Nil
|
$0.027
|
1/10/2022
|
Nil
|
Nil
|
Nil
|
Nil
|
Larry Liang(2)
|
2,500,000
|
Nil
|
Nil
|
$0.038
|
8/10/2015
|
Nil
|
Nil
|
Nil
|
Nil
|
(1)
|
Eduardo Othon terminated his employment with us on
November 17, 2011. He had until February 17, 2012 in order to exercise his
exercisable incentive stock options. He did not exercise his incentive
stock options and therefore, they expired on February 17, 2012.
|
|
|
(2)
|
Effective August 28, 2013, Mr. Liang resigned from all of his positions with the Company.
|
28
COMPENSATION PLANS
As of January 31, 2013 we had three compensation plans in
place, entitled "2004 Stock Option Plan", 2007 Stock Option Plan and 2010
Stock Option Plan. These plans have been approved by our security holders.
These plans have been given retroactive effect of the 1 for 4 reverse stock
split on September 1, 2009.
Plan
|
Total number of
securities authorized
|
Number of securities
to
be
issued upon
exercise
of outstanding
options
as at January 31,
2013
|
Weighted-average
exercise price
of
outstanding options
as
at January 31,
2013
|
Number of securities
remaining
available
for
further issuance as
at
January 31, 2013
|
2004 Stock Option Plan
|
962,500
|
451,375
|
$4.51
|
511,125
|
2007 Stock Option Plan
|
2,500,000
|
212,500
|
$0.88
|
2,287,500
|
2010 Stock Option Plan
|
95,500,000
|
90,875,000
|
$0.037
|
4,625,000
|
On January 10, 2012 we granted incentive stock options and
non-qualified stock options to certain of our directors, officers, employees and
consultants to purchase an aggregate of 10,500,000 shares of our common stock at
an exercise price of $0.027 per share for a term expiring on January 10, 2022.
The options were 50% vested upon granting and vested another 25% on January 10,
2013 and will vest another 25% on January 10, 2014. The options that were vested
immediately may be exercised using a cash-less exercise formula.
Long-Term Incentive Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers, except that
our directors and executive officers receive stock options at the discretion of
our Board. We do not have any material bonus or profit sharing plans pursuant to
which cash or non-cash compensation is or may be paid to our directors or
executive officers, except that stock options may be granted at the discretion
of our Board.
We have no plans or arrangements in respect of remuneration
received or that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of resignation,
retirement, change of control) or a change of responsibilities following a
change of control, where the value of such compensation exceeds $60,000 per
executive officer.
Employment Contracts
We have not entered into any written employment agreements or
compensation arrangements with any of our named executive officers. We have
entered into a verbal agreement with James Briscoe, CEO, CFO and Director for
annual salary of $148,000. We entered into a verbal agreement with Larry Liang,
President and Director for annual salary of $75,000. As of the date hereof, Mr.
Liang resigned from all of his positions with the Company.
Compensation of Directors
We have no formal plan for compensating our directors for their
service in their capacity as directors, although such directors are expected in
the future to receive stock options to purchase common stock as awarded by our
board of directors or (as to future stock options) a compensation committee
which may be established. Directors are entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance
at meetings of our board of directors. Our board of directors may award special
remuneration to any director undertaking any special services on our behalf other than
services ordinarily required of a director. No director received and/or accrued
any compensation for their services as a director, including committee
participation and/or special assignments.
29
Incentive stock options were granted to directors during the
fiscal year ended January 31, 2012. There was no compensation paid or accruing
to any director, unless such director is also a named executive officer, during
the fiscal year ended January 31, 2013.
Name
|
Year
|
Fees
Earned
or
Paid in
Cash
(US$)
|
Stock
Awards
(US$)
|
Option
Awards
(US$)
|
Nonequity
Incentive
Plan
Compensation
(US$)
|
Non-
qualified
Deferred
Compensation
Earnings
(US$)
|
All Other
Compensation
(US$)
(1)
|
Total
(US$)
|
John Guilbert
|
2013
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
$0
|
Gary Musil
|
2013
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
$0
|
Keith Brill
|
2013
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
$0
|
Pete O’Heeron
|
2013
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
$0
|
(1)
The value of perquisites and other personal
benefits, securities and property for the officers that do not exceed the lesser
of $10,000 or 10% of the total of the annual salary and bonus and is not
reported herein.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
We have set forth in the following table certain information regarding our common stock beneficially owned on October 29, 2013 for (i) each shareholder we know to be the beneficial owner of 5% or more of our outstanding common stock, (ii) each of our executive officers and directors, and (iii) all executive officers and directors as a group. In general, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership within 60 days. All percentages are calculated based upon a total number of 831,522,859 shares of common stock issued and outstanding as of October 29, 2013, plus, in the case of the individual or entity for which the calculation is made, that number of options or warrants owned by such individual or entity that are currently exercisable or exercisable within 60 days.
Name and Address of Beneficial
Owner
|
Amount and Nature of
Beneficial
Ownership
|
Percentage
of
Class
(1)
|
James Briscoe
5610 E Sutler Lane
Tucson AZ 85712
USA
|
54,762,500
(2)
(3)
|
6.19%
|
Gary Musil
3577 Marshall Street
Vancouver BC V5N 4S2
Canada
|
7,547,000
(3)
|
0.90%
|
John Guilbert
961 E Linda Vista Blvd.
Tucson AZ 85727
USA
|
15,052,500
(3)
|
1.78%
|
Keith Brill
|
|
|
30
250 Central Ave Apt B204
New York, NY
11559
USA
|
2,500,000
(3)
|
0.30%
|
Larry Liang
6651 N Campbell Ave #254
Tucson, AZ 85718
USA(4)
|
7,500,000
(3)
|
0.90%
|
Pete OHeeron
17300 El Camino Real #110
Houston, TX 77058
USA
|
7,767,973
(3)
|
0.93%
|
Cede & Company
PO Box 20
Bowling
Green Station
New York, NY 10274
|
780,791,942
|
93.9%
|
Directors and Executive Officers as a
Group
|
95,129,973
|
10.32%
|
(1)
|
Based on 831,522,859 shares of common stock issued and outstanding as of October 29, 2013. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.
|
|
|
(2)
|
There are 2,187,500 shares that are held by Alaska Star
Minerals LLC. James Briscoe beneficially owns 100% of the membership
interest in Alaska Star Minerals LLC. There are 52,575,000 incentive stock
options granted to James Briscoe under the 2004, 2007 and 2010 stock
option plans that are exercisable at September, 2013.
|
|
|
(3)
|
Includes incentive stock options granted under the 2004,
2007 and 2010 stock option plans that are exercisable at September 17,
2013.
|
|
|
(4)
|
Mr. Liang resigned from all of his positions with the
Company effective August 28, 2013. As a result, Mr. Liang must exercise
options prior to 90 days from his resignation or the options will be
forfeited.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Transactions with Related Persons
The following is a description of transactions since February
1, 2011 to which the Company has been a party in which the amount involved
exceed or will exceed $120,000 and in which any of the person who serves as our
director and executive officer or with any beneficial owners of more than 5% of
our common stock, or entities affiliated with them, had or will have a direct or
indirect material interest.
We entered into the following transactions with related
parties during the three and six months ended July 31, 2013:
Paid or accrued rent of $1,566 and $3,132 for the three and six
months ended July 31, 2013. 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.
At July 31, 2013 we had a balance of accrued unpaid wages of
$296,867 to Jim Briscoe, our Chairman of the Board, CEO and CFO.
31
For the three and six months ending July 31, 2013, we
recognized compensation expense of $12,843 and $25,686, respectively, for stock
options granted to officers and board members.
We entered into the following transactions with related
parties during the year ended January 31, 2013:
Paid or accrued $6,785 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.
At January 31, 2013 we had a balance of accrued unpaid wages of
$261,367 to Jim Briscoe, our Chairman of the Board, CEO and CFO.
At January 31, 2013 we had a balance of accrued unpaid wages of
$15,625 to Larry Liang, our Former President.
We recognized compensation expense of $49,500 for stock options
granted to an officer.
We have an option to explore 26 standard Federal lode mining
claims at the East Silver Bell project and 33 standard Federal lode mining
claims at the Walnut Creek project from JABA US Inc., an Arizona Corporation in
which two of our directors are owners. We are required to pay annual rentals to
maintain the claims in good standing. During the year ended January 31, 2013 we
paid $8,254 in rental fees to maintain the mineral claims in good standing. The
original option agreement was for the period from April 11, 2008 through January
1, 2011 and has been extended through June 1, 2013
We entered into the following transactions with related
parties during the year ended January 31, 2012:
Paid or accrued $6,263 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.
At January 31, 2012 we had a balance of accrued unpaid wages of
$183,367 to Jim Briscoe, our Chairman of the Board, CEO and CFO.
We recognized compensation expense of $99,000 for stock options
granted to officers and board members.
We have an option to explore 26 standard Federal lode mining
claims at the East Silver Bell project and 33 standard Federal lode mining
claims at the Walnut Creek project from JABA US Inc., an Arizona Corporation in
which two of our directors are owners. We are required to pay annual rentals to
maintain the claims in good standing. During the year ended January 31, 2012 we
paid $8,254 in rental fees to maintain the mineral claims in good standing. The
original option agreement was for the period from April 11, 2008 through January
1, 2011 and has been extended through June 1, 2012.
Director Independence
Quotations for the Companys common stock are entered on the
OTCQB inter-dealer quotation system, which does not have director independence
requirements. For purposes of determining director independence, the Company
applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule
4200(a)(15), a director is not considered to be independent if he or she is also
an executive officer or employee of the corporation. As a result, the Company
does not have any independent directors.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
32
SELLING STOCKHOLDER
We are registering for resale shares of our common stock that
are issued and outstanding held by the selling stockholder identified below. We
are registering the shares to permit the selling stockholder to resell the
shares when and as it deems appropriate in the manner described in the Plan of
Distribution. As of the date of this Prospectus, there are 826,499,603 shares
of common stock issued and outstanding.
The following table sets forth:
-
the name of the selling stockholder,
-
the number of shares of our common stock that the selling stockholder
beneficially owned prior to the offering for resale of the shares under this
Prospectus,
-
the maximum number of shares of our common stock that may be offered for
resale for the account of the selling stockholder under this Prospectus, and
-
the number and percentage of shares of our common stock to be beneficially
owned by the selling stockholder after the offering of the shares (assuming
all of the offered shares are sold by the selling stockholder).
The selling stockholder has never served as our officer or
director or any of its predecessors or affiliates within the last three years,
nor has the selling stockholder had a material relationship with us. The selling
stockholder is neither a broker-dealer nor an affiliate of a broker-dealer. The
selling stockholder did not have any agreement or understanding, directly or
indirectly, to distribute any of the shares being registered at the time of
purchase.
The selling stockholder may offer for sale all or part of the
shares from time to time. The table below assumes that the selling stockholder
will sell all of the shares offered for sale. The selling stockholder is under
no obligation, however, to sell any shares pursuant to this Prospectus.
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
|
|
|
|
Shares of
|
|
|
Maximum
|
|
|
Common
|
|
|
|
|
|
|
Common Stock
|
|
|
Number of
|
|
|
Stock
|
|
|
|
|
|
|
Beneficially
|
|
|
Shares of
|
|
|
Beneficially
|
|
|
Percent
|
|
|
|
Owned prior to
|
|
|
Common Stock
|
|
|
Owned after
|
|
|
Ownership
|
|
Name
|
|
Offering (1)
|
|
|
to be Offered
|
|
|
Offering
|
|
|
after Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KVM Capital Partners (2)
|
|
0
|
|
|
244,500,000
|
|
|
0
|
|
|
0%
|
|
(1)
|
Beneficial ownership is determined in accordance with the
rules and regulations of the SEC. In computing the number of shares
beneficially owned by a person and the percentage ownership of that
person, securities that are currently convertible or exercisable into
shares of our common stock, or convertible or exercisable into shares of
our common stock within 60 days of the date hereof are deemed outstanding.
Such shares, however, are not deemed outstanding for the purposes of
computing the percentage ownership of any other person. Except as
indicated in the footnotes to the following table, each stockholder named
in the table has sole voting and investment power with respect to the
shares set forth opposite such stockholders name.
|
|
|
(2)
|
Includes 244,500,000 shares issuable to KVM pursuant to
the KVM Investment Agreement. Neil Kleinman has the voting and dispositive
power over the shares owned by KVM.
|
PLAN OF DISTRIBUTION
Pursuant to the terms of the KVM Investment Agreement, KVM committed to purchase up to $8,000,000 of our common stock over a period of up to thirty-six (36) months. From time to time during the thirty-six (36) months period commencing from the effectiveness of the registration statement, we may deliver a put notice to KVM which states the dollar amount that we intend to sell to KVM on a date specified in the put notice. The maximum investment amount per notice shall be no more than two hundred and fifty percent (250%) of the average daily volume of the common stock up to $250,000 for the ten consecutive trading days immediately prior to date of the applicable put notice. The purchase price per share to be paid by KVM shall be calculated at a twenty percent (20%) discount to the lowest volume weighted average price of the common stock as reported by Bloomberg, L.P. during the five (5) consecutive trading days immediately prior to the receipt by KVM of the put notice. We initially reserved 244,500,000 shares of our common stock for issuance under the KVM Investment Agreement.
33
In connection with the KVM Investment Agreement, we also entered into a registration rights agreement with KVM, pursuant to which we are obligated to file a registration statement with the SEC covering 244,500,000 shares of our common stock underlying the KVM Investment Agreement within 21 days after the closing of the transaction. In addition, we are obligated to use all commercially reasonable efforts to have the registration statement declared effective by the SEC and maintain the effectiveness of such registration statement until termination of the KVM Investment Agreement.
At an assumed purchase price of $0.016 (equal to 80% of the closing price of our common stock of $0.02 on October 29, 2013), we will be able to receive up to $3,912,000 in gross proceeds, assuming the sale of the entire 244,500,000 shares being registered hereunder pursuant to the KVM Investment Agreement. Accordingly, we would be required to register additional 255,500,000 shares to obtain the balance of $4,088,000 under the KVM Investment Agreement. We are currently authorized to issue 1,250,000,000 shares of our common stock. We may be required to increase our authorized shares in order to receive the entire purchase price. KVM has agreed to refrain from holding an amount of shares which would result in KVM owning more than 4.99% of the then-outstanding shares of our common stock at any one time.
The selling stockholder may, from time to time, sell any or all of its shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated
prices. The selling stockholder may use any one or more of the following methods when selling shares:
-
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
-
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction
-
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
-
an exchange distribution in accordance with the rules of the applicable exchange;
-
privately negotiated transactions;
-
broker-dealers may agree with the selling stockholder to sell a specified number of such shares at a stipulated price per share;
-
broker-dealers may agree with the selling stockholder to sell a specified number of such shares at a stipulated price per share;
-
through the writing of options on the shares;
-
a combination of any such methods of sale; and
-
any other method permitted pursuant to applicable law.
The selling stockholder may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the selling stockholder and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess
of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible that a selling stockholder will attempt to sell shares of common stock in block transactions to
market makers or other purchasers at a price per share which may be below the then market price. The selling stockholder cannot assure that all or any of the shares offered in this prospectus will be issued to, or sold by, the selling stockholder.
The selling stockholder and any brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus, are “underwriters” as that term is defined under the Securities Act, or the Exchange Act, or the rules
and regulations under such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act.
Pursuant to the KVM Investment Agreement, the Company may enter into an agreement with a registered broker-dealer to act as a placement agent. The Company has no intention to engage a placement agent in connection with this registration statement,
and has not had any discussions with any broker-dealers. Additionally, KVM does not have the right to require the Company to engage a placement agent, or pick the broker-dealer to act as placement agent. Furthermore, the engagement of a placement agent does
not impact KVMs obligation to provide the Company cash funds in connection with
the delivery of a put notice.
34
Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by the
selling stockholder. The selling stockholder may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the
shares if liabilities are imposed on that person under the Securities Act.
Notwithstanding the foregoing, if the Company decides to engage a placement
agent in connection with this registration statement, then the Company shall be
obligated to pay the fees connected to the placement agent. This may result in
the Company receiving less than the expected total proceeds of $5,000,000.
KVM has agreed to pay all fees and expenses incident to the
registration of the shares of common stock. KVM intends to sell/distribute the
shares of common stock that they acquire from the Company in the open market.
The selling stockholder shall acquire the securities offered
hereby in the ordinary course of business and has advised us that it has not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of its shares of common stock,
nor is there an underwriter or coordinating broker acting in connection with a
proposed sale of shares of common stock by any selling stockholder. If we are
notified by any selling stockholder that any material arrangement has been
entered into with a broker-dealer for the sale of shares of common stock, if
required, we will file a supplement to this prospectus.
If the selling stockholder uses this Prospectus for any sale of
the shares of common stock, it will be subject to the prospectus delivery
requirements of the Securities Act.
Regulation M
The anti-manipulation rules of Regulation M under the Exchange
Act may apply to sales of our common stock and activities of the selling
stockholder.
During such time as it may be engaged in a distribution of any
of the shares we are registering by this registration statement, KVM is required
to comply with Regulation M. In general, Regulation M precludes any selling
security holder, any affiliated purchasers and any broker-dealer or other person
who participates in a distribution from bidding for or purchasing, or attempting
to induce any person to bid for or purchase, any security which is the subject
of the distribution until the entire distribution is complete. Regulation M
defines a "distribution" as an offering of securities that is distinguished from
ordinary trading activities by the magnitude of the offering and the presence of
special selling efforts and selling methods. Regulation M also defines a
"distribution participant" as an underwriter, prospective underwriter, broker,
dealer, or other person who has agreed to participate or who is participating in
a distribution.
Regulation M under the Exchange Act prohibits, with certain
exceptions, participants in a distribution from bidding for or purchasing, for
an account in which the participant has a beneficial interest, any of the
securities that are the subject of the distribution. Regulation M also governs
bids and purchases made in order to stabilize the price of a security in
connection with a distribution of the security. We have informed KVM that the
anti-manipulation provisions of Regulation M may apply to the sales of their
shares offered by this prospectus, and we have also advised KVM of the
requirements for delivery of this prospectus in connection with any sales of the
common stock offered by this prospectus.
Pursuant to the KVM Investment Agreement, KVM shall not sell
stock short, either directly or indirectly through its affiliates, principals or
advisors, our common stock during the term of the agreement.
DESCRIPTION OF SECURITIES TO BE REGISTERED
Authorized Capital Stock
We are authorized to issue 1,250,000,000 shares of common
stock, $0.00001 par value per share.
35
Common Stock
As of October 29, 2013, 831,522,859 shares of common stock are issued and outstanding.
The holders of our common stock have equal ratable rights to
dividends from funds legally available if and when declared by our board of
directors and are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or winding
up of our affairs. Our common stock does not provide the right to a preemptive,
subscription or conversion rights and there are no redemption or sinking fund
provisions or rights. Our common stock holders are entitled to one
non-cumulative vote per share on all matters on which shareholders may vote.
All shares of common stock now outstanding are fully paid for
and non-assessable. We refer you to our Articles of Incorporation, Bylaws and
the applicable statutes of the state of Nevada for a more complete description
of the rights and liabilities of holders of our securities. All material terms
of our common stock have been addressed in this section.
Holders of shares of our common stock do not have cumulative
voting rights, which means that the holders of more than 50% of the outstanding
shares, voting for the election of directors, can elect all of the directors to
be elected, if they so choose, and, in that event, the holders of the remaining
shares will not be able to elect any of our directors.
Warrants
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:
|
|
Number of whole share
|
|
|
Weighted average exercise
|
|
|
|
purchase warrants
|
|
|
price
per share
|
|
Outstanding, January 31, 2013
|
|
94,963,129
|
|
$
|
0.058
|
|
Issued
|
|
4,974,994
|
|
|
0.017
|
|
Exercised
|
|
(3,033,618)
|
|
|
0.002
|
|
|
|
|
|
|
|
|
Outstanding, April 30, 2013
|
|
96,904,505
|
|
$
|
0.057
|
|
Exercisable, April 30, 2013
|
|
96,873,255
|
|
$
|
0.057
|
|
Options
During the six months ended July 31, 2013 there were no stock
options granted. At July 31, 2013 there were 903,500 non-qualified stock options
outstanding with a weighted average exercise price of $ $1.429 per option; of
those options 872,250 are exercisable. At July 31, 2013 there were 90,635,375
incentive stock options outstanding with a weighted average exercise price of $
$0.047 per option; of those options 88,072,875 are exercisable with a weighted
average exercise price of $0.048.
During the three and six months ended July 31, 2013 we
recognized $12,843 and $47,828, respectively, of compensation expense related to
incentive and non-qualified stock options previously granted to officers,
employees and consultants.
Dividends
We have never declared or paid any cash dividends on shares of
our capital stock. We currently intend to retain earnings, if any, to fund the
development and growth of our business and do not anticipate paying cash
dividends in the foreseeable future. Our payment of any future dividends will be
at the discretion of our board of directors after taking into account various
factors, including our financial condition, operating results, cash needs and
growth plans.
36
LEGAL MATTERS
The validity of the common stock offered by this prospectus
will be passed upon for us by Szaferman, Lakind, Blumstein & Blader, PC,
Lawrenceville, New Jersey.
EXPERTS
The consolidated financial statements of our company included
in this prospectus and in the registration statement have been audited by Malone
Bailey LLP, an independent registered public accounting firm, to the extent and
for the periods set forth in their report appearing elsewhere herein and in the
registration statement, and are included in reliance on such report, given the
authority of said firm as an expert in auditing and accounting.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having
prepared or certified any part of this prospectus or having given an opinion
upon the validity of the securities being registered or upon other legal matters
in connection with the registration or offering of the common stock was employed
on a contingency basis, or had, or is to receive, in connection with the
offering, a substantial interest, direct or indirect, in the registrant or any
of its parents or subsidiaries. Nor was any such person connected with the
registrant or any of its parents or subsidiaries as a promoter, managing or
principal underwriter, voting trustee, director, officer, or employee.
WHERE YOU CAN FIND MORE INFORMATION
We filed with the Securities and Exchange Commission a
registration statement under the Securities Act for the common stock in this
offering. This prospectus does not contain all of the information in the
registration statement and the exhibits and schedule that were filed with the
registration statement. For further information with respect to us and our
common stock, we refer you to the registration statement and the exhibits and
schedule that were filed with the registration statement. Statements contained
in this prospectus about the contents of any contract or any other document that
is filed as an exhibit to the registration statement are not necessarily
complete, and we refer you to the full text of the contract or other document
filed as an exhibit to the registration statement. A copy of the registration
statement and the exhibits and schedules that were filed with the registration
statement may be inspected without charge at the Public Reference Room
maintained by the Securities and Exchange Commission at 100 F Street, N.E.
Washington, DC 20549, and copies of all or any part of the registration
statement may be obtained from the Securities and Exchange Commission upon
payment of the prescribed fee. Information regarding the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange Commission
at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website
that contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the SEC. The address of the
website is www.sec.gov.
We file periodic reports under the Exchange Act, including
annual, quarterly and special reports, and other information with the Securities
and Exchange Commission. These periodic reports and other information are
available for inspection and copying at the regional offices, public reference
facilities and website of the Securities and Exchange Commission referred to
above.
37
Liberty Star Uranium & Metals Corp.
(An
Exploration Stage Company)
July 31, 2013
F-1
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
July 31,
|
|
|
January 31,
|
|
|
|
2013
|
|
|
2013
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
194,906
|
|
$
|
117,716
|
|
Stock subscription
receivable
|
|
25,000
|
|
|
-
|
|
Prepaid expenses and supplies
|
|
6,592
|
|
|
8,662
|
|
Total current assets
|
|
226,498
|
|
|
126,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
66,164
|
|
|
81,200
|
|
Total assets
|
$
|
292,662
|
|
$
|
207,578
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
Current portion of long-term debt
|
$
|
5,336
|
|
$
|
5,089
|
|
Convertible promissory
note
|
|
3,730,174
|
|
|
3,730,174
|
|
Accounts payable and accrued
liabilities
|
|
229,095
|
|
|
151,480
|
|
Accrued wages to
related parties
|
|
312,492
|
|
|
276,992
|
|
Accrued interest
|
|
1,210,695
|
|
|
972,617
|
|
Warrant liability
|
|
34,334
|
|
|
15,112
|
|
Total current liabilities
|
|
5,522,126
|
|
|
5,151,464
|
|
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
9,573
|
|
|
12,305
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
5,531,699
|
|
|
5,163,769
|
|
|
|
|
|
|
|
|
Stockholders' deficit
|
|
|
|
|
|
|
Common stock -
$.00001 par value; 1,250,000,000 shares authorized;
823,918,971 and 644,631,457 shares issued and
outstanding
|
|
8,240
|
|
|
7,408
|
|
Additional paid-in capital
|
|
48,656,488
|
|
|
47,912,449
|
|
Deficit accumulated
during the exploration stage
|
|
(53,903,765
|
)
|
|
(52,876,048
|
)
|
Total stockholders' deficit
|
|
(5,239,037
|
)
|
|
(4,956,191
|
)
|
|
|
|
|
|
|
|
Total liabilities and shareholders' deficit
|
$
|
292,662
|
|
$
|
207,578
|
|
The Accompanying Notes are an Integral Part of the Condensed
Consolidated Unaudited Financial Statements
F-2
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGECOMPANY)
|
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
(Unaudited)
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
Period from Inception
|
|
|
|
July 31,
|
|
|
July 31,
|
|
|
(August 20, 2001)
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
to July 31, 2013)
|
|
Revenues
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geological and
geophysical costs
|
|
165,968
|
|
|
220,713
|
|
|
184,536
|
|
|
311,835
|
|
|
15,550,077
|
|
Salaries and benefits
|
|
80,518
|
|
|
90,832
|
|
|
161,131
|
|
|
180,679
|
|
|
4,429,646
|
|
Public relations
|
|
85,813
|
|
|
3,489
|
|
|
112,653
|
|
|
10,622
|
|
|
967,863
|
|
Depreciation
|
|
8,247
|
|
|
11,065
|
|
|
16,454
|
|
|
23,353
|
|
|
937,594
|
|
Legal
|
|
49,345
|
|
|
15,445
|
|
|
88,106
|
|
|
29,487
|
|
|
1,055,436
|
|
Professional services
|
|
24,524
|
|
|
47,338
|
|
|
40,053
|
|
|
67,850
|
|
|
1,416,181
|
|
General and
administrative
|
|
72,323
|
|
|
50,994
|
|
|
146,568
|
|
|
118,750
|
|
|
2,549,880
|
|
Travel
|
|
12,578
|
|
|
16,981
|
|
|
17,704
|
|
|
19,308
|
|
|
291,340
|
|
Settlement expense
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
13,241,020
|
|
Loss on sale of assets
|
|
-
|
|
|
-
|
|
|
-
|
|
|
12,119
|
|
|
54,572
|
|
Impairment loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
16,092,870
|
|
Net operating expenses
|
|
499,316
|
|
|
456,857
|
|
|
767,205
|
|
|
774,003
|
|
|
56,586,479
|
|
Loss from operations
|
|
(499,316
|
)
|
|
(456,857
|
)
|
|
(767,205
|
)
|
|
(774,003
|
)
|
|
(56,586,479
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
7
|
|
|
50
|
|
|
8
|
|
|
115
|
|
|
198,766
|
|
Interest expense
|
|
(124,859
|
)
|
|
(111,974
|
)
|
|
(241,298
|
)
|
|
(218,324
|
)
|
|
(6,616,454
|
)
|
Debt conversion expense
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(103,437
|
)
|
Gain (loss) on change
in fair value of warrant liability
|
|
(16,669
|
)
|
|
(22,828
|
)
|
|
(19,222
|
)
|
|
(15,242
|
)
|
|
(3,654,420
|
)
|
Other income
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,350,390
|
|
Income from Elle
Venture
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
300,000
|
|
Foreign exchange gain
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
505
|
|
Gain on settlement of
debt to related party
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
7,366
|
|
Total other income (expense)
|
|
(141,521
|
)
|
|
(134,752
|
)
|
|
(260,512
|
)
|
|
(233,451
|
)
|
|
(8,517,284
|
)
|
Net loss
|
|
(640,837
|
)
|
|
(591,609
|
)
|
|
(1,027,717
|
)
|
|
(1,007,454
|
)
|
|
(65,103,763
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share of
common stock
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
N/A
|
|
Basic and diluted weighted average number of shares of
common stock outstanding
|
|
796,770,075
|
|
|
650,995,705
|
|
|
776,989,500
|
|
|
646,626,752
|
|
|
N/A
|
|
The Accompanying Notes are an Integral Part of the Condensed
Consolidated Unaudited Financial Statements
F-3
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGECOMPANY)
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Period from Inception
|
|
|
|
Six Months Ended July 31,
|
|
|
(August 20, 2001)
|
|
|
|
2013
|
|
|
2012
|
|
|
to July 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(1,027,717
|
)
|
$
|
(1,007,454
|
)
|
$
|
(65,103,763
|
)
|
Adjustments to reconcile net loss to
net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
16,454
|
|
|
23,353
|
|
|
937,594
|
|
Amortization of deferred
financing charges
|
|
-
|
|
|
-
|
|
|
542,716
|
|
Amortization of discount on convertible
promissory notes
|
|
-
|
|
|
-
|
|
|
3,632,995
|
|
Mineral claim
costs
|
|
-
|
|
|
-
|
|
|
343,085
|
|
Impairment loss
|
|
-
|
|
|
-
|
|
|
16,092,870
|
|
Expenses
capitalized to debt
|
|
-
|
|
|
-
|
|
|
730,174
|
|
(Gain) loss on sale of fixed
assets
|
|
-
|
|
|
12,119
|
|
|
54,572
|
|
(Gain) loss on
change in fair value of warrant liability
|
|
19,222
|
|
|
15,242
|
|
|
3,654,420
|
|
Share based compensation
|
|
47,828
|
|
|
25,999
|
|
|
4,585,757
|
|
Share and
warrant based payments
|
|
-
|
|
|
-
|
|
|
13,795,973
|
|
Common shares issued for third
party services
|
|
-
|
|
|
-
|
|
|
91,140
|
|
Non-cash other income from sale of mineral claims
|
|
-
|
|
|
-
|
|
|
(1,000,000
|
)
|
Interest paid through issuance
of debt
|
|
-
|
|
|
-
|
|
|
282,569
|
|
Changes in
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid
expenses and supplies
|
|
2,070
|
|
|
1,508
|
|
|
35,855
|
|
Other current assets
|
|
-
|
|
|
-
|
|
|
(7,875
|
)
|
Other
assets
|
|
-
|
|
|
3,000
|
|
|
(25,000
|
)
|
Certificate of deposit
|
|
-
|
|
|
-
|
|
|
(11,435
|
)
|
Accounts
payable and accrued expenses
|
|
77,615
|
|
|
95,056
|
|
|
223,078
|
|
Accrued wages related parties
|
|
35,500
|
|
|
38,250
|
|
|
312,492
|
|
Accrued
interest
|
|
238,078
|
|
|
216,733
|
|
|
1,618,896
|
|
Cash flows from operating activities:
|
|
(590,950
|
)
|
|
(576,194
|
)
|
|
(19,213,887
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from the sale of fixed assets
|
|
-
|
|
|
-
|
|
|
407,327
|
|
Proceeds from redemption of
certificate of deposit
|
|
-
|
|
|
-
|
|
|
216,232
|
|
Purchase of certificate of deposit
|
|
-
|
|
|
-
|
|
|
(204,797
|
)
|
Purchase of equipment
|
|
(1,418
|
)
|
|
-
|
|
|
(1,186,111
|
)
|
Net cash used in investing activities
|
|
(1,418
|
)
|
|
-
|
|
|
(767,349
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Principal activity on long-term
debt
|
|
(2,485
|
)
|
|
(2,260
|
)
|
|
(507,431
|
)
|
Principal activity on capital lease obligation
|
|
-
|
|
|
-
|
|
|
(39,298
|
)
|
Principal activity on
convertible promissory notes
|
|
-
|
|
|
-
|
|
|
(286,227
|
)
|
Proceeds from the issuance of common stock,
net of expenses
|
|
672,043
|
|
|
632,884
|
|
|
15,037,802
|
|
Proceeds from the sale of
convertible promissory notes
|
|
-
|
|
|
-
|
|
|
5,772,371
|
|
Proceeds from the long-term debt
|
|
-
|
|
|
-
|
|
|
198,925
|
|
Net cash provided by financing activities
|
|
669,558
|
|
|
630,624
|
|
|
20,176,142
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash
|
|
77,190
|
|
|
54,430
|
|
|
194,906
|
|
Cash, beginning of period
|
|
117,716
|
|
|
155,869
|
|
|
-
|
|
Cash, end of period
|
$
|
194,906
|
|
$
|
210,299
|
|
$
|
194,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax paid
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Interest paid during the period
|
$
|
777
|
|
$
|
1,077
|
|
$
|
208,862
|
|
|
|
|
|
|
|
|
|
|
|
Non- Cash Investing and Financing
Activities:
|
|
|
|
|
|
|
|
|
|
Stock subscription receivable
|
$
|
25,000
|
|
|
|
|
|
|
|
The Accompanying Notes are an Integral Part of the Condensed
Consolidated Unaudited Financial Statements
F-4
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
(Unaudited)
|
NOTE 1 Interim financial statement disclosure
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 July 31, 2013
and the results of our operations and cash flows for the periods presented.
Interim results are subject to significant seasonal variations
and the results of operations for the three and six months ended July 31, 2013
are not necessarily indicative of the results to be expected for the full
year.
NOTE 2 Going concern
The Company is in the exploration stage, has incurred losses
from operations, and 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 Companys
ability to continue as a going concern.
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.
NOTE 3 Common stock
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.
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.
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.
In February, 2013, we issued 1,526,718 units to one investor in
exchange for gross proceeds 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.
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.
In May, June and July, 2013, we issued 31,270,958 shares for
gross proceeds of $255,000 related to the investment agreement with Deer Valley
Management, LLC. As of July 31, 2013, we had not yet received payment for one
transaction valued at $25,000. Subsequent to July 31, 2013, we received $5,000
for this transaction and expect to receive the remaining $20,000 over a period
of several months. In August 2013, we decided to terminate the investment
agreement with Deer Valley Management, LLC due to their violation of the payment
terms pursuant to the investment agreement. No further shares issuances to Deer
Valley Management, LLC are expected to occur.
In May, June and July, 2013, we sold 18,001,184 units to five
investors for gross proceeds of $182,043. Each unit consisted of one common
share of our company and one non-transferable share purchase warrant. The share
purchase warrants entitle the investors to purchase one additional common share
of our company at prices ranging between of $0.0116 and $0.0173 until July 30,
2016.
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.
F-5
During the six months ended July 31, 2013 there were no stock
options granted. At July 31, 2013 there were 903,500 non-qualified stock options
outstanding with a weighted average exercise price of $ $1.429 per option; of
those options 872,250 are exercisable. At July 31, 2013 there were 90,635,375
incentive stock options outstanding with a weighted average exercise price of $
$0.047 per option; of those options 88,072,875 are exercisable with a weighted
average exercise price of $0.048.
During the three and six months ended July 31, 2013 we
recognized $12,843 and $47,828, respectively, of compensation expense related to
incentive and non-qualified stock options previously granted to officers,
employees and consultants.
As of July 31, 2013, there were 110,641,700 whole share
purchase warrants outstanding and 110,610,450 exercisable. The warrants have a
weighted average remaining life of 1.30 years and a weighted average exercise
price of $$0.052 per whole warrant for one common share. Whole share purchase
warrants outstanding at July 31, 2013 are as follows:
|
|
Number of whole share
|
|
|
Weighted average exercise
|
|
|
|
purchase warrants
|
|
|
price per share
|
|
Outstanding, January 31, 2013
|
|
94,963,129
|
|
$
|
0.058
|
|
Issued
|
|
22,976,178
|
|
|
0.015
|
|
Exercised
|
|
(7,297,607
|
)
|
|
0.002
|
|
|
|
|
|
|
|
|
Outstanding, July 31, 2013
|
|
110,641,700
|
|
$
|
0.052
|
|
Exercisable, July 31, 2013
|
|
110,610,450
|
|
$
|
0.052
|
|
NOTE 4 Related party transactions
We entered into the following transactions with related
parties during the three and six months ended July 31, 2013:
Paid or accrued rent of $1,566 and $3,132 for the three and six
months ended July 31, 2013. 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.
At July 31, 2013 we had a balance of accrued unpaid wages of
$296,867 to Jim Briscoe, our Chairman of the Board, CEO and CFO.
For the three and six months ending July 31, 2013, we
recognized compensation expense of $12,843 and $25,686, respectively, for stock
options granted to officers and board members.
NOTE 5 Fair value of financial instruments
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.
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 July 31, 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 July 31, 2013
and January 31, 2013:
|
|
Expected
|
|
|
Expected dividend
|
|
|
Expected
|
|
|
Risk-free interest
|
|
Description
|
|
volatility
|
|
|
yield
|
|
|
term
|
|
|
rate
|
|
W arrant liability at July 31, 2013
|
|
131.40%
|
|
|
0%
|
|
|
3.01 years
|
|
|
1.00%
|
|
W arrant liability at January 31, 2013
|
|
99.80%
|
|
|
0%
|
|
|
3.59 years
|
|
|
0.65%
|
|
|
|
Fair value measurements at reporting date using:
|
|
|
|
|
|
|
Quoted prices in
|
|
|
|
|
|
Significant
|
|
|
|
|
|
|
active markets for
|
|
|
Significant other
|
|
|
unobservable
|
|
|
|
|
|
|
identical liabilities
|
|
|
observable inputs
|
|
|
inputs
|
|
Description
|
|
July 31, 2013
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Warrant liability
|
$
|
34,364
|
|
|
-
|
|
|
- $
|
|
|
34,364
|
|
F-6
|
|
Fair value measurements using
|
|
|
|
unobservable inputs (Level 3):
|
|
Description
|
|
Warrant liability
|
|
Balance, January 31, 2013
|
$
|
15,112
|
|
Total
(gains) or losses
|
|
19,222
|
|
Purchases, issuances and
|
|
-
|
|
Transfers
in or out of Level
|
|
-
|
|
Balance, July 31, 2013
|
$
|
34,334
|
|
NOTE 6 Subsequent events
In August, 2013, we entered into a promissory note (the August
2013 Note) for a principal sum of $555,000 plus accrued and unpaid interest and
any other fees. The consideration is up to $500,000, which would produce an
original issue discount of $55,000 if all the consideration is received. The
lender paid $150,000 upon closing pursuant to the terms of the August 2013 Note.
The August 2013 Note has a maturity of one year from the delivery of each
payment. The August 2013 Note may be convertible into shares of common stock of
our company at any time from 180 days after the date of each payment of
consideration, at a conversion price which is 70% of the average of the three
lowest closing prices in the 20 trading days previous to the conversion. We may
repay the August 2013 Note at any time on or before 90 days from the effective
date of the August 2013 Note with an interest rate of 0%, after which we may not
make any further payments on the August 2013 Note prior to the maturity date
without written approval from the lender. If we elect not to repay the August
2013 Note on or before 90 days from the effective date of the August 2013 Note,
a one-time interest charge of 12% will be applied to the principal sum.
In August, 2013, we sold 423,135 units to one investor for
gross proceeds of $7,938. 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 $0.0263 until August 2, 2016.
In September, 2013, we sold 2,157,497 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 $0.0324 until September 5, 2016.
In September, 2013, we granted 7,423,625 stock options to one director and three employees in exchange for services rendered.
In September, 2013, we entered into an agreement to issue 5,023,256 shares of common stock in exchange for services. We are not obligated to deliver one half of the shares if we do not exercise our option to use the service provider after six months. The shares are in the process of being issued.
NOTE 7 Reclassifications
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.
F-7
Liberty Star Uranium & Metals Corp.
(An
Exploration Stage Company)
January 31, 2013
F-8
Report of Independent Registered Public Accounting
Firm
Board of Directors and Stockholders of
Liberty Star Uranium
& Metals Corp.
We have audited the accompanying consolidated balance sheet of
Liberty Star Uranium & Metals Corp. and its subsidiaries (an exploration
stage company) (collectively, the Company) as of January 31, 2013 and 2012,
and the related consolidated statements of operations, stockholders equity
(deficit), and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of internal
control over financial reporting. Our audits include consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position Star
Uranium & Metals Corp. and its subsidiaries as of January 31, 2013 and 2012,
and the results of their operations, changes in stockholders equity (deficit),
and their cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 3 to the consolidated financial statements, the Company is in
the exploration stage, has suffered recurring losses from operations, and
requires additional funds for further exploratory activity prior to attaining a
revenue generating status. In addition, the Company may not find sufficient ore
reserves to be commercially mined. These conditions raise substantial doubt
about the Companys ability to continue as a going concern. Managements plans
in regard to these matters are also described in Note 3. The consolidated
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
/s/ MaloneBailey, LLP
Houston, Texas
May 16, 2013
F-9
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
CONSOLIDATED BALANCE SHEETS
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
January 31, 2013
|
|
|
January 31, 2012
|
|
Current:
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
117,716
|
|
$
|
155,869
|
|
Prepaid expenses
and supplies
|
|
8,662
|
|
|
14,151
|
|
Total current assets
|
|
126,378
|
|
|
170,020
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
81,200
|
|
|
129,510
|
|
Certificates of deposit
|
|
-
|
|
|
3,000
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
207,578
|
|
$
|
302,530
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
Current portion of long-term
debt
|
$
|
5,089
|
|
$
|
4,631
|
|
Convertible
promissory note
|
|
3,730,174
|
|
|
3,730,174
|
|
Accounts payable and accrued
liabilities
|
|
151,480
|
|
|
12,470
|
|
Accrued wages to
related parties
|
|
276,992
|
|
|
183,367
|
|
Accrued interest
|
|
972,617
|
|
|
526,971
|
|
Warrant
liability
|
|
15,112
|
|
|
53,948
|
|
Total current liabilities
|
|
5,151,464
|
|
|
4,511,561
|
|
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
12,305
|
|
|
17,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
5,163,769
|
|
|
4,528,954
|
|
|
|
|
|
|
|
|
Stockholders equity (deficit)
|
|
|
|
|
|
|
Common stock -
$.00001 par value; 1,250,000,000 shares
authorized;
740,710,265
and 635,899,389 shares issued and outstanding
|
|
7,408
|
|
|
6,359
|
|
Additional
paid-in capital
|
|
47,912,449
|
|
|
45,998,478
|
|
Deficit accumulated during the
exploration stage
|
|
(
(52,876,048
|
)
|
|
(
50,231,261
|
)
|
Total
stockholders equity (deficit)
|
|
(4,956,191
|
)
|
|
(4,226,424
|
)
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
(deficit)
|
$
|
207,578
|
|
$
|
302,530
|
|
The Accompanying Notes are an Integral Part of the Consolidated
Financial Statements
F-10
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
Cumulative from
|
|
|
|
|
|
|
|
|
|
date of inception
|
|
|
|
|
|
|
|
|
|
(August 20, 2001)
|
|
|
|
For the twelve
|
|
|
For the twelve
|
|
|
to
|
|
|
|
months ended
|
|
|
months ended
|
|
|
January 31, 2013
|
|
|
|
January 31, 2013
|
|
|
January 31, 2012
|
|
|
(unaudited)
|
|
Revenues
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Geological and geophysical costs
|
|
1,105,960
|
|
|
1,107,560
|
|
|
15,365,540
|
|
Salaries and benefits
|
|
352,159
|
|
|
434,149
|
|
|
4,268,515
|
|
Public relations
|
|
78,729
|
|
|
52,440
|
|
|
855,211
|
|
Depreciation
|
|
41,610
|
|
|
63,297
|
|
|
921,140
|
|
Legal
|
|
72,754
|
|
|
65,385
|
|
|
967,331
|
|
Professional services
|
|
107,540
|
|
|
81,788
|
|
|
1,376,128
|
|
General and administrative
|
|
430,877
|
|
|
260,315
|
|
|
2,403,313
|
|
Travel
|
|
31,129
|
|
|
51,018
|
|
|
273,636
|
|
Settlement expense
|
|
-
|
|
|
-
|
|
|
13,241,020
|
|
Impairment loss
|
|
-
|
|
|
-
|
|
|
16,092,870
|
|
Net operating expenses
|
|
2,220,758
|
|
|
2,115,952
|
|
|
55,764,704
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on sale of assets
|
|
(12,119
|
)
|
|
-
|
|
|
( 54,572
|
)
|
Loss from operations
|
|
(2,232,877
|
)
|
|
(2,115,952
|
)
|
|
(55,819,276
|
)
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
134
|
|
|
869
|
|
|
198,758
|
|
Interest expense
|
|
(450,880
|
)
|
|
(364,804
|
)
|
|
(6,375,156
|
)
|
Debt conversion expense
|
|
-
|
|
|
-
|
|
|
( 103,437
|
)
|
Gain (loss) on change in fair
value of warrant liability
|
|
38,836
|
|
|
18,428
|
|
|
( 3,635,198
|
)
|
Other income
|
|
-
|
|
|
-
|
|
|
1,350,390
|
|
Income from Elle Venture
|
|
-
|
|
|
-
|
|
|
300,000
|
|
Foreign exchange gain
|
|
-
|
|
|
-
|
|
|
505
|
|
|
|
|
|
|
|
|
|
|
|
Gain on settlement of debt to related party
|
|
-
|
|
|
-
|
|
|
7,366
|
|
Total other income (expense)
|
|
(411,910
|
)
|
|
(345,507
|
)
|
|
(8,256,772
|
)
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
(2,644,787
|
)
|
|
(2,461,459
|
)
|
|
(64,076,048
|
)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share of
common stock
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average number
of shares of
common stock outstanding
|
|
677,767,166
|
|
|
618,542,673
|
|
|
N/A
|
|
The Accompanying Notes are an Integral Part of the Consolidated
Financial Statements
F-11
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(DEFICIT)
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Deficit accumulated
|
|
|
Total
|
|
|
|
Common stock
|
|
|
paid-in
|
|
|
during
|
|
|
stockholders
|
|
|
|
Shares
|
|
|
Amount
|
|
|
capital
|
|
|
the exploration stage
|
|
|
equity (deficit)
|
|
Balance, August 20, 2001
(Date of inception)(unaudited)
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Common stock issued for cash
|
|
5,000,000
|
|
|
50
|
|
|
99,950
|
|
|
-
|
|
|
100,000
|
|
Net loss for the
period from inception, August 20, 2001, to January
31,
2004
|
|
-
|
|
|
-
|
|
|
-
|
|
|
( 132,602
|
)
|
|
( 132,602
|
)
|
Balance, January 31, 2004 (unaudited)
|
|
5,000,000
|
|
|
50
|
|
|
99,950
|
|
|
( 132,602
|
)
|
|
( 32,602
|
)
|
Acquisition,
February 3, 2004
|
|
4,375,000
|
|
|
44
|
|
|
15,924,956
|
|
|
-
|
|
|
15,925,000
|
|
Issuance of common stock and
warrants private placement
|
|
650,000
|
|
|
7
|
|
|
2,999,993
|
|
|
-
|
|
|
3,000,000
|
|
Options issued
for services
|
|
-
|
|
|
-
|
|
|
94,350
|
|
|
-
|
|
|
94,350
|
|
Return of shares
|
|
( 1,750,000
|
)
|
|
( 18
|
)
|
|
( 11,199,982
|
)
|
|
11,200,000
|
|
|
-
|
|
Net loss for the
year ended January 31, 2005
|
|
-
|
|
|
-
|
|
|
-
|
|
|
( 18,392,024
|
)
|
|
( 18,392,024
|
)
|
Balance, January 31, 2005 (unaudited)
|
|
8,275,000
|
|
|
83
|
|
|
7,919,267
|
|
|
( 7,324,626
|
)
|
|
594,724
|
|
Issuance of
common stock and warrants private placement
|
|
972,172
|
|
|
10
|
|
|
5,052,722
|
|
|
-
|
|
|
5,052,732
|
|
Net loss for the year ended
January 31, 2006
|
|
-
|
|
|
-
|
|
|
-
|
|
|
( 4,627,965
|
)
|
|
( 4,627,965
|
)
|
Balance, January 31, 2006
(unaudited)
|
|
9,247,172
|
|
|
93
|
|
|
12,971,989
|
|
|
( 11,952,591
|
)
|
|
1,019,491
|
|
Issuance of common stock private
placement
|
|
990,596
|
|
|
10
|
|
|
2,545,985
|
|
|
-
|
|
|
2,545,995
|
|
Issuance of
common stock for services
|
|
37,500
|
|
|
-
|
|
|
93,000
|
|
|
-
|
|
|
93,000
|
|
Expenses of common stock
issuance
|
|
-
|
|
|
-
|
|
|
( 320,000
|
)
|
|
-
|
|
|
( 320,000
|
)
|
Options granted
to consultants and employees
|
|
-
|
|
|
-
|
|
|
832,343
|
|
|
-
|
|
|
832,343
|
|
Net loss for the year ended
January 31, 2007
|
|
-
|
|
|
-
|
|
|
-
|
|
|
( 3,267,948
|
)
|
|
( 3,267,948
|
)
|
Balance, January 31, 2007
(unaudited)
|
|
10,275,268
|
|
|
103
|
|
|
16,123,317
|
|
|
( 15,220,539
|
)
|
|
902,881
|
|
Issuance of common stock private
placement
|
|
429,700
|
|
|
4
|
|
|
1,074,413
|
|
|
-
|
|
|
1,074,417
|
|
Issuance of
common stock for services
|
|
28,000
|
|
|
-
|
|
|
54,540
|
|
|
-
|
|
|
54,540
|
|
Issuance of common stock for
conversion of promissory note
|
|
99,884
|
|
|
1
|
|
|
259,698
|
|
|
-
|
|
|
259,699
|
|
Options granted
to employees and consultants
|
|
-
|
|
|
-
|
|
|
358,646
|
|
|
-
|
|
|
358,646
|
|
Issuance of common stock
purchase warrants
|
|
-
|
|
|
-
|
|
|
1,421,538
|
|
|
-
|
|
|
1,421,538
|
|
Beneficial
conversion feature of convertible promissory notes
|
|
-
|
|
|
-
|
|
|
1,842,734
|
|
|
-
|
|
|
1,842,734
|
|
Net loss for the year ended
January 31, 2008
|
|
-
|
|
|
-
|
|
|
-
|
|
|
( 5,697,935
|
)
|
|
( 5,697,935
|
)
|
Balance, January 31, 2008
(unaudited)
|
|
10,832,852
|
|
|
108
|
|
|
21,134,886
|
|
|
( 20,918,474
|
)
|
|
216,520
|
|
Issuance of common stock for
conversion or payment of promissory note
|
|
37,646,325
|
|
|
376
|
|
|
1,839,135
|
|
|
-
|
|
|
1,839,511
|
|
Issuance of
common stock for inducement to convert promissory note
|
|
7,500
|
|
|
-
|
|
|
9,000
|
|
|
-
|
|
|
9,000
|
|
Reduction of conversion price
for inducement to convert promissory note
|
|
-
|
|
|
-
|
|
|
94,437
|
|
|
-
|
|
|
94,437
|
|
Stock based
compensation
|
|
-
|
|
|
-
|
|
|
576,244
|
|
|
-
|
|
|
576,244
|
|
Common stock purchase warrants
exercise price reduction
|
|
-
|
|
|
-
|
|
|
67,700
|
|
|
-
|
|
|
67,700
|
|
Net loss for the
year ended January 31, 2009
|
|
-
|
|
|
-
|
|
|
-
|
|
|
( 4,176,066
|
)
|
|
( 4,176,066
|
)
|
Balance, January 31, 2009 (unaudited)
|
|
48,486,677
|
|
|
484
|
|
|
23,721,402
|
|
|
( 25,094,540
|
)
|
|
( 1,372,654
|
)
|
Issuance of
common stock for conversion or payment of promissory note
|
|
199,170,302
|
|
|
1,992
|
|
|
603,661
|
|
|
-
|
|
|
605,653
|
|
Beneficial conversion feature of
convertible promissory notes
|
|
-
|
|
|
-
|
|
|
330,366
|
|
|
-
|
|
|
330,366
|
|
Net loss for the
year ended January 31, 2010
|
|
-
|
|
|
-
|
|
|
-
|
|
|
( 2,809,843
|
)
|
|
( 2,809,843
|
)
|
Balance, January 31, 2010 (unaudited)
|
|
247,656,979
|
|
|
2,476
|
|
|
24,655,429
|
|
|
( 27,904,383
|
)
|
|
( 3,246,478
|
)
|
Issuance of
common stock for conversion or payment of promissory note
|
|
187,127,678
|
|
|
1,872
|
|
|
273,105
|
|
|
-
|
|
|
274,977
|
|
Issuance of common stock and
warrants private placement, net
|
|
31,778,484
|
|
|
318
|
|
|
1,284,363
|
|
|
-
|
|
|
1,284,681
|
|
Exercise of
common stock purchase warrants
|
|
135,848,741
|
|
|
1,358
|
|
|
1,880,588
|
|
|
-
|
|
|
1,881,946
|
|
Issuance and modification of
common stock purchase warrants
|
|
-
|
|
|
-
|
|
|
15,089,884
|
|
|
-
|
|
|
15,089,884
|
|
Stock based
compensation
|
|
-
|
|
|
-
|
|
|
2,530,750
|
|
|
-
|
|
|
2,530,750
|
|
Net loss for the year ended
January 31, 2011
|
|
-
|
|
|
-
|
|
|
-
|
|
|
( 19,865,419
|
)
|
|
( 19,865,419
|
)
|
Balance, January 31, 2011
(unaudited)
|
|
602,411,882
|
|
|
6,024
|
|
|
45,714,119
|
|
|
( 47,769,802
|
)
|
|
(2,049,659
|
)
|
Cashless exercise of common
stock purchase warrants
|
|
22,687,507
|
|
|
227
|
|
|
(227
|
)
|
|
-
|
|
|
-
|
|
Issuance of
common stock and warrants private placement, net
|
|
10,800,000
|
|
|
108
|
|
|
253,012
|
|
|
-
|
|
|
253,120
|
|
Stock based compensation
|
|
-
|
|
|
-
|
|
|
103,950
|
|
|
-
|
|
|
103,950
|
|
Recognition of
derivative liabilities into Additional Paid-In Capital
|
|
|
|
|
|
|
|
(72,376
|
)
|
|
|
|
|
(72,376
|
)
|
Net loss for the year ended
January 31, 2012
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,461,459
|
)
|
|
(2,461,459
|
)
|
Balance, January 31,
2012
|
|
635,899,389
|
|
$
|
6,359
|
|
$
|
45,998,478
|
|
$
|
(50,231,261
|
)
|
$
|
(4,226,424
|
)
|
Cashless
exercise of common stock purchase warrants
|
|
20,555,571
|
|
|
205
|
|
|
(205
|
)
|
|
-
|
|
|
-
|
|
Issuance of common stock and
warrants private placement, net
|
|
17,225,537
|
|
|
173
|
|
|
512,711
|
|
|
-
|
|
|
512,884
|
|
Issuance of
common shares for cash pursuant to investment agreement
|
|
59,670,369
|
|
|
597
|
|
|
1,174,403
|
|
|
-
|
|
|
1,175,000
|
|
Issuance of common stock for
third party service
|
|
7,359,399
|
|
|
74
|
|
|
91,066
|
|
|
|
|
|
91,140
|
|
Stock based
compensation
|
|
-
|
|
|
-
|
|
|
135,996
|
|
|
-
|
|
|
135,996
|
|
Net loss for the year ended
January 31, 2013
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,644.787
|
)
|
|
(2,644,787
|
)
|
Balance, January 31,
2013
|
|
740,710,265
|
|
$
|
7,408
|
|
$
|
47,912,449
|
|
$
|
(52,876,048
|
)
|
$
|
(4,956,191
|
)
|
The Accompanying Notes are an Integral Part of the Consolidated
Financial Statements
F-12
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
Cumulative from
|
|
|
|
|
|
|
|
|
|
date of inception
|
|
|
|
|
|
|
For the twelve
|
|
|
(August 20, 2001)
|
|
|
|
For the twelve
|
|
|
months ended
|
|
|
to
|
|
|
|
months ended
|
|
|
January 31,
|
|
|
January 31, 2013
|
|
|
|
January 31, 2013
|
|
|
2012
|
|
|
(unaudited)
|
|
Net change in cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
$
|
(2,644,787
|
)
|
$
|
(2,461,459
|
)
|
$
|
(64,076,048
|
)
|
Adjustments to reconcile net income
(loss) to net cash
from
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
41,610
|
|
|
63,297
|
|
|
921,140
|
|
Amortization of deferred
financing charges
|
|
-
|
|
|
-
|
|
|
542,716
|
|
Amortization of
discount on convertible promissory notes
|
|
-
|
|
|
-
|
|
|
3,632,995
|
|
Mineral claim costs
|
|
-
|
|
|
-
|
|
|
343,085
|
|
Impairment loss
|
|
-
|
|
|
-
|
|
|
16,092,870
|
|
Expenses capitalized to debt
|
|
|
|
|
730,174
|
|
|
730,174
|
|
(Gain) loss on
disposition of fixed assets
|
|
12,119
|
|
|
-
|
|
|
54,572
|
|
(Gain) loss on change in fair
value of warrant liability
|
|
(38,836
|
)
|
|
(18,428
|
)
|
|
3,635,198
|
|
Share based
compensation
|
|
135,996
|
|
|
103,950
|
|
|
4,537,929
|
|
Share and warrant based payments
|
|
-
|
|
|
-
|
|
|
13,795,973
|
|
Common shares
issued for third party services
|
|
91,140
|
|
|
-
|
|
|
91,140
|
|
Non-cash other income from sale
of mineral claims
|
|
-
|
|
|
-
|
|
|
(1,000,000
|
)
|
Interest paid
through issuance of debt
|
|
-
|
|
|
-
|
|
|
282,569
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid expenses and supplies
|
|
5,489
|
|
|
(6,091
|
)
|
|
33,785
|
|
Other
current assets
|
|
-
|
|
|
-
|
|
|
(7,875
|
)
|
Other assets
|
|
-
|
|
|
-
|
|
|
(25,000
|
)
|
Certificate
of Deposit
|
|
-
|
|
|
-
|
|
|
(11,435
|
)
|
Accounts payable and accrued expenses
|
|
139,010
|
|
|
(27,845
|
)
|
|
145,465
|
|
Accrued
wages related parties
|
|
93,625
|
|
|
89,667
|
|
|
276,992
|
|
Accrued interest
|
|
445,646
|
|
|
362,588
|
|
|
1,380,818
|
|
Net cash used in operating activities
|
|
(1,718,988
|
)
|
|
(1,164,147
|
)
|
|
(18,622,937
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from the sale of
fixed assets
|
|
-
|
|
|
-
|
|
|
407,327
|
|
Proceeds from redemption of certificate of
deposit
|
|
3,000
|
|
|
-
|
|
|
216,232
|
|
Purchase of certificate of
deposit
|
|
-
|
|
|
-
|
|
|
(204,797
|
)
|
Purchase of equipment
|
|
(5,419
|
)
|
|
(29,656
|
)
|
|
(1,184,693
|
)
|
Net cash provided by (used in) investing
activities
|
|
(2,419
|
)
|
|
(29,656
|
)
|
|
(765,931
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Principal activity on long-term debt
|
|
(4,630
|
)
|
|
(3,763
|
)
|
|
(504,946
|
)
|
Principal activity on capital
lease obligation
|
|
-
|
|
|
-
|
|
|
(39,298
|
)
|
Principal activity on convertible promissory
notes
|
|
-
|
|
|
-
|
|
|
(286,227
|
)
|
Proceeds from the issuance of
common stock, net of expenses
|
|
1,687,884
|
|
|
253,120
|
|
|
14,365,759
|
|
Proceeds from the sale of convertible
promissory notes
|
|
-
|
|
|
-
|
|
|
5,772,371
|
|
Proceeds from long-term debt
|
|
-
|
|
|
-
|
|
|
198,925
|
|
Net cash provided by financing activities
|
|
1,683,254
|
|
|
249,357
|
|
|
19,506,584
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents for
period
|
|
(38,153
|
)
|
|
(944,446
|
)
|
|
117,716
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
155,869
|
|
|
1,100,315
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
$
|
117,716
|
|
$
|
155,869
|
|
$
|
117,716
|
|
|
|
|
|
|
|
|
|
|
|
Income tax paid
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Interest paid during the period
|
|
5,234
|
|
|
2,216
|
|
|
208,085
|
|
|
|
|
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Recognition of derivative liabilities to additional paid-in
capital
|
$
|
- $
|
|
|
72,376
|
|
|
|
|
Common stock issued for exercise of
warrants
|
$
|
206
|
|
$
|
227
|
|
|
|
|
The Accompanying Notes are an Integral Part of the Consolidated
Financial Statements
F-13
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE 1 Organization
Liberty Star Uranium & Metals Corp. (the Company, we or
Liberty Star) was formerly Liberty Star Gold Corp. and formerly Titanium
Intelligence, Inc. (Titanium). Titanium was incorporated on August 20, 2001
under the laws of the State of Nevada. On February 5, 2004 we commenced
operations in the acquisition and exploration of mineral properties business.
Big Chunk Corp. (Big Chunk) is our wholly owned subsidiary and was
incorporated on December 14, 2003 in the State of Alaska. Big Chunk is engaged
in the acquisition and exploration of mineral properties business in the State
of Alaska. Redwall Drilling Inc. (Redwall) was our wholly owned subsidiary and
was incorporated on August 31, 2007 in the State of Arizona. Redwall performed
drilling services on the Companys mineral properties. Redwall ceased drilling
activities in July 2008 and was dissolved on March 30, 2010. In April 2007, we
changed our name to Liberty Star Uranium & Metals Corp. We are considered to
be an exploration stage company, as we have not generated any revenues from
operations.
These consolidated financial statements include the results of
operations and cash flows of Liberty Star Uranium & Metals Corp. and its
wholly owned subsidiaries, Big Chunk and Redwall, from the dates of acquisition.
All significant intercompany accounts and transactions were eliminated upon
consolidation.
These consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America (GAAP) with the on-going assumption that we will be able to realize
our assets and discharge our liabilities in the normal course of business.
However, certain conditions noted below currently exist which raise substantial
doubt about our ability to continue as a going concern. These consolidated
financial statements do not include any adjustments to the amounts and
classifications of assets and liabilities that might be necessary should we be
unable to continue as a going concern. Our operations have primarily been funded
by the issuance of common stock and debt. Continued operations are dependent on
our ability to complete equity financings or generate profitable operations in
the future. Managements plan in this regard is to secure additional funds
through future equity financings, joint venture agreements or debt. Such
financings may not be available, or may not be available on reasonable
terms.
NOTE 2 Summary of significant accounting policies
The summary of significant accounting policies presented below
is designed to assist in understanding the Company's consolidated financial
statements. Such consolidated financial statements and accompanying notes are
the representations of the Companys management, who is responsible for their
integrity and objectivity. These accounting policies conform to accounting
principles generally accepted in the United States of America in all material
respects, and have been consistently applied in preparing the accompanying
consolidated financial statements. The significant accounting policies adopted
by the Company are as follows:
Use of estimates
The preparation of financial
statements in conformity with generally accepted accounting principles in the
United States of America requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
The valuation of stock-based compensation, classification and
valuation of common stock purchase warrants, classification and value of
embedded conversion options, value of beneficial conversion features, valuation
allowance on deferred tax assets, the determination of useful lives and
recoverability of depreciable assets, accruals, and contingencies are
significant estimates made by management. It is at least reasonably possible
that a change in these estimates may occur in the near term.
Principles of consolidation
The consolidated
financial statements include the accounts of the Company and its wholly-owned
subsidiaries, Big Chunk and Redwall, from the dates of acquisition, February 5,
2004 and August 31, 2007, respectively. All significant intercompany accounts
and transactions have been eliminated upon consolidation.
Cash and cash equivalents
We consider cash held at
banks and all highly liquid investments with original maturities of three months
or less to be cash and cash equivalents. We maintain our cash in bank deposit
accounts which, for periods of time, may exceed federally insured limits. At
January 31, 2013 and 2012, we had cash in bank deposit accounts that exceeded
federally insured limits of $0 and $0, respectively.
Mineral claim costs
We account for costs incurred to
acquire, maintain and explore mineral properties as a charge to expense in the
period incurred until the time that a proven mineral resource is established, at
which point development of the mineral property would be capitalized. Currently,
we do not have any proven mineral resources on any of our mineral properties.
F-14
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 2 Summary of significant accounting policies -
continued
Property and equipment
Property and equipment is
stated at cost. We capitalize all purchased equipment over $500 with a useful
life of more than one year. Depreciation is calculated using the straight line
method over the estimated useful lives of the assets. Leasehold improvements are
stated at cost and are amortized over their estimated useful lives or the lease
term, whichever is shorter. Maintenance and repairs are expensed as incurred
while betterments or renewals are capitalized. Property and equipment is
reviewed periodically for impairment. The estimated useful lives range from 3 to
7 years.
Convertible promissory notes
We report convertible
promissory notes as liabilities at their carrying value less unamortized
discounts, which approximates fair value. We bifurcate conversion options and
detachable common stock purchase warrants and report them as liabilities at fair
value at each reporting period when required in accordance with the applicable
accounting guidance. When convertible promissory notes are converted into shares
of our common stock in accordance with the debts terms, no gain or loss is
recognized. We account for inducements to convert as an expense in the period
incurred, included in debt conversion expense.
Common stock purchase warrants
We report common stock
purchase warrants as equity unless a condition exists which requires reporting
as a derivative liability at fair market value. For common stock purchase
warrants reported as a derivative liability, as well as new and modified
warrants reported as equity, we utilize the Black-Scholes valuation method in
order to estimate fair value.
Environmental expenditures
Our operations have been
and may in the future be affected from time to time in varying degree by changes
in environmental regulations, including those for future removal and site
restoration costs. The likelihood of new regulations and their overall effect
upon us are not predictable. We provide for any reclamation costs in accordance
with the accounting standards codification section 410-30. It is managements
opinion that we are not currently exposed to significant environmental and
reclamation liabilities and have recorded no reserve for environmental and
reclamation expenditures at January 31, 2013 and 2012.
Fair Value of Financial Assets and Liabilities
The
Company measures and discloses certain financial assets and liabilities at fair
value. Authoritative guidance defines fair value as the exchange price that
would be received for an asset or paid to transfer a liability (an exit price)
in the principal or most advantageous market for the asset or liability in an
orderly transaction between market participants on the measurement date.
Authoritative guidance also establishes a fair value hierarchy which requires an
entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. The standard describes three
levels of inputs that may be used to measure fair value:
Level 1
- Quoted prices in active markets for identical
assets or liabilities.
Level 2
- Observable inputs other than Level 1 prices
such as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the
assets or liabilities.
Level 3
- Unobservable inputs that are supported by
little or no market activity and that are significant to the fair value of the
assets or liabilities.
Income taxes
Income taxes are recorded using the
asset and liability method. Under the asset and liability method, tax assets and
liabilities are recognized for the tax consequences attributable to differences
between financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Future tax assets and liabilities are measured
using the enacted tax rates expected to apply when the asset is realized or the
liability settled. The effect on future tax assets and liabilities of a change
in tax rates is recognized in income in the period that enactment occurs. To the
extent that the Company does not consider it more likely than not that a future
tax asset will be recovered, it provides a valuation allowance against the
excess. Interest and penalties associated with unrecognized tax benefits, if
any, are classified as additional income taxes in the statement of operations.
With few exceptions, we are no longer subject to U.S. federal, state and local
examinations by tax authorities for years before 2009.
Net loss per share
Basic net loss per share is
computed by dividing net loss attributable to common shareholders by the
weighted average number of shares of common stock outstanding during the period.
Diluted net loss per share takes into consideration shares of common stock
outstanding (computed under basic loss per share) and potentially dilutive
shares of common stock that are not anti-dilutive.
F-15
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 2 Summary of significant accounting policies -
continued
Net loss per share continued
At January 31, 2013
and 2012, there were 174,773,105 and 187,086,566 potentially dilutive
instruments outstanding, respectively. These instruments were not included in
the determination of diluted loss per share as their effect was anti-dilutive.
Statement Presentation
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.
Recently issued accounting standards
There are no
recent pronouncements that are expected to have a material impact on our
financial position and results of operations.
NOTE 3 Going concern
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 Companys
ability to continue as a going concern.
Management is working to secure additional funds through the
exercise of stock warrants already outstanding, equity financings, debt
financings or joint venture agreements. The consolidated financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.
NOTE 4 Mineral claims
At January 31, 2013 we held a 100% interest in 417 standard
Federal lode mining claims on the Colorado Plateau Province of Northern Arizona
(the North Pipes Claims).
At January 31, 2013 we held a 100% interest in 99 standard
Federal lode mining claims located in the Tombstone region of Arizona. The
mineral claims are owned by JABA US Inc, an Arizona Corporation in which two of
our directors are owners. At January 31, 2013 we held Arizona State Land
Department Mineral Exploration Permits covering 4,126.9 acres in the Tombstone
region of Arizona.
At January 31, 2013 we held an option to explore 26 standard
Federal Lode mining claims located in the East Silver Bell region of northwest
Tucson, Arizona. The mineral claims are owned by JABA US Inc., an Arizona
Corporation in which two of our directors are owners.
At January 31, 2013 we held a 100% interest in 612 Alaska State
mining claims in the Iliamna region of Southwestern Alaska, located on the north
side of the Cook Inlet, approximately 200 miles southwest of the city of
Anchorage, Alaska (the Big Chunk Claims). We have designated 199 of these
claims for transfer to Northern Dynasty in conjunction with a pending loan
settlement agreement.
We relinquished our Bonanza Hills claims in Alaska during 2012, to the State of Alaska.
Title to mineral claims involves certain inherent risks due to
difficulties of determining the validity of certain claims as well as potential
for problems arising from the frequently ambiguous conveyance history
characteristic of many mineral properties. The Company has investigated titles
to all its mineral properties and, to the best of its knowledge, except as noted
above for the Bonanza Hills Claims, titles to all properties are in good
standing as of January 31, 2013.
NOTE 5 Property and equipment
The balances of our major classes of depreciable assets
are:
|
|
|
|
|
|
|
|
|
January 31, 2013
|
|
|
January 31, 2012
|
|
Geology equipment (3 to 7 year lives)
|
$
|
260,521
|
|
$
|
290,736
|
|
Vehicles and transportation equipment (5 years)
|
|
50,180
|
|
|
50,180
|
|
Office furniture and equipment (5 to 7
years)
|
|
73,985
|
|
|
73,451
|
|
|
|
384,686
|
|
|
414,367
|
|
Less accumulated depreciation and amortization
|
|
(303,486
|
)
|
|
(284,857
|
)
|
|
$
|
81,200
|
|
$
|
129,510
|
|
NOTE 6 Long-term debt
Note payable to Ford Credit payable in monthly installments of
$544 including interest at a fixed rate of 9.49% through maturity in February
2016. Principal balance at January 31, 2013 and 2012 is $17,394 and $22,024,
respectively. Carrying amount of a vehicle that serves as collateral is $21,928
and $29,447 at January 31, 2013 and 2012, respectively.
F-16
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 6 Long-term debt continued
The following is a summary of the principal maturities of
long-term debt during the next five years:
For the twelve months ended January 31,
|
|
|
|
2014
|
$
|
5,089
|
|
2015
|
|
5,594
|
|
2016
|
|
6,149
|
|
2017
|
|
562
|
|
2018
|
|
-
|
|
|
|
17,394
|
|
Less current maturities
|
|
(5,089
|
)
|
|
$
|
12,305
|
|
NOTE 7 Convertible promissory notes
We issue convertible promissory notes in private placements of
our securities to institutional investors pursuant to exemptions from
registration set out in Rule 506 of Regulation D under the Securities Act of
1933.
On July 15, 2010 we issued a secured convertible promissory
note bearing interest at a rate of 10% per annum compounded monthly (the
Convertible Note) to Northern Dynasty Minerals Ltd (Northern Dynasty).
During the year ended January 31, 2012 the agreement with Northern Dynasty was
amended to issue additional secured convertible promissory notes totaling
$730,174 to reimburse Northern Dynasty for assessment work, rental fees, cash in
lieu of assessment work and filing fees on the mineral claims that was paid in
fiscal 2011 and fiscal 2012 because we could not come to an agreement on the
earn-in option and joint venture agreement with Northern Dynasty. Principal
balance of the Convertible Notes at January 31, 2013 and 2012 was $3,730,174.
Accrued interest on the Convertible Notes at January 31, 2013 and 2012 was
$972,617 and $526,971, respectively.
As part of the transaction noted above, Northern Dynasty could
earn a 60% interest in our Big Chunk project in Alaska (the Joint Venture
Claims) by spending $10,000,000 on those properties over six years. The
borrowings from Northern Dynasty could be applied as part of Northern Dynastys
earn-in requirements. Northern Dynastys minimum annual expenditures under the
earn-in would be the minimum level necessary to keep the Joint Venture Claims in
good standing. Northern Dynasty could elect to abandon the earn-in at any time
on 30 days notice, so long as sufficient annual labor was performed, or a cash
payment in lieu of labor was made, in order to fulfill the annual labor
requirements for the Joint Venture Claims for a minimum of 12 months after
termination of the earn-in. As of January 31, 2013, no such notice by Northern
Dynasty has been received.
On November 14, 2012, we signed a loan settlement agreement
with Northern Dynasty which would have discharged the $3,730,174 principal
balance and $972,617 of accrued interest for the 2010 Convertible Note and would
have terminated Northern Dynastys earn-in rights. In exchange for the
settlement, we initiated the transfer of 199 Alaska mining claims to Northern
Dynastys subsidiary, U5 Resources. However, since a third party filed liens
against the claims before the transfer could be completed, we have not recorded
the settlement transaction as of January 31, 2013, pending resolution of the
lien claims.
F-17
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 8 Common stock
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.
In June 2011 one investor exercised 21,061,763 of the August
2009 common stock purchase warrants using the cashless exercise provision. The
cashless exercise provision allows the investor, if the fair market value of one
share of common stock is greater than the exercise price, to elect to receive
shares equal to the value of the warrant less a portion of the warrant that is
cancelled using a specific formula. We issued 20,000,000 shares of common stock
and cancelled 1,061,763 common stock purchase warrants pursuant to the cashless
exercise provision. No cash proceeds were received.
F-18
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 8 Common stock continued
In August 2011 one investor exercised 2,598,898 of the August
2009 common stock purchase warrants using the cashless exercise provision. The
cashless exercise provision allows the investor, if the fair market value of one
share of common stock is greater than the exercise price, to elect to receive
shares equal to the value of the warrant less a portion of the warrant that is
cancelled using a specific formula. We issued 2,500,000 shares of common stock
and cancelled 98,898 common stock purchase warrants pursuant to the cashless
exercise provision. No cash proceeds were received.
In August 2011 one investor exercised 192,308 of the May 2007
common stock purchase warrants using the cashless exercise provision. The
cashless exercise provision allows the investor, if the fair market value of one
share of common stock is greater than the exercise price, to elect to receive
shares equal to the value of the warrant less a portion of the warrant that is
cancelled using a specific formula. We issued 187,507 shares of common stock and
cancelled 4,801 common stock purchase warrants pursuant to the cashless exercise
provision. No cash proceeds were received. In December 2011, we sold 5,800,000
units at a price of $0.0264 per unit to three investors for net proceeds of
$153,120. The financing consisted of 5,800,000 common shares of our company and
5,800,000 whole share non-transferable common stock purchase warrants. Each
common stock purchase warrant entitles the investor to purchase one additional
common share of our company at a price of $0.03696 until December 13, 2014.
In August 2011, we sold 5,000,000 units at a price of $0.02 per
unit to one investor for net proceeds of $100,000. The financing consisted of
5,000,000 common shares of our company and 2,500,000 whole share
non-transferable common stock purchase warrants. Each common stock purchase
warrant entitles the investor to purchase one additional common share of our
company at a price of $0.0264 until August 31, 2016. The common stock purchase
warrants contain a cashless exercise provision allowing the investor, if the
fair market value of one share of common stock is greater than the exercise
price, to elect to receive shares equal to the value of the warrant less a
portion of the warrant that is cancelled using a specific formula. The common
stock purchase warrants also contain an exercise price adjustment whereby if we
issue common stock, convertible debt instruments, warrants or stock options
prior to the expiration of the warrants or complete exercise of the warrants at
a price less $0.04 per common share, then the exercise price of these warrants
shall be reduced to such lower price.
In December 2012 and January 2013, we issued 7,359,399 units,
at prices ranging from $0.0116 to $0.0156 per unit, to contractors who had
provided services, directly or indirectly, on our Alaska properties. These units
were issued in lieu of cash payments and in satisfaction of claims for services
provided. Each unit consisted of one common share of our company and one
non-transferable common stock purchase warrant. Each common stock purchase
warrant entitles the investors to purchase one additional common share of our
company at prices ranging from $0.0162 to $0.0218 until January 17, 2016. The
fair value of the shares and warrants issued were $91,140 and $84,156,
respectively.
In August and September 2012, we sold 6,156,153 units, at
prices ranging from $0.027 to $0.031 per unit, to investors for gross proceeds
of $180,000. Each unit consisted of one common share of our company and one
non-transferable common stock purchase warrant. Each common stock purchase
warrant entitles the investors to purchase one additional common share of our
company at prices ranging from $0.038 to $0.044 until August 29, 2015. In May
and July 2012, we sold 4,859,073 units, at prices ranging from $0.027 to $0.033
per unit, to investors for gross proceeds of $150,004. Each unit consisted of
one common share of our company and one non-transferable common stock purchase
warrant. Each common stock purchase warrant entitles the investors to purchase
one additional common share of our company at prices ranging from $0.027 to
$0.047 until July 23, 2015. In May and July 2012, investors exercised 19,861,870
of the May 2007 common stock purchase warrants using the cashless exercise
provision. We issued 18,033,814 shares of common stock and cancelled 1,828,056
common stock purchase warrants pursuant to the cashless exercise provision. No
cash proceeds were received. We issued these shares pursuant to an exemption
from registration set out in Section 4(2) of the Securities Act of 1933. The
remaining 855,314 common stock purchase warrants from May 2007 expired on May
11, 2012 without exercise.
In March 2012, we sold 2,000,000 units at a price of $0.02844
per unit to one investor for gross proceeds of $56,880. Each unit consisted of
one common share of our company and one non-transferable common stock purchase
warrant. Each common stock purchase warrant entitles the investor to purchase
one additional common share of our company at a price of $0.03982 until March
14, 2015. In March 2012, one investor exercised 84,615 of the May 2007 common
stock purchase warrants using the cashless exercise provision. The cashless
exercise provision allows the investor, if the fair market value of one share of
common stock is greater than the exercise price, to elect to receive shares
equal to the value of the warrant less a portion of the warrant that is
cancelled using a specific formula. We issued 21,757 shares of common stock and
cancelled 62,858 common stock purchase warrants pursuant to the cashless
exercise provision. No cash proceeds were received. In February 2012, we sold
2,209,596 units at a price of $0.03168 per unit to one investor for gross
proceeds of $70,000. 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 $0.04435 until February 23, 2015. In February 2012 we sold 2,000,715
units at a price of $0.02799 per unit to one investor for gross proceeds of
$56,000. 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 $0.03919 until February 3, 2015. In February 2012 one investor exercised 2,646,199 of the August 2009 common
stock purchase warrants using the cashless exercise provision. The cashless
exercise provision allows the investor, if the fair market value of one share of
common stock is greater than the exercise price, to elect to receive shares
equal to the value of the warrant less a portion of the warrant that is
cancelled using a specific formula. We issued 2,500,000 shares of common stock
and cancelled 146,199 common stock purchase warrants pursuant to the cashless
exercise provision. No cash proceeds were received.
F-19
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
On January 19, 2012, we entered into a financing agreement with
Fairhills Capital Offshore Ltd., whereby Fairhills Capital will provide for a
non-brokered financing arrangement of up to $10,000,000. The financing allows
but does not require us to issue and sell up to the number of shares of common
stock having an aggregate purchase price of $10,000,000 to Fairhills Capital.
Subject to the terms and conditions of the financing agreement and a
registration rights agreement, we may, in our sole discretion, deliver a notice
to Fairhills Capital which states the dollar amount which we intend to sell to
Fairhills Capital on a certain date. The amount that we shall be entitled to
sell to Fairhills Capital shall be equal to two hundred percent (200%) of the
average daily volume (U.S. market only) of the common stock for the ten (10)
trading days prior to the applicable notice date. Our common stock will be
valued at a 27.5% discount from the weighted average trading price of our stock
for the five (5) trading days before Fairhills Capital receives our notice of
sale. The shares that we sell to Fairhills Capital must be registered stock,
among other conditions of investment.
In connection with the Investment Agreement, we also entered
into a registration rights agreement with Fairhills. Pursuant to this
registration rights agreement, we registered with the Securities and Exchange
Commission 185,000,000 shares of the common stock underlying the Investment
Agreement.
On November 13, 2012, we filed a 424B prospectus with the
Securities Exchange Commission, acknowledging the assignment of all the rights
under our investment agreement with Fairhills Capital Offshore Ltd. (Fairhills)
to Deer Valley Management, LLC (Deer Valley). The Investment Agreement and other
associated agreements were assigned by Fairhills to Deer Valley on November 6,
2012, and Liberty Star consented to the assignment. Fairhills and Deer Valley
share the same ownership and management and there has not been any substantial
change to our arrangement under the Investment Agreement as a result of the
Assignment.
At January 31, 2013 and subsequently, we have issued 59,670,369
and 29,479,597shares, respectively, of common stock for gross proceeds of
$1,175,000 and $250,000, respectively, related to this financing agreement. As a
result, in the future we would potentially be eligible to receive up to
$8,575,000 on the issuance of an additional 95,850,034 shares. We are currently
authorized to issue 1,250,000,000 shares of our common stock. Deer Valley has
agreed to refrain from holding an amount of shares which would result in Deer
Valley owning more than 4.99% of the then-outstanding shares of our common stock
at any one time, or 62,375,000 shares. At an assumed purchase price under the
Investment of $0.008 (equal to 72.5% of the closing price of our common stock of
$0.011 on May 13, 2013), we will be able to receive up to $766,800 in gross
proceeds.
F-20
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 8 Common stock continued
As of January 31, 2013, there were 94,059,629 whole share
purchase warrants outstanding and exercisable. The warrants have a weighted
average remaining life of 1.9 years and a weighted average exercise price of
$0.055 per whole warrant for one common share. Whole share purchase warrants
outstanding at January 31, 2013 and 2012 are as follows:
|
|
Number of whole share
|
|
|
Weighted average exercise
|
|
|
|
purchase warrants
|
|
|
price per share
|
|
Outstanding, January 31, 2011
|
|
108,475,660
|
|
$
|
0.043
|
|
Issued
|
|
8,300,000
|
|
|
0.034
|
|
Exercised
|
|
(23,852,969
|
)
|
|
0.002
|
|
|
|
|
|
|
|
|
Outstanding, January 31, 2012
|
|
92,922,691
|
|
$
|
0.053
|
|
Issued
|
|
17,225,537
|
|
|
0.041
|
|
Expired
|
|
(855,314
|
)
|
|
0.020
|
|
Exercised
|
|
(22,592,684
|
)
|
|
0.026
|
|
|
|
|
|
|
|
|
Outstanding, January 31, 2013
|
|
86,700,230
|
|
$
|
0.058
|
|
Exercisable, January 31, 2013
|
|
86,700,230
|
|
$
|
0.058
|
|
NOTE 9 Share-based compensation
The 2010 Stock Option Plan was approved and adopted by the
Board of Directors on August 10, 2010. The plan allows for up to 95,500,000
shares to be granted to key employees and non-employee consultants after
specific objectives are met. The 2007 Stock Option Plan was approved and adopted
by the Board of Directors on December 10, 2007. The plan allows for up to
2,500,000 shares to be granted to key employees and non-employee consultants
after specific objectives are met. The 2004 Stock Option Plan was approved and
adopted by the Board of Directors on December 27, 2004. The plan allows for up
to 962,500 shares to be granted to key employees and non-employee consultants
after specific objectives are met. Employees can receive incentive stock options
and non-qualified stock options while non-employee consultants can receive only
non-qualified stock options. The options granted vest under various provisions
using graded vesting, not to exceed four years. The options granted have a term
not to exceed ten years from the date of grant or five years for options granted
to more than 10% stockholders. The option price set by the Plan Administration
shall not be less than the fair market value per share of the common stock on
the grant date or 110% of the fair market value per share of the common stock on
the grant date for options granted to greater than 10% stockholders. Options
remaining available for grant under the 2010 Stock Option Plan at January 31,
2013 and 2012 are 4,625,000 and 2,000,000. Options remaining available for grant
under the 2007 Stock Option Plan at January 31, 2013 and 2012 are 2,287,500.
Options remaining available for grant under the 2004 Stock Option Plan at
January 31, 2013 and 2012 are 511,125.
On January 10, 2012 we granted incentive stock options and
non-qualified stock options to certain of our directors, officers, employees and
consultants to purchase an aggregate of 10,500,000 shares of our common stock at
an exercise price of $0.027 per share for a term expiring on January 10, 2022.
The fair value of the options on the date of issue was $231,000. The options
were 50% vested upon granting and vested another 25% on January 10, 2013. They
will vest another 25% on January 10, 2014. For the years ended January 31, 2013
and 2012, the company expensed $51,840 and $103,950, respectively, as employee
compensation reflecting the vesting of the options.
In December 2012 and January 2013, we issued 7,359,399 units,
at prices ranging from $0.0116 to $0.0156 per unit, to contractors who had
provided services, directly or indirectly, on our Alaska properties. Each unit
consisted of one common share of our company and one non-transferable common
stock purchase warrant. Each common stock purchase warrant entitles the
investors to purchase one additional common share of our company at prices
ranging from $0.0162 to $0.0218 until January 17, 2016. The fair value of the
warrants issued was $84,156 and was expensed immediately.
The following tables summarize the Companys stock option
activity during the years ended January 31, 2013 and 2012.
Incentive stock options to employees outstanding at January 31,
2013 are as follows:
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
|
|
average
|
|
|
|
|
|
|
|
|
|
Weighted average
|
|
|
remaining life
|
|
|
Aggregate
|
|
|
|
Number of options
|
|
|
exercise price
|
|
|
(years)
|
|
|
intrinsic value
|
|
Outstanding, January 31, 2011
|
|
95,385,375
|
|
$
|
0.048
|
|
$
|
|
|
|
-
|
|
Granted
|
|
10,375,000
|
|
|
0.027
|
|
|
|
|
|
|
|
Vested, Cancelled
|
|
(12,500,000
|
)
|
|
0.038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, January 31, 2012
|
|
93,260,375
|
|
$
|
0.047
|
|
|
|
|
$
|
-
|
|
Granted
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
Vested, Cancelled
|
|
(2,625,000
|
)
|
|
0.037
|
|
|
|
|
|
|
|
Outstanding, January 31, 2013
|
|
90,635,375
|
|
$
|
0.047
|
|
|
3.27
|
|
$
|
-
|
|
Exercisable, January 31, 2013
|
|
88,072,875
|
|
$
|
0.048
|
|
|
3.11
|
|
$
|
-
|
|
F-21
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 9 Share-based compensation continued
Non-qualified stock options to non-employee consultants and
vendors outstanding at January 31, 2013 and 2012 are as follows:
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
average
|
|
|
|
|
|
|
|
|
|
average exercise
|
|
|
remaining life
|
|
|
Aggregate
|
|
|
|
Number of options
|
|
|
price
|
|
|
(years)
|
|
|
intrinsic value
|
|
Outstanding, January 31, 2011
|
|
778,500
|
|
$
|
0.432
|
|
|
|
|
$
|
-
|
|
Granted
|
|
125,000
|
|
|
0.027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, January 31, 2012
|
|
903,500
|
|
$
|
0.376
|
|
|
|
|
$
|
-
|
|
Granted
|
|
7,359,399
|
|
|
0.017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, January 31, 2013
|
|
8,262,899
|
|
$
|
0.057
|
|
|
2.99
|
|
$
|
-
|
|
Exercisable, January 31, 2013
|
|
8,231,649
|
|
$
|
1.479
|
|
|
2.97
|
|
$
|
-
|
|
The aggregate intrinsic value is calculated based on the
January 31, 2013 stock price of $0.012 per share.
A summary of the status of the Companys non-vested options as
of January 31, 2013 and changes during the years ended January 31, 2013 and 2012
is presented below:
|
|
|
|
|
Weighted average grant
|
|
Incentive stock options granted to employees:
|
|
Number of options
|
|
|
date
fair value
|
|
Non-vested at January 31, 2011
|
|
-
|
|
$
|
-
|
|
Granted
|
|
10,375,000
|
|
|
0.022
|
|
Vested
|
|
(5,187,500
|
)
|
|
0.022
|
|
Nonvested at January 31, 2012
|
|
5,187,500
|
|
$
|
0.022
|
|
Granted
|
|
-
|
|
|
-
|
|
Cancelled
|
|
(62,500
|
)
|
|
|
|
Vested
|
|
(2,562,500
|
)
|
|
0.022
|
|
|
|
|
|
|
|
|
Non-vested at January 31, 2013
|
|
2,562,500
|
|
$
|
0.022
|
|
|
|
|
|
|
|
|
Total fair value of options vested during
the year ended
January 31, 2013
|
|
|
|
|
$ 51,216
|
|
|
|
|
|
|
|
|
Non-qualified stock options to non-employee
consultants and
|
|
|
|
|
Weighted average grant
|
|
vendors:
|
|
Number of options
|
|
|
date fair value
|
|
Non-vested at January 31, 2011
|
|
-
|
|
$
|
-
|
|
Granted
|
|
125,000
|
|
|
0.022
|
|
Vested
|
|
(62,500
|
)
|
|
0.022
|
|
|
|
|
|
|
|
|
Non-vested at January 31, 2012
|
|
62,500
|
|
$
|
0.022
|
|
Granted
|
|
7,359,399
|
|
|
0.011
|
|
Vested
|
|
(7,390,649
|
)
|
|
0.011
|
|
|
|
|
|
|
|
|
Non-vested at January 31, 2013
|
|
31,250
|
|
$
|
0.022
|
|
|
|
|
|
|
|
|
Total fair value of options vested during
the year ended
January 31, 2013
|
|
|
|
|
$ 84,780
|
|
We estimate the fair value of option awards on the grant date
using the Black-Scholes valuation model. The Company uses historical volatility,
disregarding identifiable periods of time in which share price was
extraordinarily volatile due to certain events that are not expected to recur
during the expected term, as its method to estimate expected volatility. The
Company used the following assumptions to estimate the fair value of stock
option grants to employees and non-employees:
|
|
Expected
|
|
|
Expected dividend
|
|
|
|
|
|
Risk-free interest
|
|
|
|
|
Grant date
|
|
volatility
|
|
|
yield
|
|
|
Expected term
|
|
|
rate
|
|
|
Forfeiture rate
|
|
January 10, 2012
|
|
128%
|
|
|
0%
|
|
|
10 years
|
|
|
2%
|
|
|
10%
|
|
December 13, 2012
|
|
174%
|
|
|
0%
|
|
|
3 years
|
|
|
0.34%
|
|
|
0%
|
|
January 1, 2013
|
|
173%
|
|
|
0%
|
|
|
3 years
|
|
|
0.36%
|
|
|
0%
|
|
January 1, 2013
|
|
171%
|
|
|
0%
|
|
|
3 years
|
|
|
0.41%
|
|
|
0%
|
|
The weighted average grant date fair value of the options
granted during the year ended January 31, 2012 was $0.022 per option. There were
7,359,399 shares of warrants granted to vendors for service provided and the
company recorded the expense into stock compensation expense. There were no
options exercised during the year ended January 31, 2013. During the year ended
January 31, 2013, a total of 2,625,000 options, of which 2,562,500 were vested,
were forfeited by two former employees who declined to exercise the options
within 90 days of termination of employment.
F-22
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 9 Share-based compensation continued
Share-based compensation expense is reported in our statement
of operations as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, 2013
|
|
|
January 31, 2012
|
|
Geological and geophysical costs
|
$
|
624
|
|
$
|
1,237
|
|
Salaries and benefits
|
|
50,592
|
|
|
101,475
|
|
Investor relations
|
|
624
|
|
|
1,238
|
|
General and administrative
|
|
84,156
|
|
|
-
|
|
|
|
|
|
|
|
|
|
$
|
135,996
|
|
$
|
103,950
|
|
At January 31, 2013 there is $51,341 unrecognized share-based
compensation for all share-based awards outstanding with a weighted average
remaining period for amortization of 0.94 years.
NOTE 10 Income taxes
As of January 31 our deferred tax asset is as follows:
|
|
January 31, 2013
|
|
|
January 31, 2012
|
|
Net operating loss carryforwards
|
$
|
9,513,000
|
|
$
|
8,681,000
|
|
Less valuation allowance
|
|
(9,513,000
|
)
|
|
( 8,681,000
|
)
|
|
$
|
-
|
|
|
-
|
|
Management has elected to provide a deferred tax asset valuation allowance equal to the potential benefit due to our history of losses. If we demonstrate the ability to generate taxable income, management will re-evaluate the allowance. The change in the valuation allowance of $832,000 and 176,000 in the years ended January 31, 2013 and 2012 primarily represents the benefit of the change in net operating loss carry-forwards during the period. As of January 31, 2013, our estimated net operating loss carryforward is approximately $27,980,000 and will expire beginning in 2024 through 2033.
Internal Revenue Code Section 382 limits the ability to utilize net operating losses if a 50% change in ownership occurs over a three year period. Such limitation of the net operating losses may have occurred but we have not analyzed it at this time as the deferred tax asset is fully reserved. We have federal and state net operating loss carry-forwards that are available to offset future taxable income.
F-23
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 11 Related party transactions
We entered into the following transactions with related
parties during the year ended January 31, 2013:
Paid or accrued $6,785 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.
At January 31, 2013 we had a balance of accrued unpaid wages of
$261,367 to Jim Briscoe, our Chairman of the Board, CEO and CFO.
At January 31, 2013 we had a balance of accrued unpaid wages of
$15,625 to Larry Liang, our President.
We recognized compensation expense of $49,500 for stock options
granted to an officer.
We have an option to explore 26 standard Federal lode mining
claims at the East Silver Bell project and 33 standard Federal lode mining
claims at the Walnut Creek project from JABA US Inc., an Arizona Corporation in
which two of our directors are owners. We are required to pay annual rentals to
maintain the claims in good standing. During the year ended January 31, 2013 we
paid $8,254 in rental fees to maintain the mineral claims in good standing. The
original option agreement was for the period from April 11, 2008 through January
1, 2011 and has been extended through June 1, 2013
We entered into the following transactions with related
parties during the year ended January 31, 2012:
Paid or accrued $6,263 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.
At January 31, 2012 we had a balance of accrued unpaid wages of
$183,367 to Jim Briscoe, our Chairman of the Board, CEO and CFO.
We recognized compensation expense of $99,000 for stock options
granted to officers and board members.
We have an option to explore 26 standard Federal lode mining
claims at the East Silver Bell project and 33 standard Federal lode mining
claims at the Walnut Creek project from JABA US Inc., an Arizona Corporation in
which two of our directors are owners. We are required to pay annual rentals to
maintain the claims in good standing. During the year ended January 31, 2012 we
paid $8,254 in rental fees to maintain the mineral claims in good standing. The
original option agreement was for the period from April 11, 2008 through January
1, 2011 and has been extended through June 1, 2012.
F-24
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
continued
|
NOTE 12 Commitments
We are required to perform annual assessment work in order to
maintain the Big Chunk Alaska State mining claims. If annual assessment work is
not performed the Company must pay the assessment amount in cash in order to
maintain the claims. Completion of annual assessment work in the amount of $400
per ¼ section (160 acre) claim or $100 per ¼ -¼ section (40 acre) claim extends
the claims for a one-year period from the staking of claims. Assessment work
performed in excess of the required amount may be carried forward for up to four
years to satisfy future obligations. The Company estimates that the required
annual assessments to maintain the claims will be approximately $238,200.
Sufficient cash in lieu assessment work has been paid for Big Chunk to maintain
the claims beyond the next labor year.
The annual state rentals for the Big Chunk Alaska State mining
claims vary from $70 to $280 per mineral claim. The rental period begins at noon
September 1
st
through the following September 1
st
and
annual rental payments are due on November 30
th
of each year. The
rentals of $164,600 to extend the Big Chunk claims through September 1, 2013
were paid in November 2012. The estimated state rentals due by November 30, 2013
for the period from September 1, 2013 through September 1, 2014 are $166,740.
Alaska State production royalty is three percent of net income. State law
prescribes that after a 3.5 -year exemption from state taxes a metal mine is
liable for a 15% state licensing tax on net income from the mine.
We are required to pay annual rentals for our Federal lode
mining claims for the North Pipes project in the State of Arizona. The rental
period begins at noon on September 1
st
through the following
September 1
st
and rental payments are due by the first day of the
rental period. The annual rentals are $140 per claim. The rentals of $60,340 for
the period from September 1, 2012 to September 1, 2013 have been paid. The
rentals due by September 1, 2013 for the period from September 1, 2013 through
September 1, 2014 of $58,380 have not been paid.
We are required to pay annual rentals for our Federal lode
mining claims for our East Silver Bell project in the State of Arizona. The
rental period begins at noon on September 1
st
through the following
September 1
st
and rental payments are due by the first day of the
rental period. The annual rental is $140 per claim. The rentals of $3,640 for
the period from September 1, 2012 to September 1, 2013 have been paid. The
annual rentals due by September 1, 2013 of $3,640 are required to maintain the
East Silver Bell claims are for the period from September 1, 2013 through
September 1, 2014. There is no requirement for annual assessment or exploration
work on the Federal lode mining claims. There are no royalties associated with
the Federal lode mining claims.
We are required to pay annual rentals for our Federal lode mining claims for the Tombstone project in the State of Arizona. The rental period begins at noon on September 1
st
through the following September 1
st
and rental payments are due by the first day of the rental period. The annual rentals are $140 per claim. The rentals and initial filing fees of $13,860 for the period from September 1, 2012 to September 1, 2013 have been paid. The rentals due by September 1, 2013 for the period from September 1, 2013 through September 1, 2014 of $13,860 have not been paid.
We are required to pay annual rentals for our Arizona State Land Department Mineral Exploration Permits (“AZ MEP”) at our Tombstone Hay Mountain project in the State of Arizona. AZ MEP permits are valid for 1 year and renewable for up to 5 years. The rental fee is $2.00 per acre for the first year, which includes the second year, and $1.00 per acre per year for years three through five. The minimum work expenditure requirements are $10 per acre per year for years one and two and $20 per acre per year for years three through five. If the minimum work expenditure requirement is not met the applicant can pay the equal amount in fees to the Arizona State Land Department to keep the AZ MEP permits current. The rental period begins on September 30
th
through the following September 29
th
for our Phase 1 permits, and September 14
th
through September 13
th
for our Phase 2 permits. Rental payments are due by the first day of the rental period. We hold AZ MEP permits for 7,515 acres at our Tombstone project. We paid initial rental fees from the date of application through September 29, 2012 of $8,254. Required minimum work expenditures for the period ended September 29, 2013 are $41,269. The annual rentals due by September 30, 2013 to maintain the AZ MEP permits are $7,515. We also paid $6,776 for rental fees on our Phase 2 permits. We will need $75,150 to cover minimum work expenditure requirements before September 30, 2013 to maintain our Phase 1 & 2 AZ MEP permits.
In December 2010 we entered into a 12 month non-cancellable
operating lease for office space. In December 2011 the lease was extended for an
additional one year term. The lease called for monthly payments of rent plus
sales tax of $2,280. We recognized rent expense of $25,077 during the year ended
January 31, 2013 pursuant to this lease. The lease expired December 31, 2012,
and was not renewed.
F-25
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
|
NOTE 12 Commitments continued
In June 2011 we entered into a two year non-cancellable operating lease for warehouse space a portion of which includes an air conditioned office space for geologic computers, scanners and printers in Tucson, Arizona. The lease calls for monthly payments of rent plus sales tax of $3,620. We have the option to extend the lease for one additional two year term at current market rates. We recognized rent expense of $42,810 during the year ended January 31, 2013 pursuant to this lease. Future minimum lease payments pursuant to this lease total $14,480 payable during the year ended January 31, 2014.
F-26
LIBERTY STAR URANIUM & METALS CORP.
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
|
NOTE 13 Fair value of financial instruments
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. 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.
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 January 31, 2012 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 January 31, 2013 and 2012 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. As a result of these provisions, these
warrants are not considered indexed to our common stock and are classified as
liabilities under ASC 815. We used the following assumptions to estimate the
fair value of the warranty liability at January 31, 2013 and 2012:
|
|
|
|
|
Expected dividend
|
|
|
|
|
|
Risk-free interest
|
|
Description
|
|
Expected volatility
|
|
|
yield
|
|
|
Expected term
|
|
|
rate
|
|
Warrant liability at January 31, 2013
|
|
99.8%
|
|
|
0%
|
|
|
3.59 years
|
|
|
0.65%
|
|
Warrant liability at January 31, 2012
|
|
127.6%
|
|
|
0%
|
|
|
4.59 years
|
|
|
0.71%
|
|
|
|
|
|
|
Fair value measurements at reporting date using:
|
|
|
|
|
|
|
Quoted prices in
|
|
|
|
|
|
Significant
|
|
|
|
|
|
|
active markets for
|
|
|
Significant other
|
|
|
unobservable
|
|
|
|
|
|
|
identical liabilities
|
|
|
observable inputs
|
|
|
inputs
|
|
Description
|
|
Fair
Value
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Warrant liability at January 31, 2013
|
$
|
15,112
|
|
|
-
|
|
|
-
|
|
$
|
15,112
|
|
Warrant liability at January 31, 2012
|
$
|
53,948
|
|
|
-
|
|
|
-
|
|
$
|
53,948
|
|
|
|
|
Fair value measurements using
significant
|
|
|
|
|
unobservable inputs (Level 3):
|
|
Description
|
|
|
Warrant liability
|
|
Balance, January 31, 2011
|
|
$
|
-
|
|
Total (gains) or losses
|
|
|
(18,428
|
)
|
Purchases, issuances and settlements
|
|
|
72,376
|
|
Transfers in or out of
Level 3
|
|
|
-
|
|
Balance, January 31, 2012
|
|
$
|
53,948
|
|
Total (gains) or losses
|
|
|
(38,836
|
)
|
Purchases, issuances and settlements
|
|
|
-
|
|
Transfers in or out of
Level 3
|
|
|
-
|
|
Balance, January 31, 2013
|
|
$
|
15,112
|
|
NOTE 14 Subsequent events
In February, March, April and May, 2013, we issued 29,479,597
shares for gross proceeds of $250,000 related to the investment agreement with
Deer Valley Management, LLC.
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 and 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.
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 and 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.
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.
F-27
244,500,000 SHARES OF COMMON STOCK
LIBERTY STAR URANIUM & METALS CORP.
PROSPECTUS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER
TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Until _____________, all dealers that effect transactions in
these securities whether or not participating in this offering may be required
to deliver a prospectus. This is in addition to the dealers obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item. 13 Other Expenses Of Issuance And Distribution.
Securities and Exchange Commission
registration fee
|
$
|
667
|
*
|
Federal Taxes
|
$
|
0
|
|
State Taxes and Fees
|
$
|
0
|
|
Transfer Agent Fees
|
$
|
6,500
|
|
Accounting fees and expenses
|
$
|
2,025
|
|
Legal fees and expense
|
$
|
12,500
|
|
Blue Sky fees and expenses
|
$
|
0
|
|
Miscellaneous
|
$
|
0
|
|
Total
|
$
|
0
|
|
|
$
|
21,692
|
|
* Previously paid.
All amounts are estimates other than the Commissions
registration fee and Legal fees and expenses. KVM is paying all expenses of the
offering listed above.
Item. 14 Indemnification Of Directors And Officers.
Nevada Revised Statute 78.037 permits a corporation to
eliminate or limit the personal liability of a director or officer to the
corporation or its stockholders for damages relating to breach of fiduciary duty
as a director or officer, but such a provision must not eliminate or limit the
liability of a director or officer for (a) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law or (b) the payment
of distributions in violation of Nevada Revised Statute 78.300.
Nevada Revised Statutes 78.7502 provides as follows with
respect to indemnification of directors, officers, employees and agents:
|
(a)
|
We may indemnify any person who was or is a party or is
threatened to be made a party to any action, except an action by us, by
reason of the fact that he is or was our director, officer, employee or
agent, or is or was serving as a director, officer, employee or agent of
any other person at our request, against expenses actually and reasonably
incurred by him in connection with the action, suit or proceeding if he:
(i) is not liable for breach of his fiduciary duties as a director or
officer pursuant to Nevada Revised Statutes 78.138; and (ii) acted in good
faith and in a manner which he reasonably believed to be in or not opposed
to our best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful.
|
|
|
|
|
(b)
|
We may indemnify any person who was or is a party or is
threatened to be made a party to any action by
us, by reason of the fact that he is or was our director,
officer, employee or agent, or is or was serving as a director, officer,
employee or agent of any other person at our request, against expenses
actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he: (i) is not liable for breach of
his fiduciary duties pursuant to Nevada Revised Statutes 78.138; and (ii)
acted in good faith and in a manner which he reasonably believed to be in
or not opposed to our best interest. We may not indemnify him for any
claim, issue or matter as to which he has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be
liable to us or for amounts paid in settlement to us, unless and only to
the extent that the court in which the action or suit was brought or other
court of competent jurisdiction determines upon application that in view
of all the circumstances of the case, he is fairly and reasonably entitled
to indemnity for such expenses as the court deems proper.
|
38
|
(c)
|
To the extent that our director, officer, employee or
agent has been successful on the merits or otherwise in defense of any
action, suit or proceeding, or in defense of any claim, issue or matter
therein, we are required to indemnify him against expenses, including
attorneys fees actually and reasonably incurred by him in connection with
the defense.
|
Our Articles of Incorporation and Bylaws provide for
elimination of any liability of our directors and officers and indemnity of our
directors and officers to the fullest extent permitted by Nevada law.
The above-described provisions relating to the exclusion of
liability and indemnification of directors and officers are sufficiently broad
to permit the indemnification of such persons in certain circumstances against
liabilities arising under the Securities Act. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to our directors
and officers and to persons controlling us pursuant to the foregoing provisions,
we have been informed that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
Item. 15 Recent Sales of Unregistered Securities.
Set forth below is information regarding securities sold by us
within the past three years that were not registered under the Securities Act:
Effective September 5, 2013, we agreed to grant stock options pursuant to our 2010 Stock Option Plan to four directors and employees for the option to purchase an aggregate of 9,375,000 shares of our common stock at an exercise price of $0.03 per share, exercisable until September 5, 2023 . The options granted will be 100% vested for directors and shall vest in 25% increments on a yearly basis over the next four years for employees. 1,457,027 of these options are reserved for future issuance when room becomes available under our 2010 Stock Option Plan.
In September, 2013, we sold 2,157,497 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 $0.0324 until September 5, 2016.
In August, 2013, we entered into a promissory note (the August
2013 Note) for a principal sum of $555,000 plus accrued and unpaid interest and
any other fees. The consideration is up to $500,000, which would produce an
original issue discount of $55,000 if all the consideration is received. The
lender paid $150,000 upon closing pursuant to the terms of the August 2013 Note.
The August 2013 Note has a maturity of one year from the delivery of each
payment. The August 2013 Note may be convertible into shares of common stock of
our company at any time from 180 days after the date of each payment of
consideration, at a conversion price which is 70% of the average of the three
lowest closing prices in the 20 trading days previous to the conversion. We may
repay the August 2013 Note at any time on or before 90 days from the effective
date of the August 2013 Note with an interest rate of 0%, after which we may not
make any further payments on the August 2013 Note prior to the maturity date
without written approval from the lender. If we elect not to repay the August
2013 Note on or before 90 days from the effective date of the August 2013 Note,
a one-time interest charge of 12% will be applied to the principal sum.
In August, 2013, we sold 423,135 units to one investor for
gross proceeds of $7,938. 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 $0.0263 until August 2, 2016.
In May, June and July, 2013, we sold 18,001,184 units to five
investors for gross proceeds of $182,043. Each unit consisted of one common
share of our company and one non-transferable share purchase warrant. The share
purchase warrants entitle the investors to purchase one additional common share of our company at prices ranging between of $0.0116 and $0.0173 until July 30, 2016.
39
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.
In April 2013, one investor exercised 3,033,618 of the May 2007 common stock purchase warrants using the cashless exercise provision. The cashless exercise provision allows the investor, if the fair market value of one share of common stock is
greater than the exercise price, to elect to receive shares equal to the value of the warrant less a portion of the warrant that is cancelled using a specific formula. We issued 2,500,000 shares of common stock and cancelled 633,618 common stock
purchase warrants pursuant to the cashless exercise provision. No cash proceeds were received. We issued these shares pursuant to an exemption from registration set out in Section 4(2) of the Securities Act of 1933.
In December 2012 and January 2013, we issued 7,359,399 units, at prices ranging from $0.0116 to $0.0156 per unit, to contractors who had provided services, directly or indirectly, on our Alaska properties. These units were issued in lieu of
cash payments and in satisfaction of claims for services provided. Each unit consisted of one common share of our company and one non-transferable common stock purchase warrant. Each common stock purchase warrant entitles the investors to purchase
one additional common share of our company at prices ranging from $0.0162 to $0.0218 until January 17, 2016. The investors are U.S. Persons and are accredited investors and in issuing securities to the investors we relied on the exemption
from the registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D promulgated thereunder.
On November 14, 2012, we signed a loan settlement agreement with Northern Dynasty which would have discharged the $3,730,174 principal balance and $972,617 of accrued interest for the 2010 Convertible Note and would have terminated Northern
Dynasty’s earn-in rights. In exchange for the settlement, we initiated transfer of 199 Alaska mining claims to Northern Dynasty’s subsidiary, U5 Resources. The transaction has not yet been completed.
In May and July 2012, we sold 4,859,073 units, at prices ranging from $0.027 to $0.033 per unit, to investors for gross proceeds of $150,004. Each unit consisted of one common share of our company and one non-transferable common stock
purchase warrant. Each common stock purchase warrant entitles the investors to purchase one additional common share of our company at prices ranging from $0.027 to $0.047 until July 23, 2015. The investors are U.S. Persons and are accredited
investors and in issuing securities to the investors we relied on the exemption from the registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D promulgated thereunder.
In May 2012, four investors exercised 644,687 of the May 2007 common stock purchase warrants using the cashless exercise provision. We issued 33,814 shares of common stock and cancelled 610,573 common stock purchase warrants pursuant to the cashless
exercise provision. No cash proceeds were received. We issued these shares pursuant to an exemption from registration set out in Section 4(2) of the Securities Act of 1933. The remaining 855,314 common stock purchase warrants from May 2007 expired
on May 11, 2012 without exercise.
On March 14, 2012, we sold 2,000,000 units at a price of $0.02844 per unit to one investor for gross proceeds of $56,880. Each unit consisted of one common share of our company and one non-transferable common stock purchase warrant. Each
common stock purchase warrant entitles the investor to purchase one additional common share of our company at a price of $0.03982 until March 14, 2015. The investor is a U.S. Person and is an accredited investor and in issuing securities to the
investor we relied on the exemption from the registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D promulgated thereunder.
In March 2012, one investor exercised 84,615 of the May 2007 common stock purchase warrants using the cashless exercise provision. We issued 21,757 shares of common stock and cancelled 62,868 common stock purchase warrants pursuant to the cashless exercise provision. No cash proceeds were received. We issued these shares pursuant to an exemption from registration set out in Section 4(2) of the Securities Act of 1933.
40
On February 23, 2012, we sold 2,209,596 units at a price of $0.03168 per unit to one investor for gross proceeds of $70,000. 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 $0.04435 until February 23, 2015. The investor is a U.S. Person and in issuing securities to the investor we relied on the exemption from
the registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D promulgated thereunder.
On February 12, 2012 we sold 2,000,715 units at a price of $0.02799 per unit to one investor for gross proceeds of $56,000. 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 $0.03919 until February 3, 2015. The investor is a U.S. Person and in issuing securities to the investor we relied on the exemption from
the registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D promulgated thereunder.
In February 2012 one investor exercised 2,646,199 of the August 2009 common stock purchase warrants using the cashless exercise provision. The cashless exercise provision allows the investor, if the fair market value of one share of common stock is
greater than the exercise price, to elect to receive shares equal to the value of the warrant less a portion of the warrant that is cancelled using a specific formula. We issued 2,500,000 shares of common stock and cancelled 146,199 common stock
purchase warrants pursuant to the cashless exercise provision. No cash proceeds were received. We issued these shares pursuant to an exemption from registration set out in Section 4(2) of the Securities Act of 1933.
In December 2011, we sold 5,800,000 units at a price of $0.0264 per unit to three investors for gross proceeds of $153,120. 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 $0.03696 until December 13, 2014. The investors are U.S. Persons and are accredited investors and in issuing securities to the investors
we relied on the exemption from the registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D promulgated thereunder.
In August 2011, we sold 5,000,000 units at a price of $0.02 per unit to one investor for net proceeds of $100,000 pursuant to a letter agreement with Sagebrush Gold Ltd. The financing consisted of 5,000,000 common shares of our company and
2,500,000 whole share non-transferable common stock purchase warrants. Each common stock purchase warrant entitles the investor to purchase one additional common share of our company at a price of $0.0264 until August 31, 2016. The common stock
purchase warrants contain a cashless exercise provision allowing the investor, if the fair market value of one share of common stock is greater than the exercise price, to elect to receive shares equal to the value of the warrant less a portion of
the warrant that is cancelled using a specific formula. The common stock purchase warrants also contain an exercise price adjustment whereby if we issue common stock, convertible debt instruments, warrants or stock options prior to the expiration of
the warrants or complete exercise of the warrants at a price less $0.04 per common share, then the exercise price of these warrants shall be reduced to such lower price. The securities were issued to an accredited investor pursuant to an
exemption from the registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D.
In June 2011 an investor exercised 21,061,763 of the August 2009 common stock purchase warrants using the cashless exercise provision. The cashless exercise provision allows the investor, if the fair market value of one share of common stock is
greater than the exercise price, to elect to receive shares equal to the value of the warrant less a portion of the warrant that is cancelled using a specific formula. We issued 20,000,000 shares of common stock and cancelled 1,061,763 common stock
purchase warrants pursuant to the cashless exercise provision. No cash proceeds were received. We issued these shares pursuant to an exemption from registration set out in Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D
promulgated under the Securities Act of 1933.
41
In August 2011 one investor exercised 2,598,898 of the August 2009 common stock purchase warrants using the cashless exercise provision. The cashless exercise provision allows the investor, if the fair market value of one share of common stock is
greater than the exercise price, to elect to receive shares equal to the value of the warrant less a portion of the warrant that is cancelled using a specific formula. We issued 2,500,000 shares of common stock and cancelled 98,898 common stock
purchase warrants pursuant to the cashless exercise provision. No cash proceeds were received. We issued these shares pursuant to an exemption from registration set out in Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D
promulgated under the Securities Act of 1933.
In August 2011 one investor exercised 192,308 of the May 2007 common stock purchase warrants using the cashless exercise provision. The cashless exercise provision allows the investor, if the fair market value of one share of common stock is greater
than the exercise price, to elect to receive shares equal to the value of the warrant less a portion of the warrant that is cancelled using a specific formula. We issued 187,507 shares of common stock and cancelled 4,801 common stock purchase
warrants pursuant to the cashless exercise provision. No cash proceeds were received. We issued these shares pursuant to an exemption from registration set out in Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated
under the Securities Act of 1933.
During the year ended January 31, 2011 investors exercised 140,808,847 common stock purchase warrants using the cashless exercise provision of the August 2009 common stock purchase warrants. The cashless exercise provision allows the investor, if
the fair market value of one share of common stock is greater than the exercise price, to elect to receive shares equal to the value of the warrant less a portion of the warrant that is cancelled using a specific formula. We issued 135,848,741
shares of common stock and cancelled 4,960,106 common stock purchase warrants pursuant to the cashless exercise provision. No cash proceeds were received. We issued these shares pursuant to an exemption from registration set out in Section 4(2) of
the Securities Act of 1933 and Rule 506 of Regulation D promulgated under the Securities Act of 1933.
During the year ended January 31, 2011 we issued 187,127,678 shares of common stock as repayment of $227,455 principal portion and $47,522 interest portion of the monthly payments on the May 2007, August 2008, May 2009 and August 2009
convertible notes.
We issued these shares pursuant to an exemption from registration set out in Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated under the Securities Act of 1933
On January 12, 2011, we sold 1,313,370 units at a price of $0.038 per unit to one investor for net proceeds of $50,000. Each unit consisted of one common share of our company and one non-transferable common stock purchase warrant. Each
common stock purchase warrant entitles the investor to purchase one additional common share of our company at a price of $0.06 until January 12, 2014. The securities were issued to an accredited investor pursuant to an exemption from the
registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D.
On November 12, 2010, we sold 5,465,114 units at a price of $0.0429 per unit to investors for net proceeds of $234,701. Each unit consisted of one common share of our company and one non-transferable common stock purchase warrant. Each
common stock purchase warrant entitles the investor to purchase one additional common share of our company at a price of $0.06 until November 12, 2013. The securities were issued to accredited investors pursuant to an exemption from the
registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D.
On October 20, 2010, we sold 25,000,000 units at a price of $0.04 per unit to one investor for gross proceeds of $1,000,000. 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 $0.056 until October 20, 2013. On November 12, 2010, we sold 5,465,114 units at a price of $0.043 per unit to four investors for
gross proceeds of $235,000. 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 $0.06 until November 12, 2013. The investors are U.S. Persons and are accredited investors and in issuing securities to these investors we relied on the exemption from the registration requirements of the Securities Act of 1933 provided by Rule 506 of Regulation D promulgated thereunder.
42
On August 10, 2010, we granted stock options to certain of our directors, officers and employees of our company to purchase an aggregate of 95,500,000 shares of our common stock at an exercise price of $0.038 per share for a term expiring on
August 10, 2015. One of our directors and officers is not a "US person" as such term is defined in Regulation S and in granting the options to our non US director and officer, we relied on the registration exemption provided by Section 3(a)(9) of
the Securities Act of 1933, as amended, and/or Regulation S, promulgated thereunder. In granting the options to our US directors, officers and employees, we relied on the exemption from the registration requirements of the
Securities Act of
1933,
as amended (the "Act"), provided by Section 4(2) of the Act and/or by Rule 506 of Regulation D promulgated thereunder.
On July 15, 2010, we issued a secured convertible promissory note (the "2010 Convertible Note") to Northern Dynasty Minerals Ltd ("Northern Dynasty"). The original advanced amount is $4,000,000 and bears interest at a rate of 10% per annum
compounded monthly (the "Loan"). On August 17, 2010, we transferred 95 of our Alaska State mineral claims from the Big Chunk Super Project to Northern Dynasty for consideration of $1,000,000 of the original advanced amount under the Convertible
Note, leaving $3,000,000 of the Loan amount outstanding. No interest accrued on the $1,000,000 of the original advanced amount. Effective September 1, 2011, the agreement with Northern Dynasty was amended to increase the 2010 Convertible
Note by $561,816 to reimburse Northern Dynasty for assessment work, rental fees, cash in lieu of assessment work and filing fees on the mineral claims that was paid in fiscal 2011 and fiscal 2012 because we could not come to an agreement on an
earn-in option and joint venture agreement with Northern Dynasty. On February 29, 2012, with effect from November 30, 2011, we executed an additional convertible promissory note in the amount of $168,358 ("2011 Convertible Note") in
reimbursement to Northern Dynasty of assessment work, rental fees and filing fees on our mineral claims. Northern Dynasty is not a U.S. person (as that term is defined in Regulation S of the 1933 Act). In issuing the Convertible Notes to Northern
Dynasty, we relied on the registration exemption provided for in Regulation S and/or Section 4(2) of the 1933 Act. For more information regarding the 2011 Convertible Note and the original 2010 Convertible Note, please see
Letter Agreement and
Secured Convertible Note with Northern Dynasty Minerals Ltd. With Respect to Big Chunk
under Item 2 to this report. Provided a minimum of $1,000,000 has been expended by Northern Dynasty on earn in expenses, the convertible notes will be
convertible until repaid or deemed repaid, into common shares of our company at the 5 day volume weighted average trading price immediately prior to Northern Dynasty giving a notice of conversion less the maximum allowable discount applicable as if
our company's shares were listed on the TSX Venture Exchange. To date Northern Dynasty has expended $712,756 of the $1,000,000 earn in expenses. Principal balance of the 2010 Convertible Note at January 31, 2012 is $3,730,174 with
accrued interest on the 2010 Convertible Note at January 31, 2012 at $526,971.
Provided a minimum of $1,000,000 has been expended by Northern Dynasty on earn in expenses, the Loan will be convertible until repaid or deemed repaid, into common shares of our company at the 5 day volume weighted average trading price
immediately prior to Northern Dynasty giving a notice of conversion less the maximum allowable discount applicable as if our company's shares were listed on the TSX Venture Exchange. To date Northern Dynasty has expended $712,756 of the
$1,000,000 earn in expenses.
In issuing the 2010 Convertible Note, we relied on the exemption from the registration requirements of the
Securities Act of 1933,
as amended (the "Act"), provided by Section 4(2) of the Act and/or by Rule 506 of Regulation D promulgated
thereunder.
We issue convertible promissory notes in private placements of its securities to institutional investors pursuant to exemptions from registration set out in Rule 506 of Regulation D under the Securities Act of 1933. The convertible notes were issued
in May 2007, August 2008, May 2009 and August 2009. In February 2010 we modified the terms of these notes with three of the nine note holders to extend their maturity dates to February 28, 2011 with two 180 day extensions exercisable by the holder.
The three note holders who signed the extension and modification agreement hold a majority of the outstanding balance of all notes. We issued detachable common stock purchase warrants with the May 2007 and August 2009 convertible notes.
43
During the year ended January 31, 2010 we issued 109,370,577
shares of common stock for conversions of $127,264 of principal and $24,905 of
accrued interest on the Convertible Notes.
|
|
May 2007
|
|
|
August 2008
|
|
|
May 2009
|
|
|
August 2009
|
|
|
|
Notes
|
|
|
Notes
|
|
|
Notes
|
|
|
Notes
|
|
Principal balance as of
January 31, 2010
|
$
|
1,873,583
|
|
$
|
395,697
|
|
$
|
162,344
|
|
$
|
778,334
|
|
Unamortized discounts as of January 31, 2010
|
|
-
|
|
|
-
|
|
|
(12,414
|
)
|
|
(192,772
|
)
|
Accrued interest as of
January 31, 2010
|
|
185,455
|
|
|
81,545
|
|
|
13,535
|
|
|
35,698
|
|
Common shares issued for conversions during
|
|
|
|
|
|
|
|
|
|
|
|
|
the twelve months ended
January 31, 2010
|
|
178,787,395
|
|
|
8,826,524
|
|
|
3,606,400
|
|
|
7,949,983
|
|
Common shares issued for conversions during
|
|
|
|
|
|
|
|
|
|
|
|
|
the twelve months ended
January 31, 2009
|
|
37,646,325
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Item 16. Exhibits and Financial Statement Schedules
Exhibit
Number
|
Description of Exhibit
|
3.1
|
Articles of
Incorporation
1
|
3.2
|
Bylaws
2
|
3.3
|
Certificate of Change to
Authorized Capital
3
|
3.4
|
Articles of Merger
3
|
5.1
|
Opinion of Szaferman, Lakind, Blumstein & Blader, P.C.
9
|
10.1
|
Letter Agreement dated November
14, 2011 with Northern Dynasty
4
|
10.2
|
Investment Agreement dated August
20, 2013 with KVM Capital *
|
10.3
|
Registration Rights Agreement
dated August 20, 2013 with KVM Capital*
|
10.4
|
Form of Subscription Agreement
5
|
10.5
|
Form of Stock Option Agreement
6
|
10.6
|
Form of Warrant Certificate
7
|
10.7
|
Settlement Agreement dated
November 13, 2012 with Northern Dynasty Minerals Ltd.
8
|
14.1
|
Code of Ethics
3
|
21.1
|
Subsidiaries: Big Chunk Corp
|
23.1
|
Consent of Malone Bailey LLP*
|
23.2
|
Consent of Szaferman, Lakind, Blumstein & Blader, P.C. (filed as Exhibit 5.1)
9
|
101.INS*
|
XBRL INSTANCE DOCUMENT
|
101.SCH*
|
XBRL TAXONOMY EXTENSION SCHEMA
|
101.CAL*
|
XBRL TAXONOMY EXTENSION
CALCULATION LINKBASE
|
101.DEF*
|
XBRL TAXONOMY EXTENSION
DEFINITION LINKBASE
|
101.LAB*
|
XBRL TAXONOMY EXTENSION LABEL
LINKBASE
|
101.PRE*
|
XBRL TAXONOMY EXTENSION
PRESENTATION LINKBASE
|
* Filed herewith.
44
___________________________________
1
Filed as
an exhibit to our Registration Statement on Form SB-2, filed with the SEC on May
14, 2002.
2
Filed as an exhibit to our Quarterly Report on Form
10-QSB, filed with the SEC on December 14, 2007.
3
Filed as an
exhibit to our Current Report on Form 8-K, filed with the SEC on September 1,
2009.
4
Filed as an exhibit to our Current Report on Form 8-K,
filed with the SEC on November 25, 2011.
6
Filed as an exhibit to
our Current Report on Form 8-K, filed with the SEC on December 13, 2011.
7
Filed as an exhibit to our Current Report on Form 8-K, filed
with the SEC on January 23, 2012.
8
Filed as an exhibit to our
Current Report on Form 8-K, filed with the SEC on July 30, 2012.
9
To be filed by amendment..
Item 17. Undertakings.
Undertaking Required by Item 512 of Regulation S-K. (a) The
undersigned registrant hereby undertakes:
(1)
to file, during any period in which it offers or sells securities are being
made, a post-effective amendment to this Registration Statement to:
(i)
include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii)
reflect in the prospectus any facts or events arising after the effective date
of this registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the Calculation of Registration Fee table in the effective
registration statement; and
(iii)
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement; provided, however, that
paragraphs (a)(1)(i) and (a)(1)(ii) of this rule do not apply if the
registration statement is on Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement; and paragraphs (a)(1)(i), (a)(1)(ii)
and (a)(1)(iii) of this section do not apply if the registration statement is on
Form S-3 or Form F-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in reports filed with
or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Exchange Act that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is not part of the registration statement.
Provided
further, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is for an offering of asset-backed securities on Form S-1
or Form S-3, and the information required to be included in a post-effective
amendment is provided pursuant to item 1100(c) of Regulation AB.
(2)
For determining liability under the Securities Act, treat each post-effective
amendment as a new registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona fide offering.
(3)
File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(b) For determining liability of the registrant under the
Securities Act to any purchaser in the initial distribution of the securities,
the registrant undertakes that in a primary offering of securities of the
registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of
any of the following communications, the registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
45
(1)
Any preliminary prospectus or prospectus of the registrant relating to the
offering required to be filed pursuant to Rule 424;
(2)
Any free writing prospectus relating to the offering prepared by or on behalf of
the registrant or used or referred to by the registrant;
(3)
The portion of any other free writing prospectus relating to the offering
containing material information about the registrant or its securities provided
by or on behalf of the registrant; and
(4)
Any other communication that is an offer in the offering made by the registrant
to the purchaser.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(d) That, for the purpose of determining liability under the
Securities Act to any purchaser:
If
the registrant is relying on Rule 430B:
(i)
Each prospectus filed by the registrant pursuant to 424(b)(3) shall be deemed to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(ii)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement in reliance on Rule 430B relating to
an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act shall
be deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or
the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date; or
If
the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to an offering, other than
registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or
prospectus that is part of a registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
46
If
the registrant is relying on Rule 430A:
(i)
For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(ii)
For the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Tucson, Arizona on November 6, 2013.
LIBERTY STAR URANIUM & METALS
CORP.
|
By:
|
/s/ James Briscoe
|
|
|
James Briscoe
|
|
|
Chief Executive Officer, Chief
Financial Officer and
|
|
|
Chairman of the Board
|
|
|
(principal executive officer and principal financial and accounting officer)
|
In accordance with the requirements of the Securities Act of
1933, this Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ James
Briscoe
|
|
Chief Executive Officer
|
|
November 6, 2013
|
James Briscoe
|
|
Chief Financial Officer and
|
|
|
|
|
Chairman of the Board (principal executive officer and principal financial and accounting officer)
|
|
|
In accordance with the requirements of the Securities Act of
1933, this Registration Statement on Form S-1 has been signed by a majority of
the board of directors and on the dates indicated.
Signature
|
|
Date
|
|
|
|
|
|
|
/s/ James
Briscoe
|
|
November 6, 2013
|
James Briscoe
|
|
|
|
|
|
/s/ Gary
Musil
|
|
November 6, 2013
|
Gary Musil
|
|
|
|
|
|
/s/ John
Guilbert
|
|
November 6, 2013
|
John Guilbert
|
|
|
|
|
|
/s/ Keith
Brill
|
|
November 6, 2013
|
Keith Brill
|
|
|
|
|
|
/s/ Pete
OHeeron
|
|
November 6, 2013
|
Pete OHeeron
|
|
|
47
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